<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
INTERSCIENCE COMPUTER CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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
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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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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<PAGE> 2
INTERSCIENCE COMPUTER CORPORATION
600 HAMPSHIRE ROAD, SUITE 105
WESTLAKE VILLAGE, CALIFORNIA 91361
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, APRIL 17, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Interscience Computer Corporation (the "Company") will be held at the principal
executive offices of the Company, located at 600 Hampshire Road, Suite 105,
Westlake Village, California, on Monday, April 17, 2000 at 2:00 p.m. P.S.T. for
the following purposes, as more fully described in the attached Proxy Statement.
1. To elect five members of the Board of Directors to serve until the next
annual meeting of shareholders;
2. To amend the Articles of Incorporation to change the name of the Company
to CaminoSoft Corp.;
3. To amend the Articles of Incorporation to increase the authorized shares
of Common Stock from 10,000,000 to 100,000,000;
4. To approve the Company's 2000 Option Plan; and
5. To consider such other matters and transact such other business as may
properly come before the meeting or any adjournment thereof. The Board
of Directors is not currently aware of any other business to come before
the Annual Meeting.
The Board of Directors has fixed the close of business on March 6, 2000 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Meeting.
Accompanying this Notice are a Proxy and Proxy Statement. IF YOU WILL NOT
BE ABLE TO ATTEND THE MEETING TO VOTE IN PERSON PLEASE COMPLETE, SIGN AND DATE
THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID
ENVELOPE. The Proxy may be revoked at any time prior to its exercise at the
meeting.
By Order of the Board of Directors
Stephen Crosson
Secretary
March 20, 2000
Westlake Village, California
<PAGE> 3
INTERSCIENCE COMPUTER CORPORATION
600 HAMPSHIRE ROAD, SUITE 105
WESTLAKE VILLAGE, CALIFORNIA 91361
ANNUAL MEETING OF SHAREHOLDERS
------------------------
PROXY STATEMENT
------------------------
INTRODUCTION
This Proxy Statement is furnished to the shareholders of Interscience
Computer Corporation, a California corporation (the "Company"), in connection
with the solicitation of proxies by and on behalf of the Board of Directors of
the Company. The proxies solicited hereby are to be voted at the Annual Meeting
of Shareholders of the Company to be held on April 17, 2000 and any and all
adjournments thereof (the "Annual Meeting").
Shareholders of the Company will consider and vote upon the following
proposals: (i) to elect five directors of the Company until the next annual
meeting of shareholders; (ii) to amend the Articles of Incorporation to change
the name of the Company to CaminoSoft Corp.; (iii) to amend the Articles of
Incorporation to increase the authorized number of shares from 10,000,000 to
100,000,000; (iv) to approve the Company's 2000 Stock Option Plan; and (v) to
consider and transact such other business as may properly come before the Annual
Meeting (collectively, the "Proposals").
A form of proxy is enclosed for your use. The shares represented by each
properly executed unrevoked proxy will be voted in accordance with the
recommendations of the Board of Directors, including a vote in favor of the
Proposals, unless a contrary instruction is indicated on the Proxy, in which
case the Proxy shall be voted in accordance with such instructions. If no
direction is made, the shares represented by each properly executed unrevoked
proxy will be voted for the Proposals. IF ANY OTHER BUSINESS IS PROPERLY
PRESENTED AT THE ANNUAL MEETING, THE PROXY CONFERS DISCRETIONARY AUTHORITY TO
AND SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS.
Any proxy given may be revoked at any time prior to the exercise thereof by
filing with Stephen Crosson, Secretary of the Company, an instrument revoking
such proxy or by the filing of a duly executed proxy bearing a later date. Any
shareholder present at the meeting who has given a proxy may withdraw it and
vote his or her shares in person if such shareholder so desires.
It is contemplated that the solicitation of proxies will be made primarily
by mail. Should it however appear desirable to do so in order to ensure adequate
representation of shares at the meeting, officers, agents and employees of the
Company may communicate with shareholders, banks, brokerage houses and others by
telephone, telegraph, or in person to request that proxies be furnished. All
expenses incurred in connection with this solicitation will be borne by the
Company. In following up the original solicitation of proxies by mail, the
Company may make arrangements with brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy materials to the beneficial
owners of the shares and will reimburse them for their expense in so doing. The
Company has no present plans to hire special employees or paid solicitors to
assist in obtaining proxies, but reserves the option of doing so if it should
appear that a quorum otherwise might not be obtained. This Proxy Statement and
the accompanying form of proxy are first being mailed to shareholders on or
about March 22, 2000.
VOTING SECURITIES
Only holders of record of the Company's voting securities at the close of
business on March 6, 2000 (the "Record Date") are entitled to notice of and to
vote at the Annual Meeting. As of March 6, 2000, the Company has issued and
outstanding the following securities, the holders of which are entitled to vote
at the Annual Meeting: 5,704,556 shares of the Company's Common Stock ("Common
Stock"). Each share of
<PAGE> 4
Common Stock that was issued and outstanding on the Record Date is entitled to
one vote at the Annual Meeting. The presence, in person or by proxy, of
shareholders entitled to cast at least a majority of the votes entitled to be
cast by all shareholders will constitute a quorum for the transaction of
business at the Annual Meeting.
Shareholders may cumulate their votes with respect to the election of
directors of the Company if one or more shareholders gives notice at the Annual
Meeting, prior to voting, of an intention to cumulate votes for a nominated
director. A shareholder may cumulate votes by casting for the election of one
nominee a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which his shares are entitled, or by
distributing his votes on the same principal among as many candidates as he sees
fit. If a proxy is marked "FOR" the election of directors, it may, at the
discretion of the proxy holders, be voted cumulatively in the election of
directors.
PROPOSAL 1.
ELECTION OF DIRECTORS
At the Annual Meeting, five directors, who will constitute the entire Board
of Directors, are to be elected to serve until the next Annual Meeting of
Shareholders and until their successors shall be elected and shall qualify. All
nominees have consented to being named herein and have agreed to serve if
elected. The names of such nominees are as follows:
Kyo Paul Jhin
Robert Pearson
Walter Kornbluh
Norman Baker
Steven Spector
Management proxies will be voted FOR the election of all of the above named
nominees unless the shareholders indicate that the proxy shall not be voted for
all or any one of the nominees. If cumulative voting is utilized, the proxy
holders intend to distribute the votes represented by each proxy, unless such
authority is withheld, among the five nominees named, in such proportion as they
see fit. Nominees receiving the highest number of affirmative votes cast, up to
the number of directors to be elected, will be elected as directors.
Abstentions, broker non-votes and instructions on the accompanying proxy card to
withhold authority to vote for one or more of the nominees will result in the
respective nominees receiving fewer votes. If, for any reason, any nominee
should, prior to the Annual Meeting, become unavailable for election as a
Director, an event not now anticipated, the proxies will be voted for such
substitute nominee if any, as may be recommended by management. In no event,
however, shall the proxies be voted for a greater number of persons than the
number of nominees named.
