SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. _________]
Filed by the Registrant _X_
Filed by a Party other than the Registrant ___
Check the appropriate box:
_X_ Preliminary Proxy Statement
___ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
___ Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
METEOR INDUSTRIES, INC.
(Name of Registrant as Specified in Its Charter)
METEOR INDUSTRIES, INC.
(Name of Person(s) Filing Proxy Statement)
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PRELIMINARY COPY
METEOR INDUSTRIES, INC.
216 16th Street, Suite 730
Denver, Colorado 80202
NOTICE OF SPECIAL MEETING
OF STOCKHOLDERS AND PROXY STATEMENT
To Be Held November 10, 1998
Dear Stockholder:
The Special Meeting of Stockholders of Meteor Industries, Inc. ("Meteor"
or the "Company") will be held at the office of Meteor's subsidiary,
Fleischli Oil Company, Inc., 6395 East 80th Avenue, Commerce City, Colorado
80022 on November 10, 1998, at 10:00 a.m. MDT for the following purposes:
1. To approve the 1998 Incentive Equity Plan (the "Incentive Plan"); and
2. To consider and act upon such other matters as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 22,
1998 as the record date for determining Stockholders entitled to notice of,
and to vote at, the meeting or any adjournments or postponements thereof.
You are cordially invited to attend the meeting in person. Whether or not
you plan to attend the meeting, you are urged to complete, date, sign and
return the enclosed proxy in the accompanying envelope, which mailing will be
postage free if mailed in the United States of America. You may revoke the
proxy by filing a properly executed proxy bearing a later date or by attending
the Special Meeting and voting in person.
Regardless of how many shares you own, your vote is very important.
Please sign, date and return the enclosed proxy card today.
BY ORDER OF THE BOARD OF DIRECTORS
Dennis R. Staal
Secretary
Denver, Colorado
October 22, 1998
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METEOR INDUSTRIES, INC.
216 16th Street, Suite 730
Denver, Colorado 80202
________________________________
PROXY STATEMENT
________________________________
This Proxy Statement is furnished to the holders ("Stockholders") of
common stock, $.001 par value ("Common Stock") of Meteor Industries, Inc., a
Colorado corporation ("Meteor" or the "Company"), in connection with the
solicitation of proxies by the Board of Directors for use at the Special
Meeting of Stockholders to be held on November 10, 1998 at 10:00 a.m. MST at
the offices of Meteor Industries, Inc.'s subsidiary, Fleischli Oil Company,
Inc., 6395 East 80th Avenue, Commerce City, Colorado 80022, including any
adjournments or postponements thereof ("Special Meeting"). A copy of the
notice of meeting accompanies this Proxy Statement. It is anticipated that the
mailing of this Proxy Statement and the accompanying Proxy Card will commence
on or about October 26, 1998.
RECORD DATE; STOCKHOLDERS ENTITLED TO VOTE
Only Stockholders of record at the close of business on October 22, 1998,
the record date ("Record Date") for the meeting, will be entitled to notice of
and to vote at the Special Meeting. As of the Record Date, Meteor had
outstanding 3,537,428 shares of Common Stock. Shares of Common Stock are the
only securities of Meteor entitled to vote at the Special Meeting and each
share outstanding as of the record date will be entitled to one vote.
VOTE REQUIRED FOR APPROVAL
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock will constitute a quorum for the
transaction of business at the meeting. If a quorum is present, a majority of
the shares of Common Stock represented in person or by proxy at the meeting
and voting is required to approve the Incentive Plan. Capco Resources Ltd.
("Capco"), and management of the Company, who together own approximately 49%
of the shares of Common Stock outstanding, have advised the Company that they
intend to vote for the approval of the Incentive Plan.
REVOCABILITY OF PROXIES
A Stockholder who dates, signs and returns the enclosed form of proxy may
revoke the proxy at any time before it is voted by submitting a duly executed
written revocation or a proxy bearing a later date to the Secretary of the
Company. Attendance at the meeting shall not have the effect of revoking a
proxy unless the Stockholder so attending shall, in writing, so notify the
secretary of the meeting at any time prior to the voting of the proxy.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition
to soliciting proxies by mail, directors, executive officers and employees of
the Company, without receiving extra compensation therefor, may solicit
proxies by telephone, by telegram or in person. Arrangements will also be made
with brokerage firms and other custodians, nominees and fiduciaries to forward
solicitation materials to the beneficial owner of shares of the Common Stock,
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and the Company will reimburse such brokerage firms and other custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by
them in connection with forwarding such materials, which are anticipated to
total less than $10,000.
VOTING OF PROXIES
Proxies will be voted in accordance with the instructions indicated
thereon. A validly executed proxy which does not indicate instructions will be
voted FOR the Incentive Plan. The proxy permits a Stockholder to withhold
voting for any or to abstain from voting for any proposal if the Stockholder
so chooses. Abstentions are counted for purposes of determining the number of
shares represented and entitled to vote at the meeting. However, abstentions
are not counted in determining the number of shares voting FOR an item of
business, and, therefore, have the same effect as a vote AGAINST a business
item. Broker non-votes are counted for purposes of determining the number of
shares represented and entitled to vote at the meeting; however, the shares
represented thereby are not voted and do not represent a vote either FOR or
AGAINST an item of business. The Special Meeting will be held for the
transaction of business described herein and for the transaction of such other
business as may properly come before the Special Meeting. Proxies will confer
discretionary authority with respect to any other matters which may properly
be brought before the Special Meeting (which, as defined herein, includes any
postponements or adjournments thereof). At the date of this Proxy Statement,
the only business which the Company's management intends to present, or knows
that others will present, is that described in this Proxy Statement. If other
matters come before the Special Meeting, the persons holding proxies solicited
hereunder intend to vote such proxies in accordance with their judgment on all
such matters.
APPROVAL OF THE 1998 INCENTIVE EQUITY PLAN
The Board of Directors adopted the 1998 Incentive Equity Plan (the
"Incentive Plan") on September 29, 1998, subject to approval by the
Stockholders of the Company at the Special Meeting. Capco and management of
the Company together own approximately 49% of the shares of Common Stock of
the Company and have advised the Company that they intend to vote for the
approval of the Incentive Plan.
PRIOR HISTORY OF EMPLOYEE STOCK OPTION PLANS
A stock option plan providing for the issuance of incentive stock options
and non-qualified stock options to Meteor's employees was approved by Meteor's
shareholders on April 15, 1993. Pursuant to the Plan, 500,000 shares of
Meteor's $.001 par value Common Stock have been reserved for issuance. As of
October 9, 1998, after reducing the number for expired options, 495,300
options were issued and outstanding under the Plan.
On October 1, 1993, options were granted to employees. As of October 9,
1998, out of these options, options to purchase 21,500 shares were outstanding
(after deducting options which expired as a result of termination of
employment). These options are exercisable at $3.00 per share and vest in
five equal installments each year following the date of grant. They expire
ten years after the date of grant.
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On February 1, 1994, additional incentive stock options were granted to
employees. As of October 9, 1998, out of these options, options to purchase
16,800 shares were outstanding (after deducting options which expired as a
result of termination of employment). These options are exercisable at $5.25
per share and vest in three equal installments each year following the date of
grant. They expire ten years after the date of grant.
On August 4, 1995, incentive stock options to purchase 10,000 shares each
of Common Stock were granted to Dennis R. Staal, Secretary/Treasurer of
Meteor, and C. Thomas Houseman, a former Director of Meteor, and an incentive
stock option to purchase 1,000 shares was granted to an employee. These
options are exercisable at $3.00 per share and vest over three years on a pro
rata annual basis following the date of grant. They expire five years after
the date of grant.
