<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
CFI ProServices, Inc.
---------------------
(Name of Issuer)
Common Stock
------------
(Title of Class of Securities)
12525N
------------
(CUSIP Number)
Heather Zane Anderson
Farleigh, Wada & Witt, P.C.
121 S.W. Morrison Street, Suite 600
Portland, Oregon 97204
(503) 228-6044
----------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 16, 1996
--------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box ____.
Check the following box if a fee is being paid with the statement: ____. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class
of securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies should
be sent.
*The remainder of this cover page shall not be deemed to be "filed" for the
purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act (however, see the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP No. 12525N Page 2 of 5 Pages
1. Name of reporting person; S.S. or I.R.S. identification no. of above
person.
Matthew W. Chapman
2. Check the appropriate box if a member of a group.* (a) ___
(b) ___
3. SEC use only.
4. Source of funds.*
PF
5. Check box if disclosure of legal proceedings is required pursuant to Items
2(d) or 2(e). _____
6. Citizenship or place of organization.
U.S. Citizen
7. Number of shares beneficially owned by each reporting person with sole
voting power.
269,850 shares of common stock
8. Number of shares beneficially owned by each reporting person with shared
voting power.
None
9. Number of shares beneficially owned by each reporting person with sole
dispositive power.
269,850 shares of common stock
10. Number of shares beneficially owned by each reporting person with shared
dispositive power.
None
11. Aggregate amount beneficially owned by each reporting person.
269,850 shares of common stock
12. Check box if the aggregate amount in Row (11) excludes certain shares.*
____
Not applicable
13. Percent of class represented by amount in Row (11).
5.7%
14. Type of reporting person.*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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Item 1. Security and Issuer
The title of the class of equity securities to which this schedule
relates is common stock and the name and address of the principal executive
offices of the issuer of such securities is CFI ProServices, Inc., 400 S.W.
Sixth Avenue, Suite 200, Portland, Oregon 97204. This Amendment No. 3 to
Schedule 13D amends and restates an original Schedule 13D and its subsequent
amendments filed by Matthew W. Chapman in compliance with Rule 101 of
Regulation S-T promulgated by the U.S. Securities and Exchange Commission.
Item 2. Identity and Background
(a) Matthew W. Chapman.
(b) CFI ProServices, Inc., 400 S.W. Sixth Avenue, Suite 200, Portland,
Oregon 97204 (business address).
(c) Chairman of the Board of Directors and Chief Executive Officer of CFI
ProServices, Inc., 400 S.W. Sixth Avenue, Portland, Oregon 97204.
(d) None.
(e) None.
(f) United States.
Item 3. Source and Amount of Funds or Other Consideration
As disclosed in Amendment No. 2 to Mr. Chapman's original Schedule 13D
("Second Amended Schedule"), Mr. Chapman used personal funds derived from the
sale of 10,000 shares of common stock on February 7, 1995 and 25,000 shares on
February 8, 1995 in order to exercise options at $1.10 per share for 307,526
shares of common stock which were purchased by Mr. Chapman on March 23, 1995.
Mr. Chapman paid the issuer $338,278.60 ($1.10 per share) in order to exercise
his incentive stock options on March 23, 1995.
Consistent with the disclosure in the Second Amended Schedule, Mr. Chapman
used personal funds to exercise options to purchase 76,882 shares of common
stock on February 14, 1996. Mr. Chapman paid the issuer $84,570.20, or $1.10
per share, to exercise his incentive stock option.
Item 4. Purpose of Transaction
Mr. Chapman first filed this Schedule 13D ("Original Schedule") to report
that, as of February 14, 1994, he had the right to exercise an incentive stock
option to purchase an additional 76,881 shares of the common stock of CFI
ProServices, Inc. pursuant to the CFI ProServices, Inc. Incentive Stock Option
Plan No. 2, which plan has since been consolidated with three other stock
option plans of CFI ProServices, Inc. and renamed the 1995 Consolidated and
Restated Stock Option Plan ("Stock Option Plan"). This option to purchase
76,881 shares is part of an option granted on February 14, 1991 under the Stock
Option Plan for the purchase of 384,408 shares, which option was subject to a
five year vesting schedule. By virtue of the definition of beneficial
ownership set forth in Rule 13d-3(d)(1)(i), Mr. Chapman reported in the
Original Schedule that he was deemed to be the beneficial owner of the
referenced 76,881 shares as of December 16, 1993 (increasing to 230,643 the
total number of vested options held by Mr. Chapman as of that date, and Mr.