PROPOSAL 2.
NAME CHANGE
The Board of Directors has proposed an amendment to the Articles of
Incorporation (the "Name Amendment") and directed that the Name Amendment be
submitted to the shareholders for approval. The Name Amendment would change the
Company's corporate name to "CaminoSoft Corp."
In the judgment of the Board of Directors, the change of the Company's
corporate name is desirable in view of the significant change in the character
and strategic focus of the business of the Company resulting from the recent
acquisition of the assets of Camino Software Systems, Inc. and the sale of the
Company's fusing agent business. The name change will reflect the fact that the
Company's business plan and principal focus is the now development and marketing
of software systems for data storage and management.
If approved by the shareholders as hereinafter provided, the Name Amendment
will become effective upon the filing of a certificate of amendment relating
thereto with the Secretary of State of California, which
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will occur as soon as reasonably practicable following such approval. The
approval of the Name Amendment requires the affirmative vote of a majority of
the shares present in person or represented by proxy and entitled to vote at the
Annual Meeting. Each outstanding share of Common Stock is entitled to one vote.
Any shares not voted on the Name Amendment (whether by abstention or broker
non-votes) will have the same effect as votes against the Name Amendment.
The Board of Directors recommends a vote "FOR" approval of the Name
Amendment.
PROPOSAL 3.
AMENDMENT TO AUTHORIZED SHARES
The Board of Directors has proposed an amendment to the Articles of
Incorporation, as amended, (the "Authorized Shares Amendment") and directed that
the Authorized Shares Amendment be submitted to the shareholders for approval.
The Amendment would increase the number of authorized shares of the Company's
Common Stock from 10,000,000 to 100,000,000.
As of March 15, 2000, there were 7,629,556 shares of Common Stock
outstanding, and an additional 1,666,500 shares reserved for issuance pursuant
to the exercise of stock options and warrants.
The Board of Directors has deemed it advisable and in the best interests of
the Company to amend the Articles of Incorporation, to increase the authorized
number of shares of Common Stock to 100,000,000. The purpose of such increase is
to place the Company in a position where it will continue to have a sufficient
number of shares of authorized and unissued Company Common Stock which can be
issued for or in connection with such corporate purposes as may, from time to
time, be considered advisable by the Board of Directors. Having such shares
available for issuance in the future will give the Company greater flexibility
and will allow such shares to be issued as determined by the Board of Directors
of the Company without the expense and delay of a special shareholders meeting
to approve such additional authorized capital stock. Such corporate purposes
could include, without limitation: (a) issuance in connection with any desirable
acquisitions which may be presented to the Company, (b) the payment of stock
dividends or issuance pursuant to stock splits, (c) the issuance of Common Stock
upon exercise of options granted under the Company's stock option plan or in
connection with other employee benefit plans, (d) the issuance of Common Stock
upon the conversion of any preferred stock, the exercise of warrants or the
conversion of other securities convertible into Common Stock which may be
outstanding from time to time, and (e) issuance in connection with an offering
to raise capital for the Company.
The authorized shares of Common Stock in excess of those presently issued
will be available for issuance at such times and for such purposes as the Board
of Directors may deem advisable without further action by the shareholders,
except as may be required by the Articles of Incorporation, as amended, and
applicable laws and regulations. Any future issuance of shares will be subject
to the rights of holders of shares of any then outstanding preferred stock.
The Authorized Shares Amendment, if adopted, may have the result of making
it more difficult for any persons or group of persons, other than the current
principal shareholders and management, to acquire control of the Company by
expanding the ability of the Company to issue shares and thereby dilute the
voting power of any person or group that might accumulate shares in order to
attempt to effect a change in control. Although the Authorized Shares Amendment
might have such effect, the Authorized Shares Amendment has been proposed by the
Board of Directors for the reasons set forth above and not for anti-takeover
reasons. The Company is not aware of any present effort to accumulate shares of
Common Stock or to attempt to change control of the Company. The Company has no
present plans to issue additional shares of Common Stock to the current
principal shareholders, the directors, the executive officers or any other
person or entity except, under the Company's stock option plan, pursuant to the
conversion or exercise of outstanding convertible securities or pursuant to a
private placement for up to 1,700,000 shares of Company Common Stock currently
being completed.
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If approved by the shareholders as hereinafter provided, the Authorized
Shares Amendment will become effective upon the filing of a certificate of
amendment relating thereto with the Secretary of State of California, which will
occur as soon as reasonably practicable following such approval. The approval of
the Authorized Shares Amendment requires the affirmative vote of a majority of
the shares present in person or represented by proxy and entitled to vote at the
Annual Meeting. Each outstanding share of Common Stock is entitled to one vote.
Any shares not voted on the Authorized Shares Amendment (whether by abstention
or broker non-votes) will have the same effect as votes against the Authorized
Shares Amendment.
The Board of Directors recommends a vote "FOR" approval of the Authorized
Shares Amendment.
PROPOSAL 4.
2000 STOCK OPTION PLAN
Effective December 8, 1999, the Board of Directors adopted the 2000 Stock
Option Plan (the "Plan"), subject to shareholder approval.
The following summary describes the material features of the Plan.
PURPOSE
The purpose of the Plan is to promote the long-term success of the Company
by attracting, motivating and retaining directors, officers and key employees
and consultants of the Company and its affiliates through the use of competitive
long-term incentives which are tied to shareholder value. The Plan seeks to
balance participants' and shareholder interests by providing incentives to the
participants in the form of stock options which offer rewards for achieving the
long-term strategic and financial objectives of the Company.
COMMON STOCK AVAILABLE
Subject to adjustment as described below, the maximum number of shares of
Common Stock which may be awarded under the Plan may not exceed an aggregate of
1,400,000 shares over the life of the Plan. The Plan provides for equitable
adjustment of the number of shares subject to the Plan and the number of shares
of each subsequent award of stock thereunder and of the unexercised portion of
the stock option award described below in the event of a change in the
capitalization of the Company due to a stock split, stock dividend,
recapitalization, merger or similar event.
ELIGIBILITY
Persons who are eligible to receive stock options granted under the Plan
are those individuals and entities as the Stock Option Committee or such other
committee appointed by the Board of Directors to administer the Plan (the
"Committee") in its discretion determines should be awarded such incentives
given the best interest of the Company.
ADMINISTRATION
The authority to control and manage the operation and administration of the
Plan is vested in the Committee appointed by the Board of Directors from time to
time. Members of the Committee serve at the pleasure of the Board of Directors.