On November 30, 1995, the Board of Directors granted options to Edward J.
Names, President of the Company, and Ilyas Chaudhary, Chairman and Chief
Executive Officer, each to purchase 100,000 shares of Meteor's Common Stock,
and Dennis R. Staal, Secretary/Treasurer of the Company, to purchase 15,000
shares of Common Stock. These options are exercisable at $3.50 per share and
vest over a period of three years on a pro rata annual basis following the
date of grant.
In May of 1996, the Board of Directors granted options to Paul W. Greaves
to purchase 50,000 shares of Meteor's Common Stock. These options are
exercisable at $3.50 per share and vest on a pro rata annual basis over five
years. These options expire five years after the date of grant.
In May of 1996, stock options were granted to two employees to purchase
an aggregate of 55,000 shares of Meteor's Common Stock at $3.50 per share.
The options vest in five equal installments each year following the date of
grant. These options expire five years after the date of grant. As of
October 9, 1998, 1997, of these options, only options to purchase 5,000 shares
remain outstanding.
On January 2, 1997, Meteor granted options to four employees to purchase
an aggregate of 20,000 shares of Common Stock at $5.07 per share. These
options vest over five years and expire on January 2, 2002.
On February 14, 1997, Meteor granted an option to Dennis R. Staal,
Secretary and Treasurer of Meteor, to purchase 25,000 shares of Common Stock
at $3.50 per share. Also on February 14, 1997, Meteor granted an option to
the president of IST, one of Meteor's subsidiaries, to purchase 5,000 shares
of Common Stock at $3.50 per share. These options vest over three years on a
annual basis and expire five years from the date of grant.
In October 1997, Meteor granted options to Robert Jensen, Fleischli's
President, to purchase 15,000 shares at an exercise price of $5.50 per share.
These options vest over three years and expire in October 2003. In March 1998
Meteor granted 5,000 options to Mr. Jensen at an exercise price of $4.25.
Such options vest over five years and expire in March of 2008.
In March 1998 Meteor granted to purchase 5,000 options to a Director and
32,500 to another Director. One half of such options vest immediately and one
half vest in March of 1999. The exercise price is $4.25 per share. Also in
March Meteor issued a total of 38,500 options to certain employees of the
Company. Such options vest over five years and expire in March 2008.
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In May 1998, Meteor granted 10,000 options each to Edward Names, Dennis
Staal and Paul Greaves for personally guaranteeing a subsidiary note. These
options vest immediately, the exercise price is $3.06 and expire in 2003.
In June 1998, Meteor granted 10,000 options to Richard Kisser, Vice
President-Finance and Accounting. These options vest over three years and
expire in June 2001. The exercise price is $3.75.
PURPOSE OF THE INCENTIVE PLAN
The purpose of the Incentive Plan is to enable the Company to attract
officers and other key employees and consultants and to provide them with
appropriate incentives and rewards for superior performance. The Incentive
Plan affords the Company the ability to respond to changes in the competitive
and legal environments by providing the Company with greater flexibility in
key employee and executive compensation than was available through the
previously approved plans or the individual stock option agreements. This plan
is designed to be an omnibus plan allowing the Company to grant a wide range
of compensatory awards including stock options, stock appreciation rights,
restricted stock, deferred stock and performance shares or units. The
Incentive Plan is intended to encourage stock ownership by recipients by
providing for or increasing their proprietary interests in the Company,
thereby encouraging them to remain in the Company's employment. The Incentive
Plan has been prepared to comply with all applicable tax and securities laws,
including Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and state and federal tax laws.
DESCRIPTION OF THE INCENTIVE PLAN
GENERAL. The following general description of certain features of the
Incentive Plan is qualified in its entirety by reference to the Incentive
Plan, which is attached as Appendix A. Subject to adjustment as provided in
the Incentive Plan, the number of shares of Common Stock that may be issued or
transferred, plus the amount of shares of Common Stock covered by outstanding
awards granted under the Incentive Plan, shall not in the aggregate exceed
750,000. The number of Performance Units granted under the Incentive Plan
shall not in the aggregate exceed 200,000. The number of shares of Common
Stock granted under the Incentive Plan to any individual in any calendar year
shall not in the aggregate exceed 100,000.
ELIGIBILITY. Officers, including officers who are members of the Board
of Directors, and other key employees of and consultants to the Company may be
selected by the Committee (as defined below) to receive benefits under the
Incentive Plan.
TERMS OF OPTIONS AND OTHER POSSIBLE AWARDS. The Incentive Plan
authorizes the granting of options to purchase shares of Common Stock ("Option
Rights"), stock appreciation rights ("Appreciation Rights"), restricted shares
("Restricted Shares"), deferred shares ("Deferred Shares"), performance shares
("Performance Shares") and performance units ("Performance Units"). The terms
applicable to these various types of awards, including those terms that may be
established by the Board of Directors when making or administering particular
awards, are set forth in detail in the Incentive Plan.
OPTION RIGHTS. The Board of Directors may grant Option Rights that
entitle the optionee to purchase shares of Common Stock at a price less than,
equal to or greater than market value on the date of grant. The option price
is payable at the time of exercise (i) in cash or cash equivalent, (ii) by the
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transfer to the Company of shares of Common Stock that are already owned by
the optionee and have a value at the time of exercise equal to the option
price, (iii) with any other legal consideration the Board of Directors may
deem appropriate or (iv) by any combination of the foregoing methods of
payment. Any grant may provide for deferred payment of the option price from
the proceeds of sale through a broker on the date of exercise of some or all
of the shares of Common Stock to which the exercise relates. The Board of
Directors has the authority to specify at any time that Restricted Shares or
other shares of Common Stock which are subject to risk of forfeiture or
restrictions on transfer will be accepted for part or all of the option price.
In such event, the Board of Directors may provide that the shares of Common
Stock received upon exercise of the stock option will not be subject to the
same risks of forfeiture or restrictions on transfer which applied to the
shares used as payment for the option price. The Board of Directors may also
provide that additional Option Rights will automatically be granted to an
optionee upon the exercise of Option Rights.
Option Rights granted under the Incentive Plan may be Option Rights that
are intended to qualify as incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986 ("Code") or Option Rights
that are not intended to so qualify. The Incentive Plan permits the granting
of incentive stock options or nonqualified stock options at the discretion of
the Board of Directors. The exercise price for nonqualified stock options
granted may not be less than 85% of the fair market value per share of Common
Stock on the date of grant. The exercise price for ISOs may not be less than
the fair market value per share of Common Stock on the date of grant, and ISOs
granted to persons owning more than 10% of the Company's voting stock must
have an exercise price of not less than 110% of the fair market value per
share of Common Stock on the date of grant. All options granted must be
exercised within ten years of grant, except that ISOs granted to 10% or more
Stockholders must be exercised within five years of grant. The aggregate
market value (as determined as of the date of grant) of the Common Stock for
which any optionee may be awarded ISOs which are first exercisable by such
optionee during any calendar year may not exceed $100,000. At or after the
date of grant of any non-qualified Option Rights, the Board of Directors may
provide for the payment of dividend equivalents to the optionee on a current,
deferred or contingent basis or may provide that dividend equivalents be
credited against the option price.
