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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
Bollinger Industries, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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[BOLLINGER INDUSTRIES LOGO]
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Bollinger Industries, Inc. (the "Company"), to be held Thursday, September
21, 2000, at 10:00 a.m., local time, at the Hilton Hotel, 2401 East Lamar
Boulevard, Arlington, Texas 76006. A Notice of Annual Meeting, Proxy Statement,
and form of proxy relating to the Annual Meeting are enclosed with this letter.
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2000 is also enclosed.
We urge you to read this material carefully. It is important that your
shares are represented at the Annual Meeting whether or not you plan to attend.
We encourage you to complete, sign and date the proxy and return it in the
enclosed envelope at your earliest convenience.
Sincerely,
/s/ GLENN D. BOLLINGER
Glenn D. Bollinger
Chairman of the Board
/s/ BOBBY D. BOLLINGER
Bobby D. Bollinger
President
Grand Prairie, Texas
August 25, 2000
Corporate Offices
602 Fountain Parkway
Grand Prairie, Texas 75050
Ph: 972 343-1000
Fax: 972 343-1199
<PAGE> 3
BOLLINGER INDUSTRIES, INC.
602 FOUNTAIN PARKWAY
GRAND PRAIRIE, TEXAS 75050
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 21, 2000
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To the Stockholders of
BOLLINGER INDUSTRIES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Bollinger Industries, Inc., a Delaware corporation (the "Company"), will be held
on Thursday, September 21, 2000, beginning at 10:00 a.m. local time, at the
Hilton Hotel, 2401 East Lamar Boulevard, Arlington, Texas 76006 for the
following purposes:
1. To elect four directors to serve until the next Annual Meeting of
Stockholders or until their successors have been duly elected and have
qualified;
2. To approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock from
8,000,000 shares to 20,000,000 shares;
3. To ratify the adoption of the 2000 Stock Option Plan of the Company;
4. To approve the appointment of King, Griffin & Adamson, P.C. as
independent public accountants of the Company for its fiscal year ending March
31, 2001; and
5. To transact such other business as may be properly brought before
the Annual Meeting, or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on August 15,
2000 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting or any adjournment thereof. Only stockholders of
record at the close of business on the record date are entitled to notice of and
to vote at the meeting. A complete list of such stockholders will be available
for inspection at the offices of the Company in Grand Prairie, Texas, during
regular business hours for a period of ten days before the meeting.
All stockholders are cordially invited to attend the meeting.
Stockholders are urged, whether or not they plan to attend the meeting, to
complete, date and sign the accompanying proxy and to return it promptly in the
enclosed postage-paid return envelope. A stockholder may revoke the proxy at any
time before the proxy is exercised by delivering written notice of revocation to
the Secretary of the Company, by delivering a subsequently dated proxy, or by
attending the meeting and withdrawing the proxy.
By Order of the Board of Directors
/s/ ROSE TURNER
Rose Turner
Secretary
Grand Prairie, Texas
August 25, 2000
<PAGE> 4
BOLLINGER INDUSTRIES, INC.
602 FOUNTAIN PARKWAY
GRAND PRAIRIE, TEXAS 75050
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 21, 2000
INTRODUCTION
This Proxy Statement is furnished to stockholders of Bollinger
Industries, Inc., a Delaware corporation ("Bollinger" or the "Company"), in
connection with the solicitation of proxies on behalf of the Board of Directors
of the Company for use at the annual meeting of stockholders to be held on
September 21, 2000, and at any postponements or adjournments thereof. Proxies in
the form enclosed will be voted at the meeting if properly executed, returned to
the Company prior to the meeting, and not revoked. The approximate date on which
this Proxy Statement and the accompanying proxy card will first be sent to
stockholders is August 25, 2000.
REVOCABILITY OF PROXY
A proxy may be revoked at any time before it is voted by delivering
written notice of revocation to the Secretary of the Company, by delivering a
subsequently dated proxy, or by attending the meeting and withdrawing the proxy.
A stockholder's attendance at the meeting will not constitute automatic
revocation of the proxy.
ACTION TO BE TAKEN AT THE MEETING
The accompanying proxy, unless the stockholder otherwise specifies in
the proxy, will be voted (i) for the election as directors of the nominees
listed under "Election of Directors"; (ii) for the approval of an amendment to
the Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 8,000,000 shares to 20,000,000 shares; (iii) for the
ratification of the adoption of the 2000 Stock Option Plan of the Company; (iv)
for the ratification of the appointment of King, Griffin & Adamson, P.C. as
independent public accountants of the Company for the 2001 fiscal year; and (v)
at the discretion of the proxy holders, on any other matter that may properly
come before the meeting or any postponements or adjournments thereof.
Where stockholders have appropriately specified how their proxies are
to be voted, they will be voted accordingly. If any other matter of business is
brought before the meeting, the proxy holders may vote the proxies at their
discretion. The directors do not know of any such other matter or business.
OUTSTANDING CAPITAL STOCK
The record date for stockholders entitled to vote at the annual meeting
is August 15, 2000. At the close of business on that day, there were 4,400,210
shares of the Company's Common Stock, $0.01 par value ("Common Stock"),
outstanding and entitled to vote at the meeting.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock is necessary to constitute a quorum at
the meeting. In deciding all questions, a holder of Common Stock is entitled to
one vote, in person or by proxy, for each share held in his or her name on
<PAGE> 5
the record date. Directors of the Company will be elected by a plurality of the
votes cast by the stockholders present in person or by proxy at the Annual
Meeting and entitled to vote thereon. Any other matters submitted to a vote of
the stockholders will be decided by the vote of a majority of the votes cast by
the stockholders present in person or by proxy at the Annual Meeting and
entitled to vote thereon. Abstentions will be included in vote totals and, as
such, will have the same effect on each proposal other than the election of
directors as a negative vote. Broker non-votes, if any, will not be included in
vote totals and, as such, will have no effect on any proposal.
PERSONS MAKING THE SOLICITATION
The accompanying proxy is being solicited by the Board of Directors of
the Company. The cost of soliciting proxies will be borne entirely by the
Company and no other person or persons will bear such costs either directly or
indirectly. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by directors, officers and employees
of the Company.
BOARD OF DIRECTORS
COMMITTEES
The Board of Directors has Executive, Audit, Compensation and Stock
Option Committees.
Glenn Bollinger, Bobby Bollinger and Stephen Parr served on the
Executive Committee during fiscal 2000, and Mr. Parr served as its chairman.
Subject to statutory limitations, the Executive Committee is authorized to
exercise the powers of the Board of Directors between regular meetings. The
Executive Committee held numerous meetings via telephonic conferences during
fiscal 2000, met once, and took certain other actions by written consent.
John Maguire and Stephen Parr served on the Audit Committee during
fiscal 2000, and Mr. Parr served as its chairman. The Audit Committee is
responsible for reviewing the scope of the independent auditors' examinations of
the Company's financial statements and receiving and reviewing their reports.
The Audit Committee also meets with the independent auditors and has the
authority to conduct internal audits and investigations, receive recommendations
or suggestions for changes in accounting procedures, and initiate or supervise
any special investigations it may choose to undertake. The Audit Committee met
once during fiscal 2000 and held telephonic conferences with the outside
auditors.