Chapman confirmed in the Original Schedule that in the event that he executes
any of his incentive stock options, he will do so for investment purposes and
not to change control of CFI ProServices, Inc.
Thereafter, Mr. Chapman filed Amendment No. 1 to his Original Schedule
("First Amended Schedule") to report that, as of February 14, 1995, he had the
right to exercise an incentive stock option to purchase an additional 76,881
shares of the common stock of CFI ProServices, Inc. pursuant to the Stock
Option Plan. By virtue of the definition of beneficial ownership set forth in
Rule 13d-3(d)(1)(i), Mr. Chapman was deemed to be the beneficial owner of those
securities as of
3
<PAGE> 4
December 16, 1994, and Mr. Chapman confirmed in the First Amended Schedule that
in the event that he executes any of his incentive stock options, he will do so
for investment purposes and not to change control of CFI ProServices, Inc.
Subsequently, Mr. Chapman filed the Second Amended Schedule (referred to
in Item 2 herein) to report that the purpose of the transaction on March 23,
1995 (i.e., the exercise of options for 307,526 shares described in Item 3
above) was to acquire the direct ownership of 307,526 shares for investment
purposes and not for the purpose of changing control of CFI ProServices, Inc.
The Second Amended Schedule disclosed that of the original options granted to
Mr. Chapman on February 14, 1991, the 76,882 shares that remained subject to
the option grant would not become exercisable under a vesting schedule until
February 14, 1996, the same day the option was scheduled to expire. Consistent
with his intent as disclosed in the Second Amended Schedule, Mr. Chapman
acquired those remaining option shares by exercising the option for 76,882
shares on February 14, 1996. Those shares were acquired for investment
purposes and not for the purpose of changing control of CFI ProServices, Inc.
Item 5. Interest in Securities of the Issuer
(a) Mr. Chapman is the beneficial owner of 269,850 shares of the common
stock of CFI ProServices, Inc. and his percentage of ownership of
such class is 5.7%, based upon 4,768,914 shares issued and
outstanding as of June 13, 1996.
(b) Mr. Chapman has the sole power to vote or to direct the vote and the
sole power to dispose or direct the disposition of all 269,850 shares
that he beneficially owns.
(c) On May 6, 1994, Mr. Chapman sold 35,000 shares of the common stock of
CFI ProServices, Inc. at $12.25 per share through Grove Securities,
Inc., a licensed broker, pursuant to Form 144, OTC.
In addition to the exercise of the options on March 23, 1995, Mr.
Chapman sold 10,000 shares of common stock on February 7, 1995 and an
additional 25,000 shares of common stock on February 8, 1995. These
transactions were effected through a licensed broker-dealer. Mr.
Chapman received $14.50 per share for the sale on February 7, 1995
and $15.00 per share for the sale on February 8, 1995. The shares
were sold on the over-the-counter market and in accordance with the
provisions of Rule 144.
In addition to the exercise of options on February 14, 1996, from May
16, 1996 through May 23, 1996, in seven separate transactions, Mr.
Chapman sold an aggregate of 125,000 shares of common stock at prices
ranging from a low of $21.84 to a high of $25.04 through Hambrecht &
Quist, LLC, a licensed broker-dealer. The shares were sold on the
over-the-counter market and in accordance with the applicable
provisions of Rule 144. The foregoing are the only transactions
effected by Mr. Chapman in the shares of common stock of the Company
during the past 60 days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Mr. Chapman disclosed in his Original Schedule that by letter dated June
21, 1993, Mr. Chapman agreed with Hambrecht & Quist, LLC, Allen & Company,
Inc., and Dain Bosworth Incorporated (collectively, the "Underwriters"), not to
sell or transfer any of his shares of the common stock of CFI ProServices, Inc.
without the prior written consent of the Underwriters for a period of 180 days
after the effective date of the Registration Statement on Form S-1 filed by CFI
ProServices, Inc. in connection with its initial public offering. This
agreement and the lock-up period expired on February 14, 1994.