Each grant must specify the conditions, including as and to the extent
determined by the Board of Directors, the period or periods of continuous
employment or continuous engagement of consulting services of the optionee by
the Company or any subsidiary, or the achievement of Management Objectives (as
defined in the Incentive Plan), that are necessary before the Option Rights
will become exercisable, and may provide for the earlier exercise of the
Option Rights, including, without limitation, in the event of a change in
control of the Company or other similar transaction or event. Successive
grants may be made to the same optionee regardless of whether Option Rights
previously granted to him or her remain unexercised.
APPRECIATION RIGHTS. Appreciation Rights granted under the Incentive
Plan may be either freestanding or granted in tandem with Option Rights. An
Appreciation Right represents the right to receive from the Company the
difference ("Spread"), or a percentage thereof not in excess of 100 percent,
between the base price per share of Common Stock in the case of a free-
standing Appreciation Right, or the option price of the related Option Right
in the case of a tandem Appreciation Right, and the market value of the Common
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Stock on the date of exercise of the Appreciation Right. Tandem Appreciation
Rights may only be exercised at a time when the related Option Right is
exercisable and the Spread is positive, and the exercise of a tandem
Appreciation Right requires the surrender of the related Option Right for
cancellation.
A free-standing Appreciation Right must have a base price that is at
least equal to the fair market value of a share of Common Stock on the date of
grant, must specify the conditions, including as and to the extent determined
by the Board of Directors, the period of continuous employment or continuous
engagement of consulting services, or the achievement of Management
Objectives, that are necessary before the Appreciation Right becomes
exercisable (except that it may provide for its earlier exercise, including,
without limitation, in the event of a change in control of the Company or
other similar transaction or event) and may not be exercised more than 10
years from the date of grant. Any grant of Appreciation Rights may specify
that the amount payable by the Company upon exercise may be paid in cash,
shares of Common Stock or a combination thereof, and the Board of Directors
may either reserve or grant to the recipient the right to elect among those
alternatives. The Board of Directors may provide with respect to any grant of
Appreciation Rights for the payment of dividend equivalents thereon in cash or
Common Stock on a current, deferred or contingent basis.
RESTRICTED SHARES. An award of Restricted Shares involves the immediate
transfer by the Company to a participant of ownership of a specific number of
shares of Common Stock in consideration of the performance of services or, as
and to the extent determined by the Board of Directors, the achievement of
Management Objectives. The participant is entitled immediately to voting,
dividend and other ownership rights in the shares. The transfer may be made
without additional consideration from the participant or in consideration of a
payment by the participant that is less than the market value of the shares on
the date of grant, as the Board of Directors may determine.
Restricted Shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined by
the Board of Directors. An example would be a provision that the Restricted
Shares would be forfeited if the participant ceased to serve the Company as an
officer or other key employee during a specified period of years. In order to
enforce these forfeiture provisions, the transferability of Restricted Shares
will be prohibited or restricted in a manner and to the extent prescribed by
the Board of Directors for the period during which the forfeiture provisions
are to continue. The Board of Directors may provide for a shorter period
during which the forfeiture provisions are to apply, including, without
limitation, in the event of a change in control of the Company or other
similar transaction or event.
DEFERRED SHARES. An award of Deferred Shares constitutes an agreement by
the Company to deliver shares of Common Stock to the participant in the future
in consideration of the performance of services, subject to the fulfillment of
such conditions during the Deferral Period (as defined in the Incentive Plan)
as the Board of Directors may specify. During the Deferral Period, the
participant has no right to transfer any rights under the award and no right
to vote the shares covered by the award. On or after the date of any grant of
Deferred Shares, the Board of Directors may authorize the payment of dividend
equivalents thereon on a current, deferred or contingent basis in either cash
or additional shares of Common Stock. Grants of Deferred Shares may be made
without additional consideration from the participant or for consideration in
an amount that is less than the market value of the shares on the date of
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grant. Deferred Shares must be subject to a Deferral Period, as determined by
the Board of Directors on the date of grant, except that the Board of
Directors may provide for a shorter Deferral Period, including, without
limitation, in the event of a change in control of the Company or other
similar transaction or event.
PERFORMANCE SHARES AND PERFORMANCE UNITS. A Performance Share is the
equivalent of one share of Common Stock, and a Performance Unit is the
equivalent of $1.00. A participant may be granted any number of Performance
Shares or Performance Units. The participant will be given one or more
Management Objectives to meet within a specified period ("Performance Period")
which may be subject to earlier termination, including, without limitation, in
the event of a change in control of the Company or other similar transaction
or event. A minimum level of acceptable achievement will also be established
by the Board of Directors. If by the end of the Performance Period the
participant has achieved the specified Management Objectives, he or she will
be deemed to have fully earned the Performance Shares or Performance Units. If
the participant has not achieved the Management Objectives but has attained or
exceeded the predetermined minimum level of acceptable achievement, he or she
will be deemed to have partly earned the Performance Shares or Performance
Units in accordance with a predetermined formula. To the extent earned, the
Performance Shares or Performance Units will be paid to the participant at the
time and in the manner determined by the Board of Directors in cash, shares of
Common Stock or any combination thereof, and the Board of Directors may either
grant to the recipient or retain the right to elect among these alternatives.
At or after the date of grant of any Performance Shares, the Board of
Directors may provide for the payment of dividend equivalents to the optionee
on a current, deferred or contingent basis.
MANAGEMENT OBJECTIVES. Management Objectives mean the achievement of
performance objectives established pursuant to the Incentive Plan. The Board
of Directors may adjust Management Objectives and related minimum acceptable
levels of achievement if events or transactions have occurred after the date
an award was granted that are unrelated to the performance of the participant
and result in distortion of the Management Objectives or the related minimum
levels. Management Objectives may be described in terms of either Company-wide
objectives or objectives that are related to the performance of the individual
participant or the division, subsidiary, department or function within the
Company or a subsidiary in which the participant is employed or with respect
to which the participant provides consulting services.
TRANSFERABILITY. Option Rights and awards granted under the Incentive
Plan shall be nontransferable by the participant except by will or the laws of
descent and distribution of the state where the participant is domiciled at
the time of his death. However, the Board of Directors may (but need not)
permit other transfers to the extent consistent with Rule 16b-3 where the
Board of Directors concludes that such transferability does not result in
accelerated taxation and is otherwise appropriate and desirable.
ADJUSTMENTS. The maximum number of shares of Common Stock that may be
issued or transferred under the Incentive Plan, the number of shares covered
by outstanding awards and the option prices or base prices per share
applicable thereto, are subject to adjustment in the event of stock dividends,
stock splits, combinations of shares, recapitalizations, mergers,
consolidations, spin-offs, reorganizations, liquidations, issuances of rights
or warrants, and similar transactions or events. In the event of any such
transaction or event, the Board of Directors may in its discretion provide in
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substitution for any or all outstanding awards under the Incentive Plan such
alternative consideration as it may in good faith determine to be equitable in
the circumstances and may require the surrender of all awards so replaced.
ADMINISTRATION AND AMENDMENTS. The Incentive Plan is administered by
the Board of Directors. In connection with its administration of the
Incentive Plan, the Board of Directors is authorized to interpret the
Incentive Plan and related agreements and other documents. The Board of
Directors may make grants to participants under any or a combination of all of
the various categories of awards that are authorized under the Incentive Plan.
The Board of Directors may with the concurrence of the affected participant
cancel any agreement evidencing an award granted under the Incentive Plan. In
the event of any such cancellation, the Board of Directors may authorize the
granting of a new award under the Incentive Plan in such manner, at such price
and subject to such other terms, conditions and discretion as would have been
applicable under the Incentive Plan had the canceled award not been granted.