The Committee may from time to time determine which officers, directors and key
employees and consultants of the Company and its affiliates may be granted
options under the Plan, the terms thereof (including, without limitation,
determining whether the option is an incentive stock option ("ISO") and the
times at which the option shall become exercisable), and the number of shares
for which an option or options may be granted. If rights of the Company to
repurchase stock are imposed, the Board of Directors or the Committee may, in
its sole discretion, accelerate, in whole or in part, the time for lapsing of
any rights of the Company to repurchase shares or forfeiture restrictions. The
Board of Directors or the Committee has the sole authority, in its absolute
discretion. to adopt, amend and rescind such rules and regulations, consistent
with the provisions of the Plan, as, in its opinion, may be advisable in the
administration
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of the Plan, to construe and interpret the Plan, the rules and regulations, and
the instruments evidencing options granted under the Plan and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
All decisions, determinations and interpretations of the Committee are binding
on all option holders under the Plan.
GRANT AND EXERCISE OF OPTIONS
All ISOs will have option exercise prices per option share not less than
the fair market value of a share on the date the option is granted, except in
the case of ISOs granted to any person possessing more than 10% of the total
combined voting power of all classes of stock in which case the price will be
not less than 110% of such fair market value. The term of each option may not be
more than 10 years, except that the term of each ISO issued to any person
possessing more than 10% of the voting power of all classes of stock may not be
more than five years.
The vesting schedule for any option granted under the Plan will be
determined by the Board of Directors or the Committee and will be set forth in a
specific option agreement. To the extent not exercised, installments will
accumulate and be exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the option expires. The Committee has
the right to accelerate the exercisability of any option.
Each ISO granted pursuant to the Plan is exercisable, during the optionee's
lifetime, only by the optionee or the optionee's guardian or legal
representative. Neither the option nor any right to purchase stock may be
transferred, assigned or pledged other than by will under the laws of descent
and distribution.
Payment of the purchase price is by cash or check, or, at the discretion of
the Committee, by delivery of a promissory note or such other consideration as
the Committee deems appropriate.
The Committee may, in its discretion, assist any option holder in the
exercise of options granted under the Plan, including the satisfaction of any
tax arising therefrom by (i) authorizing the extension of loans from the
Company, (ii) permitting the option holder to pay the exercise price in
installments or (iii) authorizing a guaranty by the Company of a third party
loan to the option holder.
AMENDMENT AND TERMINATION
The Board of Directors may at any time suspend or terminate the Plan, and
may amend it from time to time in such respects as the Board of Directors may
deem advisable. Unless terminated by the Board of Directors earlier, the Plan
will terminate on December 8, 2009.
As of March 15, 2000, eleven individuals had been granted options for the
purchase of 966,500 shares.
MARKET VALUE OF UNDERLYING SECURITIES
On March 17, 2000, the closing bid price for the Company's Common Stock on
the OTC Electronic Bulletin Board was $6.37.
FEDERAL INCOME TAX INFORMATION
Under the terms of the Plan, options may be granted as either ISOs under
Section 422 of the Internal Revenue Code of 1986, as amended, (the "Code") and
the regulations thereunder or non-incentive stock options ("NSOs"). In general,
an optionee does not recognize taxable income upon grant or exercise of an ISO
and the Company is not entitled to any business expense deduction with respect
thereto. However, upon the exercise of an ISO, the excess of the fair market
value on the date of exercise of the shares received over the exercise price of
the shares is treated as an item of adjustment for purpose of calculating
alternative minimum taxable income. In order for the exercise of an ISO to
qualify for the foregoing tax treatment, the optionee generally must be an
employee of the Company or a subsidiary (within the meaning of Section 422 of
the Code) from the date the ISO is granted through the date three months before
the date of exercise (one year before the date of exercise in the case of an
optionee who is terminated due to disability).
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If the optionee has held the shares acquired upon exercise of an ISO for at
least two years after the date of grant and for at least one year after the date
of exercise, upon disposition of the shares by the optionee, the difference, if
any, between the sales price of the shares and the exercise price of the option
is treated as long-term capital gain or loss. If the optionee does not satisfy
these ISO holding period requirements (a "Premature Disposition"), the optionee
will recognize ordinary income at the time of the disposition of the shares,
generally in an amount equal to the excess of the fair market value of the
shares at the time the option was exercised over the exercise price of the
option. The balance of the gain realized, if any, will be long-term or
short-term capital gain, depending on the holding period. If the optionee sells
the shares prior to the satisfaction of the ISO holding period requirements, but
at a price below the fair market value of the shares at the time the option was
exercised, the amount of ordinary income is limited to the amount realized on
the sale over the exercise price of the option. Upon a Premature Disposition,
the Company and its subsidiaries are allowed a business expense deduction to the
extent the optionee recognizes ordinary income.
In general, an optionee to whom a NSO is granted recognizes no income at
the time of the grant of the option. Upon exercise of a NSO, an optionee
recognizes ordinary income and the Company is entitled to a deduction in an
amount equal to the excess of the fair market value of the shares on the date of
exercise over the exercise price of the option. The Company's deduction is
conditioned upon its reporting the taxable income amount.
The foregoing summary of the Plan is subject to the provisions of the Plan
which is included as Appendix A to this Proxy Statement.
The approval of the Stock Option Plan Proposal requires the affirmative
vote of a majority of the shares present in person or by proxy and entitled to
vote at the Annual Meeting. Each outstanding share of Common Stock is entitled
to one vote. Consequently, any shares not voted on the Stock Option Plan
Proposal (whether by abstention or broker non-votes) will have the same effect
as votes against the Stock Option Plan Proposal.
The Board of Directors recommends a vote "FOR" approval of the Stock Option
Plan Proposal:
MEETINGS; ATTENDANCE; COMMITTEES
During the fiscal year ended September 30, 1999, the Board of Directors of
the Company met four times. No incumbent member who was a director during the
past fiscal year attended fewer than 75% of the aggregate of all meetings of the
Board of Directors. There were no separate committees set up by the Board of
Directors.
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MANAGEMENT OF THE COMPANY
Set forth below is certain information with respect to the directors and
executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Kyo Paul Jhin................... 66 Director
Norman Baker.................... 58 Director
Robert Pearson.................. 64 Director
Walter Kornbluh................. 68 President, Chief Executive Officer and Chairman of the Board
Stephen Crosson................. 40 Vice President of Operations, Secretary and Treasurer
Steven Spector.................. 53 Director
</TABLE>
Kyo Paul Jhin. Dr. Jhin is Director of the National Asian Pacific Center on
Aging. He also served as Director of International Programs for the
Korea/Vietnam Memorial National Education Center. He was Executive Assistant to
the Secretary, Department of Veteran Affairs, Washington, D.C., from 1990 to
1993. Dr. Jhin was elected to the Company's board in September 1999.
Norman Baker. Mr. Baker, a U.K. national, joined the Company in January
1994 as Managing Director of Interscience Computer Corporation-PLC. Mr. Baker
has for the past fifteen years been a director and associate of N.B. Direct Mail
Ltd., a U.K. domiciled direct marketing, research and mailing operation. Mr.
Baker was elected to the Company's board in 1995.