Stephen Parr was the sole member of the Compensation Committee during
fiscal 2000, and served as its chairman. The Compensation Committee determines
the Company's policy with respect to the nature and amount of all compensation
of the Company's officers, and will at least annually prepare a compensation
report in accordance with rules promulgated by the Securities and Exchange
Commission (the "SEC"). The Compensation Committee met once during fiscal 2000.
Stephen Parr was the sole member of the Stock Option Committee during
fiscal 2000, and served as its chairman. The Stock Option Committee administers
the Bollinger Industries, Inc. 1993 and 1998 Stock Option Plans and the
Bollinger Industries, Inc. 2000 Nonqualified Stock Option Plan. The Stock Option
Committee met twice in fiscal 2000.
DIRECTORS' FEES AND COMPENSATION
Stephen Parr receives a fee of $30,000 annually and is reimbursed for
out-of-pocket expenses incurred in connection with attendance at Board of
Directors and committee meetings. He was granted options to purchase 8,333
shares of Common Stock at the time he began serving on the Board of Directors.
Glenn Bollinger and Bobby Bollinger each receive $10,000 annually for their
service as
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directors. John Maguire receives $36,000 annually and acts as a consultant on
certain financial matters and acquisitions.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The Board of Directors met four times during the fiscal year ended
March 31, 2000. The Board took all other actions by unanimous written consent
during fiscal 2000. In addition, all directors attended at least 75% of all
meetings of each of the committees on which they served.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
Four directors are to be elected at the Annual Meeting. The Board of
Directors has nominated the four individuals named below to serve as directors
of the Company. All of the nominees have consented to serve if elected. If for
any unforeseen reason a nominee is unable to serve if elected, the persons named
in the accompanying proxy may exercise their discretion to vote for a substitute
nominee selected by the Board. However, the Board has no reason to anticipate
that any of the nominees will not be able to serve, if elected.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
<S> <C> <C>
Glenn D. Bollinger (1) 50 1979
Bobby D. Bollinger (1) 47 1979
John L. Maguire (3)(5) 69 1993
Stephen L. Parr (1)(2)(3)(4)(5) 47 1995
</TABLE>
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(1) Member of the Executive Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee
(4) Member of the Stock Option Committee
(5) Independent director
Set forth below is certain information concerning each of the persons
nominated for election as a director of the Company:
Glenn D. Bollinger is a co-founder of the Company and has served as
Chairman of the Board, Chief Executive Officer and a Director since 1979. Mr.
Bollinger is primarily responsible for the Company's overall operations,
including in particular inventory, purchasing and warehousing. Mr. Bollinger is
subject to an order of permanent injunction entered by the United States
District Court for the District of Columbia, which enjoins him from engaging in
any conduct which would constitute violations of various provisions of the
Securities Exchange Act of 1934, specifically, Sections 10(b), 13(a), 13(b), and
various rules promulgated thereunder. It does not preclude or otherwise limit
his participation as an executive officer or director of the Company. The order
arose out of an action filed by the SEC on September 30, 1996 complaining of
certain transactions with three customers of the Company, which occurred during
the Company's fiscal years ended March 31, 1994 and 1995. Mr. Bollinger agreed
to the entry of the order without admitting or denying that he committed any
violations of law.
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Bobby D. Bollinger is a co-founder of the Company and has served as
Vice Chairman of the Board, President and a Director since 1979. Mr. Bollinger
is primarily responsible for sales, marketing and product development.
John L. Maguire became a Director of the Company in September 1993 and
served as interim Chief Financial Officer from August 1992 to August 1993. In
addition, the Company from time to time retains Mr. Maguire as a consultant on
certain financial matters and acquisitions. Mr. Maguire is a certified public
accountant. Since November 1, 1999 Mr. Maguire has served as Director of
Administrative Services, City of Fayetteville, Arkansas City Government. Since
1982 he has been self-employed, concentrating on private family investments. He
was previously Chief Financial Officer of Tyson Foods, Inc.
Stephen L. Parr became a Director of the Company in November 1995. Mr.
Parr is currently President of Navigator Capital Management, LLC. Mr. Parr was
previously a Vice President of Goldman Sachs, where he was an international
specialist. Mr. Parr was with Goldman Sachs from 1977 to 1995. Mr. Parr serves
on the board of directors of Braman, Ltd., a furniture manufacturing company;
Nextek, Inc., an Alabama electronics company; Corphealth, Inc., a Texas
behavioral healthcare company; NavTel, LLC, a competitive local exchange
carrier; and Aqua Dynamics, a specialty chemical and ozone services company.
Glenn D. Bollinger and Bobby D. Bollinger are brothers, and are the
sons of Dell Bollinger, Senior Vice President - Administration of the Company.
Otherwise, there is no family relationship between any of the nominees,
directors and any executive officer of the Company.
No director presently holds any other directorships in companies with a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or subject to the requirements of Section 15 of that act.
The four nominees receiving the greatest number of votes cast at the
Annual Meeting will be elected whether or not any of them receives a majority of
the votes cast.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE FOUR PERSONS NAMED UNDER "PROPOSAL NO. 1: ELECTION
OF DIRECTORS."
PROPOSAL NO. 2:
APPROVAL OF AN INCREASE IN THE
AUTHORIZED CAPITAL STOCK
On June 22, 2000, the Board of Directors approved a proposal to amend
Article FOURTH of the Company's Certificate of Incorporation to increase the
authorized shares of Common Stock from 8 million to 20 million (the
"Amendment"). The complete text of the proposed Amendment is set forth on
EXHIBIT A to this Proxy Statement. The Amendment would increase the total number
of shares the Company is authorized to issue from 9 million (8 million in Common
Stock and 1 million in Preferred Stock) to 21 million (20 million in Common
Stock and 1 million in Preferred Stock). The proposed increase is necessary to
enable the Company to issue additional shares of Common Stock if future
financing and acquisition activities require additional shares and to effect
stock dividends and stock splits of the Common Stock should the Board of
Directors determine that such action is desirable.
The SEC requires the Company to discuss how such shares could be used
to make it more difficult to effect a change in control of the Company. For
example, the additional shares of Common Stock could be used to dilute the stock
ownership of a person seeking to obtain control of the Company
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or could be privately placed with purchasers who would support the Board of
Directors in opposing a hostile takeover attempt. This proposal to amend the
Certificate of Incorporation is not in response to any effort of which the
Company is aware to accumulate Common Stock or obtain control of the Company,
nor is it part of a plan by management to recommend a series of similar
amendments to the Board of Directors and stockholders. The Board of Directors
does not presently contemplate recommending the adoption of any other amendments
to the Certificate of Incorporation which could be construed to affect the
ability of third parties to take over or change control of the Company.
The Company has not paid cash dividends on its Common Stock since its
inception. The Company's Board of Directors does not anticipate payment of any
cash dividends by the Company in the foreseeable future and such payments are
restricted by agreements with its primary lender.
The Amendment will be effective as soon as practicable following
approval by the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED SHARES OF COMMON STOCK.
