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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-12
AMERIGON INCORPORATED
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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Amerigon Incorporated
5462 Irwindale Avenue
Irwindale, CA 90041
NOTICE OF ANNUAL MEETING
Dear Shareholder:
On Wednesday, May 24, 2000, Amerigon Incorporated, a California corporation
("Amerigon"), will hold its 2000 Annual Meeting of Shareholders at Amerigon's
headquarters at 5462 Irwindale Avenue, Irwindale, California 91706-2058. The
meeting will begin at 10:00 a.m. (local time).
Only shareholders who owned Class A Common Stock or Series A Preferred
Stock at the close of business on March 31, 2000 can vote at the Annual Meeting
or any adjournments that may take place. At the Annual Meeting, you will be
asked to:
1. Elect directors to the Board of Directors;
2. Approve an amendment to the Certificate of Determination of the Series A
Preferred Stock;
3. Approve an amendment to our Articles of Incorporation;
4. Approve an amendment to the 1997 Stock Option Plan increasing the number of
shares of Class A Common Stock authorized under the plan from 150,000 to
1,300,000; and
5. Attend to other business properly presented at the meeting.
Your Board of Directors recommends that you vote in favor of each of the
proposals outlined in this proxy statement.
A copy of Amerigon's Annual Report for 1999 is being mailed with this proxy
statement. The approximate date of mailing for this proxy statement and card(s)
is May 1, 2000.
By order of the Board of Directors,
/s/ Richard A. Weisbart
President and Chief Executive Officer
May 1, 2000
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TABLE OF CONTENTS
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Page
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Questions and Answers..................................................................................... 1
Proposals You May Vote On................................................................................. 5
Interests of Certain Persons in Matters to be Acted Upon.................................................. 6
1. Nominees for the Board of Directors.................................................................... 7
2. Approval of an Amendment to the Certificate of Determination of the Series A
Preferred Stock........................................................................................ 9
3. Approval of an Amendment to the Articles of Incorporation.............................................. 10
4. Approval of an Amendment to the 1997 Stock Option Plan................................................. 11
Statement on Corporate Governance......................................................................... 18
Directors' Compensation................................................................................... 19
Performance Graph......................................................................................... 20
Security Ownership of Certain Beneficial Owners and Management............................................ 21
Report of the Compensation Committee on Executive Compensation............................................ 22
Compensation Committee Interlocks and Insider Participation............................................... 24
Executive Compensation.................................................................................... 24
Option Grant Table........................................................................................ 26
Aggregated Option Exercises and Year-End Values........................................................... 26
Certain Transactions...................................................................................... 27
Independent Accountants................................................................................... 29
Section 16(a) Beneficial Ownership Reporting Compliance................................................... 29
Other Matters............................................................................................. 29
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QUESTIONS AND ANSWERS
1. Q: What may I vote on?
A: You are being asked by the Board of Directors of Amerigon to vote on
the following four matters:
(1) The election of nominees to serve on the Board of Directors.
(2) The approval of an amendment to the Certificate of Determination
of the Series A Preferred Stock (the "Preferred Stock Amendment"),
deleting Subsection 2(c), which specifies certain events deemed to
trigger preferential rights of the holders of Series A Preferred
Stock in a liquidation, dissolution or winding up of the company,
in its entirety.
(3) The approval of an amendment to the Articles of Incorporation (the
"Articles Amendment"), eliminating the Class B Common Stock and
renaming the Class A Common Stock as "Common Stock."
(4) The approval of an Amendment to the 1997 Stock Option Plan (the
"Option Plan Amendment") to increase the number of shares of Class
A Common Stock authorized under the plan from 150,000 to
1,300,000.
These four matters are summarized beginning on page 5 and discussed
more fully beginning on page 7.
2. Q: How does the Board recommend I vote on the proposals?
A: The Board recommends a vote FOR each of the nominees, FOR the approval
of the Preferred Stock Amendment, FOR the approval of the Articles
Amendment, and FOR the Option Plan Amendment.
3. Q: Who is entitled to vote?
A: Shareholders of the Class A Common Stock (the "Common Shareholders")
and shareholders of the Series A Preferred Stock (the "Preferred
Shareholders") as of the close of business on March 31, 2000 (the
"Record Date") are entitled to vote at the Annual Meeting.
4. Q: How do I vote?
A: Sign and date each proxy card you receive and return it in the prepaid
envelope. You have the right to revoke your proxy at any time before
the meeting by:
(1) notifying Amerigon in writing;
(2) voting in person; or
(3) returning a later-dated proxy card.
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5. Q: Who will count the vote?
A: Representatives of U.S. Stock Transfer Corporation will count the
votes and act as the inspector of election.
6. Q: Is my vote confidential?
A: Proxy cards, ballots and voting tabulations that identify individual
shareholders are mailed or returned directly to U.S. Stock Transfer
Corporation and handled in a manner that protects your voting privacy.
Your vote will not be disclosed except: (1) as needed to permit U.S.
Stock Transfer Corporation to tabulate and certify the vote; (2) as
required by law; or (3) in limited circumstances such as a proxy
contest in opposition to the Board.
7. Q: What shares are included on the proxy card(s)?
A: The shares on your proxy card(s) represent ALL of your shares. If you
do not return your proxy card(s), your shares will not be voted.
8. Q: What does it mean if I get more than one proxy card?
A: If your shares are registered differently and are in more than one
account, you will receive more than one proxy card. Sign and return
all proxy cards to ensure that all your shares are voted. We encourage
you to have all accounts registered in the same name and address
(whenever possible). You can accomplish this by contacting our
transfer agent, U.S. Stock Transfer Corporation, at 1745 Gardena
Avenue, Suite 200, Glendale, California 91204.
9. Q: What is required to approve each proposal?
A: As of the Record Date, 1,914,089 shares of Class A Common Stock and
9,000 shares of Series A Preferred Stock were issued and outstanding.
Each Common Shareholder is entitled to one vote for each share held.
Each Preferred Shareholder is entitled to one vote for each share of
Class A Common Stock into which such Series A Preferred Stock could
have been converted on the Record Date. As of the Record Date, the
Preferred Shareholders were entitled to convert their shares in
5,373,134 shares of Class A Common Stock. Other than with respect to
the election of directors, the Preferred Shareholders are entitled to
vote, together with the Common Shareholders, as a single class with
respect to any question upon which the Common Shareholders have the
right to vote. The Preferred Shareholders have indicated they will
vote in favor of each proposal.
Once a quorum has been established, the following votes are required
to approve each proposal:
(1) For the election of directors, the five nominees who receive the
most votes of the Series A Preferred Stock and the two nominees
who receive the most votes of the Class A Common Stock will become
directors of Amerigon.
(2) To approve the Preferred Stock Amendment, a majority of the
outstanding Series A Preferred Stock and a majority of all
outstanding shares of Class A
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Common Stock and Series A Preferred Stock (on an as-converted
basis) must be voted in favor of the amendment.
(3) To approve the Articles Amendment, a majority of all outstanding
shares of Class A Common Stock and Series A Preferred Stock (on an
as-converted basis) must be voted in favor of the amendment.
(4) To approve the Option Plan Amendment, a majority of the shares of
Class A Common Stock and Series A Preferred Stock (on an as-
converted basis) voting at the Annual Meeting must be voted in
favor of the amendment.
If a broker indicates on its proxy that it does not have discretionary
authority to vote on a particular matter, the affected shares will be
treated as not present and not entitled to vote with respect to that
matter, even though the same shares may be considered present for
quorum purposes and may be entitled to vote on other matters. In the
absence of instructions, shares represented by valid proxies will be
voted as recommended by the directors.
10. Q: What is a "quorum"?
A: A "quorum" is a majority of the outstanding shares entitled to vote.
They may be present or represented by proxy. For the purposes of
determining a quorum, shares held by brokers or nominees will be
treated as present even if the broker or nominee does not have
discretionary power to vote on a particular matter or if instructions
were never received from the beneficial owner. These shares are called
"broker non-votes." Abstentions will be counted as present for quorum
purposes.
11. Q: Can I cumulate my votes for directors?
A: You cannot cumulate votes (i.e., cast a number of votes greater than
the number of your shares) for directors unless (1) the nominee's or
nominees' names were placed in nomination prior to the election and
(2) you gave us notice prior to the commencement of voting of your
intention to cumulate votes. As of the date of this proxy statement,
we have not received this notice from any shareholders. If you decide
to cumulate your votes, and you give us notice of your decision in
time, you will be entitled to cast a number of votes equal to the
number of shares you hold multiplied by two (the number of directors
to be elected) in the case of holders of Class A Common Stock, or five
in the case of holders of Series A Preferred Stock. You may then
decide to cast these votes for a single nominee or to distribute your
votes among two or more nominees. Your proxy will permit Richard A.
Weisbart and James L. Mertes to cumulate votes if any shareholder
decides to cumulate votes.
12. Q: How will voting on any other business be conducted?
A: Although we do not know of any business to be considered at the Annual
Meeting other than the proposals described in this proxy statement, if
any other business is presented at the Annual Meeting, your signed
proxy card gives authority to
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Richard A. Weisbart and James L. Mertes to vote on such matters at
their discretion.
13. Q: When are shareholder proposals for the 2001 Annual Meeting due?
A: All shareholder proposals to be considered for inclusion in next
year's proxy statement must be submitted in writing to Richard A.
Weisbart, President, Amerigon Incorporated, 5462 Irwindale Avenue,
Irwindale, California 91706 by January 1, 2001. Any proposal
received after this date will be considered untimely. Until further
notice, a shareholder proposal (other than in respect of a nominee for
election to the Board of Directors) to be presented at the next Annual
Meeting of Shareholders but not submitted for inclusion in the proxy
statement pursuant to Rule 14a-8 will be considered untimely under the
SEC's proxy rules if received after March 16, 2001. Each proposal
must comply with the Securities and Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
14. Q: How much did this proxy solicitation cost?
A: U.S. Stock Transfer Corporation was hired to assist in the
distribution of proxy materials and solicitation of votes for $3,600,
plus estimated out-of-pocket expenses of $500. We also reimburse
brokerage houses and other custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses for forwarding proxy and
solicitation materials to shareholders.
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PROPOSALS YOU MAY VOTE ON
1. ELECTION OF DIRECTORS.
There are seven nominees for election this year. Detailed information on
each nominee is provided beginning on page 7.
The holders of the Series A Preferred Stock have the right to elect five of
the seven seats on the Board of Directors. Roy A. Anderson, John W. Clark,
Oscar B. Marx, III, Paul Oster and James J. Paulsen have been nominated for
election as directors by the holders of the Series A Preferred Stock.
The holders of the Class A Common Stock have the right to elect the
remaining two seats on the Board of Directors. Richard A. Weisbart and Lon
E. Bell have been nominated for election as directors by the holders of the
Class A Common Stock.
All directors are elected annually and normally serve a one-year term until
the next Annual Meeting. If any of the nominees become unavailable to
stand for re-election at the Annual Meeting, the Board will designate a
substitute. Proxies voting on the original nominee will be cast for the
substitute.
Your Board unanimously recommends a vote FOR each of these directors.
2. APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF DETERMINATION OF THE SERIES
A PREFERRED STOCK ELIMINATING SUBSECTION 2(C) IN ITS ENTIRETY.
The Certificate of Determination of Rights, Preferences and Privileges of
the Series A Preferred Stock (the "Certificate of Determination")
designates 9,000 shares of Series A Preferred Stock (the "Preferred Stock")
and grants to them various powers, privileges and rights, as well as
certain qualifications, limitations and restrictions. Subsection 2(c) of
the Certificate of Determination grants to holders of the Preferred Stock
preferential rights upon liquidation, dissolution or winding up of
Amerigon. This right is triggered by (1) the acquisition of Amerigon by
another entity or (2) the sale of all or substantially all of the assets of
Amerigon (unless immediately afterwards, prior Amerigon shareholders hold
50% or more of the surviving or acquiring entity). This provision is
deemed to be a condition of redemption that is not solely within the
control of Amerigon. As such, Amerigon is required for financial reporting
purposes to classify the Preferred Stock as mandatorily redeemable or
mezzanine equity. Neither Amerigon nor the Preferred Shareholders
understood or intended the Preferred Stock to be mezzanine equity, and in
March 2000, the Preferred Shareholders waived their rights under subsection
2(c) and agreed to amend the Certificate of Determination to eliminate
subsection 2(c).
Your Board unanimously recommends a vote FOR the approval of the Preferred
Stock Amendment.
3. APPROVAL OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION ELIMINATING THE
CLASS B COMMON STOCK.
Under our Articles of Incorporation, we are authorized to issue 20,000,000
shares of Class A Common Stock and 600,000 shares of Class B Common Stock.
As of the
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Record Date, we have 1,914,089 shares of Class A Common Stock and
no shares of Class B Common Stock outstanding. The Class B Common Stock
was all held at one time by Dr. Lon E. Bell, Amerigon's Director of
Technology and Vice Chairman of the Board, but has been redeemed by
Amerigon in connection with a transaction related to the electric vehicle
business approved by our shareholders at the 1999 Annual Meeting. No
shares of Class B Common Stock remain outstanding and we have no plans on
issuing any such shares in the future. For such reasons, the Board has
determined it would be in the best interests of Amerigon to eliminate the
Class B Common Stock from the Articles of Incorporation. As a result of
the Articles Amendment, the Class A Common Stock will be renamed "Common
Stock" and the stock symbol of the common stock will be changed from
"ARGNA" to "ARGN."
Your Board unanimously recommends a vote FOR the approval of the Articles
Amendment.
4. APPROVAL OF AN AMENDMENT TO THE 1997 STOCK OPTION PLAN TO INCREASE CAPACITY
FROM 150,000 SHARES TO 1,300,000 SHARES.
On June 23, 1999, the Board of Directors unanimously adopted a resolution
to increase the capacity of the 1997 Stock Option Plan from 150,000 shares
to 1,300,000 shares of Class A Common Stock, subject to shareholder
approval, in order to be able to provide equity incentives to employees.
Because the capacity of the plan has been exhausted, the Board of Directors
believes it is prudent to increase capacity to ensure sufficient shares
will be available for grant to new and existing personnel. To date,
options for 598,200 shares of Class A Common Stock have been granted by the
Board over and above the existing limit of 150,000 shares, subject to
shareholder approval.
Your Board unanimously recommends a vote FOR the approval of the Articles
Amendment
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
In considering the recommendation of the Board of Directors that you
approve the Preferred Stock Amendment, you should be aware that John W. Clark, a
member of the Board, is also a general partner of Westar Capital Associates II
LLC, an affiliate of one of the two Preferred Shareholders, and that Oscar B.