Robert Pearson. Mr. Pearson has been associated with Renaissance Capital
Corporation ("RCC") since April 1994. Presently, Mr. Pearson serves as a Senior
Vice President, Director of Corporate Finance of RCC. He served as Executive
Vice President of the Thomas Group from May 1990 to March 1994. For 25 years,
Mr. Pearson held various senior management positions at Texas Instruments,
including Vice President of Finance from October 1983 to June 1985. Mr. Pearson
holds directorships in the following companies: Poore Brothers, Inc., which
manufactures and distributes snack food products, Integrated Security Systems,
which manufactures and distributes security software and other products, and
Thermoview Industries, a retailer of replacement vinyl windows. Mr. Pearson was
elected to the Company's board in 1997.
Walter Kornbluh. Mr. Kornbluh joined the Company in May 1997 as President.
For the past 10 years, he has been the President and majority owner of Workout
Specialist, Inc., a firm that specializes in assisting companies with financial
problems. He spent 17 years as President of Marathon Office Supply, Inc., which
distributed office supplies and was a public company whose stock was listed on
the American Stock Exchange. Mr. Kornbluh is a Certified Public Accountant. Mr.
Kornbluh was elected to the Company's board in 1997.
Stephen Crosson. Mr. Crosson joined the Company in 1985 as Manager of
accounting, government contracts and logistics. In September 1989, he left the
Company to work for First Interstate Bank as a Financial Analysis Officer until
March 1992. Mr. Crosson rejoined the Company and became Director of Operations
in March 1992. In April 1995, Mr. Crosson became Vice President of Operations.
In 1997, Mr. Crosson became Secretary and in April 1998, Treasurer of the
Company.
Steven Spector. Mr. Spector became director in February 2000. Since 1971,
Mr. Spector has practiced finance, banking and corporate reorganization law,
most recently as a partner in the Los Angeles Office of McDermott, Will & Emery.
In addition to practicing law, Mr. Spector is a partner in the investment group
of LBS Investments, LLC, and a trustee of The Joseph B. Gould Charitable
Foundation. Mr. Spector has lectured and taught extensively in his legal
specialties of finance, banking and corporate reorganization.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION
Directors do not receive any annual compensation. Each outside director
receives $1,000 for each meeting attended and reimbursement for out-of-pocket
expenses for attending meetings. During the 1998
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fiscal year, three outside directors were issued options to purchase 50,000
shares of common stock each at $1.00 per share. The options are exercisable
during a three year period commencing August 21, 1998.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company for its
fiscal years ended September 30, 1997, 1998 and 1999 to all executive officer
(the "Named Executive Officers") who earned in excess of $100,000 for the fiscal
year ended September 30, 1999.
ANNUAL COMPENSATION(1)
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED ALL OTHER
NAME AND PRINCIPAL POSITION SEPTEMBER 30, SALARY BONUS COMPENSATION
--------------------------- ------------- -------- ----- ------------
<S> <C> <C> <C> <C>
Walter Kornbluh............................... 1999 $150,000 -- --
President, Chief Executive Officer, 1998 $150,000 -- --
and Chairman of The Board 1997(1) -- -- --
Stephen Crosson............................... 1999 $120,000 -- --
Vice President of Operations 1998 $ 97,083 -- --
Secretary and Treasurer 1997 $ 95,000 -- --
</TABLE>
- ---------------
(1) Mr. Kornbluh joined the Company in May 1997.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
All existing employment agreements were canceled pursuant to the Company's
Plan of Reorganization (the "Plan") which become effective on April 20, 1998.
Pursuant to the Plan, Renaissance Capital Corporation ("RCC") exchanged its
preferred stock (Series A and Series B Cumulative Convertible Preferred Stock)
into 1,750,000 shares of Common Stock. RCC was also granted warrants to purchase
500,000 shares of Common Stock at $1.00 per share and 250,000 shares at $.50 per
share. The management agreement with RCC and all back fees were canceled. On
February 3, 2000, RCC exercised its warrant for 250,000 shares.
OPTION GRANTS AND EXERCISES
Prior to September 30, 1999, none of the Executive Officers were granted
options by the Company. Since September 30, 1999, options to Walter Kornbluh and
Stephen Crosson were granted as shown on page 11, item nos. 7 and 8.
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<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 15, 2000 by (i) each person
who is known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock; (ii) each of the Company's directors; (iii) the named
Executive Officers; and (iv) the executive officers and directors of the Company
as a group:
<TABLE>
<CAPTION>
COMMON STOCK(1)
---------------------------
NUMBER OF PERCENTAGE OF
NAME AND ADDRESS(2) SHARES OUTSTANDING(3)
------------------- --------- --------------
<S> <C> <C>
Frank J. LaChapelle(4)...................................... 835,000 14.0
Kyo Paul Jhin............................................... 576,696 7.56
Robert Pearson(5)........................................... -- --
Norman Baker................................................ 85,000(6) 1.4
Walter Kornbluh............................................. 1,245,200(7) 14.23
Steven Spector.............................................. -- --
Stephen Crosson............................................. 788,800(8) 9.43
Renaissance Capital Growth & Income Fund III, Inc. ......... 2,250,000(9) 33.83
8080 N. Central Expressway, Suite 210
Dallas, Texas 75206
All executive officers and directors as a group (6
persons).................................................. 2,692,9966 28.40
</TABLE>
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(1) As used herein, the term beneficial ownership is defined by Rule 13d.3 under
the Securities Exchange Act of 1934 as consisting of sole or shared voting
power and/or sole or shared investment power subject to community property
laws where applicable.
(2) The address of each person is c/o the Company at 600 Hampshire Road, Suite
105, Westlake Village, California 91361.
(3) Based on 7,629,556 shares of Common Stock outstanding as of March 15, 2000.
(4) All shares are held in the LaChapelle Family Trust with respect to which Mr.
LaChapelle exercises voting and investment power.
(5) Does not include any shares owned by RCC. Mr. Pearson is an executive
officer of RCC.
(6) Includes three year options to purchase 50,000 shares of Common Stock of the
Company at $1.00 per share.
(7) Includes currently exercisable options to purchase (a) 300,000 shares from
RCC at $2.00 per share; (b) 120,000 shares from Frank LaChapelle at $3.00
per share; (c) 112,200 shares from La Jolla Cove Investors at $1.80 per
share; (d) 92,000 shares from the Company at $.56 per share; (e) 180,000
shares from the Company at $3.87 per share; (f) 90,000 shares from the
Company at $5.00 per share; (g) 90,000 shares from the Company at $6.50 per
share; and (h) 90,000 shares from the Company at $7.50 per share.
(8) Includes currently exercisable options to purchase (a) 200,000 shares from
RCC at $2.00 per share; (b) 80,000 shares from Frank LaChapelle at $3.00 per
share; (c) 74,800 shares from La Jolla Investors at $1.80 per share; (d)
48,000 shares from the Company at $.56 per share; (e) 120,000 shares from
the Company at $3.87 per share; (f) 60,000 shares from the Company at $5.00
per share; (g) 60,000 shares from the Company at $6.50 per share; and (h)
60,000 shares from the Company at $7.50 per share.