The Board of Directors may also grant any award or combination of awards
authorized under the Incentive Plan, including without limitation an award
that was granted prior to the adoption of the Incentive Plan, and any such
award or combination of awards so granted under the Incentive Plan may or may
not cover the same number of shares of Common Stock as had been covered by the
canceled award and will be subject to such other terms, conditions and
discretion as would have been permitted under the Incentive Plan had the
canceled award not been granted.
The Incentive Plan may be amended from time to time by the Board of
Directors, but without further approval by the Stockholders of the Company no
such amendment (unless expressly allowed pursuant to the adjustment provisions
described above) may (i) increase the aggregate number of shares that may be
issued or transferred plus the amount of shares covered by outstanding awards,
or increase the aggregate number of Performance Units that may be granted
thereunder or (ii) otherwise cause Rule 16b-3 under the Exchange Act to cease
to be applicable to the Incentive Plan.
FEDERAL INCOME TAX CONSEQUENCES TO PARTICIPANTS IN PLAN
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Incentive Plan based on federal
income tax laws in effect on January 1, 1996. This summary is not intended to
be exhaustive and does not describe state or local tax consequences.
NON-QUALIFIED OPTION RIGHTS. In general; (i) no income will be
recognized by an optionee at the time a non-qualified Option Right is granted;
(ii) at the time of exercise of a non-qualified Option Right, ordinary income
will be recognized by the optionee in an amount equal to the difference
between the option price paid for the shares and the fair market value of the
shares if they are nonrestricted on the date of exercise; and (iii) at the
time of sale of shares acquired pursuant to the exercise of a non-qualified
Option Right, any appreciation (or depreciation) in the value of the shares
after the date of exercise will be treated as either short-term or long-term
capital gain (or loss) depending on how long the shares have been held.
INCENTIVE STOCK OPTIONS. No income generally will be recognized by an
optionee upon the grant or exercise of an incentive stock option. If shares of
Common Stock are issued to an optionee pursuant to the exercise of an
incentive stock option and no disqualifying disposition of the shares is made
by the optionee within two years after the date of grant or within one year
after the transfer of the shares to the optionee, then upon the sale of the
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shares any amount realized in excess of the option price will be taxed to the
optionee as long-term capital gain and any loss sustained will be a long-term
capital loss.
If shares of Common Stock acquired upon the exercise of an incentive
stock option are disposed of prior to the expiration of either holding period
described above, the optionee generally will recognize ordinary income in the
year of disposition in an amount equal to any excess of the fair market value
of the shares at the time of exercise (or, if less, the amount realized on the
disposition of the shares in a sale or exchange) over the option price paid
for the shares. Any further gain (or loss) realized by the optionee generally
will be taxed as short-term or long-term capital gain (or loss) depending on
the holding period.
APPRECIATION RIGHTS. No income will be recognized by a participant in
connection with the grant of an Appreciation Right. When the Appreciation
Right is exercised, the participant normally will be required to include as
taxable ordinary income in the year of exercise an amount of cash, and the
fair market value of any nonrestricted shares of Common Stock, received
pursuant to the exercise. In limited circumstances, however, the Internal
Revenue Service ("IRS") may contend that the holder of a freestanding
appreciation right is in constructive receipt of ordinary income before the
Appreciation Right is actually exercised if (i) a maximum limitation on the
amount payable upon exercise of the Appreciation Right at a time when the
Appreciation Right is imposed and (ii) the maximum limitation is reached prior
to the exercise of the Appreciation Right at a time when the Appreciation
Right is exercisable.
RESTRICTED SHARES. A recipient of Restricted Shares generally will be
subject to tax at ordinary income rates on the fair market value of the
Restricted Shares reduced by any amount paid by the recipient at such time as
the shares are no longer subject to a risk of forfeiture or restrictions on
transfer for purposes of Section 83 of the Code. However, a recipient who so
elects under Section 83(b) of the Code within 30 days of the date of transfer
of the shares will have taxable ordinary income on the date of transfer of the
shares equal to the excess of the fair market value of the share (determined
without regard to the risk of forfeiture or restrictions on transfer) over any
purchase price paid for the shares. If a Section 83(b) election has not been
made, any non-restricted dividends received with respect to Restricted Shares
that are subject at that time to a risk of forfeiture or restrictions on
transfer generally will be treated as compensation that is taxable as ordinary
income to the recipient.
DEFERRED SHARES. No income generally will be recognized upon the grant
of Deferred Shares. The recipient of a grant of Deferred Shares generally will
be subject to tax at ordinary income rates on the fair market value of
nonrestricted shares of Common Stock on the date that the Deferred Shares are
transferred to the recipient, reduced by any amount paid by the recipient, and
the capital gain or loss holding periods for the Deferred Shares will also
commence on that date.
PERFORMANCE SHARES AND PERFORMANCE UNITS. No income generally will be
recognized upon the grant of Performance Shares or Performances Units. Upon
payment in respect of the earn-out of Performance Shares or Performance Units,
the recipient generally will be required to include as taxable ordinary income
in the year of receipt an amount equal to the amount of cash received and the
fair market value of any nonrestricted shares of Common Stock received.
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TAX CONSEQUENCES TO THE COMPANY. To the extent that a participant
recognizes ordinary income in the circumstance described above, the Company
will be entitled to a corresponding deduction provided that, among other
things, (i) the income meets the test of reasonableness, is an ordinary and
necessary business expense, is not subject to the annual compensation
limitation set forth in Section 162(m) of the Code and is not an "excess
parachute payment" within the meaning of Section 280G of the Code and (ii) any
applicable withholding obligations are satisfied.
NEW PLAN BENEFITS
No options or awards have been granted under the Incentive Plan. The
future benefits or amounts that would be received under the Incentive Plan by
executive officers, the non-executive directors and the non-executive officer
employees are discretionary and are therefore not determinable at this time.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF
THE INCENTIVE PLAN.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 9, 1998, the stock
ownership of each person known by the Company to be the beneficial owner of
five percent or more of the Company's Common Stock, all Directors individually
and all Directors and Officers of the Company as a group. Except as noted,
each person has sole voting and investment power with respect to the shares
shown.
NAME AND ADDRESS AMOUNT OF BENEFICIAL PERCENTAGE
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
Capco Resources Ltd. 1,325,000 37.3%
#950, 444 - 5th Avenue, S.W.
Calgary, Alberta
Canada T0P 2T8
Edward J. Names 373,907 (1) 10.3%
216 - 16th Street, Suite 730
Denver, CO 80202
Ilyas Chaudhary 1,391,667 (2) 38.5%
#950, 444 - 5th Avenue, SW
Calgary, Alberta
Canada TOP 2T8
Dennis R. Staal 107,599 (3) 3.0%
216 - 16th Street, Suite 730
Denver, CO 80202
Irwin Kaufman 43,600 (4) 1.2%
8224 Paseo Vista Drive
Las Vegas, NV 89128
Richard Dana -- --%
128 Ash Street
Denver, CO 80220
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Theron J. Graves 785,309 (5) 22.2%
761 South Miller
Farmington, NM 87499
All Executive Officers and 1,945,073 (6)(7) 51.8%
Directors as a Group
(8 Persons)
__________________
(1) Represents 40,240 shares held directly by Mr. Names, 265,000 shares held
by NFF, Ltd., a limited partnership of which he served as general partner;
2,400 shares held by his wife of which he disclaims beneficial ownership, and
66,667 shares underlying stock options exercisable within 60 days by Mr.
Names.
(2) Includes shares of the Company held by Capco Resources Ltd. of which Mr.