Marx, III and Paul Oster, both members of the Board, are partners in W III H
Partners, L.P., the majority owner of the second Preferred Shareholder. See
"Certain Transactions--Placement of Preferred Stock."
In considering the recommendation of the Board of Directors that you
approve the Option Plan Amendment, you should be aware that because the current
limit on the number of shares of Class A Common Stock authorized under the 1997
Stock Option Plan has been reached and the Option Plan Amendment will increase
the number of such shares available, the non-employee directors on the Board,
who are entitled to receive an annual grant of options for 1,000 such shares,
have a personal interest in its approval. In addition, Roy A. Anderson and
James Paulsen, two non-employee directors, have received options conditioned on
shareholder approval of the Option Plan Amendment for 7,500 shares and 15,000
shares, respectively.
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NOMINEES FOR THE BOARD OF DIRECTORS
(Item 1 on the Proxy Card)
The following table sets forth certain information regarding the directors
who have been nominated for re-election to the Board of Directors for a one-year
term. Messrs. Marx, Anderson, Clark, Oster and Paulsen have been nominated to
serve on the Board pursuant to an understanding between the two Preferred
Shareholders, Big Beaver Investments LLC ("Big Beaver") and Westar Capital II
LLC ("Westar Capital") whereby each will name two directors to serve on
Amerigon's Board and they will jointly choose a fifth person who is an expert
from the auto industry. Mr. Marx and Mr. Oster were chosen by Big Beaver, Mr.
Anderson and Mr. Clark were chosen by Westar Capital, and Mr. Paulsen is the
jointly-chosen auto expert.
Messrs. Anderson, Clark, Marx, Oster and Paulsen have been nominated for
the five seats on the Board to be elected by the holders of the Series A
Preferred Stock. Mr. Weisbart and Dr. Bell have been nominated for the two
seats on the Board to be elected by the holders of the Class A Common Stock.
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Director
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Name Age Last Five Years Since
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Richard A. Weisbart 54 Chief Executive Officer of Amerigon since June 1999, 1997
succeeding Dr. Bell in such capacity. From 1997 to
1999, Mr. Weisbart served as President and Chief
Operating Officer. Before joining Amerigon, Mr.
Weisbart served as Director, International Operations,
for the Ford Division of Lear Corporation since May
1996. Mr. Weisbart joined Lear Corporation in
February 1994 as General Manager of Lear Plastics
Corporation, a wholly-owned subsidiary of Lear
Corporation. Prior to joining Lear Corporation, Mr.
Weisbart was employed for seven years by Smiths
Industries, a company specializing in advanced
avionics, medical systems and specialized industrial
products, most recently as Senior Vice President,
Operations.
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Director
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Name Age Last Five Years Since
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Lon E. Bell, Ph.D 59 Founded Amerigon in 1991 and currently serves as Vice 1991
Chairman of the Board of Directors and the Chief
Technology Officer. Dr. Bell served as Chairman of
the Board and Chief Executive Officer from the
Company's formation until 1999. He also served as
President of Amerigon since its formation until May
1997. Dr. Bell co-founded Technar Incorporated with
Dr. Allen Gillespie and Robert Diller in 1967, which
developed and manufactured automotive components. Dr.
Bell served as Technar's Chairman and President until
selling majority ownership of it to TRW Inc. in 1986.
Dr. Bell continued managing Technar, then known as TRW
Technar, as its President until 1991, when he left to
form Amerigon. Dr. Bell received a bachelor's degree
in mathematics in 1962, a master's degree in rocket
propulsion in 1963, and a Ph.D. in mechanical
engineering in 1968 from the California Institute of
Technology.
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Oscar B. Marx, III 61 President and CEO of TMW Enterprises, a private 1999
investment firm located in Troy, Michigan. Prior to
TMW, Mr. Marx was President and CEO of Electro-Wire
Products, a $500 million electrical components
supplier to the automotive industry. Prior to
Electro-Wire, Mr. Marx had a long and illustrious
career at Ford, having retired from Ford in 1994 as
Vice President of their Automotive Components Group
(currently known as Visteon), with revenues of $11
billion at the time he was responsible for the
operation.
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Roy A. Anderson 79 Chairman Emeritus of Lockheed Corporation. Mr. 1993
Anderson served as Chairman of the Board and Chief
Executive Officer of Lockheed from 1977 until his
retirement on December 31, 1985. He continued to
serve as a director of Lockheed until December 31,
1990 and also served as a consultant to that company
until December 31, 1992. Mr. Anderson is a member of
the boards of directors of the Los Angeles Music
Center, the Greater Los Angeles United Way and the Los
Angeles World Affairs Council. He is Co-Chairman of
the Select Panel of Project California.
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John W. Clark 54 General Partner of Westar Capital Associates, a 1996
private equity investment company since 1995. From
1990 to May 1995, Mr. Clark was a private investor.
Prior to 1990, he was President of Valentec
International Corporation, a producer of metal and
electronic components for military and commercial
products.
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Director
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Name Age Last Five Years Since
---- --- ---------------- -----
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Paul Oster 42 Chief Financial Officer of TMW Enterprises. Prior to 1999
becoming CFO at TMW, Mr. Oster was Corporate
Controller of Electro-Wire Products, a major supplier
of electrical components to the automotive industry.
Mr. Oster is also a Certified Public Accountant,
having previously worked for PriceWaterhouse and Ernst
and Whinney.
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James J. Paulsen 59 Retired Ford senior executive. He served as President 1999
of Ford's China Operations, initiating Ford's entry
into the China market. He was also Executive Director
of the Corporate Quality Control Office reporting to
the company President. He had also been General
Manufacturing Manager for several of Ford's major
component plants.
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</TABLE>
Other Directorships
In addition to serving on Amerigon's Board of Directors, Dr. Bell, Mr.
Oster, Mr. Marx and Mr. Clark serve as directors of other companies. Dr. Bell
is a director of AEVT. Mr. Oster is a director of Pullman Industries, Inc.,
which is controlled by TMW Enterprises. Mr. Marx is a director of Tesma
International, Inc., Parametric Technology Corporation, and SMTEK International,
Inc. He also is a director of Pullman Industries, Inc., TMW Enterprises,
EcoAir, Inc., and Vehicular Technologies, Inc. Mr. Clark is a director of All
Post, Inc., Doskocil Manufacturing Company, Inc., Verteq, Inc., Tecstar, Inc.,
and SoffCot, Inc.
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF DETERMINATION OF THE SERIES A
PREFERRED STOCK
(Item 2 on Proxy Card)
The Certificate of Determination designates 9,000 shares of Series A
Preferred Stock and grants to them various powers, privileges and rights, as
well as certain qualifications, limitations and restrictions. The Certificate
of Determination gives the Preferred Shareholders a liquidation preference in
the event of any liquidation, dissolution or winding up of Amerigon, either
voluntary or involuntary, and the Preferred Shareholders shall be entitled to
receive, before any distribution of assets to the Common Shareholders, an amount
per share equal to the sum of (i) $1,000 for each outstanding share of Series A
Preferred Stock, (ii) an amount equal to 7% of the original issue price
annually, but only until the fourth anniversary of the issuance of the Series A
Preferred Stock and (iii) an amount equal to any declared but unpaid dividends
on such share.
For purposes of the liquidation preference, subsection 2(c) of the
Certificate of Determination deems certain events to be a liquidation,
dissolution or winding up of Amerigon. These events include (1) the acquisition
of Amerigon by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or
consolidation but, excluding any merger effected exclusively for the purpose of
changing the domicile of Amerigon) or (2) the sale of all or substantially all
of the assets of
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Amerigon (unless immediately afterwards, prior Amerigon shareholders hold at
least 50% of the voting power of the surviving or acquiring entity).
Subsection 2(c) also requires Amerigon to give the Preferred Shareholders
20 days' written notice describing the material terms and conditions of such
impending transaction prior to (A) the date of the shareholders' meeting called
to approve such transaction, (B) the effective date of a written consent of the
shareholders to approve the transaction, or (C) the closing of such transaction,
whichever is earlier, and requires Amerigon to notify such holders in writing of
the final approval of such transaction.
Subsection 2(c) has been deemed to be a condition of redemption that is not
solely within the control of Amerigon. Thus, Amerigon is required for financial
reporting purposes to classify the Series A Preferred Stock as mandatorily
redeemable or mezzanine equity. Since neither Amerigon nor the Preferred
Shareholders understood or intended the Series A Preferred Stock to be mezzanine
equity, the Board has proposed to eliminate subsection 2(c) from the Certificate
of Determination and, in March 2000, the Preferred Shareholders agreed to waive
their rights under subsection 2(c) and to support an amendment to the
Certificate of Determination eliminating subsection 2(c). Upon approval by the
shareholders, a certificate of amendment to the Certificate of Determination
will be filed with the California Secretary of State effecting the deletion of
subsection 2(c) from the Certificate of Determination.
APPROVAL OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION
(Item 3 on Proxy Card)
Under our Articles of Incorporation, we are authorized to issue 20,000,000
shares of Class A Common Stock and 600,000 shares of Class B Common Stock. As
of the Record Date, we had 1,914,089 shares of Class A Common Stock and no
shares of Class B Common Stock outstanding. The Articles Amendment would
eliminate the Class B Common Stock from our authorized capital structure and
reduce the number of authorized shares from 25,600,000 to 25,000,000; the number
of authorized shares of Class A Common Stock would remain 20,000,000. As a
result of the Articles Amendment, the Class A Common Stock will be renamed
"Common Stock" and the stock symbol of the common stock on the Nasdaq Stock
Market will be changed from "ARGNA" to "ARGN."
The Class A Common Stock and the Class B Common Stock are substantially the
same on a share-for-share basis, except that holders of outstanding shares of
Class B Common Stock are entitled to receive dividends and distributions upon
liquidation at a per share rate equal to five percent of the per share rate
received by holders of outstanding shares of Class A Common Stock. The Class B
Common Stock is neither transferable nor convertible and is subject to
cancellation under certain circumstances.
The Class B Common Stock was all held at one time by Dr. Lon E. Bell, our
current Chief Technology Officer and Vice Chairman of the Board, but has been
redeemed by Amerigon in connection with a transaction related to the electric
vehicle business approved by our shareholders at the 1999 Annual Meeting. No
shares of Class B Common Stock remain
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outstanding and we have no plans on issuing any such shares in the future. For
such reasons, the Board has approved and unanimously recommended for the
approval of the shareholders an amendment to our Articles of Incorporation which
eliminates the Class B Common Stock.
The text of the Articles Amendment is set forth below:
"Article III, paragraphs (1) and (2) of the Corporation's Amended and
Restated Articles of Incorporation are amended to read as follows:
(1) The total number of shares which the Corporation is authorized to
issue is 25,000,000, of which 20,000,000 shall be Common Stock,
without par value, and 5,000,000 shall be Preferred Stock, without par
value.
(2) [Intentionally Deleted]"
APPROVAL OF AMENDMENT TO THE 1997 STOCK OPTION PLAN
(Item 4 on the Proxy Card)
On June 23, 1999, the Board of Directors unanimously adopted a resolution
to approve the Option Plan Amendment to the 1997 Stock Option Plan (as so
amended, the "1997 Plan" unless the context otherwise dictates) to increase the
capacity of the 1997 Plan from 150,000 shares to 1,300,000 shares of Class A
Common Stock, subject to shareholder approval, in order to be able to provide
equity incentives to employees. Because the capacity of the plan has been
exhausted, the Board of Directors believes it is prudent to increase capacity to
ensure sufficient shares will be available for grant to new and existing
personnel.
The Board of Directors approved stock options under the 1997 Plan for
643,500 shares of Class A Common Stock to various employees on June 23, 1999
vesting in equal installments over a 4 year period and expiring on June 22,
2009 at an exercise price of $3.06 per share, which was the fair value of the
underlying shares as of the date of grant, conditioned on subsequent shareholder
approval of the Option Plan Amendment. The amount approved by the Board
exceeded by 598,200 shares the existing limit of 150,000 shares. Awards granted
under the 1997 Plan and in excess of the existing limit prior to the Annual
Meeting are subject to shareholder approval of the Option Plan Amendment.
In the table below, the benefits or amounts to be received by or allocated
to each of the following from such grants are:
<TABLE>
<CAPTION>
Conditional Awards Granted
Name and Position Number of Units
<S> <C>
Richard A. Weisbart 180,000
President and Chief Executive Officer
Lon E. Bell 82,500
Vice Chairman of the Board and Chief Technology Officer
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Daniel R. Coker 125,000
Vice President of Sales and Marketing
James L. Mertes 75,000
Vice President of Quality and Operations
Executive Group (1) 462,500
Non-Executive Director Group (2) 22,500
Non-Executive Officer Employee Group (3) 113,200
</TABLE>
(1) Consists of all current Executive Officers as a group (4 persons).
(2) Consists of two non-executive directors, Messrs. Andersen and Paulsen.
(3) Consists of all current non-Executive Officer employees as a group (34
persons)
Except for the options already granted, the benefits to be received in 2000
as a result of the Option Plan Amendment by officers, current directors who are
not officers and all employees are not determinable, because all grants under
the Plan are discretionary (with the exception of the 1,000 options
automatically granted each year to Non-Employee Directors).
The principal terms of the 1997 Plan are summarized below. The following
summary is qualified in its entirety by reference to the full text of the 1997
Plan. The full text of the 1997 Plan is attached as Appendix A. Capitalized
terms used herein not otherwise defined have the meanings given to them in the
1997 Plan.
Summary Description of the 1997 Plan
The 1997 Plan was approved at the 1997 Annual Meeting. The purpose of the
1997 Plan is to promote the success of the Company by providing an additional
means through the grant of stock options to attract, retain, motivate and reward
key employees (including officers, whether or not directors) of the Company and
its related subsidiaries by providing incentives related to equity interests in
and the financial performance of the Company. In addition, the 1997 Plan
includes an automatic award feature to attract, motivate and retain experienced
and knowledgeable outside directors through the grant of fixed nonqualified
stock options to them.