(9) According to Schedule 13D, dated September 13, 1994, filed with the
Commission, RCC is the investment advisor of Renaissance Capital Growth &
Income Fund III, Inc. (the "Fund"). As a part of the Plan, the Fund
exchanged all of its shares of Preferred Stock for 1,750,000 shares of
Common Stock of the Company and three year warrants to purchase 500,000
shares of Common Stock at $1.00 per share. In August 1999, RCC lent the
Company $500,000 and received a warrant to purchase 250,000 shares at $.50
per share. On February 3, 2000, RCC exercised its warrant to purchase the
250,000 shares.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended September 30, 1999, the Company paid $75,000 to
Workout Specialists, Inc. ("WSI"), a firm owned by Walter Kornbluh, for WSI's
consulting during the bankruptcy proceedings.
On April 1, 1998, Interscience PLC, the Company's then subsidiary in the
U.K., was sold to Mr. Norman Baker, a current director of the Company. Payment
for the acquisition included an initial $10,000 payment and a royalty agreement
which requires a $10 per case fee for each case of fusing agent sold by PLC
commencing May 1, 1999. The Company and PLC continue to work on consumable
distribution projects that involve both U.S. and European sales efforts.
In August 1999, the Company borrowed $500,000 from RCC for 13 months with
interest at 8% per annum and issued a warrant to Renaissance to purchase 250,000
shares at $.50 per share. On February 3, 2000, RCC exercised the warrant. On
February 15, 2000, the Company repaid all principal and interest owed to RCC.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders are advised that any shareholder proposal, including
nominations to the Board of Directors, intended for consideration at the 2001
Annual Meeting must be received by the Company no later than November 20, 2000
to be included in the proxy materials for the 2001 Annual Meeting. It is
recommended that shareholders submitting proposals direct them to Stephen
Crosson, Secretary of the Company, and utilize certified mail, return receipt
requested in order to ensure timely delivery.
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report to Shareholders for the fiscal year ended September 30,
1999 is being mailed to the shareholders concurrently herewith, but such Report
is not incorporated in this Proxy Statement and is not deemed to be part of the
proxy solicitation materials.
OTHER MATTERS
The Board of Directors knows of no matter to come before the Annual Meeting
other than as specified herein. If other business should, however, be properly
brought before such meeting, the persons voting the proxies will vote them in
accordance with their best judgment.
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN PROMPTLY THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
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<PAGE> 13
APPENDIX "A"
INTERSCIENCE COMPUTER CORPORATION
2000 STOCK OPTION PLAN
1. ESTABLISHMENT, PURPOSE AND DEFINITIONS.
(a) The 2000 Stock Option Plan (the "Plan") of Interscience Computer
Corporation, a California corporation (the "Company"), is hereby adopted. The
Plan shall provide for the issuance of incentive stock options ("ISOs") and
nonqualified stock options ("NSOs") to purchase the Stock of the Company.
(b) The purpose of this Plan is to promote the long-term success of the
Company by attracting, motivating and retaining directors, officers and key
employees and consultants of the Company and its Affiliates (the "Participants")
through the use of competitive long-term incentives which are tied to
shareholder value. The Plan seeks to balance Participants' and shareholder
interests by providing incentives to the Participants in the form of stock
options which offer rewards for achieving the long-term strategic and financial
objectives of the Company.
(c) The Plan is intended to provide a means whereby Participants may be
given an opportunity to purchase shares of Stock of the Company pursuant to (i)
options which may qualify as ISOs under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"), or (ii) NSOs which may not so
qualify.
(d) The term "Affiliates" as used in this Plan means, in the case of an
ISO, parent or subsidiary corporations, as defined in Section 424(e) and (f) of
the Code (but substituting "the Company" for "employer corporation"), including
parents or subsidiaries which become such after adoption of the Plan, and in all
other cases, any entity which is controlled by or which controls the Company.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Compensation Committee of the
Board of Directors (the "Board") or such other committee appointed by the Board
to administer the Plan (the "Committee") or in the absence of a Committee, by
the Board acting in such capacity.
(b) The Committee may from time to time determine which Participants (each
an "option holder") shall be granted options under the Plan, the terms thereof
(including without limitation determining whether the option is an ISO and the
times at which the options shall become exercisable), and the number of shares
of Common Stock for which an option or options may be granted.
(c) If rights of the Company to repurchase Stock are imposed, the Board or
the Committee may, in its sole discretion, accelerate, in whole or in part, the
time for lapsing of any rights of the Company to repurchase shares of such Stock
or forfeiture restrictions.
(d) If rights of the Company to repurchase Stock are imposed, the
certificates evidencing such shares of Stock awarded hereunder, although issued
in the name of the option holder concerned, shall be held by the Company or a
third party designated by the Committee in escrow subject to delivery to the
option holder or to the Company at such times and in such amounts as shall be
directed by the Board under the terms of this Plan. Share certificates
representing Stock which is subject to repurchase rights shall have imprinted or
typed thereon a legend or legends summarizing or referring to the repurchase
rights.
(e) The Board or the Committee shall have the sole authority, in its
absolute discretion, to adopt, amend and rescind such rules and regulations,
consistent with the provisions of the Plan, as, in its opinion, may be advisable
in the administration of the Plan, to construe and interpret the Plan, the rules
and regulations, and the instruments evidencing options granted under the Plan
and to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations and interpretations of
the Committee shall be binding on all option holders under the Plan.
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<PAGE> 14
3. STOCK SUBJECT TO THE PLAN.
(a) "Stock" shall mean the Common Stock of the Company or such stock as may
be changed as contemplated by Section 3(c) below. Stock shall include shares
drawn from either the Company's authorized but unissued shares of Common Stock
or from reacquired shares of Common Stock, including without limitation shares
repurchased by the Company in the open market.
(b) Options may be granted under the Plan from time to time to eligible
persons to purchase an aggregate of up to 1,400,000 shares of Stock. Stock
options awarded pursuant to the Plan which are forfeited, terminated,
surrendered or cancelled for any reason prior to exercise shall again become
available for grants under the Plan (including any option cancelled in
accordance with the cancellation regrant provisions of Section 6(f) herein).
(c) If there shall be any change in the Stock subject to the Plan,
including Stock subject to any option granted hereunder, through merger,
consolidation, recapitalization, reorganization, reincorporation, stock split,
reverse stock split, stock dividend, combination or reclassification of the
Company's Stock or other similar events, an appropriate adjustment shall be made
by the Committee in the number of shares and/or the option price with respect to
any unexercised shares of Stock. Consistent with the foregoing, in the event
that the outstanding Stock is changed into another class or series of capital
stock of the Company, outstanding options to purchase Stock granted under the
Plan shall become options to purchase such other class or series and the
provisions of this Section 3(c) shall apply to such new class or series.