PROPOSAL NO. 3:
RATIFICATION OF 2000 STOCK OPTION PLAN
GENERAL
On June 22, 2000 the Board adopted, subject to the approval of the
stockholders of the Company, the 2000 Stock Option Plan of Bollinger Industries,
Inc. (the "2000 Plan").
The Company has previously granted stock options to officers and
employees under various stock option plans (the "Stock Options Plans"). See
"Executive Compensation and Other Information - Stock Option Plans." In the
opinion of the Board, the Company and its stockholders have benefited
substantially from having these officers and employees acquire shares of its
Common Stock pursuant to options granted under such stock option plans. Such
options, in the opinion of the Board, have secured the benefits of the incentive
resulting from stock ownership by such directors, officers and employees who are
largely responsible for the Company's growth and success.
In view of the limited number of shares available for grant under the
Stock Option Plans, the Board adopted, subject to stockholder approval, the 2000
Plan. The Board believes it is advisable to make these shares available for the
purpose of granting further stock options to officers and other employees who
have been or are participants, consistent with their present responsibilities,
and to other officers and employees who assume or who, as a result of promotion,
will assume new and important responsibilities.
SUMMARY OF 2000 PLAN
A brief summary of the material provisions of the 2000 Plan is set out
below. The following summary is qualified in its entirety by reference to the
full text of the 2000 Plan, a copy of which is attached hereto as EXHIBIT B and
by reference made a part hereof.
PURPOSE. The purpose of the 2000 Plan is to give the Company a
competitive advantage in attracting, retaining and motivating officers and
employees and to provide the Company and its subsidiaries with a stock plan
providing incentives more directly linked to the profitability of the Company's
businesses and increases in shareholder value.
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SHARES SUBJECT TO THE 2000 PLAN. Subject to provisions for
proportionate adjustment occasioned by changes in the Company's capital
structure, a total of 500,000 shares of Common Stock have been set aside under
the 2000 Plan for issuance upon exercise of stock options granted thereunder.
Stock options granted under the 2000 Plan (the "Stock Options") may be
of two types: Incentive Stock Options and Nonqualified Stock Options. The Board
has the authority to grant to any participant Incentive Stock Options,
Nonqualified Stock Options or any combination thereof.
At August 1, 2000 the closing price of the Company's Common Stock was
$0.375. As of that date no Stock Options had been granted under the 2000 Plan.
If the outstanding shares of Common Stock subject to Stock Options are
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of a merger, consolidation,
recapitalization, or reclassification, or the number of shares of Common Stock
is increased or decreased by reason of a stock split-up, stock dividend,
combination of shares or any other increase or decrease in the number of such
shares of Common Stock effected without receipt of consideration by the Company
(provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration"),
the Board shall make appropriate adjustments in the number and kind of shares as
to which all outstanding Stock Options, or portions thereof then unexercised,
shall be exercisable with respect to any such Stock Options, to the end that
after such event the participant's proportionate interest shall be maintained as
before the occurrence of such event.
ELIGIBILITY. All officers and employees of the Company and its
subsidiaries who are responsible for or contribute to the management, growth and
profitability of the business of the Company and its subsidiaries are eligible
to be granted stock options under the 2000 Plan. On August 1, 2000 approximately
63 persons were eligible to receive Stock Options under the 2000 Plan. Directors
who are not officers or salaried employees of the Company and its subsidiaries
are ineligible to receive Stock Options under the 2000 Plan.
ADMINISTRATION. The 2000 Plan is administered by the Board, which may
from time to time delegate all or any part of its authority under the 2000 Plan
to a committee or subcommittee of not less than two directors appointed by the
Board who are not officers or salaried employees of the Company and who
therefore are ineligible to receive Stock Options under the 2000 Plan. The Board
is empowered (a) to select the officers and employees to whom and the time or
times at which Stock Options will be granted under the 2000 Plan; (b) to
determine whether and to what extent Incentive Stock Options and Nonqualified
Stock Options or any combination thereof are to be granted under the 2000 Plan;
(c) to determine the number of shares of Common Stock to be covered by each
Stock Option granted under the 2000 Plan; (d) to determine the terms and
conditions of such Stock Options, including but not limited to, the exercise
price, any vesting condition, restriction or limitation, and any vesting
acceleration or forfeiture waiver regarding any Stock Option and the shares
relating thereto; (e) to modify, amend or adjust the terms and conditions of any
Stock Option; and (f) to determine to what extent and under what circumstances
Common Stock and other amounts payable with respect to a Stock Option shall be
deferred.
The Board also has the authority to adopt, alter and appeal such
administrative rules, guidelines and practices governing the 2000 Plan; to
interpret the terms and provisions of the 2000 Plan and any Stock Options
granted under the 2000 Plan; and to otherwise supervise the administration of
the 2000 Plan.
OPTION PRICE. The exercise price at which shares of Common Stock may be
purchased pursuant to the exercise of Stock Options under the 2000 Plan will be
determined by the Board; provided, however, the price at which shares of Common
Stock may be purchased pursuant to the exercise of an Incentive Stock Option
granted under the 2000 Plan may not be less than one hundred percent (100%) of
the fair market
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value thereof on the date such Incentive Stock Option is granted (or 110% of the
fair market value thereof on the date such Incentive Stock Option is granted for
participants under the 2000 Plan who own more than ten percent (10%) of the
shares of Common Stock of the Company).
TERM AND EXERCISE OF STOCK OPTIONS. The term of each Stock Option
granted under the 2000 Plan is ten years from the date of grant or such shorter
period of time as the Board may determine; provided, however, in the case of an
Incentive Stock Option granted to a participant under the 2000 Plan who owns
more than ten percent (10%) of the shares of Common Stock of the Company, the
term of such Incentive Stock Option is five years from the date of grant or such
shorter period of time as the Board may determine.
All Stock Options granted under the 2000 Plan are exercisable by the
participants at such time or times and subject to such terms and conditions as
shall be determined by the Board. The 2000 Plan also provides for the earlier
termination of a Stock Option in the event of the participant's termination of
employment by death, disability or otherwise.
The term during which Stock Options may be granted under the 2000 Plan
expires on June 22, 2010, unless sooner terminated by the Board. Such a
termination, however, will have no effect on Stock Options then outstanding.
Payment for any shares of Common Stock to be issued upon exercise of a
Stock Option granted under the 2000 Plan may be tendered either in cash or by
certified or bank check, or by the tender of shares of Common Stock of the
Company owned by the participant, or shares issuable to the participant upon
exercise of the Stock Option, in each case having a fair market value as of the
date of exercise equal to the exercise price.
The Board may require as a condition to the grant of a Stock Option to
a participant that the participant surrender for cancellation some or all of the
unexercised Stock Options which have been previously granted to him under the
2000 Plan. A Stock Option the grant of which is conditioned upon such surrender
may have a per share exercise price lower (or higher) than the per share
exercise price of the surrendered Stock Option, may cover the same (or a lesser
or greater) number of shares as the surrendered Stock Option, may contain such
other terms as the Board deems appropriate and shall be exercisable in
accordance with its terms, without regard to the number of shares, exercise
price, term or any other term or condition of the surrendered Stock Option.
NONTRANSFERABILITY OF STOCK OPTIONS. Stock Options granted under the
2000 Plan are nontransferable except by will or by the laws of descent and
distribution; thus, during the lifetime of a participant, Stock Options granted
to a participant may only be exercised by such participant.