4
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Item 7. Material to Be Filed as Exhibits
10.1 CFI ProServices, Inc. 1995 Consolidated and Restated Stock Option Plan
(incorporated herein by this reference to Exhibit 99.13 of the
Registration Statement on Form S-8 filed by CFI ProServices, Inc. on
March 1, 1995)
10.2 First Amendment to 1995 Consolidated and Restated Stock Option Plan
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
June 14, 1996 /s/ Matthew W. Chapman
- ------------------------------- ----------------------------------------
Date Signature
Matthew W. Chapman
----------------------------------------
Name/Title
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).
5
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<S> <C> <C>
10.1 CFI ProServices, Inc. 1995 Consolidated and
Restated Stock Option Plan (incorporated herein
by this reference to Exhibit 99.13 to the
Registration Statement on Form S-8 filed by CFI
ProServices, Inc. on March 1, 1995).
10.2 First Amendment to CFI ProServices, Inc. 1995
Consolidated and Restated Stock Option Plan
</TABLE>
i
CFI PROSERVICES, INC.
1995 CONSOLIDATED AND RESTATED STOCK OPTION PLAN
(Incentive Stock Options and Nonqualified Stock Options)
1. PURPOSE
1.1 The CFI ProServices, Inc. 1995 Consolidated and Restated
Stock Option Plan (the "Plan") is designed to attract and retain employees of
the Company and is intended to encourage capital accumulation and stock
ownership by employees, in order to increase the proprietary interest of such
employees in the success of the Company. The term "Company" shall mean CFI
ProServices, Inc. ("CFI") and any subsidiary corporation in which CFI may own,
directly or indirectly, a majority of the voting stock.
The Plan is intended to combine the Company's Incentive Stock
Option Plan No. 1 as Amended and Restated October 15, 1993 ("Plan No. 1"),
Incentive Stock Option Plan No. 2 as Amended and Restated October 15, 1993
("Plan No. 2"), Incentive Stock Option Plan Dated April 30, 1993 (Restated as
of October 15, 1993) ("Plan No. 3"), and Nonqualified Stock Option Plan Dated
April 30, 1993 (Restated as of October 15, 1993) ("Plan No. 4") (collectively,
the "Prior Plans") and govern any and all outstanding unexercised stock options
granted under the Prior Plans. In addition, all unissued stock options
reserved for issuance under the Prior Plans, and all stock options issued but
not exercised under the Prior Plans which have been terminated or
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expired, will continue to be available and reserved for issuance hereunder.
2. ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the
Board of Directors of CFI (the "Committee"). All members of the Committee must
be "disinterested" directors as such term is defined from time to time in Rule
16b-3 issued under the Securities Exchange Act of 1934. The Committee of not
less than two members of the Board of Directors of CFI (the "Board") shall be
appointed by the Board, and the Board, from time to time, may remove members
from or name new members to the Committee. Subject to the provisions of the
Plan, the Committee is authorized to grant options under the Plan, including
determining the employees to whom options will be granted and the amount and
terms of such grants, to interpret the Plan and each option granted thereunder,
to prescribe, amend, and rescind rules and regulations relating to the Plan,
and to any options granted thereunder, and to make all other determinations
necessary or advisable for the administration of the Plan; provided, however,
that only the Board may amend or terminate the Plan as provided in Section 11.
3. ELIGIBILITY FOR PARTICIPATION
The Committee shall determine and designate, from time to time, those
"eligible employees" of the Company to whom options are to be granted and who
thereby become participants in the Plan. An "eligible employee" means an
employee of the Company, either part- time or full-time (including officers and
directors active in an
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employment capacity other than as a director only), who, in the judgment of the
Committee, is in a position to contribute substantially to the success of the
Company.
4. STOCK SUBJECT TO THE PLAN
4.1 The stock subject to the options to be granted under the
Plan shall be made available either from CFI common stock ("shares") authorized
but unissued or from shares reacquired by CFI. Subject to the adjustment as
provided in Section 6.11, the total number of shares with respect to which the
Committee may grant stock options under the Plan shall not exceed 1,453,584
shares (the aggregate share reserve of Plans No. 1, 2, 3, and 4 as of January
1, 1995), of which no more than 500,000 shares shall be granted as
"nonqualified stock options" as defined below in Section 5.
4.2 If any outstanding stock option granted under the Plan is
terminated or expires unexercised, in whole or in part, for any reason before
the end of the term of the Plan, the shares released from the expired or
terminated option may be made the subject of new additional options granted
under the Plan.