Administration. The 1997 Plan is administered by the Compensation
Committee of the Board of Directors. The 1997 Plan provides that it may be
administered by the Board of Directors or a committee consisting of two or more
directors (or such greater number of directors as may be required under
applicable law) who are (i) in respect of any decision at any time when a
Participant affected by the decision may be subject to Section 162(m) of the
Internal Revenue Code (the "Code") must be "outside" directors within the
meaning of the Code; and (ii) in respect of any decision affecting a transaction
at a time when the Participant involved in the transaction may be subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), must be "non-employee directors" within the meaning of Rule 16b-3(b)(3)
under the Exchange Act. (Hereinafter, the Board or such committee is referred
to as the "Committee".) The Committee has the authority to determine the
specific terms and conditions of all options granted under the 1997 Plan,
including, without limitation, the number of shares subject to each option, the
price to be paid for the shares and any other vesting criteria. The
12
<PAGE>
Committee makes all other determinations necessary or advisable for the
administration of the 1997 Plan. Notwithstanding the foregoing, the award of
options to Non-Employee Directors on the first business day of each calendar
year is automatic and, to the maximum extent possible, self-effectuating, and
the discretion of the Committee does not extend to such options in any manner
that would be impermissible under Rule 16b-3 of the Exchange Act.
Eligibility. Any officer (whether or not a director) or key employee (an
"Eligible Employee") of the Company or its subsidiaries, as determined in the
sole discretion of the Committee, is eligible to be granted options under the
1997 Plan. The 1997 Plan also provides that each director who is not an officer
or employee of the Company or one of its subsidiaries (a "Non-Employee
Director") is automatically granted fixed Nonqualified Stock Options as
described below (see "Non-Employee Director Options").
Shares Available for Awards. You are being asked to approve a change in
the maximum aggregate number of shares of Common Stock that may be issued upon
the exercise of options awarded under the 1997 Plan from 150,000 to 1,300,000,
subject to adjustment as described below. 598,200 options have been granted by
the Board in excess of the 150,000 originally authorized, pending shareholder
approval.
Subject to the provisions of the 1997 Plan, the Committee determines the
number of shares subject to each option granted to an Eligible Employee and the
terms and conditions of such options, including the price to be paid for the
shares. Notwithstanding the foregoing, but subject to adjustments as described
below, no more than 1,240,000 shares may be delivered upon the exercise of
Incentive Stock Options granted under the 1997 Plan. The maximum number of
shares of Common Stock which may be delivered pursuant to the exercise of
options granted during any calendar year to any Eligible Employee may not exceed
250,000 shares. In addition, the maximum number of shares of Common Stock that
may be delivered to Non-Employee Directors pursuant to the exercise of fixed
awards may not exceed 60,000 shares. These numbers reflect the 1-for-5 reverse
stock split that became effective on January 26, 1999.
The number and kind of shares available under the 1997 Plan are subject to
adjustment in the event of (i) certain reorganizations, mergers, combinations,
recapitalizations, stock splits, stock dividends, or other similar events that
change the number or kind of shares outstanding, and (ii) extraordinary
dividends or distributions of property to the shareholders. Shares relating to
options that are not exercised or that expire or are cancelled will again become
available for regrant and award purposes under the 1997 Plan to the extent
permitted by law. If an option is settled only in cash, it need not be counted
against any of the limits described in the paragraph immediately above.
All of the current officers and all of the current Non-Employee Directors
of the Company are among those eligible to receive options, subject to the
discretion of the Committee to determine the particular individuals who, from
time to time, will be selected to receive options. The number of key employees
of the Company, if any, who will be eligible to receive options has not been
determined at this time. In addition, neither the individuals who are to
receive options, nor the number of options that will be granted to any
individual or group of individuals, has been determined at this time.
13
<PAGE>
Vesting and Option Periods. Except as may be provided in an applicable
Option Agreement, no option made under the 1997 Plan may be exercisable or may
vest until at least six months after the initial Option Date, and once
exercisable, an option will remain exercisable until the expiration or earlier
termination of the option. Each option made to an employee will expire on such
date as is determined by the Committee, but not later than ten years after the
Option Date.
Transferability. The 1997 Plan provides, with limited exceptions, that
rights or benefits under any option are not assignable or transferable except by
will or the laws of descent and distribution, and that only the Participant (or,
if the Participant has suffered a disability, his or her legal representative)
may exercise the option during the Participant's lifetime.
Options Grants to Eligible Employees
An option is the right to purchase shares of Common Stock at a future date
at a specified price (the "Option Price"). The Option Price of any options
granted to Eligible Employees under the 1997 Plan is determined by the Committee
at the time of the grant; provided, that the Option Price for Incentive Stock
Options granted under the plan may not be less than 100% (110% in the case of an
incentive stock option granted to a Participant who owns or is deemed to own
more than 10% of the total combined voting power of all classes of stock of the
Company) of the Fair Market Value of the Common Stock on the date of grant.
An option granted to an Eligible Employee may either be an incentive stock
option, as defined in the Code, or a Nonqualified Stock Option. An incentive
stock option may not be granted to a person who owns more than 10% of the total
combined voting power of all classes of stock of the Company unless the Option
Price is at least 110% of the Fair Market Value of shares of Common Stock
subject to the option and such option by its terms is not exercisable after
expiration of five years from the date such option is granted. To the extent
that the aggregate fair market value (defined for this purpose as the fair
market value of the stock subject to the options as of the date of grant of the
options) of stock with respect to which Incentive Stock Options first become
exercisable in any calendar year exceeds $100,000 (taking into account stock
subject to Incentive Stock Options granted under the 1997 Plan or any other
plan), such options will be treated as Nonqualified Stock Options.
Full payment for shares purchased on the exercise of any option, except as
provided below, must be made at the time of such exercise (i) in cash or by
electronic funds transfer, (ii) by check payable to the order of the Company;
(iii) by notice and third party payment in such manner as may be authorized by
the Committee; or (iv) by the delivery of shares of Common Stock already owned
by the Participant, provided, however, that the Committee may in its discretion
limit the Participant's ability to exercise an option by delivering such shares.
Termination of Employment. The Committee establishes in respect of each
option granted under the 1997 Plan to an Eligible Employee the effect of a
termination of employment on the rights and benefits thereunder and in so doing
may make distinctions based upon the cause of termination or otherwise.
14
<PAGE>
Options to Non-Employee Directors
The 1997 Plan provides that each Non-Employee Director then in office will
automatically be granted, on the first business day of each calendar year during
the term of the 1997 Plan, commencing in 1998, a Nonqualified Stock Option to
purchase 1,000 shares of Common Stock. The purchase price per share of Common
Stock covered by each such option granted to a Non-Employee Director, payable in
cash or shares of Common Stock, will be the Fair Market Value of the Common
Stock on the Option Date. Any previously owned shares used in payment of the
exercise price must have been owned by the Non-Employee Director at least six
months prior to the date of exercise. The options become exercisable on the
first anniversary of the Option Date and, unless earlier terminated, expire ten
years after the Option Date.
In the event that a Non-Employee Director's service as a member of the
Board of Directors is terminated for any reason other than the death, Total
Disability or retirement of such director, any portion of an Option granted to
such individual which is not then exercisable will terminate, and any portion of
such Option which is then exercisable will remain exercisable for two years
after such service terminates or until the expiration of the stated term of such
Option, whichever occurs first. If a Non-Employee Director's service as a
member of the Board is terminated by reason of the death or Total Disability of
such director, then all options granted to such director under the 1997 Plan
(whether or not vested at such time) become immediately exercisable and may be
exercised for a period of two years after the effective date of such director's
termination of service on the Board or until the original expiration of the
options, whichever first occurs. In the event that a Non-Employee Director
retires on or after age 65 and after 10 years of service as a director, all
options granted to such director will become immediately exercisable and may be
exercised for five years after the date of retirement or until the expiration of
the stated term of the option, whichever first occurs.
Other Provisions
Adjustments; Acceleration. The 1997 Plan provides for certain adjustments
to options granted under the Plan upon the occurrence of certain specified
events. The number and kind of shares available under the 1997 Plan, as well as
the number, kind and price of shares subject to outstanding options, are subject
to adjustment in the event of a reorganization, merger, sale of assets,
recapitalization, stock split, stock dividend, exchange offer or similar event.
Adjustments to options granted to Non-Employee Directors may only be made to the
extent that such adjustments (i) are consistent with applicable law, (ii) are,
in the case of a Change in Control Event, effected pursuant to a plan of
reorganization approved by shareholders, and (iii) are consistent with
adjustments to options granted under the 1997 Plan held by persons other than
executive officers or directors of the Company.
The 1997 Plan also provides for full vesting and acceleration of options
(subject to certain limitations applicable to persons subject to Section 16 of
the Exchange Act) in the event of a Change in Control Event affecting the
Company. The Committee, however, prior to the Change in Control Event, may
determine that there will be no such acceleration of benefits. (A Change in
Control Event is generally defined to include liquidation of the Company, the
sale of substantially all of the Company's business or assets, an acquisition by
one person (or group of
15
<PAGE>
persons) of at least 20% of the ownership of the Company, the replacement of the
majority of the members of the incumbent Board of Directors (excluding
replacement directors nominated by the incumbent Board of Directors), or mergers
and similar transactions which result in a 50% change in ownership, subject to
certain exceptions.)
Tax Withholding. Upon exercise of any option, the Company has the right at
its option to (i) require the Participant to pay or provide for payment of the
amount of any taxes which the Company may be required to withhold with respect
to such option event or payment or (ii) deduct from any amount payable in cash
the amount of any taxes which the Company may be required to withhold with
respect to such cash payment. In any case where a tax is required to be
withheld in connection with the delivery of shares of Common Stock, the
Committee may in its sole discretion grant to the Participant the right to
elect, pursuant to such rules and subject to such conditions as the Committee
may establish, to have the Company reduce the number of shares to be delivered
by (or otherwise reacquire) the appropriate number of shares valued at their
then Fair Market Value to satisfy such withholding obligation.
Termination of or Changes to the 1997 Plan. The authority to grant new
options under the 1997 Plan terminates on April 24, 2007, unless the 1997 Plan
is terminated prior to that time by the Board of Directors. Such termination
typically will not affect rights of participants, which accrue prior to such
termination. The Board of Directors may, without shareholder approval,
terminate, suspend or amend the 1997 Plan at any time. However, the Board of
Directors may not increase the maximum number of shares which may be delivered
pursuant to options granted under the 1997 Plan, materially increase the
benefits accruing to Participants under the 1997 Plan or materially change the
requirements as to eligibility to participate in the 1997 Plan. Amendment of
the 1997 Plan will not, without the written consent of a Participant, adversely
affect such Participant's rights under an option previously granted.
Amendments to Options. Subject to certain limitations, the Committee may
waive conditions of or limitations on options to Eligible Employees without the
consent of a Participant. In addition, the Committee may make other changes to
the terms and conditions of options that do not affect in any manner materially
adverse to the Participant, his or her rights and benefits under an option.
However, the Committee may not, without prior shareholder approval (except in
the case of an adjustment as provided under the plan), (i) authorize the
amendment of outstanding options to reduce the exercise price, or (ii) cancel
and replace outstanding options with similar options having an exercise or base
price that is lower.
Federal Income Tax Consequences of Options Under the 1997 Plan
The federal income tax consequences of the 1997 Plan under current federal
law, which is subject to change, are summarized in the following discussion,
which deals with the general tax principles applicable to the 1997 Plan. State
and local tax consequences are beyond the scope of this summary.
Nonqualified Stock Options. No taxable income will be realized by an
option holder upon the grant of a Nonqualified Stock Option under the 1997 Plan.
When the holder exercises the Nonqualified Stock Option, however, he or she will
generally recognize ordinary income equal to the difference between the option
price and the fair market value of the shares at the
16
<PAGE>
time of exercise. The Company is generally entitled to a corresponding deduction
at the same time and in the same amounts as the income recognized by the option
holder. Upon a subsequent disposition of the Common Stock, the option holder
will realize short-term or long-term capital gain or loss, depending on how long
the Common Stock is held. The Company will not be entitled to any further
deduction at that time.
Incentive Stock Options. An employee who is granted an Incentive Stock
Option under the 1997 Plan does not recognize taxable income either on the date
of its grant or on the date of its exercise, provided that, in general, the
exercise occurs during employment or within three months after termination of
employment. However, any appreciation in value of the Common Stock after the
date of the grant will be includable in the participant's federal alternative
minimum taxable income at the time of exercise in determining liability for the
alternative minimum tax. If Common Stock acquired pursuant to an Incentive
Stock Option is not sold or otherwise disposed of within two years from the date
of grant of the option nor within one year after the date of exercise, any gain
or loss resulting from disposition of the Common Stock will be treated as long-
term capital gain or loss. If stock acquired upon the exercise of an Incentive
Stock Option is disposed of prior to the expiration of such holding periods (a
"Disqualifying Disposition"), the participant generally will recognize ordinary
income at the time of such Disqualifying Disposition equal to the difference
between the exercise price and the fair market value of the Common Stock on the
date the Incentive Stock Option is exercised or, if less, the excess of the
amount realized on the Disqualifying Disposition over the exercise price. Any
remaining gain or net loss is treated as a short-term or long-term capital gain
or loss, depending upon how long the Common Stock is held. Unlike the case in
which a Nonqualified Stock Option is exercised, the Company is not entitled to a
tax deduction upon either the grant or exercise of an Incentive Stock Option or
upon disposition of the Common Stock acquired pursuant to such exercise, except
to the extent that the employee recognizes ordinary income in a Disqualifying
Disposition.
Special Rules Governing Persons Subject to Section 16(b). Under the
federal tax law, special rules may apply to participants in the 1997 Plan who
are subject to the restrictions on resale of the Company's Common Stock under
Section 16(b) of the Exchange Act. These rules, which effectively take into
account the Section 16(b) restrictions, apply in limited circumstances and may
impact the timing or amount of income recognized by these persons with respect
to options under the 1997 Plan.
Accelerated Payments. If, as a result of certain changes in control of the
Company, a participant's options become immediately exercisable, the additional
economic value, if any, attributable to the acceleration may be deemed a
"parachute payment." The additional value generally will be deemed a parachute
payment if such value, when combined with the value of other payments that are
deemed to result from the change in control, equals or exceeds a threshold
amount equal to 300% of the participant's average annual taxable compensation
over the five calendar years preceding the year in which the change in control
occurs. In such case, the excess of the total parachute payments over such
participant's average annual taxable compensation will be subject to a 20% non-
deductible excise tax in addition to any income tax payable. The Company will
not be entitled to a deduction for that portion of any parachute payment, which
is subject to the excise tax.