AMENDMENT AND TERMINATION OF THE 2000 PLAN. Subject to the terms and
conditions and within the limitations of the 2000 Plan, the Board may amend,
alter or discontinue the 2000 Plan, but no amendment, alteration or
discontinuation may be made which would (i) impair the rights of a participant
under a Stock Option without the participant's consent, except such an amendment
made to cause the 2000 Plan to qualify for the exemption provided by Rule 16b-3
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended from time
to time (the "Exchange Act"), or (ii) disqualify the 2000 Plan from the
exemption provided by Rule 16b-3. In addition, no such amendment shall be made
without the approval of the Company's stockholders to the extent such approval
is required by Rule 16b-3.
TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS. Incentive Stock Options granted under the 2000
Plan are intended to qualify as "incentive stock options" under Section 422 of
the Internal Revenue Code of 1986, as amended
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<PAGE> 11
(the "Code"). Under applicable provisions of the Code now in effect and pursuant
to the terms and provisions of the 2000 Plan, (i) an "incentive stock option"
results in no taxable income to a participant or deduction to the Company at the
time it is granted; (ii) upon exercise of the option, no taxable income results
to the participant from the receipt of the shares of Common Stock thereby
acquired, and no deduction is allowed to the Company; (iii) if, after exercise
of such an option, the participant does not dispose of the shares of Common
Stock thereby acquired within the later of two (2) years of the date of grant of
the option or within one (1) year of the date of the transfer of such shares to
the participant, the participant will be entitled, subject to certain
exceptions, to treat any gain realized upon disposition of the shares of Common
Stock as capital gain in the year of sale; and (iv) if held by the participant
for the periods described in clause (iii) above, the Company will not be
entitled to any deduction respecting any gain realized from the disposition of
shares of Common Stock by the recipient. A recipient of an option may be subject
to the alternative minimum tax under the Code, as the inherent gain measured by
the difference between the fair market value of the Common Stock and the
exercise price (the "spread") at the date of exercise is a potential adjustment
item to income on which the alternative minimum tax is computed. As a general
rule, if the 2-year and 1-year holding requirements discussed above are not met,
but all other requirements are met, gains derived from the sale of the Common
Stock will be treated as compensation income to the participant, and the Company
will be entitled to a corresponding tax deduction for the spread at that time.
However, the recipient's tax consequences from a disposition of the shares may
vary depending upon the circumstances involved in the disposition.
In addition, characterization of the gain realized from the disposition
of Common Stock as capital gain or ordinary income may have material tax
consequences to the recipient. Specifically, gain characterized as capital gain
is subject to offset against any capital losses of the recipient. Conversely,
any loss realized from the disposition of shares of Common Stock treated as a
long term capital loss can only be offset against other capital gains of the
recipient plus an amount not in excess of $3,000 of other ordinary income. Any
long term capital loss of the recipient over and above those annual amounts are
carried forward to subsequent taxable years. Moreover, gain realized from the
early disposition of shares of Common Stock which is treated as ordinary income
is subject to withholding taxes and social security taxes. THE TAX CONSEQUENCES
OF A DISPOSITION OF SHARES WILL VARY, DEPENDING ON THE PARTICIPANT'S INDIVIDUAL
TAX SITUATION. THEREFORE, EACH PARTICIPANT IS ENCOURAGED TO CONSULT WITH HIS OWN
TAX ADVISOR.
NONQUALIFIED STOCK OPTIONS. Nonqualified Stock Options may be granted
under the 2000 Plan, and this type of option will not qualify for the incentive
stock option tax benefits under Section 422 of the Code. A participant generally
will not recognize any taxable income at the time he or she is granted a
Nonqualified Stock Option. However, upon exercise, the participant will have
taxable ordinary income equal to the excess of (i) the fair market value on the
exercise date of the shares received, less (ii) the option price for the shares
received. This ordinary income will be subject to income tax withholding. A
participant's recognition of ordinary income with regard to Nonqualified Stock
Options will increase the participant's adjusted cost basis of the shares for
purposes of calculating gain or loss on a later disposition of the shares.
In general, there will be no Federal income tax consequences to the
Company upon the grant or termination of a Nonqualified Stock Option or a sale
or disposition of the shares acquired upon the exercise of a Nonqualified Stock
Option. However, upon the exercise of a Nonqualified Stock Option, the Company
will be entitled to a deduction for Federal income tax purposes equal to the
amount of ordinary income that a participant is required to recognize as a
result of the exercise.
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of a majority of the shares of Common Stock
represented at the meeting, in person or by proxy, will be necessary to ratify
the adoption of the 2000 Plan.
-8-
<PAGE> 12
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE APPROVAL OF THE
2000 STOCK OPTION PLAN OF THE COMPANY.
PROPOSAL NO. 4:
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to approval by the stockholders, the Board of Directors has
selected King, Griffin & Adamson, P.C. as independent public accountants of the
Company for its fiscal year ended March 31, 2001. King, Griffin & Adamson, P.C.
has acted in such capacity for the Company since August 1995 and has reported
that neither the firm nor any of its partners has any material direct or
indirect financial interest in the Company, other than as independent public
accountants.
Representatives of King, Griffin & Adamson, P.C. will be present at the
Annual Meeting of Stockholders with the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.
The affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock represented and entitled to vote at the
Annual Meeting or any adjournment(s) thereof is necessary for the approval of
the appointment of King, Griffin & Adamson, P.C. as independent public
accountants of the Company for the fiscal year ending March 31, 2001.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE APPOINTMENT OF KING, GRIFFIN & ADAMSON, P.C. AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR ITS FISCAL YEAR ENDING MARCH 31, 2001.
ACTION TO BE TAKEN UNDER THE PROXY
The accompanying proxy will be voted "FOR" the election of the four
persons recommended by the Board of Directors and named under "PROPOSAL NO. 1:
ELECTION OF DIRECTORS" as nominees for directors of the Company; "FOR" approval
of the Amendment to the Company's Certificate of Incorporation to increase the
number of authorized share of Common Stock from 8,000,000 shares to 20,000,000
shares; "FOR" the ratification of the adoption of the 2000 Stock Option Plan;
and "FOR" approval of the appointment of King, Griffin & Adamson, P.C. as the
independent public accountants of the Company for its fiscal year ending March
31, 2001, unless the proxy is marked in such a manner as to withhold authority
to so vote.
The accompanying proxy will also be voted in connection with the
transaction of such other business as may properly come before the Annual
Meeting of Stockholders, or any adjournment or adjournments thereof. Management
knows of no other matters to be considered at the Annual Meeting of
Stockholders. If, however, any other matters properly come before the Annual
Meeting of Stockholders, or any adjournment or adjournments thereof, the persons
named in the accompanying proxy will vote such proxy in accordance with their
best judgment on such matter. The persons named in the accompanying proxy will
also, if in their judgment it is deemed advisable, vote to adjourn the meeting
from time to time.