(d) The Company may grant options under the Plan in substitution for
options held by employees of another company who become employees of the Company
as a result of merger or consolidation. The Company may direct that substitute
options be granted on such terms and conditions as deemed appropriate by the
Board or the Committee.
(e) The aggregate number of shares of Stock approved by the Plan may not be
exceeded without amending the Plan and obtaining shareholder approval within
twelve months of such amendment.
4. ELIGIBILITY.
Persons who shall be eligible to receive stock options granted under the
Plan shall be those Participants referred to in Section 1(b) above; provided,
however, that (i) ISOs may only be granted to employees of the Company and its
Affiliates and (ii) any person holding capital stock possessing more than 10% of
the total combined voting power of all classes of capital stock of the Company
or any Affiliate shall not be eligible to receive ISOs unless the exercise price
per share of Stock is at least 110% of the fair market value of the Stock on the
date the option is granted.
5. EXERCISE PRICE FOR OPTIONS GRANTED UNDER THE PLAN.
(a) All ISOs will have option exercise prices per option share equal to the
fair market value of a share of the Stock on the date the option is granted,
except that in the case of ISOs granted to any person possessing more than 10%
of the total combined voting power of all classes of stock of the Company or any
Affiliate the price shall be not less than 110% of such fair market value. The
option exercise prices per option for NSO's shall be as determined by the
Committee. The price of ISOs or NSOs granted under the Plan shall be subject to
adjustment to the extent provided in Section 3(c) above.
(b) The fair market value on the date of grant shall be determined based
upon the closing price on an exchange on that day or, if the Stock is not listed
on an exchange, on the average of the closing bid and asked prices in the Over
the Counter Market on that day.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) Each option granted pursuant to the Plan shall be evidenced by a
written stock option agreement (the "Option Agreement") executed by the Company
and the person to whom such option is granted. The Option Agreement shall
designate whether the option is an ISO or an NSO.
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<PAGE> 15
(b) The term of each ISO and NSO shall be no more than 10 years, except
that the term of each ISO issued to any person possessing more than 10% of the
voting power of all classes of stock of the Company or any Affiliate shall be no
more than 5 years.
(c) In the case of ISOs, the aggregate fair market value (determined as of
the time such option is granted) of the Stock to which ISOs are exercisable for
the first time by any individual during any calendar year (under this Plan and
any other plans of the Company or its Affiliates if any) shall not exceed the
amount specified in Section 422(d) of the Internal Revenue Code, or any
successor provision in effect at the time an ISO becomes exercisable.
(d) The Option Agreement may contain such other terms, provisions and
conditions regarding vesting, repurchase or other similar provisions as may be
determined by the Committee and not inconsistent with this Plan. If an option,
or any part thereof, is intended to qualify as an ISO, the Option Agreement
shall contain those terms and conditions which the Committee determine are
necessary to so qualify under Section 422 of the Internal Revenue Code.
(e) The Committee shall have full power and authority to extend the period
of time for which any option granted under the 2000 Option Plan is to remain
exercisable following the option holder's cessation of service as an employee or
consultant, including without limitation cessation as a result of death or
disability; provided, however, that in no event shall such option be exercisable
after the specified expiration date of the option term.
(f) The Committee shall have full power and authority to effect at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution new options under the Plan covering the same or different numbers
of shares of Stock with the same or different exercise prices.
(g) As a condition to option grants under the Plan, the option holder
agrees to grant the Company the repurchase rights as Company may at its option
require and as may be set forth in the Option Agreement or a separate repurchase
agreement.
(h) Any option granted under the Plan may be subject to a vesting schedule
as provided in the Option Agreement and, except as provided in this Section 6
herein, only the vested portion of such option may be exercised at any time
during the Option Period. All rights to exercise any option shall lapse and be
of no further effect whatsoever immediately if the option holder's service as an
employee is terminated for "Cause" (as hereinafter defined) or if the option
holder voluntarily terminates the option holder's service as an employee. The
unvested portion of the option will lapse and be of no further effect
immediately upon any termination of employment of the option holder for any
reason. In the remaining cases where the option holder's service as an employee
is terminated or due to death, permanent disability, or is terminated by the
Company (or its Affiliates) without Cause at any time, the vested portion of the
option will extend for a period of three (3) months following the termination of
employment and shall lapse and be of no further force or effect whatsoever only
if it is not exercised before the end of such three (3) month period. There
shall be "Cause" for termination as set forth in any applicable employment or
consulting agreement or, in the absence of such agreement if (i) the option
holder is convicted of a felony, (ii) the option holder engages in any
fraudulent or other dishonest act to the detriment of the Company, (iii) the
option holder fails to report for work on a regular basis, except for periods of
authorized absence or bona fide illness, (iv) the option holder misappropriates
trade secrets, customer lists or other proprietary information belonging to the
Company for the option holder's own benefit or for the benefit of a competitor,
(v) the option holder engages in any willful misconduct designed to harm the
Company or its shareholders, or (vi) the option holder fails to perform properly
assigned duties with a failure to cure after 20 days notice.
(i) No fractional shares of Stock shall be issued under the Plan, whether
by initial grants or any adjustments to the Plan.
7. USE OF PROCEEDS.
Cash proceeds realized from the sale of Stock under the Plan shall
constitute general funds of the Company.
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<PAGE> 16
8. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Board may at any time suspend or terminate the Plan, and may amend
it from time to time in such respects as the Board may deem advisable provided
that such amendment, suspension or termination complies with all applicable
state and federal requirements and requirements of any stock exchange on which
the Stock is then listed, including any applicable requirement that the Plan or
an amendment to the Plan be approved by the shareholders. The Plan shall
terminate on the earlier of (i) ten (10) years from December 8, 1999 or (ii) the
date on which no additional shares of Stock are available for issuance under the
Plan.
(b) No option may be granted during any suspension or after the termination
of the Plan, and no amendment, suspension or termination of the Plan shall,
without the option holder's consent, materially alter or impair any rights or
obligations under any option granted under the Plan.
(c) The Committee, with the consent of affected option holders, shall have
the authority to cancel any or all outstanding options under the Plan and grant
new options having an exercise price which may be higher or lower than the
exercise price of cancelled options.
9. ASSIGNABILITY OF OPTIONS AND RIGHTS.
(a) Subject to Subparagraph (b), no Option issued under the Plan shall be
assignable or transferable by an option holder other than by will or the laws of
descent and distribution. An Option awarded to an option holder during such
option holder's lifetime shall be exercisable only by an option holder or his or
her guardian or legal representation.