5. AWARD OF OPTIONS
The Committee, at any time, may authorize the granting of options
under the Plan to any "eligible employee." The options may be (a) incentive
stock options within the meaning of Section 422(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), (b) options which will not be treated as
incentive stock options under Section 422(a) of the Code ("nonqualified stock
options"), and
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(c) any other stock options which are or may become permitted by any applicable
law. The Committee shall have the authority, subject to the terms of the Plan,
to determine the date of grant, the types of options to be granted, the number
of shares, the exercise price, and the other terms and conditions of each
option under the Plan.
6. TERMS AND CONDITIONS OF STOCK OPTION AGREEMENTS
Stock options granted under the Plan shall be evidenced by stock
option agreements executed by an authorized representative of the Committee and
signed by the participant. Stock options granted hereunder shall be subject to
the following terms and conditions:
6.1 Payment for Shares. Upon exercise of any option, in whole
or in part, the option price for shares to which the exercise relates shall be
paid in cash or by certified check, bank draft, or money order payable to the
order of CFI (or in property if agreed to in writing by the Committee in
connection with a particular option) at the time of exercise. No shares for
which a purchase price is due shall be issued until full payment has been made,
and a participant shall have none of the rights of a shareholder with respect
to optioned shares until such shares are issued to the participant.
6.2 Number of Shares. Each stock option agreement shall state
the total number of shares subject to the option. In the case of any incentive
stock option granted hereunder, in no event shall the aggregate "fair market
value" of the stock
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exercisable for the first time by an employee during any calendar year exceed
$100,000. For purposes hereof, the "fair market value" of the stock shall be
determined by the Committee in good faith at the time of the grant of the
option.
6.3 Purchase Price. The purchase price (exercise price) for
shares subject to an incentive stock option granted hereunder shall be
determined by the Committee but, except as otherwise provided in Section 8,
shall in no instance be less than one hundred percent (100%) of the "fair
market value" of the shares on the date the option is granted, as determined in
good faith by the Committee. In the case of an incentive stock option granted
to any participant owning more than ten percent (10%) of the voting power of
all classes of CFI's stock on the date of grant of the option, the option price
per share of the stock subject to option shall be not less than one hundred ten
percent (110%) of the "fair market value" of the stock on the date the option
is granted, as determined in good faith by the Committee. The purchase price
(exercise price) for shares subject to a nonqualified stock option granted
hereunder shall be determined by the Committee, except that the purchase price
shall in no instance be less than the aggregate par value of such shares.
6.4 Term of Options. In the case of incentive stock options
and except as otherwise provided in Sections 6.8 and 6.9, any option granted to
a participant then owning more than ten percent (10%) of the voting power of
all classes of CFI's stock shall, by its terms, expire at such time as the
Committee may
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determine in granting it, but not later than five (5) years from the date the
option is granted. Any other option granted hereunder shall by its terms
expire at such time as the Committee may determine in granting it, but not
later than ten (10) years from the date the option is granted.
6.5 Vesting Schedules. Subject to the provisions of Section 9
below, in the case of an incentive stock option, twenty percent (20%) of each
option granted to any participant hereunder shall be exercisable by the
participant only after each succeeding twelve (12) months of continuous
employment with the Company immediately following the date the option is
granted, provided, however, that if a participant dies prior to the completion
of this five-year vesting period, the option may nonetheless be exercised in
full in accordance with Section 6.8, below. Subject to the provisions of
Section 9 below, in the case of a nonqualified stock option, vesting schedules,
if any, shall be determined by the Committee when the option is granted,
provided, however, that if a participant dies prior to the completion of any
vesting period, the option may nonetheless be exercised in full in accordance
with Section 6.8, below.
6.6 Employment as Condition to Exercise. No option eligible
for exercise hereunder may be exercised unless the participant holding such
option has been employed by the Company for the entire time from the effective
date of the grant of the option until sixty (60) days before the date of
exercise (or up to ninety (90) days if employment ceases due to death or
disability).
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6.7 Executive Officers. Any stock option granted to a
participant who may be subject to Section 16(b) of the Securities Exchange Act
of 1934 (an executive officer) shall not be exercisable for six (6) months
after the date of grant, except in case of death or disability.
6.8 Death. Any option granted hereunder which has not expired
and which is held by a participant at the time of death may be exercised by the
person or persons entitled thereto at any time or from time to time within
ninety (90) days after date of death, but in no event later than ten (10) years
from the date the option is granted.