SECURITY OWNERSHIP OF
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the shares of Common Stock of the Company as of August
15, 2000 by (i) each director, (ii) each executive
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<PAGE> 13
officer, (iii) each person deemed to beneficially own more than five (5%)
percent of the outstanding shares of Common Stock of the Company, and (iv) all
executive officers and directors of the Company as a group. Except as otherwise
indicated, each stockholder identified in the table has sole voting and
investment power with respect to his or her shares.
<TABLE>
<CAPTION>
SHARES OWNED
------------------------
NAME NUMBER PERCENTAGE
---- --------- -----------
<S> <C> <C>
Glenn D. Bollinger (1)(2) 1,534,843 34.9%
Bobby D. Bollinger (1)(3) 1,535,894 34.9%
Rose Turner (4) 24,000 *
Dell K. Bollinger (5) 122,294 2.8%
David Barr (6) 32,000 *
Floyd L. DePauw (7) 11,200 *
John L. Maguire (8) 108,333 2.5%
Stephen L. Parr (9) 9,167 *
All directors and executive officers 2,505,731 56.9%
as a group (8 persons) (10)(11)
</TABLE>
----------
* Less than 1% of the outstanding shares of Common Stock.
(1) Business mailing address is 602 Fountain Parkway, Grand Prairie,
Texas 75050.
(2) Includes (i) 425,069 shares over which Glenn Bollinger has sole
voting and investment control; (ii) 436,000 shares held by Glenn Bollinger
Family Enterprises, Ltd., a Texas limited partnership, over which Glenn
Bollinger has shared voting and investment power with Bobby Bollinger through
each of their 49.5% ownership of the outstanding stock of the sole general
partner; (iii) 436,000 shares held by Bob Bollinger Family Enterprises, Ltd., a
Texas limited partnership, over which Glenn Bollinger has shared voting and
investment power with Bobby Bollinger through each of their 49.5% ownership of
the outstanding stock of the sole general partner; and (iv) 212,058 shares held
by the Company's 401(k) plan representing his interest in the plan as a
participant. Neither the inclusion of shares owned by Bob Bollinger Family
Enterprises, Ltd., nor the inclusion of shares in the Company's 401(k) plan not
allocated to Glenn Bollinger's participant account in the Company's 401(k) plan
is to be construed as an admission that he is the beneficial owner of such
shares. Includes options to purchase 25,716 shares of Common Stock that are
currently exercisable.
(3) Includes (i) 425,069 shares over which Bobby Bollinger has sole
voting and investment control; (ii) 436,000 shares held by Bob Bollinger Family
Enterprises, Ltd., a Texas limited partnership, over which Bobby Bollinger has
shared voting and investment power with Glenn Bollinger through each of their
49.5% ownership of the outstanding stock of the sole general partner; (iii)
436,000 shares held by Glenn Bollinger Family Enterprises, Ltd., a Texas limited
partnership, over which Bobby Bollinger has shared voting and investment power
with Glenn Bollinger through each of their 49.5% ownership of the outstanding
stock of the sole general partner; and (iv) 213,109 shares held by the Company's
401(k) plan representing his interest in the plan as a participant. Neither the
inclusion of shares owned by Glenn Bollinger Family Enterprises, Ltd., nor the
inclusion of any shares in the Company's 401(k) plan not allocated to Bobby
Bollinger's participant account in the Company's 401(k) plan is to be construed
as an admission that he is the beneficial owner of such shares. Includes options
to purchase 25,716 shares of Common Stock that are currently exercisable.
-10-
<PAGE> 14
(4) Represents options to purchase 24,000 shares of Common Stock
exercisable within sixty days from the date hereof.
(5) Includes 61,731 shares of Common Stock owned of record and options
to purchase 49,763 shares of Common Stock exercisable within sixty days from the
date hereof.
(6) Represents options to purchase 32,000 shares of Common Stock
exercisable within sixty days from the date hereof.
(7) Represents options to purchase 11,200 shares of Common Stock
exercisable within sixty days from the date hereof.
(8) Includes 50,000 shares of Common Stock owned of record and options
to purchase 58,333 shares of Common Stock exercisable within sixty days from the
date hereof. Does not include 26,000 shares of Common Stock held in trust for
which Mr. Maguire is the trustee and a contingent beneficiary. Mr. Maguire
disclaims beneficial ownership of these shares.
(9) Includes 2,500 shares of Common Stock owned of record and options
to purchase 6,667 shares of Common Stock exercisable within sixty days from the
date hereof.
(10) Includes options to purchase 233,395 shares of Common Stock
exercisable within sixty days from the date hereof.
(11) Shares held beneficially by Glenn Bollinger and Bobby Bollinger
are only included once in the group total.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers, directors and persons who own more
than ten percent (10%) of the Common Stock to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and reports of changes
in ownership of the Common Stock. Such persons are required by SEC regulations
to furnish the Company with copies of all Section 16(a) reports they file with
the SEC. Based solely on the Company's review of the copies of such forms
received during the year, the Company believes that during the year ended March
31, 2000, all the Company's directors, executive officers and holders of more
than ten percent (10%) of the Common Stock complied with all Section 16(a)
filing requirements.
To the best knowledge of management of the Company, during fiscal year
2000 no director, officer or ten percent (10%) beneficial owner of Common Stock
of the Company failed to file with the SEC any required reports on Form 3, 4 or
5 regarding transactions in securities of the Company.
-11-
<PAGE> 15
EXECUTIVE OFFICERS
The following persons are the executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Glenn D. Bollinger 50 Chairman of the Board, Chief Executive Officer and Director
Bobby D. Bollinger 47 Vice Chairman of the Board, President and Director
Rose Turner 44 Executive Vice President - Finance, Chief Operating Officer,
Chief Financial Officer, Treasurer and Secretary
Dell K. Bollinger 73 Senior Vice President - Administration
David Barr 42 Executive Vice President - Product Acquisition
Floyd L. DePauw 50 Controller and Chief Accounting Officer
</TABLE>
Set forth below is a description of the business experience of each of
the executive officers.
Information concerning the business experience of Glenn Bollinger is
provided under "Proposal No. 1: Election of Directors."
Information concerning the business experience of Bobby Bollinger is
provided under "Proposal No. 1: Election of Directors."
Rose Turner has served as Chief Financial Officer, Treasurer and
Secretary since January 1997, as Executive Vice President - Finance since
October 1997, and as Chief Operating Officer of the Company since January 1999.
She previously served as the Company's Senior Vice President - Finance from
January 1997 to October 1997. Ms. Turner joined the Company on a contract and
then full-time basis in November 1995. Ms. Turner was previously employed by a
variety of food manufacturing companies including Mission Foods and Borden, Inc.
Ms. Turner is a certified public accountant.
Dell K. Bollinger accepted an integral role in the Company's business
when it was founded by her sons, Glenn and Bobby Bollinger, in 1974. Mrs.
Bollinger has served as a Vice President of the Company since 1979.
David Barr has served as Executive Vice President - Product Acquisition
of the Company since August 1996, and previously served as Vice President -
Product Development from July 1994 to August 1996. Prior to joining the Company
Mr. Barr was President and Owner of New Zone Corporation, a privately held
distributor of children's safety and related products. Prior to that employment
Mr. Barr held various positions at Tandy Corporation, Fort Worth, Texas,
including Director of Marketing for Computer City.