(b) Notwithstanding Subparagraph (a), in the case of an NSO, an option
holder shall be permitted to transfer the Option to the option holder's spouse,
adult lineal descendants, adult spouses of adult lineal descendants and trusts
for the benefit of the option holder's minor or adult lineal descendants (a
"Related Transferee") if the Option Agreement under which the Option is granted
so specifies. If the Option is transferred to a Related Transferee pursuant to
the preceding sentence, the Related Transferee shall, upon exercise of the
Option, hold the Stock subject to all the provisions of the transferor's Option
Agreement in the same manner as the transferor and shall execute and deliver to
the Company such instruments as the Company shall require to evidence the same.
10. PAYMENT UPON EXERCISE.
(a) Payment of the purchase price upon exercise of any option or right to
purchase Stock granted under this Plan shall be made by giving the Company
written notice of such exercise, specifying the number of such shares of Stock
as to which the option is exercised. Such notice shall be accompanied by payment
of an amount equal to the Option Price of such shares of Stock. Such payment may
be (i) cash, (ii) by check drawn against sufficient funds, (iii) at the
Committee's discretion, by delivery to the Company of the option holder's
promissory note, (iv) such other consideration as the Committee, in its sole
discretion, determines and is consistent with the Plan's purpose and applicable
law, or (v) any combination of the foregoing. Any Stock used to exercise options
to purchase Stock (including Stock withheld upon the exercise of an option to
pay the purchase price of the shares of Stock as to which the option is
exercised) shall be valued in accordance with procedures established by the
Committee. Any promissory note used to exercise options to purchase Stock shall
be a full recourse, interest-bearing obligation secured by Stock in the Company
being purchased and containing such terms as the Committee shall determine. If a
promissory note is used to exercise options the option holder agrees to execute
such further documents as the Company may deem necessary or appropriate in
connection with issuing the promissory note, perfecting a security interest in
the stock purchased with the promissory note and any related terms the Company
may propose. Such further documents may include, without limitation, a security
agreement and an assignment separate from certificate. If accepted by the
Committee in its discretion, such consideration also may be paid through a
broker-dealer sale and remittance procedure pursuant to which the option holder
(I) shall provide irrevocable written instructions to a designated brokerage
firm to effect the immediate sale of the purchased Stock and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate option price payable for the purchased Stock plus
all applicable Federal and State income and employment
14
<PAGE> 17
taxes required to be withheld by the Company in connection with such purchase
and (II) shall provide written directives to the Company to deliver the
certificates for the purchased Stock directly to such brokerage firm in order to
complete the sale transaction.
11. WITHHOLDING TAXES.
(a) Shares of Stock issued hereunder shall be delivered to an option holder
only upon payment by such person to the Company of the amount of any withholding
tax required by applicable federal, state, local or foreign law. The Company
shall not be required to issue any Stock to an option holder until such
obligations are satisfied.
(b) The Committee may, under such terms and conditions as it deems
appropriate, authorize an option holder to satisfy withholding tax obligations
under this Section 11 by surrendering a portion of any Stock previously issued
to the option holder or by electing to have the Company withhold shares of Stock
from the Stock to be issued to the option holder, in each case having a fair
market value equal to the amount of the withholding tax required to be withheld.
12. CORPORATE TRANSACTIONS.
(a) For the purpose of this Section 12, a "Corporate Transaction" shall
include any of the following shareholder-approved transactions to which the
Company is a party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State of the Company's incorporation; or
(ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Company in liquidation or dissolution of the
Company.
(b) Upon the occurrence of a Corporate Transaction, if the surviving
corporation or the purchaser, as the case may be, does not assume the
obligations of the Company under the Plan, then irrespective of the vesting
provisions contained in individual option agreements, all outstanding options
shall become immediately exercisable in full and each option holder will be
afforded an opportunity to exercise their options prior to the consummation of
the merger or sale transaction so that they can participate on a pro rata basis
in the transaction based upon the number of shares of Stock purchased by them on
exercise of options if they so desire. To the extent that the Plan is unaffected
and assumed by the successor corporation or its parent company a Corporate
Transaction will have no effect on outstanding options and the options shall
continue in effect according to their terms.
(c) Each outstanding option under this Plan which is assumed in connection
with the Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number of securities which would have been issued to the
option holder in connection with the consummation of such Corporate Transaction
had such person exercised the option immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
payable per share, provided the aggregate option price payable for such
securities shall remain the same. In addition, the class and number of
securities available for issuance under this Plan following the consummation of
the Corporate Transaction shall be appropriately adjusted.
(d) The grant of options under this Plan shall in no way affect the right
of the Company to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
13. LOANS OR GUARANTEE OF LOANS.
(a) The Committee may, in its discretion, assist any option holder in the
exercise of options granted under this Plan, including the satisfaction of any
income and employment tax obligations arising therefrom by (i) authorizing the
extension of a loan from the Company to such option holder, (ii) permitting the
option holder to pay the exercise price for the Stock in installments over a
period of years or (iii) authorizing a
15
<PAGE> 18
guarantee by the Company of a third party loan to the option holder. The terms
of any loan, installment method of payment or guarantee (including the interest
rate and terms of repayment) will be upon such terms as the Committee specifies
in the applicable option or issuance agreement or otherwise deems appropriate
under the circumstances. Loans, installment payments and guarantees may be
granted with or without security or collateral (other than to option holders who
are not employees, in which event the loan must be adequately secured by
collateral other than the purchased Stock). However, the maximum credit
available to the option holder may not exceed the exercise or purchase price of
the acquired shares of Stock plus any Federal and State income and employment
tax liability incurred by the option holder in connection with the acquisition
of such shares of Stock.
(b) The Committee may, in its absolute discretion, determine that one or
more loans extended under this financial assistance program shall be subject to
forgiveness by the Company in whole or in part upon such terms and conditions as
the Committee may deem appropriate.
14. REGULATORY APPROVALS.
(a) The obligation of the Company with respect to Stock issued under the
Plan shall be subject to all applicable laws, rules and regulations and such
approvals by any governmental agencies or stock exchanges as may be required.
The Company reserves the right to restrict, in whole or in part, the delivery of
Stock under the Plan until such time as any legal requirements or regulations
have been met relating to the issuance of Stock, to their registration or
qualification under the Securities Exchange Act of 1934, if applicable, or any
applicable state securities laws, or to their listing on any stock exchange at
which time such listing may be applicable.
15. NO EMPLOYMENT/SERVICE RIGHTS.
(a) Neither the action of the Company in establishing this Plan, nor any
action taken by the Board or the Committee hereunder, nor any provision of this
Plan shall be construed so as to grant any individual the right to remain in the
employ or service of the Company (or any parent, subsidiary or affiliated
corporation) for any period of specific duration, and the Company (or any
parent, subsidiary or affiliated corporation retaining the services of such
individual) may terminate or change the terms of such individual's employment or
service at any time and for any reason, with or without cause.
16. MARKET STANDOFF.
(a) In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed
under the Securities Act, a person shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
of or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to any shares issued pursuant to an Option granted
under the Plan without prior written consent of the Company or its underwriters.