Chaudhary is Chairman of the Board, Chief Executive Officer and beneficially
owns over 50% of its outstanding stock and 66,667 shares underlying stock
options exercisable within 60 days by Mr. Chaudhary.
(3) Includes 5,400 shares held by Mr. Staal; 71,500 shares held by PAMDEN,
Ltd., a limited partnership of which Mr. Staal is general partner; 8,432
shares held by Mystique Resources Company which is wholly owned by PAMDEN,
Ltd.; 600 shares held by an IRA and 21,667 shares underlying stock options
exercisable within 60 days by Mr. Staal.
(4) Consists of 30,000 shares underlying stock options exercisable within 60
days by Mr. Kaufman and 13,600 shares owned by Mr. Kaufman directly.
(5) Represents shares of the Company's Common Stock which Mr. Graves
presently has the right to acquire upon the exchange of shares of Graves
Preferred Stock held by him.
(6) Includes 6,300 shares held directly and 20,000 shares underlying stock
options exercisable within 60 days held by Paul W. Greaves, who is President
and Chief Executive Officer of certain of the Company's subsidiaries.
(7) Includes 2,000 shares held directly by Robert Jensen, who is President of
Fleischli Oil Company, Inc.
SUBMISSION OF PROPOSALS BY STOCKHOLDERS
In order to be eligible for inclusion in the Company's Proxy Statement
for the next Annual Meeting of Stockholders, anticipated to beheld in a June
1999, any proposal by a stockholder must be received by the Company in writing
at its principal office in Denver, Colorado a reasonable time before the
solicitation of proxies for such meeting is made in order to be included in
the Company's proxy statement and proxy relating to that meeting.
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OTHER BUSINESS
The Board of Directors does not know of any business to be presented for
consideration at the Special Meeting of Stockholders other than the stated in
the Notice of Special Meeting of Stockholders. The Board of Directors may, in
the absence of instructions to the contrary, vote or act in accordance with
their judgment with respect to any other proposal properly presented for
action at such meeting.
BY ORDER OF THE BOARD OF DIRECTORS
METEOR INDUSTRIES, INC.
Dennis R. Staal
Secretary
Denver, Colorado
October 22, 1998
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APPENDIX A
METEOR INDUSTRIES, INC.
1998 INCENTIVE EQUITY PLAN
1. PURPOSE.
The purpose of this Plan is to attract and retain officers and other key
employees of and consultants to Meteor Industries, Inc. (the "Corporation")
and its Subsidiaries and to provide such persons with incentives and rewards
for superior performance.
2. DEFINITIONS.
As used in this Plan,
"APPRECIATION RIGHT" means a right granted Pursuant to Section 5 of this
Plan, including a Free-standing Appreciation Right and a Tandem Appreciation
Right.
"BASE PRICE" means the price to be used as the basis for determining the
Spread upon the exercise of a Free-standing Appreciation Right.
"BOARD" means the Board of Directors of the Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMON SHARES" means (i) shares of the Common Stock, $.00l par value, of
the Corporation and (ii) any security into which Common Shares may be
converted by reason of any transaction or event of the type referred to in
Section 10 of this Plan.
"DATE OF GRANT" means the date specified by the Board of Directors on
which a grant of Option Rights, Appreciation Rights, Performance Shares or
Performance Units or a grant or sale of Restricted Shares or Deferred Shares
shall become effective, which shall not be earlier than the date on which the
Board of Directors takes action with respect thereto.
"DEFERRAL PERIOD" means the period of time during which Deferred Shares
are subject to deferral limitations under Section 7 of this Plan.
"DEFERRED SHARES" means an award pursuant to Section 7 of this Plan of
the right to receive Common Shares at the end of a specified Deferral Period.
"EFFECTIVE DATE" shall have the meaning set forth in Section 17.
"FREE-STANDING APPRECIATION RIGHT" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right or similar right.
"INCENTIVE STOCK OPTION" means an Option Right that is intended to
qualify as an "incentive stock option" under Section 422 of the code or any
successor provision thereto.
"MANAGEMENT OBJECTIVES" means the achievement of performance objectives
established pursuant to this Plan, which may be described in terms of
Corporation-wide objectives or objectives that are related to the performance
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of the individual Participant, or the Subsidiary, division, department or
function within the corporation or Subsidiary in which the Participant is
employed or with respect to which the Participant provides consulting
services. The Board of Directors may adjust Management Objectives and the
related minimum acceptable level of achievement if, in the sole judgment of
the Board of Directors, events or transactions have occurred after the Date of
Grant that are unrelated to the performance of the Participant and result in
distortion of the Management Objectives or the related minimum acceptable
level of achievement.
"MARKET VALUE PER SHARE" means the fair market value of the Common Shares
as determined by the Board of Directors from time to time.
"NONQUALIFIED OPTION" means an Option Right that is not intended to
qualify as an Incentive Stock Option.
"OPTIONEE" means the person so designed in an agreement evidencing an
outstanding Option Right or the Successor of an Optionee, as the context so
requires.
"OPTION PRICE" means the purchase price payable upon the exercise of an
Option Right.
"PARTICIPANT" means a person who is selected by the Board of Directors to
receive benefits under this Plan and (i) is at the time an officer, including
without limitation an officer who may also be a member of the Board, or other
key employee of or a consultant to the Corporation or any Subsidiary or (ii)
has agreed to commence serving in any such capacity, or the Successor of a
Participant, as the context requires.
"PERFORMANCE PERIOD" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 8 of this Plan.
"PERFORMANCE UNIT" means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 8 of this Plan.
"RELOAD OPTION RIGHTS" means additional Option Rights automatically
granted to an Optionee upon the exercise of Option Rights pursuant to Section
4(f) of this Plan.
"RESTRICTED SHARES" means Common Shares granted or sold pursuant to
Section 6 of this Plan as to which neither the substantial risk of forfeiture
nor the restrictions on transfer referred to in Section 6 hereof has expired.
"RULE 16b-3" means Rule 16b-3, as promulgated and amended from time to
time by the Securities and Exchange Commission under the Securities and
Exchange Act of 1934, as amended, or any successor rule to the same effect.
"SPREAD" means, in the case of a Free-standing Appreciation Right, the
amount by which the Market Value per share on the date when the Appreciation
Right is exercised exceeds the Base price specified therein or, in the case of
Tandem Appreciation Right, the amount by which the Market Value per share on
the date when the Appreciation Right is exercised exceeds the Option Price
specified in the related Option Right.
"SUBSIDIARY" means any corporation in which the Corporation owns or
controls directly or indirectly more than 50 percent of the total combined
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voting power represented by all classes of stock issued by such corporation at
the time of the grant.
"SUCCESSOR" of a Participant means the legal representative of the estate
of a deceased Participant or the person or persons who shall acquire the right
to exercise an award hereunder by bequest or inheritance or by reason of death
of the Participant.
"TANDEM APPRECIATION RIGHT" means an Appreciation Right granted pursuant
to Section 5 of this Plan that is granted in tandem with an Option Right or
any similar right granted under any other plan of the Corporation.
3. SHARES AND PERFORMANCE UNITS AVAILABLE UNDER THE PLAN.
(a) Subject to adjustment as provided in Section 10 of this Plan, the
number of Common Shares issued or transferred, plus the number of Common
shares covered by outstanding awards granted under this Plan, shall not in the
aggregate exceed 750,000 Common Shares. For the purposes of this Section
3(a):
(i) Upon payment in cash of the benefit provided by any award
granted under this Plan, any Common Shares that were covered by that award
shall again be available for issuance or transfer hereunder.