Floyd DePauw became Controller and Chief Accounting Officer of the
Company in October 1996. Mr. DePauw is a certified public accountant. Before
joining the Company, Mr. DePauw previously served as the controller of Taylor
Publishing Company, a subsidiary of Insilco Corporation, a publicly owned
company. He was employed by Taylor in a variety of accounting positions for
approximately sixteen years. Prior to being employed by Taylor, Mr. DePauw was
employed by Zoecon Industries, Inc., a chemical manufacturer, for approximately
five years.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER INFORMATION
The following table summarizes the compensation paid to the Company's
chief executive officer and the Company's three other most highly compensated
executive officers for services rendered in all capacities to the Company during
fiscal 2000, 1999 and 1998.
-12-
<PAGE> 16
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
Stock
Name and Position Year Salary ($) Bonus ($) Options(#)
----------------- ---- ---------- --------- ----------
<S> <C> <C> <C> <C>
Glenn D. Bollinger 2000 262,143(1) -- 25,716
Chairman of the Board and Chief 1999 285,717(1) -- --
Executive Officer 1998 325,717(2) 100,000 --
Bobby D. Bollinger 2000 262,143(1) -- 25,716
Vice Chairman of the Board and 1999 285,717(1) -- --
President 1998 325,717(2) 100,000 --
Rose Turner 2000 146,445 20,000 --
Executive Vice President - 1999 132,700 -- 7,000
Finance, Chief Operating Officer, 1998 117,488 40,000 33,000
Chief Financial Officer,
Treasurer and Secretary
David Barr 2000 109,732 8,000(3) 20,000
Executive Vice President - 1999 97,194 -- --
Product Acquisition 1998 89,422 60,000 --
</TABLE>
(1) Glenn Bollinger and Bobby Bollinger were paid $10,000 as
directors fees in fiscal 1999 and 2000.
(2) Glenn Bollinger and Bobby Bollinger were paid $10,000 per year
as directors fees in fiscal 1998 retroactive to 1994 (each a
total of $50,000).
(3) David Barr's bonus for fiscal 2000 was paid subsequent to
March 31, 2000.
STOCK OPTION PLANS
DESCRIPTION OF STOCK OPTION PLANS.
1993 Plan. In September 1993 the Board of Directors adopted the
Bollinger Industries, Inc. 1993 Stock Option Plan (the "1993 Plan") pursuant to
which options to purchase up to 500,000 shares of Common Stock may be granted.
The individuals eligible to participate in the 1993 Plan are those full-time key
employees, including officers and employee directors, and independent directors
of the Company or its subsidiaries as the Stock Option Committee of the Board of
Directors, which administers the 1993 Plan, may determine from time to time. The
Stock Option Committee may grant either incentive stock options ("ISOs") within
the meaning of Section 422 of the Code or nonqualified stock options. Only
nonqualified stock options may be granted to independent directors.
The purchase price of shares subject to an option granted under the
1993 Plan is determined by the Stock Option Committee at the time of grant, but
may not be less than 50% of the fair market value of the shares of Common Stock
on the date of grant. The exercise price of ISOs must be at least 100% of the
fair market value. The aggregate fair market value (determined as of the date
the option is granted) of the stock with respect to which ISOs are exercisable
for the first time by the optionee in any calendar year (under the 1993 Plan and
any other incentive stock option plan of the Company) may not exceed $100,000.
Options granted under the 1993 Plan must be exercised within ten years from the
date of grant and will generally vest in annual installments as determined by
the Stock Option Committee. In the case
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<PAGE> 17
of any eligible employee who owns or is deemed to own stock possessing more than
10% of the total combined voting power of all classes of stock of the Company,
the exercise price of any ISOs granted under the 1993 Plan may not be less than
110% of the fair market value of the Common Stock on the date of grant, and the
exercise period may not exceed five years from the date of grant.
Options granted under the 1993 Plan are not transferable by the
optionee other than by will or under the laws of descent and distribution.
Options terminate on the earlier of the date of the expiration of the option or
thirty (30) days after the date the optionee terminates employment with the
Company and its subsidiaries for any reason other than termination for cause or
the death or disability of the optionee. During the 30-day period, the optionee
may exercise the option in respect of the number of shares that were vested on
the date of termination of employment. In the event of termination because of
the death or disability of an optionee and before the date of expiration of the
option, the option terminates on the earlier of the date of expiration or one
year following the date of termination of employment, during which period the
option may be exercised in respect of the number of shares that were vested on
the termination of employment.
The 1993 Plan provides that an option agreement may permit an optionee
to tender previously owned shares of Common Stock in partial or full payment for
shares to be purchased on exercising an option. Unless sooner terminated by
action of the Board of Directors, the 1993 Plan will terminate in 2003. Subject
to certain exceptions, the 1993 Plan may be amended, altered or discontinued by
the Board of Directors without stockholder approval.
As of August 15, 2000 options to purchase a total of 178,666 shares of
Common Stock are outstanding under the 1993 Plan at prices ranging from $0.63 to
$13.00 per share.
1998 Plan. The Bollinger Industries, Inc. 1998 Stock Option Plan (the
"1998 Plan") was adopted by the Board of Directors and approved by the
stockholders in September 1998. This plan provides for the grant of options to
purchase up to 500,000 shares of Common Stock of the Company to officers and
employees of the Company who are responsible for or contribute to the
management, growth and profitability of the business. No grant will be made
under this Plan to a director who is not an officer or a salaried employee of
the Company.
The purchase price of shares subject to an option granted under the
1998 Plan is determined by the Stock Option Committee at the time of grant, and
the exercise price shall not be less than 100% of the fair market value of the
Common Stock subject to the stock option on the date of grant (or 110% in the
case of a stock option granted to a participant who owns or is deemed to own
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company). Options granted under the 1998 Plan must generally be
exercised within ten years from the date of grant (five years from the date of
grant in the case of a stock option granted to a participant who owns or is
deemed to own stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company), unless otherwise provided by the Stock
Option Committee.
Stock options granted under the 1998 Plan may be of two types: ISOs and
nonqualified stock options. The Board of Directors has the authority to grant to
any participant ISOs, nonqualified stock options or any combination thereof.
Options granted under the 1998 Plan are not transferable by the
optionee other than by will or under the laws of descent and distribution.
Unless otherwise determined by the Stock Option Committee: (i) options terminate
on the earlier of the date of the expiration of the option or three months after
the date the optionee terminates employment with the Company and its
subsidiaries for any reason other than termination as a result of the death or
disability of the optionee; (ii) during the 3-month period, the optionee may
exercise the option in respect of the number of shares that were vested on the
date of
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<PAGE> 18
termination of employment; and (iii) in the event of termination because of the
death or disability of an optionee and before the date of expiration of the
option, the option terminates on the earlier of the date of expiration or one
year following the date of termination of employment due to death or six months
following the date of termination of employment due to disability, during which
period the option may be exercised in respect of the number of shares that were
vested on the termination of employment, or on such accelerated basis as the
Stock Option Committee may otherwise determine.
The 1998 Plan provides that an option agreement may permit an optionee
to tender previously owned shares of Common Stock in partial or full payment for
shares to be purchased on exercising an option. Unless sooner terminated by
action of the Board of Directors, the 1998 Plan will terminate in 2008.