Such limitations shall be in effect for such period of time as may be requested
by the Company or such underwriters and agreed to by the Company's officers and
directors with respect to their shares; provided, however, that in no event
shall such period exceed 180 days. Holders of shares issued pursuant to an
Option granted under the Plan shall be subject to the market standoff provisions
of this paragraph only if the officers and directors of the Company are also
subject to similar arrangements.
(b) In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the Company's
receipt of consideration, any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately subject to
the provisions of this Section 16, to the same extent the purchased shares are
at such time covered by such provisions.
(c) In order to enforce the limitations of this Section 16, the Company may
impose stop-transfer instructions with respect to the purchased shares until the
end of the applicable standoff period.
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17. MISCELLANEOUS PROVISIONS.
(a) The provisions of this Plan shall be governed by the laws of the State
of California, as such laws are applied to contracts entered into and performed
in such State, without regard to its rules concerning conflicts of law.
(b) The provisions of this Plan shall inure to the benefit of, and be
binding upon, the Company and its successors or assigns, whether by Corporate
Transaction or otherwise, and the option holders, the legal representatives of
their respective estates, their respective heirs or legatees and their permitted
assignees.
(c) The option holders shall have no dividend rights, voting rights or any
other rights as a shareholder with respect to any options under the Plan prior
to the issuance of a stock certificate for such Stock.
(d) With respect to grants to non-U.S. residents, options may be granted
hereunder which may vary from the terms of the Plan but which are consistent
with the terms hereof to the extent necessary or appropriate to comply with
foreign laws including but not limited to tax laws.
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APPENDIX A FOR CALIFORNIA RESIDENTS
This Appendix to the Interscience Computer Corporation Stock Option Plan
(the "Plan") shall have application only to Participants who are residents of
the State of California. Capitalized terms contained herein shall have the same
meaning given to them in the Plan, unless otherwise provided in this Appendix.
NOTWITHSTANDING ANY PROVISION CONTAINED IN THE PLAN TO THE CONTRARY AND TO THE
EXTENT REQUIRED BY APPLICABLE LAW, THE FOLLOWING TERMS AND CONDITIONS SHALL
APPLY TO ALL OPTIONS GRANTED TO RESIDENTS OF THE STATE OF CALIFORNIA, UNTIL SUCH
TIME AS THE COMMON STOCK BECOMES A "LISTED SECURITY" UNDER THE SECURITIES ACT:
1. Nonqualified Stock Options shall have an exercise price that is not
less than 85% of the Fair Market Value of the stock at the time the Option
is granted, as determined by the Board, except that the exercise price
shall be 110% of the Fair Market Value in the case of any person who owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or its parent or subsidiary corporations.
2. Options shall have a term of not more than ten years from the date
the Option is granted.
3. Options shall be nontransferable other than by will or the laws of
descent and distribution. Notwithstanding the foregoing, and to the extent
permitted by Section 422 of the Code, the Committee, in its discretion, may
permit distribution of an Option to an inter vivos or testamentary trust in
which the Option is to be passed to beneficiaries upon the death of the
trustor (settlor), or by gift to "immediate family" as that term is defined
in Rule 16a-1(e) of the Exchange Act.
4. Options shall become exercisable at the rate of at least 20% per
year over five years from the date of the Option is granted, subject to
reasonable conditions such as continued employment. However, in the case of
an Option granted to officers, directors or consultants of the Company or
any of its affiliates, the Option may become fully exercisable, subject to
reasonable conditions such as continued employment, at any time or during
any period established by the Company or any of its affiliates.
5. Unless employment is terminated for Cause, the right to exercise an
Option in the event of termination of employment, to the extent that the
Participant is otherwise entitled to exercise an Option on the date
employment terminates, shall be:
a. at least six months from the date of termination of employment
if termination was caused by death or disability;
b. at least 30 days from the date of termination if termination of
employment was caused by other than death or disability; and
c. but in no event later than the remaining term of the Option.
6. No Option may be granted to a resident of California more than ten
years after the earlier of the date of adoption of the Plan and the date
the Plan is approved by the shareholders.
7. Any Option exercised before shareholder approval is obtained shall
be rescinded if shareholder approval is not obtained within 12 months
before or after the Plan. Such shares shall not be counted in determining
whether such approval is obtained.
8. The Company shall provide annual financial statements of the
Company to each California resident holding an outstanding Option under the
Plan. Such financial statements need not be audited and need not be issued
to key employees whose duties at the Company assure them access to
equivalent information.
18
<PAGE> 21
REVOCABLE PROXY
INTERSCIENCE COMPUTER CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
April 17, 2000
The undersigned hereby appoints Walter Kornbluh and Stephen Crosson with
full powers of substitution to act as attorneys and proxies for the undersigned,
to vote all shares of Company Common Stock which the undersigned is entitled to
vote at the Annual Meeting of Shareholders, to be held at the principal
executive offices of the Company, located at 600 Hampshire Road, Suite 105,
Westlake Village, California, on Monday, April 17, 2000 at 2:00 p.m. P.S.T. as
follows:
1. The election of directors of all nominees listed below (except as marked to
the contrary below.)
<TABLE>
<CAPTION>
VOTE FOR WITHHELD
<S> <C> <C>
Kyo Paul Jhin [ ] [ ]
Robert Pearson [ ] [ ]
Walter Kornbluh [ ] [ ]
Norman Baker [ ] [ ]
Steven Spector [ ] [ ]
</TABLE>
2. The approval of the amendment of the Articles of Incorporation, as amended,
to change the name of the Company to "CaminoSoft Corp."
[ ] VOTE FOR [ ] AGAINST [ ] ABSTAIN
3. The approval of the amendment of the Articles of Incorporation, as amended,
to increase the number of authorized shares of common stock from 10,000,000
to 100,000,000.
[ ] VOTE FOR [ ] AGAINST [ ] ABSTAIN
4. The approval of the adoption of the Company's 2000 Stock Option Plan.
[ ] VOTE FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote "FOR" each of the listed propositions.
<PAGE> 22
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting and after
notification to the Secretary of the Company at the Meeting of the shareholder's
decision to terminate this proxy, then the power of said attorneys and proxies
shall be deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company prior to the execution
of this proxy of notice of the Meeting, a Proxy Statement dated March 20, 2000
and an Annual Report to Shareholders.
<TABLE>
<S> <C>
Dated: , 2000
----------------------------------------------
Print Name of Shareholder
----------------------------------------------
Signature
Please sign exactly as your name appears on the envelope in
which this card was mailed. When signing as attorney,
executor, administrator, trustee or guardian, please give
your full title. If shares are held jointly, each holder
should sign.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS
STATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING,
THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN
THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING. THIS PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON
THE THOSE PERSONS NAMED IN THIS PROXY TO VOTE WITH RESPECT
TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE
IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, AND
MATTERS INCIDENT TO THE CONDUCT OF THE 2000 ANNUAL MEETING.
</TABLE>
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