17
<PAGE>
Section 162(m) Limits. Notwithstanding the foregoing discussion with
respect to the deductibility of compensation under the 1997 Plan by the Company,
Section 162(m) of the Code would render non-deductible to the Company certain
compensation to certain employees required to be named in the Summary
Compensation Table (i.e., the Named Executive Officers) in excess of $1,000,000
in any year unless such excess compensation is "performance-based" (as defined
in the Code) or is otherwise exempt from these new limits on deductibility. The
applicable conditions of an exemption for performance-based compensation plans
include, among others, a requirement that the shareholders approve the material
terms of the plan. The Company believes that options granted (to the extent
granted at a price not less than market price on the date of grant) are exempt
from such limits as performance-based compensation. However, in light of
uncertainties regarding its ultimate interpretation, no assurances can be given
that all compensation intended to so qualify will in fact be deductible, if the
nonqualifying amount should, together with other non-exempt compensation, paid
to a Named Executive Officer, exceed $1,000,000. As of the date of this Proxy
Statement, no Named Executive Officer of the Company has ever received
compensation in excess of $1,000,000 in any year.
Specific Benefits. Except for the fixed annual option grants to Non-
Employee Directors and the conditional awards granted described above, the
number of options to be granted to Participants under the 1997 Plan in addition
to is subject to the discretion of the Committee and is therefore not
determinable. In addition, the gains, if any, to be realized by optionees upon
exercise of any options granted under the 1997 Plan are dependent on the future
performance of the Common Stock and on overall market conditions and cannot be
determined or estimated at this time.
STATEMENT ON CORPORATE GOVERNANCE
Board Operations and Meetings
The Board held five meetings during 1999, and all of the directors attended
at least 75% of the Board meetings. In addition, all of the directors attended
at least 75% of the committee meetings of which they were members.
Committee Structure
Although the full Board considers all major decisions of Amerigon, the
Board has established two standing committees to more fully address certain
areas of importance to Amerigon. The Board has established the following two
committees, each of which is comprised only of non-employee Directors:
. Audit Committee: The Audit Committee provides advice and assistance to the
Board of Directors on accounting and financial reporting practices of Amerigon.
It also reviews the scope of audit work and findings of the firm of independent
public accountants who serve as auditors of Amerigon and monitors the work of
Amerigon's internal auditors. The Audit Committee consists of Messrs. Anderson,
Clark, and Paulsen. The Audit Committee held no meetings in 1999.
18
<PAGE>
. Compensation Committee: The Compensation Committee reviews and makes
recommendations to the Board of Directors concerning the compensation
arrangements of Amerigon's executive officers and administers the 1997 Stock
Option Plan to determine awards to be made thereunder. The Compensation
Committee consists of Messrs. Anderson, Clark, and Paulsen. The Compensation
Committee held two meetings in 1999.
DIRECTORS' COMPENSATION
No retainer, consulting, or other fees (other than reimbursement for
expenses incurred in attending Board of Directors and committee meetings) are
paid to Directors as consideration for their service to Amerigon in their
capacity as directors, except for the options described below.
Pursuant to the 1997 Stock Option Plan, each Non-Employee Director of
Amerigon is automatically granted options to purchase 1,000 shares of Class A
Common Stock on the first business day of each calendar year. The exercise
price of these options is the fair market value of shares of the Class A Common
Stock on the date of the grant and the option has a term of ten years (subject
to reduction under certain circumstances).
In addition, on June 23, 1999, two non-employee directors, Roy A. Anderson
and James Paulsen, who were not affiliated with either Big Beaver or Westar
Capital, were awarded additional grants of stock options by the Board of
Directors (with Messrs. Anderson and Paulson abstaining from such decision),
because the Board believed that these individuals should receive equity
compensation in addition to that which would be awarded under the 1997 Stock
Option Plan as non-employee directors. The Board noted that Mr. Anderson
already had certain options because of his previous service and that Mr. Paulsen
had no stock ownership and, thus, awarded grants of 7,500 shares and 15,000
shares of Class A Common Stock, respectively. Each grant had a term of 10
years, vesting over four years and with an exercise price equal to the fair
market value on the date of grant.
19
<PAGE>
PERFORMANCE GRAPH
The graph below compares the performance of the Class A Common Stock to
that of the Nasdaq Stock Market -- US Companies Index and the Nasdaq Non-
Financial Index for the period commencing December 31, 1993 and ending December
31, 1999. During this period, Amerigon has been in the development stage.
The indexes assume that the value of the investment in Amerigon's common
stock and in each index was $100 on December 31, 1993. The total shareholder
returns depicted in the graph are not necessarily indicative of future
performance.
<TABLE>
<CAPTION>
[PERFORMANCE GRAPH APPEARS HERE]
Fiscal Year Ending
================================================================================================================
Company/Index/ Market 1993 1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Amerigon Incorporated 100.00 120.00 107.50 58.75 25.00 3.44 6.00
- ----------------------------------------------------------------------------------------------------------------
NASDAQ Non- 100.00 50.75 72.34 103.11 124.39 230.49 465.48
Financial Index (NDX)
- ----------------------------------------------------------------------------------------------------------------
NASDAQ Market 100.00 97.56 137.12 168.91 206.73 289.91 538.87
Index-U.S.
Companies (IXQ)
================================================================================================================
</TABLE>
20
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Class A Common Stock
The table below sets forth certain information regarding the beneficial
ownership of the Class A Common Stock as of the Record Date by (1) each person
who is known by Amerigon to own beneficially more than 5% of the outstanding
shares of Class A Common Stock; (2) each director and/or nominee for director;
(3) each of Amerigon's executive officers identified in the compensation table
under "Executive Compensation" (the "Named Executive Officers"); and (4) all
executive officers and directors of Amerigon as a group.
<TABLE>
<CAPTION>
Name and Address of Amount Beneficially Owned and Nature
Beneficial Owner (1) of Beneficial Ownership Percent of Class
===================================================================================================================
<S> <C> <C>
Oscar B. Marx (2) 3,321,388 63.7%
- -------------------------------------------------------------------------------------------------------------------
Paul Oster (2) 3,303,388 63.4%
- -------------------------------------------------------------------------------------------------------------------
Big Beaver (3) 2,686,567 58.5%
- -------------------------------------------------------------------------------------------------------------------
Westar Capital (3) 2,686,567 58.5%
- -------------------------------------------------------------------------------------------------------------------
Lon E. Bell (4) 233,064 12.0%
- -------------------------------------------------------------------------------------------------------------------
Richard A. Weisbart (5) 82,700 4.2%
- -------------------------------------------------------------------------------------------------------------------
Daniel R. Coker (6) 37,880 1.9%
- -------------------------------------------------------------------------------------------------------------------
John W. Clark (7) 14,500 *
- -------------------------------------------------------------------------------------------------------------------
James L. Mertes (8) 24,554 1.3%
- -------------------------------------------------------------------------------------------------------------------
James J. Paulsen (9) 4,000 *
- -------------------------------------------------------------------------------------------------------------------
Roy A. Anderson (9) 8,833 *
- -------------------------------------------------------------------------------------------------------------------
All executive officers and directors as a
group (9 persons) (2) (4) (5) (6) (7) (8) (9) 7,043,604 80.7%
===================================================================================================================
</TABLE>
* Holdings represent less than 1% of all shares outstanding.
NOTES TO STOCK OWNERSHIP TABLE:
(1) For all shareholders listed, the address is c/o Amerigon Incorporated, 5462
Irwindale Avenue, Irwindale, California 91706.
(2) Includes 4,500 share of Series A Preferred Stock owned by Big Beaver,
convertible on the Record Date to 2,686,567 shares of Class A Common Stock;
a contingent warrant for 523,530 shares, exerciseable upon the exercise of
any of the Class A Warrants governed by the Warrant Agreement dated February
12, 1997; a Contingent Warrant for 9,225 shares, exerciseable upon the
exercise of any of the Common Stock Purchase Warrants dated December 21,
1998 issued to Spencer Trask Securities Inc., Adam K. Stern, Roger K.
Baumberger, and Matthew Schilowitz; a contingent warrant for 4,428 shares,
exerciseable upon the exercise of either of the Warrants to Purchase Class A
Common Stock dated December 29, 1995 issued to Sutro & Co. and Lido
Consulting, Inc.; a contingent warrant for 70,258 shares, exercisable upon
the exercise of options to purchase an aggregate of 1,700 units (each Unit
consisting of 56 shares of Class A Common Stock and Class A Warrants to
purchase 56 shares of Class A Common Stock) issued to D.H. Blair Investment
Banking Corp, and a contingent warrant for 7,380 shares, exerciseable upon
the exercise of the Common Stock Purchase Warrant dated June 8, 1999 issued
to Spencer Trask Securities. Messrs. Marx and Oster are partners in W III H
Partners, L.P., the majority owner of Big Beaver.
(3) Includes 4,500 shares of Series A Preferred Stock for each of Big Beaver and
Westar Capital convertible on the Record Date into 2,686,567 shares of Class
A Common Stock.
(4) Includes an aggregate of 15,000 escrowed shares, for which Dr. Bell has
transferred to three trusts created for the benefit of his children. Dr.
Bell and his wife are co-trustees of these trusts and share voting power and
investment power with respect to these shares.
(5) Includes 82,000 shares issuable within 60 days of the Record Date upon
exercise of options granted under the 1993 and/or 1997 Stock Option Plans.
(6) Includes 35,880 shares issuable within 60 days of the Record Date upon
exercise of options granted under the 1993 and/or 1997 Stock Option Plans.
21
<PAGE>
(7) Includes 12,000 shares issuable within 60 days of the Record Date upon
exercise of options granted under the 1993 and/or 1997 Stock Option Plans.
(8) Includes 24,554 shares issuable within 60 days of the Record Date upon
exercise of options granted under the 1993 and/or 1997 Stock Option Plans
(9) All shares issuable within 60 days of the Record Date upon exercise of non-
qualified options.
Series A Preferred Stock
The table below sets forth certain information regarding the beneficial
ownership of Series A Preferred Stock as of March 31, 2000 by each person who is
known by Amerigon to own beneficially more than 5% of the outstanding shares of
Series A Preferred Stock.
<TABLE>
<CAPTION>
====================================================================================================================
Name and Address of Amount Beneficially Owned and Nature Percent of Class
Beneficial Owner (1) of Beneficial Ownership
====================================================================================================================
<S> <C> <C>
Big Beaver 4,500 (2) 50% (3)
Westar Capital 4,500 (2) 50% (3)
====================================================================================================================
</TABLE>
NOTES TO STOCK OWNERSHIP TABLE:
(1) For all shareholders listed, the address is c/o Amerigon Incorporated, 5462
Irwindale Avenue, Irwindale, California 91706.
(2) On the Record Date, the 4,500 shares of Series A Preferred Stock for each of
Big Beaver and Westar Capital was convertible into 2,686,567 shares of Class
A Common Stock for a total of 5,373,134 common shares.
(3) On the Record Date, the 9,000 outstanding shares of Series A Preferred Stock
represented approximately 73.7% of Amerigon's common equity.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The directors comprising the Compensation Committee are Messrs. Anderson,
Clark, and Paulsen. The Committee determines the compensation of the directors
and executive officers of Amerigon, including the compensation in the form of
stock options under Amerigon's 1997 Stock Option Plan.
Amerigon's executive compensation programs are designed to provide
competitive levels of compensation in order to attract, retain and motivate
highly qualified employees; tie individual total compensation to individual and
Amerigon performance; and align the interests of directors and executive
officers with those of Amerigon's shareholders. Amerigon's executive
compensation consists of three components: base salary, bonus and stock options.
Base Salaries. In determining salaries for executive officers, the
Committee reviews base salary ranges for competitive positions in the market.
The Committee generally attempts to set base salary at or near the midpoint of
prevailing salaries for comparable positions at comparable companies. In
determining annual increases in base salary, the Committee considers (in
addition to competitive factors) the recommendations of Amerigon's Chief
Executive Officer and, in some instances, other members of senior management,
although no officer makes recommendations or participates in decisions with
respect to his or her own compensation. Management's recommendations and the
Committee's determinations are based on a subjective
22
<PAGE>
assessment of the relative contributions made by the executive officer to the
success of Amerigon in achieving its strategic objectives. Such contributions
are measured on the basis of various subjective and objective criteria, which
are appropriate for the officer's position and responsibilities within Amerigon.
Examples of such criteria include leadership, division or department performance
relative to Amerigon's budget and strategic plan for the year, achievement of
certain project milestones, and improvements in customer satisfaction.
Bonuses. The Committee may, in its discretion, award cash bonuses to
executive officers as an additional performance incentive and to recognize
extraordinary contributions to Amerigon's performance relative to its strategic
plan. Such bonuses are subjectively determined by the Committee using
substantially the same processes and factors as are described above for
determining salary increases, but without regard to competitive factors. The
Committee also favors performance-based bonuses relating to achievement of
milestone objectives.
CCS(TM) Incentive Bonus Plan. At its June 16, 1998 meeting, the Board of
Directors adopted a "Project CCS Incentive Bonus Plan" to provide incentives for
all employees to contribute to the success of the CCS project. All full-time
employees of Amerigon on or after January 1, 1998 were eligible participants in
the Plan. Bonuses under the Plan were awarded and calculated based on whether
certain sales and production goals for Climate Control Seats(TM) were achieved,
with five different "tiers" of job classifications being eligible for bonuses of
varying percentages of annual salary. These percentages increase proportionally
with the degree of involvement in the development of CCS products of the
employees in that classification. The largest bonus payable under the Plan
would be awarded to "Tier I" employees (i.e., the Chief Executive Officer and
the Chief Operating Officer) when all three goals of the program were met, and
would be equal to one year's salary. The various production goals were met in
1999 and 2000, and the CCS Incentive Bonus Plan has been completed as of March
31, 2000.
Stock Options. Options to purchase Amerigon's Common Stock may be
granted to executive officers under the 1997 Stock Option Plan in the discretion
of the Compensation Committee. The Committee believes that such option grants
link the interests of management and shareholders by incentifying management to
build shareholder value.
Stock options are typically granted to an executive officer as an
inducement to commence employment with Amerigon. Thereafter, additional grants
of stock options may be made to such executive officer in the discretion of the
Compensation Committee to reward the performance of such officer or for other
reasons. In determining option grants, the Compensation Committee considers a
number of factors (including the officer's performance, his or her position
within Amerigon, and the number of shares or options currently held by the
officer), although the Compensation Committee does not attach greater weight to
any one factor over the others.