(ii) Common Shares covered by any award granted under this Plan
shall be deemed to have been issued or transferred, and shall cease to be
available for future issuance or transfer in respect of any other award
granted hereunder, at the earlier of the time when they are actual issued or
transferred or the time when dividends or dividend equivalents are paid
thereon; PROVIDED, HOWEVER, that Restricted Shares shall be deemed to have
been issued or transferred at the earlier of the time when they cease to be
subject to a substantial risk of forfeiture or the time when dividends are
paid thereon.
(b) The number of Performance Units that may be granted under this Plan
shall not in the aggregate exceed 200,000. Performance Units that are granted
under this Plan, but are paid in Common Shares or are not earned by the
Participant at the end of the Performance Period, shall be available for
future grants of Performance Units hereunder.
4. OPTION RIGHTS.
The Board of Directors may from time to time authorize grants to
Participants of options to purchase Common Shares upon such terms and
conditions as the Board of Directors may determine in accordance with the
following provisions:
(a) Each grant shall specify the number of Common Shares to which it
pertains; PROVIDED, HOWEVER, that no participant shall be granted Option
Rights for more than 100,000 Common Shares in any one fiscal year of the
Corporation, subject to adjustment as provided in Section 10 of this Plan.
(b) Each grant shall specify an Option Price per Common Share, which may
be less than, equal to or greater than the Market Value per Share on the Date
of Grant; PROVIDED, HOWEVER, (i) the Option Price shall equal at least 75% of
the Market Value per Share on the Date of Grant, or (ii) the Option Price with
respect to each Incentive Stock Option shall not be less than 100% (or 110%,
in the case of an individual described in Section 422(b) (6) of the Code
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(relating to certain 10% owners)) of the Market Value per Share on the Date of
Grant.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check or
other cash equivalents acceptable to the Board of Directors, (ii) subject to
Section 4(d), nonforfeitable, unrestricted Common Shares, which are already
owned by the Optionee and have a value at the time of exercise that is equal
to the Option Price, (iii) any other legal consideration that the Board of
Directors may deem appropriate, including without limitation any form of
consideration authorized under Section 4(d) below, on such basis as the Board
of Directors may determine in accordance with this Plan and (iv) any
combination of the foregoing.
(d) On or after the Date of Grant of any Nonqualified Option, the Board
of Directors may determine that payment of the Option Price may also be made
in whole or in part in the form of Restricted Shares or other Common Shares
that are subject to risk of forfeiture or restrictions on transfer. Unless
otherwise determined by the Board of Directors on or after the Date of Grant,
whenever any Option Price is paid in whole or in part by means of any of the
forms of consideration specified in this Section 4(d), the Common Shares
received by the Optionee upon the exercise of the Nonqualified Option shall be
subject to the same risks of forfeiture or restrictions on transfer as those
that applied to the consideration surrendered by the Optionee; PROVIDED,
HOWEVER, that such risks of forfeiture and restrictions on transfer shall
apply only to the same number of Common Shares received by the Optionee as
applied to the forfeitable or restricted Common Shares surrendered by the
Optionee.
(e) Any grant may provide for deferred payment of the Option Price from
the proceeds of sale through a broker on the date of exercise of some or all
of the Common Shares to which the exercise relates.
(f) On or after the Date of Grant of any Option Rights, the Board of
Directors may provide the automatic grant to the Optionee of Reload Option
Rights upon the exercise of Option Rights, including Reload Option Rights for
Common Shares or any other noncash consideration authorized under Sections
4(c) and (d) above.
(g) Successive grants may be made to the same Participant regardless of
whether any Option Rights previously granted to the Participant remain
unexercised.
(h) Each grant shall specify the conditions, including, and to the
extent determined by the Board of Directors, the period or periods of
continuous employment, or continuous engagement of the consulting services, of
the Optionee by the Corporation or any Subsidiary, or the achievement of
Management Objectives, that are necessary before the Option Rights or
installments thereof shall become exercisable, and any grant may provide for
the earlier exercise of the Option Rights, including, without limitation, in
the event of a change in control of the Corporation or other similar
transaction or event.
(i) Option Rights granted pursuant to this Section 4 may be
Nonqualified Options or Incentive Stock Options or combinations thereof, as
set forth in the award agreement.
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(j) On or after the Date of Grant of any Nonqualified Option, the Board
of Directors may provide for the payment to the Optionee of dividend
equivalents thereon in cash or Common Shares on a current, deferred or
contingent basis, or the Board of Directors may provide that any dividend
equivalents shall be credited against the Option Price.
(k) No Option Right granted pursuant to this Section 4 may be exercised
more than 10 years from the Date of Grant (except that, in the case of an
individual described in Section 422(b) (6) of the Code (relating to certain
10% owners) who is granted an Incentive Stock Option, the term of such Option
Right shall be no more than five years from the Date of Grant)
(l) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by an officer thereof and delivered to
and accepted by the Optionee and shall contain such terms and provisions as
the Board of Directors may determine consistent with this Plan.
(m) The aggregate Market Value per Share, determined as of the Date of
Grant, of the Common Shares for which any Optionee may be awarded Incentive
Stock Options which are first exercisable by the Optionee during any calendar
year under this Plan (or any other stock option plan required to be taken into
account under Section 422(b) of the Code) shall not exceed $100,000.
(n) If and to the extent otherwise advisable herein or under the
applicable option agreement, upon and after the death of an Optionee, such
Optionee's Option Rights, to the extent exercisable after death may be
exercised by the Successors of the Optionee. An Option Right may be
exercised, and payment in full of the aggregate Option Price made, by the
Successors of an Optionee only by written notice (in the form prescribed by
the Board of Directors) to the Corporation specifying the number of Common
Shares to be purchased. Such notice shall state that the aggregate Option
Price will be paid in full, or that the Option Right will be exercised as
otherwise provided hereunder, in the discretion of the Corporation or the
Board of Directors, if and as applicable.
5. APPRECIATION RIGHTS.
The Board of Directors may also authorize grants to Participants of
Appreciation Rights. An Appreciation Right shall be a right of the
Participant to receive from the Corporation an amount, which shall be
determined by the Board of Directors and shall be expressed as a percentage
(not exceeding 100 percent) of the Spread at the time of the exercise of an
Appreciation Right. Any grant of Appreciation Rights under this Plan shall be
upon such terms and conditions as the Board of Directors may determine in
accordance with the following provisions:
(a) Any grant may specify that the amount payable upon the exercise of
an Appreciation Right may be paid by the Corporation in cash, Common Shares or
any combination thereof and may (i) either grant to the Participant or reserve
to the Board of Directors the right to elect among those alternatives or (ii)
preclude the right of the Participant to receive and the Corporation to issue
Common Shares or other equity securities in lieu of cash; PROVIDE, HOWEVER,
that no form of consideration or manner of payment that would cause Rule 16b-3
to cease to apply to this Plan shall be permitted.
(b) Any grant may specify that the amount payable upon the exercise of
an Appreciation Right shall not exceed a maximum specified by the Board of
Directors on the Date of Grant.
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(c) Any grant may specify (i) a waiting period or periods before
Appreciation Rights shall become exercisable and (ii) permissible dates or
periods on or during which Appreciation Rights shall be exercisable.
(d) Any grant may specify that an Appreciation Right may be exercised
only in the event of a change in control of the Corporation or other similar
transaction or event.
(e) On or after the Date of Grant of any Appreciation Rights, the Board
of Directors may provide for the payment to the Participant of dividend
equivalents thereon in cash or Common Shares on a current, deferred or
contingent basis.