6.9 Termination of Employment. In all cases of termination of
employment of a participant other than as described in Section 6.8, the option
shall be exercised within sixty (60) days after the date the participant ceases
to be an employee of the Company, but in no event later than ten (10) years
from the date the option is granted. To the extent set forth in an agreement
entered into under a Prior Plan, express provisions relating to the exercise of
a stock option upon termination of employment shall continue to apply unless
modified by the Committee.
6.10 Exercise Subject to Limitations. Each option shall be
exercisable for the full amount or for any part thereof, from time to time,
subject to such limitations thereon as may be established by the Plan or by the
Committee at the time the grant is authorized.
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6.11 Effect of Change in Shares Subject to the Plan. In the
event there is any change in the shares of the Company through the declaration
of stock dividends or through merger, consolidation, or recapitalization
resulting in stock split-ups or combinations or exchanges of shares or
otherwise, the Committee shall appropriately adjust the number of shares
available for the granting of stock options under the Plan, the number of
shares subject to each outstanding stock option, and the exercise price of each
stock option. No adjustment to the exercise price of any stock option under
the Plan may reduce the exercise price to an amount less than the par value of
the shares subject to the option. If the Company is the surviving or resulting
corporation in any merger, consolidation or share exchange, any outstanding
option granted under the Plan shall apply to those securities to which a holder
of the number of shares of common stock subject to the stock option would have
been entitled under the merger or consolidation. If the Company is not the
surviving or resulting corporation in any merger, consolidation or share
exchange, the surviving or resulting corporation shall tender stock options to
purchase its shares on terms and conditions that substantially preserve the
rights and benefits of any stock option outstanding under the Plan at the time
of the merger or consolidation. The term "common stock" as used in the Plan
shall include the shares resulting from any change in the Company's common
stock, limited to a change in its designation to "capital stock" or other
similar designation, a change in the par value of the common stock, or a change
from par value to no par
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value, in each case without any increase in the number of issued shares.
6.12 Nontransferability. No stock option granted under the Plan
shall be assignable or transferable except by will or by the laws of descent
and distribution. During a participant's lifetime, any stock option shall be
exercisable only by the participant.
6.13 Resale of Shares. In the event that a participant desires
to dispose of shares issued pursuant to options, any resales of such shares
shall be made by a participant only in compliance with applicable securities
laws and regulations.
6.14 Rights as a Shareholder. A participant shall have no
rights as a shareholder with respect to shares covered by his or her stock
options until the date of issuance of the shares to the participant and the
payment by the participant to the Company of the full purchase price for the
shares. No adjustment will be made for dividends or other rights for which the
record date is prior to the date of issuance of the shares.
6.15 Other Provisions. The stock option agreements authorized
under the Plan may contain such other and additional provisions, not
inconsistent with the terms of the Plan, which the Committee or legal counsel
to CFI deems necessary or advisable.
7. STOCK RESERVE
The Company shall, at all times during the term of the Plan, reserve
and keep available such number of shares of its common stock as will be
sufficient to satisfy the requirements of
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the Plan, and shall pay all administrative fees and expenses necessarily
incurred by the Company in connection with the exercise of options granted
hereunder.
8. SUBSTITUTION OF STOCK OPTIONS OF ACQUIRED CORPORATIONS
Notwithstanding any other contrary or inconsistent provision of the
Plan, the Company may, subject to the provisions of Section 4, substitute an
option issued under the Plan for an option issued under another plan, or assume
under the Plan an option issued under another plan, if the other plan was the
plan of another corporation (the "acquired corporation") (or the parent of the
acquired corporation) and the new option is substituted, or the old option is
assumed, by reason of a corporate merger, consolidation, acquisition of
property or of stock, reorganization or liquidation within the meaning of
Section 424(a) of the Code, as amended, and provided that the requirements of
Code Sections 424(a)(1) and (2) are complied with. In the event that a written
agreement pursuant to which the acquisition transaction is completed is
approved by the Board, and said agreement sets forth the terms and conditions
of the substitution for, or assumption of, outstanding stock options of the
acquired corporation, said terms and conditions shall be deemed to be the
action of the Committee hereunder without any further action by the Committee,
and the persons holding said option shall be deemed to meet the eligibility
requirements under the Plan. The terms and conditions of any substituted or
assumed options may vary from the terms and
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conditions set forth in the Plan to the extent that the Board or Committee
deems appropriate.