Other Perquisites and Compensation. Mr. Weisbart is the beneficiary of a
Supplemental Executive Retirement Plan (SERP). Under the terms of the SERP, the
Company agrees that it will establish, in its sole discretion, an investment
account into which it may make annual cash contributions that it will invest in
its discretion after consultation with Mr. Weisbart. The Company, in its good
faith discretion, will pay to Mr. Weisbart upon his retirement at age 65 and for
a 10-year period thereafter, annual retirement payments out of the investment
account to the extent the Company determines in good faith that the value of his
stock option plan is less than
23
<PAGE>
$1,000,000. The SERP is an unsecured obligation of the Company, and is an
unfunded plan within the meaning of the Employee Retirement Income Security Act
of 1974 (ERISA).
The Company entered this agreement with Mr. Weisbart because since his
employment by the Company on May 5, 1997, he has acquired experience and
knowledge of considerable value to the Company. It is in the Company's best
interest to offer the SERP, thereby compensating him beyond his regular salary,
as an inducement to Mr. Weisbart to remain in its employ.
Internal Revenue Code Section 162(m). Given the current compensation
levels of Amerigon's executive officers and Amerigon's reported losses for
federal income tax purposes, the Committee does not presently anticipate that
the limitation contained in Section 162(m) of the Internal Revenue Code will
affect the deductibility of compensation paid by Amerigon to its executive
officers.
Roy A. Anderson
John W. Clark
James J. Paulsen
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1999, Roy A. Anderson, John W.
Clark and James J. Paulsen comprised the Compensation Committee. No member of
the Compensation Committee is a former or current officer or employee of
Amerigon. See "Certain Transactions" for a discussion of certain transactions
between Amerigon and Mr. Clark as principal of Westar Capital. See also
"Directors' Compensation" for a discussion of certain stock option awards made
to Messrs. Anderson and Clark by the Board of Directors in June 1999.
EXECUTIVE COMPENSATION
Executive Officers
The positions and biographical descriptions of Dr. Bell and Mr. Weisbart are
included under "Nominees for the Board of Directors."
Mr. Coker, 46, is Vice President of Sales and Marketing, a position he has held
since joining Amerigon in March 1996. Previously, he worked with Arvin, Inc., a
tire pressure sensor manufacturer, from 1986 through 1995 as Vice President and
General Manager of North American Operations. Mr. Coker received his bachelor's
degree from Tennessee Technological University in 1974.
Mr. Mertes, 46, has served as Vice President of Quality and Operations since
1994. He joined Amerigon in December 1993 as Vice President of Quality.
Immediately prior to joining
24
<PAGE>
Amerigon, Mr. Mertes was Director of Quality at TRW Sensor Operations, a unit of
TRW Inc., for two years.
Executive Compensation Table
The following table sets forth information on the compensation of Amerigon's
Chief Executive Officer and its three most highly compensated executive officers
earning at least $100,000 in 1999 (the "Named Executive Officers") for each of
the three most recent fiscal years:
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
- ----------------------------------------------------------------------------------------------------------------------------
Securities
Underlying Options
Name/Position Year Salary Bonus (#) (5)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard A. Weisbart 1999 $194,251 $ 26,030 (2) 180,000
President and Chief 1998 $190,337 $ 77,700 (3) 16,000
Executive Officer 1997 $120,692 (1) $ 45,000 (4) 30,000
- ----------------------------------------------------------------------------------------------------------------------------
Lon E. Bell, Ph.D 1999 $144,490 $ 18,964 (2) 82,500
Vice Chairman of the Board and 1998 $144,070 $ 56,609 (3) 8,000
Chief Technology Officer 1997 $134,784 $ 0 0
- ----------------------------------------------------------------------------------------------------------------------------
Daniel R. Coker 1999 $160,552 $ 13,668 125,000
Vice President of Sales and 1998 $150,722 $ 42,669 14,000
Marketing 1997 $138,170 $ 36,667 900
- ----------------------------------------------------------------------------------------------------------------------------
James L. Mertes 1999 $115,745 $ 9,649 75,000
Vice President of Quality and 1998 $104,942 $ 41,401 8,000
Operations 1997 $105,234 $ 20,500 2,221
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents 8 months salary paid in 1997.
(2) Bonus was awarded in 1999.
(3) Bonus was awarded in 1998, but was paid in 1999.
(4) Bonus was awarded in 1997, but was paid in 1998.
(5) The number of stock options reflects the 1-for-5 reverse stock split that
became effective on January 26, 1999.
25
<PAGE>
OPTION GRANT TABLE
The following table presents additional information concerning the stock options
shown in the Summary Compensation Table and granted to the named executive
officers for fiscal year 1999:
<TABLE>
<CAPTION>
================================================================================================================================
Potential Realizable Value
at Assumed Annual Rates
of Stock Price
Appreciation for Option
Term
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Number of Percent of
Securities Total Options
Underlying Granted to Exercise
Option Employees in or Base Expiration
Name/Position Granted Fiscal Year Price Date 5% 10%
- ---------------------------------------------------------------------------------------------------------------------------------
Richard A. Weisbart 180,000 23.72 $3.06 6/22/2009 $346,275.27 $877,460.35
President and Chief
Executive Officer
- ---------------------------------------------------------------------------------------------------------------------------------
Lon E. Bell, Ph.D 82,500 10.87 $3.06 6/22/2009 $158,709.48 $402,169.33
Vice Chairman of the
Board and Chief
Technology Officer
- ---------------------------------------------------------------------------------------------------------------------------------
Daniel R. Coker 125,000 16.47 $3.06 6/22/2009 $240,468.92 $609,347.46
Vice President of
Marketing and Sales
- ---------------------------------------------------------------------------------------------------------------------------------
James L. Mertes 75,000 9.88 $3.06 6/22/2009 $144,281.35 365,608.48
Vice President of
Quality and Operations
=================================================================================================================================
</TABLE>
Note: The number of stock options reflects the 1-for-5 reverse stock split that
became effective on January 26, 1999.
AGGREGATED OPTION EXERCISES AND YEAR-END VALUES
None of the Named Executive Officers exercised any options during 1999, or held
"in the money" options as of December 31, 1999, which were granted to them by
Amerigon. The following table sets forth information concerning the number of
unexercised stock options held by the named executive officers on December 31,
1999.
<TABLE>
<CAPTION>
===========================================================================================================
Number of Securities Underlying Unexercised Options at
December 31, 1999
- -----------------------------------------------------------------------------------------------------------
Name Exercisable Unexercisable
- ---- ----------- -------------
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lon E. Bell, Ph.D 7,500 83,000
- -----------------------------------------------------------------------------------------------------------
Richard A. Weisbart 55,998 170,002
- -----------------------------------------------------------------------------------------------------------
Daniel R. Coker 27,213 112,687
- -----------------------------------------------------------------------------------------------------------
James L. Mertes 17,887 67,334
===========================================================================================================
</TABLE>
Note: The number of stock options reflects the 1-for-5 reverse stock split
that became effective on January 26, 1999.
26
<PAGE>
CERTAIN TRANSACTIONS
Loan by Big Star
In March 2000, we obtained a loan from Big Star LLC (a limited liability
company owned by Westar Capital and Big Beaver, our two largest shareholders)
for an initial advance of $1.5 million and, at our request and subject to Big
Star's sole discretion, additional advances of up to an additional $2.5 million.
The principal and accrued interest of the initial loan is convertible at any
time into Class A Common Stock at a conversion price equal to $18.8375.
Additional advances will also be convertible based on the average price of the
Class A Common Stock during the ten days preceding such additional advances.
The conversion price of all advances will be adjusted in the event we raise in
excess of $5 million through the sale of equity securities at an issuance price
that is less than the then stated conversion price. The adjusted conversion in
such event will be the price at which such equity securities are sold. The
loans are due on August 31, 2000 and are secured by substantially all of our
assets. Warrants to purchase Class A Common Stock were also issued in
connection with the loan for an amount equal to 10% of the principal amount of
the advances made divided by the conversion price (approximately 8,000 shares).
The exercise price for the warrants and adjustments to their exercise price is
the same as for the loans.
Placement of Preferred Stock
On June 8, 1999, we completed a private placement of 4,500 shares of
Preferred Stock to Westar Capital and 4,500 shares to Big Beaver pursuant to a
Securities Purchase Agreement dated March 29, 1999. The Preferred Shareholders,
which are both private investment companies, paid consideration in an aggregate
amount of $9,001,000 for the Preferred Stock as well as contingent warrants
which are exercisable to the extent that warrants held by entities other than
the Preferred Shareholders are exercised.
The Preferred Stock has voting rights equal to the number of shares of
Class A Common Stock that the Preferred Stock is convertible. The Preferred
Stock can convert into a number of shares of the Class A Common Stock, no par
value, equal to the Preferred Stock's liquidation preference divided by the
conversion price. Each share of Preferred Stock has a liquidation preference
equal to $1,000 plus accrued but unpaid dividends and an initial conversion
price of $1.675, subject to anti-dilution adjustment.
Pursuant to the terms of the Preferred Stock, the size of the Board of
Directors was fixed at seven and the holders of the Preferred Stock have the
right to elect five of the seven directors. The Preferred Shareholders have
agreed to vote for two nominees selected by Westar, two nominees selected by Big
Beaver and one nominee mutually agreeable to the Preferred Shareholders who is
an auto industry expert. As of the Record Date, the Preferred Stock purchased
by the Preferred Shareholders represented approximately 74% of our common equity
(on an as-converted basis, excluding options and warrants).
Mr. Clark, a director of the Company, is a general partner of Westar
Capital Associates II LLC, an affiliate of Westar Capital. Mr. Marx, Chairman of
the Board of the Company, is Chief Executive Officer of Big Beaver and Mr.
Oster, a director of the Company, is Chief Financial Officer of Big Beaver. Both
of these companies
27
<PAGE>
are partners in the credit facility. Further, Mr. Marx and Mr. Oster are
partners in W III H Partners, L.P., the majority owner of Big Beaver. This
transaction, combined with Mr. Clark's, Mr. Marx's and Mr. Oster's membership on
the Board of Directors, could give rise to conflicts of interest.
Sale of Electric Vehicle Assets
When the Board of Directors decided in 1998 to suspend funding the electric
vehicle program (effective August 1998), Dr. Bell, at that time Chairman of the
Board, believed that there were still commercial opportunities worth pursuing
and agreed to fund the program personally in return for a 15% interest in the
subsidiary in which the electric vehicle assets were to be placed (the "AEVT").
In connection with the Company's June 1999 financing, in a transaction that was
approved by the Company's shareholders in May 1999, Dr. Bell sold all of his
Class B Common Stock of Amerigon in exchange for the remaining 85% interest in
AEVT.
AEVT's License of Amerigon's CCS
In April of 1999, Amerigon granted a royalty-free license (the "Agreement")
to AEVT Incorporated ("AEVT") to use CCS technology in connection with the use,
manufacture, advertisement, marketing, and sale of electric vehicles in India,
Sri Lanka, Bangladesh, Pakistan, Nepal, Myanmar, Seychelles, and Maldives (the
"Territory"). Dr. Bell is director and the controlling shareholder of AEVT, a
company developing electric vehicles that at one time was a subsidiary of
Amerigon. The Agreement was entered to enable AEVT to perform its obligations
under the December 16, 1998 letter agreement between AEVT and Sudarshan K.
Maini, Maini Materials Movement and Maini Precision Products, Pvt. Ltd.
The Agreement provides that AEVT may purchase CCS modules from Amerigon at
the same price that Amerigon charges its principal customers, and that AEVT may
purchase CCS parts from Amerigon at 110% of their production cost. AEVT agreed
to pay Amerigon for any royalties or other fees that Amerigon is required to pay
to those it has licensed patents or other intellectual property from as a result
of the Agreement. Amerigon also agreed to provide reasonable technical
assistance to AEVT, including allowing an AEVT representative to study its
production and design facilities for a period of six weeks. The Agreement also
allows AEVT to export complete electric vehicles containing CCS technology to
customers outside of the Territory.
28
<PAGE>
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP served as Amerigon's independent accountants for
the fiscal year ended December 31, 1999, and is expected to continue to serve in
such capacity for the current year. A representative of PricewaterhouseCoopers
LLP will be present at the Annual Meeting and will have the opportunity to make
a statement if they so choose. They will also be available to respond to
appropriate questions at such time.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of the relevant forms and written representations
furnished to Amerigon, there were three reports required by Section 16(a) of the
Exchange Act that were not timely filed during the fiscal year ended December
31, 1999. Each of Messrs. Anderson, Paulsen and Bell reported transactions on a
Form 4, Statement of Changes of Beneficial Ownership, which was not timely
filed.
OTHER MATTERS
If any matters not referred to in this proxy statement should properly come
before the meeting, your "proxy" will vote your shares represented by the proxy
in accordance with his or her judgment. We are not aware of any such matters
which may be presented for action at the meeting. Your proxy may also vote your
shares on matters regarding the conduct of the meeting.