As of August 15, 2000 options to purchase a total of 329,495 shares of
Common Stock are outstanding under the 1998 Plan at an exercise price of $1.00
per share.
NQO Plan. On June 22, 2000 the Board of Directors adopted the Bollinger
Industries, Inc. 2000 Nonqualified Stock Option Plan (the "NQO Plan") pursuant
to which options to purchase up to 200,000 shares of Common Stock may be
granted. The individuals eligible to participate in the NQO Plan are members of
the Board of Directors who are not officers or other employees of the Company or
of any corporation or other entity which is then a subsidiary of the Company.
The purchase price of shares subject to an option granted under the NQO
Plan is determined by the Stock Option Committee at the time of grant, but may
not be less than 100% of the fair market value of the shares of Common Stock on
the date of grant. Options granted under the NQO Plan must be exercised within
ten years from the date of grant or such shorter term as may be determined by
the Stock Option Committee and may vest in installments as determined by the
Stock Option Committee. Options granted under the NQO Plan are not transferable
by the optionee other than by will or under the laws of descent and
distribution.
Unless sooner terminated by action of the Board of Directors, the NQO
Plan will terminate in 2010. As of August 15, 2000 no options had been granted
under the NQO Plan.
OPTION GRANTS. There were 357,495 options granted in fiscal 2000.
OPTION EXERCISES AND HOLDINGS. The following table sets forth information with
respect to the named executive officers concerning the exercise of options
during fiscal 2000 and unexercised options held as of the end of fiscal 2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE MONEY OPTIONS
FISCAL YEAR-END (#) AT FISCAL YEAR-END ($) (1)
SHARES ACQUIRED VALUE ------------------------------ -----------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Glenn D. Bollinger(2) -- -- 25,716 -- -- --
Bobby D. Bollinger(3) -- -- 25,716 -- -- --
Rose Turner(4) -- -- 24,000 16,000 -- --
David Barr(5) -- -- 32,000 10,000 -- --
</TABLE>
-15-
<PAGE> 19
----------
(1) Based on the market value of the Common Stock on March 31, 2000 of
$0.375 per share as reported by the over-the-counter Bulletin Board
(minus the exercise or base price).
(2) Glenn D. Bollinger was granted options for the purchase of 25,716
shares of Common Stock in exchange for a salary reduction, at an
exercise price of $1.00 per share, in September 1999. These options
vested in March 2000 and expire five years from the date of grant.
(3) Bobby D. Bollinger was granted options for the purchase of 25,716
shares of Common Stock in exchange for a salary reduction, at an
exercise price of $1.00 per share, in September 1999. These options
vested in March 2000 and expire five years from the date of grant.
(4) Rose Turner was granted options for the purchase of 33,000 shares of
Common Stock at an exercise price of $0.63 per share in January 1997;
and options for the purchase of 7,000 shares of Common Stock at an
exercise price of $1.00 per share in April 1999. These options vest
over a five-year period and expire ten years from the date of grant.
(5) David Barr was granted options for the purchase of 10,000 shares of
Common Stock at an exercise price of $13.00 per share in October 1994.
These options vest over a five-year period and expire ten years from
the date of grant. Mr. Barr was granted options for the purchase of
2,000 shares of Common Stock at an exercise price of $11.00 per share
in December 1994. These options vest over a four-year period and expire
ten years from the date of grant. Mr. Barr was granted options for the
purchase of 10,000 shares of Common Stock at an exercise price of $3.00
per share in February 1996; and options for the purchase of 20,000
shares of Common Stock at an exercise price of $1.00 per share in
April, 1999. These options vest over a five-year period and expire ten
years from the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2000 Stephen Parr served as the sole member of the
Compensation Committee. No member of the Compensation Committee is a current or
former employee or officer of the Company or any of its affiliates or has any
interlocking relationship with any other corporation that requires specific
disclosure under this heading. Please refer to "Certain Relationships and
Related Transactions."
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The basic policy of the Compensation Committee is to ensure that salary
levels and compensation incentives are designed to attract and retain qualified
individuals in key positions and are commensurate with the level of executive
responsibility, the type and scope of the Company's operations, and the
Company's financial condition and performance. The goal of this policy is to
promote the attainment of the financial and strategic objectives of the Company.
Stephen Parr was the sole member of the Compensation Committee for
fiscal 2000. The Compensation Committee believes that the base salary levels in
place during fiscal 2000 continue to be consistent with the Company's status as
a public company and with the Company's peers in the fitness industry. The
salary levels during fiscal 2000 were not substantially different from those in
fiscal 1999. The Compensation Committee has not, however, conducted a detailed
examination of the compensation structure of peer companies, nor has it engaged
the services of an executive compensation consultant.
The base salaries of the Company's executive officers may be augmented
at the discretion of the Compensation Committee, at the recommendation of the
Chief Executive Officer, by the award of individual performance-based cash
bonuses ("Cash Bonuses"). Cash Bonuses are based on among other
-16-
<PAGE> 20
things an individual's quality of work performed, the financial condition and
results of operation of the Company, progress made towards business objectives,
and return on the Company's Common Stock for the period. Based on the financial
condition and results of operations of the Company, the Compensation Committee
determined to award Cash Bonuses to two of the named executive officers for
fiscal 2000.
The Company also grants stock options pursuant to the Company's 1993
and 1998 Stock Option Plans. The Company's Chief Executive Officer and
President, who each beneficially own a substantial amount of Common Stock of the
Company, are not eligible to receive options under the 1993 Stock Option Plan.
Grants of stock options to eligible executive officers are intended to attract
qualified individuals to work for the Company as additional compensation and as
an incentive for future performance. Through grants under the 1993 and 1998
Stock Option Plans, the Company's goal is to encourage ownership of the Common
Stock by executive officers and other employees in order to enhance mutuality of
interest with stockholders of the Company.
At this time, based on the Company's current executive compensation
structure, the Company does not believe it is necessary to adopt a policy with
respect to qualifying executive compensation in excess of $1 million for
deductibility under Section 162 (m) of the Internal Revenue Code.
Consistent with the above policies and objectives, the fiscal 2000 base
salary for Glenn Bollinger, the Company's Chairman of the Board and Chief
Executive Officer, was not changed by the Board of Directors, and remained at
$275,717. During fiscal 2000 Mr. Bollinger elected to reduce his salary to
$250,000 in exchange for 25,716 stock options. The Compensation Committee
considers that Mr. Bollinger's base salary was within the range of salaries of
chief executive officers of comparable companies.
This report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
acts.
The Compensation Committee
of the Board of Directors
Stephen L. Parr
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
the Common Stock of the Company with that of a peer group and the NASDAQ Stock
Market - U.S. Index for the periods indicated. The comparison for each of the
periods assumes that $100 was invested on March 31, 1995 in each of the Common
Stock of the Company, the stocks included in the peer group, and the stocks
included in the NASDAQ Stock Market - U.S. Index. These indexes, which reflect
formulas for dividend reinvestment and weighting of individual stocks, do not
necessarily reflect returns that could be achieved by individual investors.