9. CHANGE OF CONTROL
9.1 In the event of a "change of control" of the Company, any
and all stock options (both incentive stock options and nonqualified stock
options) granted by the Company prior to such change of control shall be fully
vested and may be exercised in whole or in part immediately prior to and after
the following: (i) the Company terminates the participant's employment
relationship with the Company, (ii) the Company reduces the participant's
annual compensation (including base salary, bonuses, and incentive compensation
programs) from the participant's annual compensation for the calendar year
ended prior to the change of control, (iii) the Company requires the
participant to transfer to a new job location which necessitates a change in
residence or increased travel, (iv) the Company materially alters the
participant's responsibilities to the Company, including a change in title,
status, or job description, or (v) any of the Company's shareholders are
entitled under Oregon law (ORS 60.554) to dissent from and obtain payment of
the fair value of any of the Company's common shares.
9.2 For purposes hereof, a "change of control" shall be defined
as any event or circumstance whereby an entity, an individual, or an affiliated
group acquires control, directly or indirectly, of fifty percent (50%) or more
of the Company's common stock.
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9.3 In the event of any accelerated vesting hereunder, all
options granted to the participant may be exercised only in accordance with
Sections 6.1-6.4 and 6.6-6.15 of the Plan.
10. TERM OF PLAN AND EFFECTIVE DATE
Since this Plan is a consolidation of four plans approved by the
shareholders of CFI on different dates and with ten year limits, the following
sinking reserves shall apply. Of the 1,453,584 shares held in reserve as of
January 1, 1995, the share reserve shall be reduced further on the dates set
forth below:
<TABLE>
<CAPTION>
Date Sinking Share Reserve
---- ---------------------
<S> <C>
January 1, 1995 1,453,584
February 9, 1998 1,405,769
February 14, 2001 500,000
August 26, 2003 0
</TABLE>
The Effective Date of this Consolidated and Restated Plan shall be January 1,
1995, and no further options shall be granted under the Plan commencing on
August 26, 2003.
11. AMENDMENTS AND DISCONTINUANCE
The Board, at any time, may alter, amend, suspend, discontinue, or
terminate the Plan and may alter or amend any stock option agreement executed
under the Plan, including a Prior Plan. Additionally, the Board may amend the
Plan or any agreement under the Plan to provide for any amendment or revision
of Section 16 of the Securities Exchange Act of 1934. The Board may not,
however, without shareholder approval, alter the provisions of the Plan so as
to (i) materially alter terms relating to the option price, (ii) materially
increase the number of shares which may be issued under
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the Plan, (iii) materially modify the requirements as to eligibility for
participation in the Plan, or (iv) extend beyond ten (10) years the maximum
term of stock options under the Plan or the term of the Plan.
12. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of shares to
participants under the Plan will be used for general corporate purposes.
13. CERTAIN TAX MATTERS
13.1 Notification of Certain Events. The stock option
agreements executed under the Plan shall require the holder of an option to
notify the Company within ten (10) days of the occurrence of either of the
following events: (i) the making of an election under Section 83(b) of the
Code to include in gross income in the year of transfer the amount specified in
Section 83(b); or (ii) the disposition of any stock issued on the exercise of
an incentive stock option within two (2) years of the granting of the incentive
stock option or within one (1) year of its exercise, and the amount that the
participant will recognize as compensation income due to the disqualifying
disposition of the underlying shares.
13.2 Withholding. Whenever, under the Plan, the exercise of a
stock option will result in the recognition of taxable income by the
participant, the Company shall be entitled to require, as a condition of
delivery to the participant of the certificate representing the shares, that
the participant remit to
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the Company an amount sufficient to satisfy all applicable tax requirements,
including, but not limited to, all federal, state, and other withholding tax
requirements related to the income recognized by the participant. If a
participant makes a disqualifying disposition of stock acquired upon the
exercise of an incentive stock option as described in Section 13.1,
subsection (ii), the participant shall remit to the Company an amount
sufficient to satisfy all federal, state, and other withholding tax
requirements related to the compensation income realized by the participant on
the disqualifying disposition. In any case under this Section 13.2 where
withholding by the Company is required, the Company shall have the right to
withhold any such amounts from compensation otherwise due to the participant.