Enclosed with this proxy statement is our Annual Report for the fiscal year
ended December 31, 1999. The Annual Report is enclosed for the convenience of
shareholders only and should not be viewed as part of the proxy solicitation
material. If any person who was a beneficial owner of Class A Common Stock or
Series A Preferred Stock on the Record Date for the Annual Meeting desires
additional copies of the Annual Report, the same will be furnished without
charge upon receipt of a written request. The request should identify the
person making the request as a shareholder of Amerigon as of the Record Date and
should be directed to Richard A. Weisbart, President, Amerigon Incorporated,
5462 Irwindale Avenue, Irwindale, California 91706.
By Order of the Board of Directors,
/s/ Richard A. Weisbart
President and Chief Executive Officer
29
<PAGE>
APPENDIX A
AMERIGON INCORPORATED
1997 STOCK INCENTIVE PLAN
AS AMENDED ON JUNE 23, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
1. THE PLAN............................................................... 1
1.1 Purpose.......................................................... 1
-------
1.2 Administration and Authorization; Power and Procedure............ 1
-----------------------------------------------------
1.3 Participation.................................................... 3
-------------
1.4 Shares Available for Options; Share Limits....................... 3
------------------------------------------
1.5 Grant of Option.................................................. 4
---------------
1.6 Option Period.................................................... 4
-------------
1.7 Limitations on Exercise and Vesting of Options................... 4
----------------------------------------------
1.8 No Transferability............................................... 4
------------------
2. EMPLOYEE OPTIONS....................................................... 5
2.1 Grants........................................................... 5
------
2.2 Option Price..................................................... 5
------------
2.3 Limitations on Grant and Terms of Incentive Stock Options........ 6
---------------------------------------------------------
2.4 Limits on 10% Holders............................................ 6
---------------------
2.5 Cancellation and Regrant/Waiver of Restrictions.................. 7
-----------------------------------------------
3. NON-EMPLOYEE DIRECTOR OPTIONS.......................................... 7
3.1 Participation.................................................... 7
-------------
3.2 Annual Option Grants............................................. 7
--------------------
3.3 Option Price..................................................... 7
------------
3.4 Option Period and Exercisability................................. 8
--------------------------------
3.5 Termination of Directorship...................................... 8
---------------------------
3.6 Adjustments...................................................... 8
-----------
3.7 Acceleration Upon a Change in Control Event...................... 8
-------------------------------------------
3.8 Limitation on Amendments......................................... 9
------------------------
4. OTHER PROVISIONS....................................................... 9
4.1 Rights of Eligible Employees, Participants and Beneficiaries..... 9
------------------------------------------------------------
4.2 Adjustments; Acceleration........................................ 9
-------------------------
4.3 Effect of Termination of Employment..............................11
-----------------------------------
4.4 Compliance with Laws.............................................11
--------------------
4.5 Tax Withholding..................................................11
---------------
4.6 Plan Amendment, Termination and Suspension.......................12
------------------------------------------
4.7 Privileges of Stock Ownership....................................13
-----------------------------
4.8 Effective Date of the Plan.......................................13
--------------------------
4.9 Term of the Plan.................................................13
----------------
4.10 Governing Law/Construction/Severability.........................13
---------------------------------------
4.11 Captions........................................................14
--------
4.12 Effect of Change of Subsidiary Status...........................14
-------------------------------------
4.13 Non-Exclusivity of Plan.........................................14
-----------------------
5. DEFINITIONS............................................................14
5.1 Definitions......................................................14
-----------
</TABLE>
<PAGE>
AMERIGON INCORPORATED
1997 STOCK INCENTIVE PLAN
AS AMENDED ON JUNE 23, 1999
1. THE PLAN.
1.1 Purpose.
-------
The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Options to attract, motivate,
retain and reward key employees, including officers, whether or not directors,
of the Company with awards and incentives for high levels of individual
performance and improved financial performance of the Company and to attract,
motivate and retain experienced and knowledgeable independent directors through
the benefits provided under Article 3. "Corporation" means Amerigon
Incorporated and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in Article 5.
1.2 Administration and Authorization; Power and Procedure.
-----------------------------------------------------
(a) Committee. This Plan shall be administered by and all Options to
---------
Eligible Employees shall be authorized by the Committee. Action of
the Committee with respect to the administration of this Plan shall be
taken pursuant to a majority vote or by written consent of its
members.
(b) Plan Awards; Interpretation; Powers of Committee. Subject to the
------------------------------------------------
express provisions of this Plan, the Committee shall have the
authority:
(i) to determine from among those persons eligible the
particular Eligible Employees who will receive any Options;
(ii) to grant Options to Eligible Employees, determine the price
at which securities will be offered and the amount of securities to be
offered to any of such persons, and determine the other specific terms
and conditions of such Options consistent with the express limits of
this Plan, and establish the installments (if any) in which such
Options shall become exercisable or shall vest, or determine that no
delayed exercisability or vesting is required, and establish the
events of termination of such Options;
<PAGE>
(iii) to approve the forms of Option Agreements (which need not
be identical either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Participants
who are granted Options under Article 2 of this Plan, further define
the terms used in this Plan, and prescribe, amend and rescind rules
and regulations relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights with
respect to, or modify, discontinue, suspend, or terminate any or all
outstanding Options held by Eligible Employees, subject to any
required consent under Section 4.6;
(vi) to accelerate or extend the exercisability or extend the
term of any or all such outstanding Options within the maximum ten-
year term of Options under Section 1.6; and
(vii) to make all other determinations and take such other
action as contemplated by this Plan or as may be necessary or
advisable for the administration of this Plan and the effectuation of
its purposes.
Notwithstanding the foregoing, the provisions of Article 3 relating to Non-
Employee Director Options shall be automatic and, to the maximum extent
possible, self-effectuating, and the discretion of the Committee shall not
extend to such Options in any manner that would be impermissible under Rule
16b-3.
(c) Binding Determinations. Any action taken by, or inaction of, the
----------------------
Corporation, any Subsidiary, the Board or the Committee relating or
pursuant to this Plan shall be within the absolute discretion of that
entity or body and shall be conclusive and binding upon all persons.
No member of the Board or Committee, or officer of the Corporation or
any Subsidiary, shall be liable for any such action or inaction of the
entity or body, of another person or, except in circumstances
involving bad faith, of himself or herself. Subject only to
compliance with the express provisions hereof, the Board and Committee
may act in their absolute discretion in matters within their authority
related to this Plan.
(d) Reliance on Experts. In making any determination or in taking or
-------------------
not taking any action under this Plan, the Committee or the Board, as
the case may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Corporation. No director,
officer or agent of the Company shall be liable for any such action or
determination taken or made or omitted in good faith.
(e) Delegation. The Committee may delegate ministerial, non-
----------
discretionary functions to individuals who are officers or employees
of the Company.
2
<PAGE>
1.3 Participation.
-------------
Options may be granted by the Committee only to those persons that the
Committee determines to be Eligible Employees. An Eligible Employee who has
been granted an Option may, if otherwise eligible, be granted additional Options
if the Committee shall so determine. Non-Employee Directors shall only be
eligible to receive Nonqualified Stock Options granted automatically without
action of the Committee under the provisions of Article 3.
1.4 Shares Available for Options; Share Limits.
------------------------------------------
(a) Shares Available. Subject to the provisions of Section 4.2, the
----------------
capital stock that may be delivered under this Plan shall be shares of
the Corporation's authorized but unissued Common Stock and any shares
of its Common Stock held as treasury shares. The shares may be
delivered for any lawful consideration.
(b) Share Limits. The maximum number of shares of Common Stock that
------------
may be delivered pursuant to all Options (including both Nonqualified
Stock Options and Incentive Stock Options) granted under this Plan
shall not exceed 1,300,000 shares (the "Share Limit"). The maximum
number of shares of Common Stock that may be delivered pursuant to
options qualified as Incentive Stock Options granted under this Plan
is 1,240,000 shares. The maximum number of shares of Common Stock
that may be delivered to Non-Employee Directors under the provisions
of Article 3 shall not exceed 60,000 shares. The maximum number of
shares subject to those options that are granted during any calendar
year to any Eligible Employee shall be limited to 250,000. Each of
the four foregoing numerical limits shall be subject to adjustment as
contemplated by this Section 1.4 and Section 4.2.
(c) Share Reservation; Replenishment and Reissue of Unvested Options.
----------------------------------------------------------------
No Option may be granted under this Plan unless, on the date of grant,
the sum of (i) the maximum number of shares issuable at any time
pursuant to such Option, plus (ii) the number of shares that have
previously been issued pursuant to Options granted under this Plan,
other than reacquired shares available for reissue consistent with any
applicable limitations, plus (iii) the maximum number of shares that
may be issued at any time after such date of grant pursuant to Options
that are outstanding on such date, does not exceed the Share Limit.
Shares that are subject to or underlie Options which expire or for any
reason are cancelled or terminated, are forfeited, fail to vest, or
for any other reason are not paid or delivered under this Plan, as
well as reacquired shares, shall again, except to the extent
prohibited by law, be available for subsequent Options under this
Plan. Except as limited by law, if an Option is settled only in cash,
such Option need not be counted against any of the limits under this
Section 1.4.
3
<PAGE>
1.5 Grant of Option.
---------------
Subject to the express provisions of this Plan, the Committee shall
determine the number of shares of Common Stock subject to each Option and the
price to be paid for the shares. Each Option shall be evidenced by an Option
Agreement signed by the Corporation and, if required by the Committee, by the
Participant.
1.6 Option Period.
-------------
Each Option and all executory rights or obligations under the related
Option Agreement shall expire on such date (if any) as shall be determined by
the Committee, but not later than ten (10) years after the Option Date.
1.7 Limitations on Exercise and Vesting of Options.
----------------------------------------------
(a) Provisions for Exercise. Unless the Committee otherwise expressly
-----------------------
provides, no Option shall be exercisable or shall vest until at least
six months after the initial Option Date, and once exercisable an
Option shall remain exercisable until the expiration or earlier
termination of the Option.
(b) Procedure. Any exercisable Option shall be deemed to be exercised
---------
when the Secretary of the Corporation receives written notice of such
exercise from the Participant, together with any required payment made
in accordance with Section 2.2(a) or 3.3, as the case may be.
(c) Fractional Shares/Minimum Issue. Fractional share interests shall
-------------------------------
be disregarded, but may be accumulated. The Committee, however, may
determine in the case of Eligible Employees that cash, other
securities, or other property will be paid or transferred in lieu of
any fractional share interests. No fewer than 100 shares may be
purchased on exercise of any Option at one time unless the number
purchased is the total number at the time available for purchase under
the Option.
1.8 No Transferability.
------------------
(a) Limit on Exercise and Transfer. Unless otherwise expressly
------------------------------
provided in (or pursuant to) this Section 1.8, by applicable law and
by the Option Agreement, as the same may be amended, (i) all Options
are non-transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or
charge; (ii) Options shall be exercised only by the Participant; and
(iii) amounts payable or shares issuable pursuant to an Option shall
be delivered only to (or for the account of) the Participant.
(b) Exceptions. The Committee may permit Options to be exercised by
----------
and paid to certain persons or entities related to the Participant
pursuant to such conditions and procedures as the Committee may
establish. Any
4
<PAGE>
permitted transfer shall be subject to the condition that the
Committee receive evidence satisfactory to it that the transfer is
being made for estate and/or tax planning purposes or a gratuitous or
donative basis and without consideration (other than nominal
consideration). Notwithstanding the foregoing, Incentive Stock Options
shall be subject to any and all applicable transfer restrictions under
the Code.
(c) Further Exceptions to Limits On Transfer. The exercise and
----------------------------------------
transfer restrictions in Section 1.8(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive benefits in the
event of the Participant's death or, if the Participant has died,
transfers to or exercise by the Participant's beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will or the
laws of descent and distribution,
(iii) transfers pursuant to a QDRO order,
(iv) if the Participant has suffered a disability, permitted
transfers or exercises on behalf of the Participant by his or her
legal representative, or
(v) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for the purpose of
(or who otherwise facilitate) the exercise of Awards consistent with
applicable laws and the express authorization of the Committee.
Notwithstanding the foregoing, Incentive Stock Options shall be subject to
all applicable transfer restrictions under the Code.
2. EMPLOYEE OPTIONS.
2.1 Grants.
------
One or more Options may be granted under this Article to any Eligible
Employee. Each Option granted may be either an Option intended to be an
Incentive Stock Option, or not so intended, and such intent shall be indicated
in the applicable Option Agreement.
2.2 Option Price.
------------
(a) Pricing Limits. The purchase price per share of the Common Stock
--------------
covered by each Option shall be determined by the Committee at the
time of the grant, but in the case of Incentive Stock Options shall
not be less than 100% (110% in the case of a Participant who owns or
is deemed to own under Section 424(d) of the Code more than 10% of the
total
5
<PAGE>
combined voting power of all classes of stock of the Corporation) of
the Fair Market Value of the Common Stock on the date of grant.
(b) Payment Provisions. The purchase price of any shares purchased on
------------------
exercise of an Option granted under this Article shall be paid in full
at the time of each purchase in one or a combination of the following
methods: (i) in cash or by electronic funds transfer; (ii) by check
payable to the order of the Corporation; (iii) by notice and third
party payment in such manner as may be authorized by the Committee; or
(iv) by the delivery of shares of Common Stock of the Corporation
already owned by the Participant, provided, however, that the
-------- -------
Committee may in its absolute discretion limit the Participant's
ability to exercise an Option by delivering such shares. Shares of
Common Stock used to satisfy the exercise price of an Option shall be
valued at their Fair Market Value on the date of exercise.
2.3 Limitations on Grant and Terms of Incentive Stock Options.
---------------------------------------------------------
(a) $100,000 Limit. To the extent that the aggregate "fair market
--------------
value" of stock with respect to which incentive stock options first
become exercisable by a Participant in any calendar year exceeds
$100,000, taking into account both Common Stock subject to Incentive
Stock Options under this Plan and stock subject to incentive stock
options under all other plans of the Company or any parent
corporation, such options shall be treated as nonqualified stock
options. For this purpose, the "fair market value" of the stock
subject to options shall be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options
shall be reduced first. To the extent a reduction of simultaneously
granted options is necessary to meet the $100,000 limit, the Committee
may, in the manner and to the extent permitted by law, designate which
shares of Common Stock are to be treated as shares acquired pursuant
to the exercise of an Incentive Stock Option.
(b) Option Period. Each Option and all rights thereunder shall expire
-------------
no later than ten years after the Option Date.
(c) Other Code Limits. There shall be imposed in any Option Agreement
-----------------
relating to Incentive Stock Options such terms and conditions as from
time to time are required in order that the Option be an "incentive
stock option" as that term is defined in Section 422 of the Code.
2.4 Limits on 10% Holders.
---------------------
No Incentive Stock Option may be granted to any person who, at the
time the Option is granted, owns (or is deemed to own under Section 424(d) of
the Code) shares of outstanding Common Stock possessing more than 10% of the
total combined
6
<PAGE>
voting power of all classes of stock of the Corporation, unless the exercise
price of such Option is at least 110% of the Fair Market Value of the stock
subject to the Option and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.
2.5 Cancellation and Regrant/Waiver of Restrictions.
-----------------------------------------------
Subject to Section 1.4 and Section 4.6 and the specific limitations on
Options contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible Employee
any adjustment in the number of shares subject to, the restrictions upon or the
term of, an Option granted under this Article by cancellation of an outstanding
Option and a subsequent regranting of an Option, by amendment, by substitution
of an outstanding Option, by waiver or by other legally valid means. Such
amendment or other action may provide for a greater or lesser number of shares
subject to the Option, or provide for a longer or shorter vesting or exercise
period.
3. NON-EMPLOYEE DIRECTOR OPTIONS.
3.1 Participation.
-------------
Options under this Article 3 shall be made only to Non-Employee
Directors and shall be evidenced by Option Agreements substantially in the form
of Exhibit A hereto.
3.2 Annual Option Grants.
--------------------
(a) Annual Options. On the first business day of each calendar year
--------------
during the term of this Plan, commencing with the first business day
occurring in 1998, there shall be granted automatically (without any
action by the Committee or the Board) a Nonqualified Stock Option (the
Option Date of which shall be such date) to each Non-Employee Director
then in office to purchase 5,000 shares of Common Stock.
(b) Maximum Number of Shares. Annual grants that would otherwise
------------------------
exceed the maximum number of shares under Section 1.4(a) shall be
prorated within such limitation. A Non-Employee Director shall not
receive more than one Nonqualified Stock Option under this Section 3.2
in any calendar year.