(f) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered to
and accepted by the Optionee and shall contain such other terms and provisions
as the Board of Directors may determine consistent with this Plan.
(g) Regarding Tandem Appreciation Rights only: Each grant shall provide
that a Tandem Appreciation Right may be exercised only (i) at a time when the
related Option Right (or any similar right granted under any other plan of
the Corporation) is also exercisable and the Spread is positive and (ii) by
surrender of the related Option Right (or such other right) for cancellation.
(h) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each Free-standing
Appreciation Right a Base Price per Common Share, which shall be equal to or
greater than the Market Value per Share on the Date of Grant;
(ii) Successive grants may be made to the same Participant
regardless of whether any Free-standing Appreciation Rights previously granted
to the Participant remain unexercisable; PROVIDED, HOWEVER, that no
participant shall be granted more than 100,000 Free-standing Appreciation
Rights in any one fiscal year of the Corporation, subject to adjustments as
provided in Section 10 of this Plan;
(iii) Each grant shall specify the conditions, including as and to
the extent determined by the Board of Directors, the period or periods of
continuous employment, or continuous engagement of the consulting services,
of the Participant by the Corporation or any Subsidiary, or the achievement
of Management Objectives, that are necessary before the Free-standing
Appreciation Rights or installments thereof shall become exercisable, and any
gant may provide for the earlier exercise of the Free-standing Appreciation
Rights, including, without limitation, in the event of a change in control of
the Corporation or other similar transaction or event; and
(iv) No Free-standing Appreciation Right granted under this Plan
may be exercised more than 10 years from the Date of Grant.
6. RESTRICTED SHARES.
The Board of Directors may also authorize grants or sales to Participants
of Restricted Shares upon such terms and conditions as the Board of Directors
may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute an immediate transfer of the
ownership of Common Shares to the Participant in consideration of the
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performance of services, or as and to the extent determined by the Board of
Directors, the achievement of Management Objectives, entitling such
Participant to dividend, voting and other ownership rights, subject to the
substantial risk of forfeiture and restrictions on transfer hereinafter
referred to.
(b) Each grant or sale may be made without additional consideration from
the Participant or in consideration of a payment by the Participant that is
less than the Market Value per Share on the Date of Grant.
(c) Each grant or sale shall provide that the Restricted Shares covered
thereby shall be subject to a "substantial risk of forfeiture" within the
meaning of section 83 of the Code for a period to be determined by the Board
of Directors on the Date of Grant, and any grant or sale may provide for the
earlier of such period, including without limitation, in the event of a change
in control of the Corporation or other similar transaction or event.
(d) Each grant or sale shall provide that, during the period for which
such substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Board of Directors on the Date of Grant. Such
restrictions may include, without limitation, rights of repurchase or first
refusal in the Corporation or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any transferee.
(e) Any grant or sale may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered and reinvested on an immediate or
deferred basis in additional Common Shares, which may be subject to the same
restrictions as the underlying award or such other restrictions as the Board
of Directors may determine.
(f) Each grant or sale shall be evidenced by an agreement, which shall
be executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Participant and shall contain such terms and provisions
as the Board of Directors may determine consistent with this Plan. Unless
otherwise directed by the Board of Directors, all certificates representing
Restricted Shares, together with a stock power that shall be endorsed in blank
by the Participant with respect to the Restricted Shares, shall be held in
custody by the Corporation until all restrictions thereon lapse.
7. DEFERRED SHARES.
The Board of Directors may also authorize grants or sales of Deferred
Shares to Participants upon such terms and conditions as the Board of
Directors may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute the agreement by the Corporation
to issue or transfer Common Shares to the Participant in the future in
consideration of the performance of services rendered, subject to the
fulfillment during the Deferral Period of such conditions as the Board of
Directors may specify.
(b) Each grant or sale may be made without additional consideration from
the Participant or in consideration of a payment by the Participant that is
less than the Market value per Share on the Date of Grant.
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(c) Each grant or sale shall provide that the Deferred Shares covered
thereby shall be subject to a Deferral Period, which shall be fixed by the
Board of Directors on the Date of Grant, and any grant or sale may provide for
the earlier termination of the Deferral Period, including without limitation,
in the event of a change in control of the Corporation or other similar
transaction or event.
(d) During the Deferral Period, the Participant shall not have any right
to transfer any rights under the subject award, shall not have any rights of
ownership in the Deferred Shares and shall not have any right to vote the
Deferred Shares, but the Board of Directors may on or after the Date of Grant
authorize the payment of dividend equivalents on the Deferred Shares in cash
or additional Common Shares on a current, deferred or contingent basis.
(e) Each grant or sale shall be evidenced by an agreement, which shall
be executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Participant and shall contain such terms and provisions
as the Board of Directors may determine consistent with this Plan.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS.
The Board of Directors may also authorize grants of Performance Shares
and Performance Units, which shall become payable to the Participant upon the
achievement of specified Management Objectives, upon such terms and conditions
as the Board of Directors may determine in accordance with the following
provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Performance Share or
Performance Unit shall be determined by the Board of Directors on the Date of
Grant and may be subject to earlier termination, including, without
limitation, in the event of a change in control of the Corporation or other
similar transaction or event.
(c) Each grant shall specify the Management Objectives that are to be
achieved by the Participant.
(d) Each grant shall specify in respect of the specified Management
Objectives a minimum acceptable level of achievement below which no payment
will be made and shall set forth a formula for determining the amount of any
payment to ve made if performance is at or above the minimum acceptable level
but falls short of full achievement of the specified Management Objectives.
(e) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been earned, and any
grant may specify that any such amount may be paid by the Corporation in cash,
Common Shares or any combination thereof and may either grant to the
Participant or reserve to the Board of Directors the right to elect among
those alternative; PROVIDED, HOWEVER, that no form of consideration or manner
of payment that would cause Rule 16b-3 to cease to apply to this Plan shall be
permitted.
(f) Any grant of Performance Shares may specify that the amount payable
with respect thereto may not exceed a maximum specified by the Board of
Directors on the Date of Grant. Any grant of Performance of Units may specify
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that the amount payable, or the number of Common Shares issued, with respect
thereto may not exceed maximums specified by the Board of Directors on the
Date of Grant.
(g) On or after the Date of Grant of Performance Shares, the Board of
Directors may provide for the payment to the Participant of dividend
equivalents thereon in cash or additional Common Shares on a current, deferred
or contingent basis.
(h) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered to
and accepted by the Participant and shall contain such terms and provisions as
the Board of Directors may determine consistent with this Plan.
9. TRANSFERABILITY.
(a) No Option Right or other derivative security (as that term is used
in Rule 16b-3) granted under this Plan may be transferred by a Participant
except by will or the laws of descent and distribution. Option Rights and
Appreciation Rights granted under this Plan may not be exercised during a
Participant's lifetime except by the Participant or, in the event of the
Participant's legal incapacity, by his guardian or legal representative acting
in a fiduciary capacity on behalf of the Participant under state law and court
supervision.
(b) Any grant made under this Plan may provide that all of any part of
the Common Shares that are to be issued or transferred by the Corporation upon
the exercise of Deferred Shares or in payment of Performance Shares or
Performance Units, or are no longer subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 6 of this Plan,
shall be subject to further restrictions upon transfer.