14. MISCELLANEOUS PROVISIONS
14.1 No Obligation to Exercise. Participants shall have no
obligation to exercise any stock option granted to them under the Plan.
14.2 No Alienation of Benefits. No benefit provided to
participants under the Plan shall be subject to alienation, assignment,
attachment, or other legal process. Any attempted alienation, assignment, or
attachment of benefits under the Plan shall be void. Stock certificates and
cash payments shall be delivered only to the participants entitled to receive
them or to their authorized legal representatives.
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<PAGE> 15
14.3 No Employment Right. Participation in the Plan shall not
confer any right of continuation of employment with the Company.
14.4 Fractional Shares. Any fractional shares resulting from
the exercise of stock options under the Plan shall be eliminated at the time of
exercise by rounding down for fractions less than one-half (1/2) and rounding
up for fractions equal to or greater than one-half (1/2). No cash settlements
shall be made with respect to fractional shares eliminated by rounding.
14.5 Governing Law. All matters relating to the Plan or to
stock options granted under the Plan shall be governed by the laws of the State
of Oregon, without regard to the principles of conflict of laws adopted by
Oregon courts.
14.6 References to Plan Include Prior Plans. Unless expressly
stated otherwise, any provision in the Plan applying to stock options granted
under the Plan shall also apply to stock options granted under the Prior Plans.
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FIRST AMENDMENT TO 1995 CONSOLIDATED AND RESTATED
STOCK OPTION PLAN
Section 1.2 shall be amended to read as follows:
1.2 The Plan is intended to combine the Company's incentive Stock
Option Plan No. 1 as Amended and Restated October 15, 1993 ("Plan
No. 1"), Incentive Stock Option Plan No. 2 as Amended and Restated
October 15, 1993 ("Plan No. 2"), Incentive Stock Option Plan Dated
April 30, 1993 (Restated as of October 15, 1993) ("Plan No. 3"),
and Nonqualified Stock Option Plan Dated April 30, 1993 (Restated
as of October 15, 1993) ("Plan No. 4") (collectively, the "Prior
Plans"), govern any and all outstanding unexercised stock options
granted under the Prior Plans, and govern an additional 500,000
unissued stock options authorized for issuance commencing in 1996
(the "Additional Stock Options"). In addition, all unissued stock
options reserved for issuance under the Prior Plans, and all stock
options issued but not exercised under the Prior Plans which have
been terminated or expired, will continue to be available and
reserved for issuance thereunder.
Section 4.1 shall be amended to read as follows:
4.1 The stock subject to the options to be granted under the Plan
shall be made available either from CFI common stock ("shares")
authorized but unissued or from shares reacquired by CFI. Subject
to the adjustment as provided in Section 6.11, the total number of
shares with respect to which the Committee may grant stock options
under the Plan shall not exceed 1,406,044 shares (the aggregate
share reserve of Plans No. 1, 2, 3, and 4 and the Additional Stock
Options as of January 12, 1996), of which no more than 500,000
shares shall be granted as "nonqualified stock options" as defined
below in Section 5.
Section 6.1 shall be amended to read as follows:
6.1 Payment for Shares. Upon exercise of any option, in whole or
in part, the option price for shares to which the exercise relates
shall be paid in cash or by certified check, bank draft, or money
order payable to the order of CFI (or in property if agreed to in
writing by the Committee in connection with a particular option)
at the time of exercise. This payment procedure includes broker-
assisted cashless exercises. No shares for which a purchase price
is due shall be issued until full payment has been made, and a
participant shall have none of the rights of a shareholder with
respect to optioned shares until such shares are issued to the
participant.
Section 10 shall be amended to read as follows:
10. TERM OF PLAN AND EFFECTIVE DATE
Since this Plan is a consolidation of four plans and
Additional Stock Options approved by the shareholders of CFI on
different dates and with ten year limits, the following sinking
reserves shall apply. Of the 1,406,044 shares held in reserve
as of January 12, 1996, the share reserve shall be reduced further
on the dates set forth below:
Date Sinking Share Reserve
---- ---------------------
February 9, 1998 1,365,125
January 21, 2001 986,022
April 16, 2003 500,000
January 12, 2006 0
The Effective Date of this Consolidated and Restated Plan shall
be January 1, 1995, and no further options shall be granted
under the Plan commencing on January 12, 2006.