3.3 Option Price.
------------
The purchase price per share of the Common Stock covered by each
Option granted pursuant to Section 3.2 hereof shall be 100 percent of the Fair
Market Value of the Common Stock on the Option Date. The exercise price of any
Option granted under this Article shall be paid in full at the time of each
purchase in cash or by check or in shares of Common Stock valued at their Fair
Market Value on the date of exercise of the Option, or partly in such shares and
partly in cash, provided that any such
-------------
7
<PAGE>
shares used in payment shall have been owned by the Participant at least six
months prior to the date of exercise.
3.4 Option Period and Exercisability.
--------------------------------
Each Option granted under this Article 3 and all rights or obligations
thereunder shall expire ten years after the Option Date and shall be subject to
earlier termination as provided below. Subject to section 3.5 below, each
Option granted under Section 3.2 shall become exercisable on the first
anniversary of the Option Date.
3.5 Termination of Directorship.
---------------------------
If a Non-Employee Director's services as a member of the Board of
Directors terminate for any reason other than Total Disability, death or
retirement, any portion of an Option granted pursuant to this Article which is
not then exercisable shall terminate and any portion of such Option which is
then exercisable may be exercised for two years after the date of such
termination or until the expiration of the stated term, whichever first occurs.
If a Non-Employee Director's services as a member of the Board of Directors
terminate because of Total Disability or death, then all Options granted
pursuant to this Article shall become immediately exercisable and may be
exercised for two years after the effective date of the termination of service
or until the expiration of the stated term, whichever first occurs. If a Non-
Employee Director retires on or after age 65 and after ten years of service as a
Director, all Options granted pursuant to this Article shall become immediately
exercisable and may be exercised for five years after the date of retirement or
until the expiration of the stated term, whichever first occurs.
3.6 Adjustments.
-----------
Options granted under this Article 3 shall be subject to adjustment as
provided in Section 4.2, but only to the extent that (a) such adjustment and the
Committee's actions in respect thereof satisfy the requirements of all
applicable law, (b) such adjustment in the case of a Change in Control Event is
effected pursuant to the terms of a reorganization agreement approved by
shareholders of the Corporation, and (c) such adjustment is consistent with
adjustments to Options held by persons other than executive officers or
directors of the Corporation.
3.7 Acceleration Upon a Change in Control Event.
-------------------------------------------
Upon the occurrence of a Change in Control Event, each Option granted
under Section 3.2 hereof shall become immediately exercisable in full; provided,
however, that none of the Options granted under Section 3.2 shall be accelerated
to a date less than six months after the Award Date of such Option. To the
extent that any Option granted under this Article 3 is not exercised prior to
(i) a dissolution of the Corporation or (ii) a merger or other corporate event
that the Corporation does not survive, and no provision is (or consistent with
the provisions of Section 3.7 can be) made for the assumption, conversion,
substitution or exchange of the Option, the Option shall terminate upon the
occurrence of such event.
8
<PAGE>
3.8 Limitation on Amendments.
------------------------
The provisions of this Article 3 shall not be amended more than once
every six months (other than as may be necessary to conform to any applicable
changes in the Code or the rules thereunder).
4. OTHER PROVISIONS.
4.1 Rights of Eligible Employees, Participants and Beneficiaries.
------------------------------------------------------------
(a) Employment Status. Status as an Eligible Employee shall not be
-----------------
construed as a commitment that any Option will be made under this Plan
to an Eligible Employee or to Eligible Employees generally.
(b) No Employment Contract. Nothing contained in this Plan (or in any
----------------------
other documents related to this Plan or to any Option) shall confer
upon any Eligible Employee or other Participant any right to continue
in the employ or other service of the Company or constitute any
contract or agreement of employment or other service, nor shall
interfere in any way with the right of the Company to change such
person's compensation or other benefits or to terminate the employment
of such person, with or without cause, but nothing contained in this
Plan or any document related hereto shall adversely affect any
independent contractual right of such person without his or her
consent thereto.
(c) Plan Not Funded. Awards payable under this Plan shall be payable
---------------
in shares or from the general assets of the Corporation, and (except
as provided in Section 1.4(c)) no special or separate reserve, fund or
deposit shall be made to assure payment of such Awards. No
Participant, Beneficiary or other person shall have any right, title
or interest in any fund or in any specific asset (including shares of
Common Stock, except as expressly otherwise provided) of the Company
by reason of any Option hereunder. Neither the provisions of this
Plan (or of any related documents), nor the creation or adoption of
this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a
fiduciary relationship between the Company and any Participant,
Beneficiary or other person. To the extent that a Participant,
Beneficiary or other person acquires a right to receive payment
pursuant to any Option hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Company.
4.2 Adjustments; Acceleration.
-------------------------
(a) Adjustments. If there shall occur any extraordinary dividend or
-----------
other extraordinary distribution in respect of the Common Stock
(whether in the form of cash, Common Stock, other securities, or other
property), or any recapitalization, stock split (including a stock
split in the form of a stock dividend), reverse stock split,
reorganization, merger, combination,
9
<PAGE>
consolidation, split-up, spin-off, repurchase, or exchange of Common
Stock or other securities of the Corporation, or there shall occur any
other like corporate transaction or event in respect of the Common
Stock or a sale of substantially all the assets of the Corporation as
an entirety, then the Committee shall, in such manner and to such
extent (if any) as it deems appropriate and equitable (i)
proportionately adjust any or all of (a) the number and type of shares
of Common Stock (or other securities) which thereafter may be made the
subject of Options (including the specific numbers of shares set forth
elsewhere in this Plan), (b) the number, amount and type of shares of
Common Stock (or other securities or property) subject to any or all
outstanding Options, (c) the exercise price of any or all outstanding
Options, or (d) the securities, cash or other property deliverable
upon exercise of any outstanding Options, or (ii) in the case of an
extraordinary dividend or other distribution, merger, reorganization,
consolidation, combination, sale of assets, split up, exchange, or
spin off, make provision for a cash payment or for the substitution or
exchange of any or all outstanding Options or the cash, securities or
property deliverable to the holder of any or all outstanding Options
based upon the distribution or consideration payable to holders of the
Common Stock of the Corporation upon or in respect of such event;
provided, however, in each case, that with respect to Incentive Stock
-------- -------
Options, no such adjustment shall be made which would cause this Plan
to violate Section 424(a) of the Code or any successor provisions
thereto without the written consent of holders materially adversely
affected thereby. In any of such events, the Committee may take such
action sufficiently prior to such event if necessary to permit the
Participant to realize the benefits intended to be conveyed with
respect to the underlying shares in the same manner as is available to
shareholders generally.
(b) Acceleration of Options Upon Change in Control. As to any
----------------------------------------------
Participant who has been granted an Option pursuant to Article 2,
unless prior to a Change in Control Event the Committee determines
that, upon its occurrence, there shall be no acceleration of benefits
under Options or determines that only certain or limited benefits
under Options shall be accelerated and the extent to which they shall
be accelerated, and/or establishes a different time in respect of such
Change in Control Event for such acceleration, then upon the
occurrence of a Change in Control Event each Option shall become
immediately exercisable; provided, however, that in no event shall any
Option be accelerated as to any Section 16 Person to a date less than
six months after the Option Date of such Award. The Committee may
override the limitations on acceleration in this Section 4.2(b) by
express provision in the Option Agreement and may accord any Eligible
Employee a right to refuse any acceleration, whether pursuant to the
Option Agreement or otherwise, in such circumstances as the Committee
may approve. Any acceleration of Options shall comply with applicable
regulatory requirements, including without limitation Section 422 of
the Code.
10
<PAGE>
(c) Possible Early Termination of Accelerated Awards. If any Option
------------------------------------------------
under this Plan (other than an Option granted under Article 3) has
been fully accelerated as permitted by Section 4.2(b) but is not
exercised prior to (i) a dissolution of the Corporation, or (ii) a
reorganization event described in Section 4.2(a) that the Corporation
does not survive, or (iii) the consummation of reorganization event
described in Section 4.2(a) that results in a Change in Control Event
approved by the Board, and no provision has been made for the
survival, substitution, exchange or other settlement of such Option,
such Option shall thereupon terminate.
4.3 Effect of Termination of Employment.
-----------------------------------
The Committee shall establish in respect of each Option granted to an
Eligible Employee the effect of a termination of employment on the rights and
benefits thereunder and in so doing may make distinctions based upon the cause
of termination or otherwise.
4.4 Compliance with Laws.
--------------------
This Plan, the granting and vesting of Options under this Plan and the
issuance and delivery of shares of Common Stock and/or the payment of money
under this Plan or under Options granted hereunder are subject to compliance
with all applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities law and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to assure
compliance with all applicable legal requirements.
4.5 Tax Withholding.
---------------
(a) Cash or Shares. Upon any exercise of any Option or upon the
--------------
disposition of shares of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option prior to satisfaction of the
holding period requirements of Section 422 of the Code, the Company
shall have the right at its option to (i) require the Participant (or
Personal Representative or Beneficiary, as the case may be) to pay or
provide for payment of the amount of any taxes which the Company may
be required to withhold with respect to such Option event or payment
or (ii) deduct from any amount payable in cash the amount of any taxes
which the Company may be required to withhold with respect to such
cash payment. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this
Plan, the Committee may in its sole discretion grant (either at the
time of the Option or thereafter) to the Participant the right to
elect, pursuant to such rules and subject to such
11
<PAGE>
conditions as the Committee may establish, to have the Corporation
reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares valued at their then Fair
Market Value, to satisfy such withholding obligation.
(b) Tax Loans. The Company may, in its discretion, authorize a loan
---------
to an Eligible Employee in the amount of any taxes which the Company
may be required to withhold with respect to shares of Common Stock
received (or disposed of, as the case may be) pursuant to a
transaction described in subsection (a) above. Such a loan shall be
for a term, at a rate of interest and pursuant to such other terms and
conditions as the Company, under applicable law may establish.
4.6 Plan Amendment, Termination and Suspension.
------------------------------------------
(a) Board Authorization. The Board may, at any time, terminate or,
-------------------
from time to time, amend, modify or suspend this Plan, in whole or in
part. No Options may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain
jurisdiction as to Options then outstanding in accordance with the
terms of this Plan.
(b) Shareholder Approval. Any amendment that would (i) materially
--------------------
increase the benefits accruing to Participants under this Plan, (ii)
materially increase the aggregate number of securities that may be
issued under this Plan, or (iii) materially modify the requirements as
to eligibility for participation in this Plan, shall be subject to
shareholder approval only to the extent then required by Section 422
of the Code or applicable law, or deemed necessary or advisable by the
Board.
(c) Amendments to Options. Without limiting any other express
---------------------
authority of the Committee under but subject to the express limits of
this Plan, the Committee by agreement or resolution may waive
conditions of or limitations on Options to Eligible Employees that the
Committee in the prior exercise of its discretion has imposed, without
the consent of a Participant, and may make other changes to the terms
and conditions of Options that do not affect in any manner materially
adverse to the Participant, his or her rights and benefits under an
Option. Notwithstanding anything else contained herein to the
contrary, the Committee shall not, without prior shareholder approval
(i) authorize the amendment of outstanding Options to reduce the
exercise price, as applicable, except as contemplated by Section 4.2,
or (ii) cancel and replace outstanding Options with similar Options
having an exercise or base price which is lower, except as
contemplated by Section 4.2.
(d) Limitations on Amendments to Plan and Options. No amendment,
---------------------------------------------
suspension or termination of this Plan or change of or affecting any
outstanding Option shall, without written consent of the
12
<PAGE>
Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or obligations
of the Corporation under any Option granted under this Plan prior to
the effective date of such change. Changes contemplated by Section 4.2
shall not be deemed to constitute changes or amendments for purposes
of this Section 4.6.
4.7 Privileges of Stock Ownership.
-----------------------------
Except as otherwise expressly authorized by the Committee or this
Plan, a Participant shall not be entitled to any privilege of stock ownership as
to any shares of Common Stock not actually delivered to and held of record by
him or her. No adjustment will be made for dividends or other rights as a
shareholder for which a record date is prior to such date of delivery.
4.8 Effective Date of the Plan.
--------------------------
This Plan shall be effective as of April 24, 1997, the date of Board
approval, subject to shareholder approval within 12 months thereafter.
4.9 Term of the Plan.
----------------
No Option shall be granted more than ten years after the effective
date of this Plan (the "Termination Date"). Unless otherwise expressly provided
in this Plan or in an applicable Option Agreement, any Option theretofore
granted may extend beyond such date, and all authority of the Committee with
respect to Options hereunder shall continue during any suspension of this Plan
and in respect of outstanding Options on such Termination Date.
4.10 Governing Law/Construction/Severability.
---------------------------------------
(a) Choice of Law. This Plan, the Options, all documents evidencing
-------------
Options and all other related documents shall be governed by, and
construed in accordance with the laws of the State of California.
(b) Severability. If any provision shall be held by a court of
------------
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
(c) Plan Construction.
-----------------
(1) Rule 16b-3. It is the intent of the Corporation that
----------
transactions in and affecting Options in the case of Participants who
are or may be subject to Section 16 of the Exchange Act satisfy any
then applicable requirements of Rule 16b-3 so that such persons
(unless they otherwise agree) will be entitled to the benefits of Rule
16b-3 or other exemptive rules under Section 16 of the Exchange Act in
respect of these transactions and will not be subjected to avoidable
liability thereunder. If any provision of this Plan or of any Option
would otherwise frustrate or
13
<PAGE>
conflict with the intent expressed above, that provision to the extent
possible shall be interpreted so as to avoid such conflict. If the
conflict remains irreconcilable, the Committee may disregard the
provision if it concludes that to do so furthers the interest of the
Corporation and is consistent with the purposes of this Plan as to
such persons in the circumstances.
(2) Section 162(m). It is the further intent of the Company that
--------------
Options with an exercise price not less than Fair Market Value on the
date of grant shall qualify as performance-based compensation under
Section 162(m) of the Code, and this Plan shall be interpreted
consistent with such intent.
4.11 Captions.
--------
Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
4.12 Effect of Change of Subsidiary Status.
-------------------------------------
For purposes of this Plan and any Option hereunder, if an entity
ceases to be a Subsidiary a termination of employment shall be deemed to have
occurred with respect to each employee of such Subsidiary who does not continue
as an employee of another entity within the Company.