10. ADJUSTMENTS.
The Board of Directors may make or provide for such adjustments in the
number of Common Shares covered by outstanding awards granted hereunder, the
Option Prices per Common Share or Base Prices per Common Share applicable to
any such awards, and the kind of shares (including shares of another issuer)
covered thereby, as the Board of Directors may in good faith determine to be
equitably required in order to prevent dilution or expansion of the rights of
Participants that otherwise would result from (a) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Corporation or (b) any merger, consolidation, spin-off,
spin-out, split-off, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of warrants or other rights to
purchase securities or any other corporate transaction or event having an
effect similar to any of the foregoing. In the event of any such transaction
or event, the Board of Directors may provide in substitution for any or all
outstanding awards under this Plan such alternative consideration as it may in
good faith determine to be equitable under the circumstances and may require
in connection therewith the surrender of all awards so replaced. Moreover,
the Board of Directors may on or after the Date of Grant provide in the
agreement evidencing any award under this Plan that the holder of the award
may elect to receive an equivalent award in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event
having a similar effect, or the Board of Directors may provide that the holder
will automatically be entitled to receive such an equivalent award. The Board
of Directors may also make or provide for such adjustments in the maximum
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number of Common Shares specified in Section 3(a) of this Plan, the maximum
number of Performance Units specified in Section 3(b), and the maximum number
of Common Shares and Free-standing Appreciation Rights specified in Sections
4(a) and 5(h) (ii) of this Plan as the Board of Directors may in good faith
determine to be appropriate in order to reflect any transaction or event
described in this Section 10.
11. FRACTIONAL SHARES.
The Corporation shall not be required to issue any fractional Common
Shares pursuant to this Plan. The Board of Directors may provide for the
elimination of fractions or for the settlement thereof in cash.
12. WITHHOLDING TAXES.
To the extent that the Corporation is required to withhold federal,
state, local or foreign taxes in connection with any payment made or benefit
realized by a Participant or other person under this Plan, and the amounts
available to the Corporation for the withholding are insufficient, it shall be
a condition to the receipt of any such payment or the realization of any such
benefit that the Participant or such other person make arrangements
satisfactory to the Corporation for payment of the balance of any taxes
required to be withheld. At the discretion of the Board of Directors and
subject to the provisions of Rule 16b-3, any such arrangements may include
relinquishment of a portion of any such payment or benefit. The Corporation
and any Participant or such other person may also make similar arrangements
with respect to the payment of any taxes with respect to which withholding is
not required.
13. CERTAIN TERMINATIONS OF EMPLOYMENT OR CONSULTING SERVICES, HARDSHIP AND
APPROVED LEAVES OF ABSENCE.
Notwithstanding any other provision of this Plan to the contrary, in the
event of termination of employment or consulting services by reason of death,
disability, normal retirement, early retirement, with the consent of the
Corporation, termination of employment or consulting services to enter public
service with the consent of the Corporation or leave of absence approved by
the Corporation, or in the event of hardship or other special circumstances,
of a Participant who holds an Option Right or Appreciation Right that is not
immediately and fully exercisable, any Restricted Shares as to which the
substantial risk of forfeiture or the prohibition or restriction on transfer
has not lapsed, any Deferred Shares as to which the Deferral Period is not
complete, any Performance Shares or Performance Units that have not been fully
earned, or any Common Shares that are subject to any transfer restriction
pursuant to Section 9b) of this Plan, the Board of Directors may take any
action that it deems to be equitable under the circumstances or in the best
interests of the Corporation, including without limitation, waiving or
modifying any limitation or requirement with respect to any award under this
Plan.
14. ADMINISTRATION OF THE PLAN.
(a) This Plan shall be administered by a Board of Directors of the
Corporation.
(b) The interpretation and construction by the Board of Directors of any
provision of this Plan or any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Shares, Deferred
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Shares, Performance Shares or Performance Units, and any determination by the
Board of Directors pursuant to any provision of this Plan or any such
agreement, notification or document, shall be final and conclusive. No member
of the Board of Directors shall be liable for any such action taken or
determination made in good faith.
15. AMENDMENTS AND OTHER MATTERS.
(a) This plan may be amended from time to time by the Board of
Directors; PROVIDED, HOWEVER, that except as expressly authorized by this
Plan, no such amendment shall increase the number of Common Shares specified
in Section 3(a) hereof, increase the number of Performance Units specified in
Section 3(b) hereof, or otherwise cause this Plan to cease to satisfy any
applicable condition of Rule 16b-3, without further approval of the
stockholders of the Corporation.
(b) With the concurrence of the affected Participant, the Board of
Directors may cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of any such cancellation, the Board of
Directors may authorize the granting of new Option Rights or other awards
hereunder, which may or may not cover the same number of Common Shares or
Performance Units as had been covered by the canceled Option Rights or other
award, at such Option Price, in such manner and subject to such other terms,
conditions and discretion as would have been permitted under this Plan had the
canceled Option Rights or other award not been granted.
(c) The Board of Directors may grant under this Plan any award or
combination of awards authorized under this Plan in exchange for the
cancellation of an award that was not granted under this Plan, including
without limitation any award that was granted prior to the adoption of this
Plan by the Board, any and such award or combination of awards so granted
under this Plan may or may not cover the same number of Common Shares as had
been covered by the canceled award and shall be subject to such other terms,
conditions and discretion as would have been permitted under this Plan and the
canceled award not been granted.
(d) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Corporation or
any Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(e) (i) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as an Incentive Stock Option from so
qualifying, any such provision shall be null and void with respect to any such
Option Right; PROVIDED, HOWEVER, that any such provision shall remain in
effect with respect to other Option Rights, and there shall be no further
effect on any provision of this Plan.
(ii) Any award that may be made pursuant to an amendment to this
Plan that shall have been adopted without the approval of the stockholders of
the Corporation shall be null and void if it is subsequently determined that
such approval was required in order for this Plan to continue to satisfy the
applicable conditions of Rule 16b-3.
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16. TERMINATION OF THE PLAN.
No further awards shall be granted under this Plan after the passage of
10 years from the date on which this Plan is first approved by the
stockholders of the Corporation.
17. EFFECTIVE DATE.
The effective date of this Plan (the "Effective Date") shall be September
29, 1998, provided, however, that this Plan and each award granted hereunder
shall be void and of no force or effect until and unless this Plan shall have
been approved by a vote of the holders of the majority of the Common Shares of
the Corporation present, or represented, and entitled to vote at a meeting
duly held in accordance with Colorado law.
18. NONTRANSFERABILITY.
Each award granted under this Plan shall by its terms nontransferable by
the Participant except by will or the laws of decent and distribution of the
state wherein the Participant is domiciled at the time of his death; provided,
however, that the Board of Directors may (but need not) permit other
transfers, to the extent consistent with Rule 16b-3; where the Board of
Directors concludes that such transferability does not result in accelerated
taxation and is otherwise appropriate and desirable.
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PRELIMINARY COPY
P R O X Y
METEOR INDUSTRIES, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edward J. Names with the power to appoint
his substitute, and hereby authorizes him to represent and to vote as
designated below, all the shares of common stock of Meteor Industries, Inc.
held of record by the undersigned on October 9, 1998, at the Special Meeting
of Shareholders to be held on _________, 1998, or any adjournment thereof.
1. The approval of the Company's 1998 Incentive Equity Plan.
____ FOR ____ AGAINST ____ ABSTAIN
2. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL NO. 1.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF THE SPECIAL MEETING OF SHAREHOLDERS TO
THE UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement.
Dated: __________________________ ____________________________________
Signature(s) of Shareholder(s)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF METEOR
INDUSTRIES, INC. PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED
PRE-ADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IF YOU ATTEND THE MEETING.