4.13 Non-Exclusivity of Plan.
-----------------------
Nothing in this Plan shall limit or be deemed to limit the authority
of the Board or the Committee to grant awards or authorize any other
compensation, with or without reference to the Common Stock, under any other
plan or authority.
5. DEFINITIONS.
5.1 Definitions.
-----------
(a) "Beneficiary" shall mean the person, persons, trust or trusts
designated by a Participant or, in the absence of a designation,
entitled by will or the laws of descent and distribution, to receive
the benefits specified in the Option Agreement and under this Plan in
the event of a Participant's death, and shall mean the Participant's
executor or administrator if no other Beneficiary is designated and
able to act under the circumstances.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Change in Control Event" shall mean any of the following:
14
<PAGE>
(i) Approval by the shareholders of the Corporation of the
dissolution or liquidation of the Corporation;
(ii) Approval by the shareholders of the Corporation of an
agreement to merge or consolidate, or otherwise reorganize, with or
into one or more entities that are not wholly owned by the
Corporation, as a result of which less than 50% of the outstanding
voting securities of the surviving or resulting entity immediately
after the reorganization are, or will be, owned by shareholders of the
Corporation immediately before such reorganization (assuming for
purposes of such determination that there is no change in the record
ownership of the Corporation's securities from the record date for
such approval until such reorganization and that such record owners
hold no securities of the other parties to such reorganization);
(iii) Approval by the shareholders of the Corporation of the
sale of substantially all of the Corporation's business and/or assets
to a person or entity which is not wholly owned by the Corporation;
(iv) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act but excluding any person described in and
satisfying the conditions of Rule 13d-1(b)(1) thereunder), becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
more than 20% of the combined voting power of the Corporation's then
outstanding securities entitled to then vote generally in the election
of directors of the Corporation; or
(v) A majority of the Board not being composed of Continuing
Directors.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Commission" shall mean the Securities and Exchange Commission.
(f) "Committee" shall mean the Board or a committee appointed by the
Board to administer this Plan, which committee shall be comprised only
of two or more directors or such greater number of directors as may be
required under applicable law, each of whom, (i) in respect of any
decision at a time when the Participant affected by the decision may
be subject to Section 162(m) of the Code, shall be an "outside"
director within the meaning of Section 162(m) of the Code, and (ii) in
respect of any decision affecting a transaction at a time when the
Participant involved in the transaction may be subject to Section 16
of the Exchange
15
<PAGE>
Act, shall be a "non-employee director" within the meaning of Rule
16b-3(b)(3) promulgated under the Exchange Act.
(g) "Common Stock" shall mean the Common Stock of the Corporation and
such other securities or property as may become the subject of
Options, or become subject to Options, pursuant to an adjustment made
under Section 4.2 of this Plan.
(h) "Company" shall mean, collectively, the Corporation and its
Subsidiaries.
(i) "Continuing Directors" shall mean persons who were members of the
Board on June 17, 1997 or nominated for election or elected to the
Board with the affirmative vote of at least three-fourths of the
directors who were Continuing Directors at the time of such nomination
or election.
(j) "Corporation" shall mean Amerigon Incorporated, a California
corporation and its successors.
(k) "Disinterested" shall mean disinterested within the meaning of any
applicable regulatory requirements, including Rule 16b-3.
(l) "Eligible Employee" shall mean an officer (whether or not a
director) or other key employee of the Company.
(m) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(o) "Fair Market Value" shall mean (i) if the stock is listed or
admitted to trade on a national securities exchange, the closing price
of the stock on the Composite Tape, as published in the Western
Edition of The Wall Street Journal, of the principal national
securities exchange on which the stock is so listed or admitted to
trade, on such date, or, if there is no trading of the stock on such
date, then the closing price of the stock as quoted on such Composite
Tape on the next preceding date on which there was trading in such
shares; (ii) if the stock is not listed or admitted to trade on a
national securities exchange, the last price for the stock on such
date, as furnished by the National Association of Securities Dealers,
Inc. ("NASD") through the NASDAQ National Market Reporting System or a
similar organization if the NASD is no longer reporting such
information; (iii) if the stock is not listed or admitted to trade on
a national securities exchange and is not reported on the National
Market Reporting System, the mean between the bid and asked price for
the stock on such date, as furnished by the NASD or a similar
organization; or (iv) if the stock is not listed or admitted to trade
on a national securities exchange, is not
16
<PAGE>
reported on the National Market Reporting System and if bid and asked
prices for the stock are not furnished by the NASD or a similar
organization, the value as established by the Committee at such time
for purposes of this Plan.
(p) "Incentive Stock Option" shall mean an Option which is designated
as an incentive stock option within the meaning of Section 422 of the
Code, the award of which contains such provisions (including but not
limited to the receipt of shareholder approval of this Plan, if the
award is made prior to such approval) and is made under such
circumstances and to such persons as may be necessary to comply with
that section.
(r) "Nonqualified Stock Option" shall mean an Option that is
designated as a Nonqualified Stock Option and shall include any Option
intended as an Incentive Stock Option that fails to meet the
applicable legal requirements thereof. Any Option granted hereunder
that is not designated as an incentive stock option shall be deemed to
be designated a nonqualified stock option under this Plan and not an
incentive stock option under the Code.
(s) "Non-Employee Director" shall mean a member of the Board of
Directors of the Corporation who is not an officer or employee of the
Company.
(t) "Option" shall mean an option to purchase Common Stock granted
under this Plan. The Committee shall designate any Option granted to
an Eligible Employee as a Nonqualified Stock Option or an Incentive
Stock Option. Options granted under Article 3 shall be Nonqualified
Stock Options.
(u) "Option Agreement" shall mean any writing setting forth the terms
of an Option that has been authorized by the Committee.
(v) "Option Date" shall mean the date upon which the Committee took
the action granting an Option or such later date as the Committee
designates as the Option Date at the time of the Option or, in the
case of Options under Article 3, the applicable dates set forth
therein.
(w) "Option Period" shall mean the period beginning on an Option Date
and ending on the expiration date of such Option.
(x) "Participant" shall mean an Eligible Employee who has been granted
an Option under this Plan and a Non-Employee Director who has been
granted an Option under Article 3 of this Plan.
(y) "Personal Representative" shall mean the person or persons who,
upon the disability or incompetence of a Participant, shall have
acquired on behalf of the Participant, by legal proceeding or
otherwise, the power to
17
<PAGE>
exercise the rights or receive benefits under this Plan and who shall
have become the legal representative of the Participant.
(z) "Plan" shall mean this 1997 Stock Incentive Plan.
(aa) "QDRO" shall mean a qualified domestic relations order as defined
in Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA
(to the same extent as if this Plan were subject thereto), or the
applicable rules thereunder.
(bb) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission pursuant to the Exchange Act, as amended from time to time.
(cc) "Section 16 Person" shall mean a person subject to Section 16(a)
of the Exchange Act.
(dd) "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
(ee) "Subsidiary" shall mean any corporation or other entity a
majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.
(ff) "Total Disability" shall mean a "permanent and total disability"
within the meaning of Section 22(e)(3) of the Code and (except in the
case of a Non-Employee Director) such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may include.
18
<PAGE>
Exhibit A
AMERIGON INCORPORATED
ELIGIBLE DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the _____ day of _____________, 19__, by
and between Amerigon Incorporated, a California corporation (the "Corporation"),
and ________________ (the "Director").
W I T N E S S E T H
-------------------
WHEREAS, the Corporation has adopted and the shareholders of the
Corporation have approved the Amerigon Incorporated 1997 Stock Incentive Plan
(the "Plan"); and
WHEREAS, pursuant to Article 3 of the Plan, the Corporation has
granted an option (the "Option") to the Director upon the terms and conditions
evidenced hereby, as required by the Plan, which Option is not intended as and
shall not be deemed to be an incentive stock option within the meaning of
Section 422 of the Code;
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by the Director, the Corporation and the Director agree to the terms
and conditions set forth herein as required by the terms of the Plan.
1. Option Grant. This Agreement evidences the grant to the Director,
------------
as of ___________, 19__ (the "Option Date"), of an Option to purchase an
aggregate of _____ shares of Common Stock, par value [$____] per share, under
Article 3 of the Plan, subject to the terms and conditions and to adjustment as
set forth herein or pursuant to the Plan.
2. Exercise Price. The Option entitles the Director to purchase
--------------
(subject to the terms of Sections 3 through 5 below) all or any part of the
Option shares at a price per share of $_______, which amount represents the Fair
Market Value of a share on the Option Date.
3. Option Exercisability and Term. The Option will become and remain
------------------------------
exercisable on ______________, 19__, subject to acceleration under Section 3.7
of the Plan. The Option shall terminate on ____________, 19__,* unless earlier
terminated in accordance with the terms of Section 3.4, 3.5, or 3.7 of the Plan.
4. Service and Effect of Termination of Service. The Director agrees
--------------------------------------------
to serve as a director in accordance with the provisions of the Corporation's
Articles of Incorporation, bylaws and applicable law. If the Director's
services as a
- -----------------
*Insert day before the tenth anniversary of the Option Date.
19
<PAGE>
member of the Board shall terminate, this Option shall terminate at the times
and to the extent set forth in Section 3.5 of the Plan.
5. General Terms. The Option and this Agreement are subject to, and
-------------
the Corporation and the Director agree to be bound by, the provisions of the
Plan that apply to the Option. Such provisions are incorporated herein by this
reference. The Director acknowledges receiving a copy of the Plan and reading
its applicable provisions. Capitalized terms not otherwise defined herein shall
have the meaning assigned to such terms in the Plan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERIGON INCORPORATED
(a California corporation)
By ___________________________
Title ________________________
DIRECTOR
_____________________________
(Signature)
_____________________________
(Print Name)
_____________________________
(Address)
_____________________________
(City, State, Zip Code)
20
<PAGE>
CONSENT OF SPOUSE
-----------------
In consideration of the execution of the foregoing Nonqualified Stock
Option Agreement by Amerigon Incorporated, I, _______________________, the
spouse of the Director therein named, do hereby agree to be bound by all of the
terms and provisions thereof and of the Plan.
DATED: ______________, 19__.
Signature of Spouse
21
<PAGE>
PROXY for SERIES A PREFERRED STOCK
AMERIGON INCORPORATED
5462 IRWINDALE AVENUE
IRWINDALE, CALIFORNIA 90041
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Richard A. Weisbart
and James L. Mertes as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated below, all
the shares of Series A Preferred Stock of Amerigon Incorporated held of record
by the undersigned on March 31, 2000 at the annual meeting of shareholders to be
held on May 24, 2000 or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE DIRECTOR NOMINEES IN PROPOSAL (1) AND FOR PROPOSALS (2),
(3) AND (4). WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE
ANNUAL MEETING AND ANY ADJOURNMENTS THEREOF, IN THE DISCRETION OF RICHARD A.
WEISBART AND JAMES L. MERTES IN ACCORDANCE WITH THEIR BEST JUDGMENT.
/X/ Please mark your votes as in this example
PROPOSAL (1): The election of the nominees for director specified in the Proxy
Statement to the Board of Directors: Oscar B. Marx III, Roy A. Anderson, John W.
Clark, Paul Oster and James J. Paulsen.
/ / FOR ALL NOMINEES LISTED ABOVE (EXCEPT AS MARKED TO THE CONTRARY BELOW)
(INSTRUCTION: To withhold authority to vote for any nominee, write that
nominee's name in the space below.)
_______________________________________________________________
PROPOSAL (2): Approval of amendment to the Certificate of Determination of the
Series A Preferred Stock.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
PROPOSAL (3): Approval an amendment to our Articles of Incorporation eliminating
Class B Common Stock and renaming Class A Common Stock as Common Stock.
/ / FOR / / AGAINST / /ABSTAIN
PROPOSAL (4): Approve an amendment to the 1997 Stock Option Plan to increase the
number of shares of Class A Common Stock authorized from 150,000 to 1,300,000.
/ / FOR / / AGAINST / /ABSTAIN
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY CARD. IF SHARES ARE
HELD JOINTLY, EACH HOLDER SHOULD SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES,
GUARDIANS, ATTORNEYS AND AGENTS SHOULD GIVE THEIR FULL TITLES. IF THE
STOCKHOLDER IS A CORPORATION, SIGN IN FULL CORPORATE NAME BY THE AUTHORIZED
OFFICER.
Signature
_________________________
Signature (if jointly held)
_________________________
Dated:
__________________________
2000
<PAGE>
PROXY for SERIES A COMMON STOCK
AMERIGON INCORPORATED
5462 IRWINDALE AVENUE
IRWINDALE, CALIFORNIA 90041
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Richard A. Weisbart
and James L. Mertes as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated below, all
the shares of Class A Common Stock of Amerigon Incorporated held of record by
the undersigned on March 31, 2000 at the annual meeting of shareholders to be
held on May 24, 2000 or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE DIRECTOR NOMINEES IN PROPOSAL (1) AND FOR PROPOSALS (2),
(3) AND (4). WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE
ANNUAL MEETING AND ANY ADJOURNMENTS THEREOF, IN THE DISCRETION OF RICHARD A.
WEISBART AND JAMES L. MERTES IN ACCORDANCE WITH THEIR BEST JUDGMENT.
/X/ Please mark your votes as in this example
PROPOSAL (1): The election of the nominees for director specified in the Proxy
Statement to the Board of Directors: Richard A. Weisbart and Lon E. Bell.
/ / FOR ALL NOMINEES LISTED ABOVE (EXCEPT AS MARKED TO THE CONTRARY BELOW)
(INSTRUCTION: To withhold authority to vote for any nominee, write that
nominee's name in the space below.)
_______________________________________________________________
PROPOSAL (2): Approval of amendment to the Certificate of Determination of the
Series A Preferred Stock.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
PROPOSAL (3): Approval an amendment to our Articles of Incorporation eliminating
Class B Common Stock and renaming Class A Common Stock as Common Stock.
/ / FOR / / AGAINST / /ABSTAIN
PROPOSAL (4): Approve an amendment to the 1997 Stock Option Plan to increase the
number of shares of Class A Common Stock authorized from 150,000 to 1,300,000.
/ / FOR / / AGAINST / /ABSTAIN
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY CARD. IF SHARES ARE
HELD JOINTLY, EACH HOLDER SHOULD SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES,
GUARDIANS, ATTORNEYS AND AGENTS SHOULD GIVE THEIR FULL TITLES. IF THE
STOCKHOLDER IS A CORPORATION, SIGN IN FULL CORPORATE NAME BY THE AUTHORIZED
OFFICER.
Signature
_________________________
Signature (if jointly held)
_________________________
Dated:
__________________________
2000