-17-
<PAGE> 21
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN AMONG
BOLLINGER INDUSTRIES, INC.,
THE NASDAQ STOCK MARKET - U.S. INDEX, AND A PEER GROUP
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------------
3/95 3/96 3/97 3/98 3/99 3/00
<S> <C> <C> <C> <C> <C> <C>
BOLLINGER INDUSTRIES, INC. 100.00 32.35 8.82 10.29 4.41 5.15
PEER GROUP 100.00 130.88 123.63 173.21 126.88 80.59
NASDAQ STOCK MARKET (U.S.) 100.00 135.79 150.95 228.88 309.19 574.68
</TABLE>
(1) The peer group, which currently includes the Company, is comprised
of the following companies: Acres Gaming, Inc.; Adams Golf, Inc.; Ajay Sports,
Inc.; Aldila, Inc.; Alottafun, Inc.; American Bingo & Gaming Corp.; Baoa, Inc.;
Bio-Dyne Corp.; Brass Eagle, Inc.; Callaway Golf Co.; Coastcast Corp.; Colmena
Corp.; Coyote Sports, Inc.; Cyber Mark International Corp.; Cybex International,
Inc.; Cyntech Technologies, Inc.; Direct Connect International, Inc.; Discovery
Zone, Inc.; DSI Toys, Inc.; Ecom Ecom Com Incorporated; Educational Insights,
Inc.; Empire of Carolina, Inc.; Equity Marketing, Inc.; Escalade, Inc.; Exx,
Inc. Cl A; Exx, Inc. Cl B; First Team Sports, Inc.; Fusion FD, Inc.; Gary Player
Direct, Inc.; Golfgear International, Inc.; Granite Bay Technologies, Inc.;
Hasbro, Inc.; Hockey Company; Jakks Pac, Inc.; Johnson Outdoors, Inc.; Just
Toys, Inc.; K2, Inc.; Karts International, Inc.; Knickerbocker LL, Inc.; L A
Group, Inc.; LCS Golf, Inc.; Magnatude Information Systems, Inc.; Marker
International; Marvel Enterprises, Inc.; Mattel, Inc.; Monarch Services, Inc.;
Ohio Art Company; OnTV, Inc.; Play by Play Toys & Novelties Company; Playcore,
Inc; Racing Champions Corp.; Ranger Inds, Inc.; RDM Sports Group, Inc.; Riddell
Sports, Inc.; Rollerball International, Inc.; Royal Precision, Inc.; S2 Golf,
Inc.; Salesrepcentral.com, Inc.; Teardrop Golf Company; Technigen Corp.; Toymax
International, Inc.; TRB System International, Inc.; Trudy Corp.; US Wireless
Corp.; Variflex, Inc.; Vermont Teddy Bear, Inc.; Victormaxx Technologies, Inc.
and Yes Entertainment Corp. The members of the peer group are based on the
companies listed in the 2000 NASDAQ Fact Book and Company Directory for Standard
Industrial Classification Code 394, Toys and Sporting Goods (2000 Peer Group),
and which have been publicly traded since at least March 31, 1995. NASDAQ did
not provide a performance index for this group of companies.
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<PAGE> 22
(2) The following companies were included in the 1999 Peer Group, but
were not included in the 2000 Peer Group: Grand Toys International, Inc.;
Imaginon, Inc.; Laser Storm, Inc.; Morrow Snowboards, Inc.; Paul-Son Gaming
Corp.; Arnold Palmer Golf Company; Rawlings Sporting Goods, Inc. and Xdogs.com,
Inc.
(3) The following companies are included in the 2000 Peer Group, but
were not included in the 1999 Peer Group: Acres Gaming, Inc.; Adams Golf, Inc.;
Alottafun, Inc.; American Bingo & Gaming Corp.; Baoa, Inc.; Bio-Dyne Corp.;
Brass Eagle, Inc.; Callaway Golf Co.; Coastcast Corp.; Colmena Corp.; Coyote
Sports, Inc.; Cyber Mark International Corp.; Cybex International, Inc.; Cyntech
Technologies, Inc.; Direct Connect International, Inc.; Discovery Zone, Inc.;
DSI Toys, Inc.; Ecom Ecom Com Incorporated; Empire of Carolina, Inc.; Equity
Marketing, Inc.; Exx, Inc. Cl A; Exx, Inc. Cl B; First Team Sports, Inc.; Fusion
FD, Inc.; Gary Player Direct, Inc.; Golfgear International, Inc.; Granite Bay
Technologies, Inc.; Hasbro, Inc.; Hockey Company; Jakks Pac, Inc.; K2, Inc.;
Karts International, Inc.; L A Group, Inc.; LCS Golf, Inc.; Magnatude
Information Systems, Inc.; Marvel Enterprises, Inc.; Mattel, Inc.; Ohio Art
Company; OnTV, Inc.; Play by Play Toys & Novelties Company; Playcore, Inc;
Racing Champions Corp.; Ranger Inds, Inc.; RDM Sports Group, Inc.; Rollerball
International, Inc.; Royal Precision, Inc.; Salesrepcentral.com, Inc.; Technigen
Corp.; Toymax International, Inc.; TRB System International, Inc.; Trudy Corp.;
US Wireless Corp. and Victormaxx Technologies, Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has a continuing arrangement with John L. Maguire, a
director of the Company, for financial, corporate and acquisition consulting
services. This arrangement currently provides for an annual fee of $36,000,
which includes the fee for his services as a director.
All other transactions, if any, between the Company and any of its
directors, officers, principal stockholders, employees and other affiliates are
subject to the approval of a majority of the independent directors of the
Company who are disinterested in the transactions. All such transactions and
loans must be on terms no less favorable to the Company than those generally
available from unaffiliated third parties.
STOCKHOLDER PROPOSALS
Any proposals from stockholders to be presented for consideration for
inclusion in the proxy material in connection with the 2000 annual meeting of
stockholders of the Company must be submitted in accordance with the rules of
the SEC and received by the Secretary of the Company at the Company's principal
executive offices no later than the close of business on April 30, 2001.
OTHER MATTERS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. Costs of solicitation will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by personal
interview, telephone, and telegram by directors, officers and employees of the
Company. Arrangements have also been made with brokerage houses, banks and other
custodians, nominees, and fiduciaries for the forwarding of soliciting materials
to the beneficial owners of the Common Stock held of record by such persons, and
the Company will reimburse them for reasonable out-of-pocket expenses incurred
by them in connection therewith.
All information contained in this Proxy Statement relating to the
occupations, affiliations, and securities holdings of directors and officers of
the Company and their relationship and transactions with the Company is based
upon information received from the individual directors and officers. All
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<PAGE> 23
information relating to any beneficial owner of more than five percent (5%) of
the Company's Common Stock is based upon information contained in reports filed
by such owner with the SEC.
The Annual Report to stockholders of the Company for the fiscal year
ended March 31, 2000, which includes financial statements, accompanying this
Proxy Statement, does not form any part of the material for the solicitation of
proxies.
THE COMPANY HAS PROVIDED TO EACH PERSON WHOSE PROXY IS SOLICITED HEREBY
A COPY OF THE COMPANY'S FISCAL 2000 ANNUAL REPORT, WHICH INCLUDES A COPY OF THE
COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 2000.
By the Order of the Board of Directors
/s/ ROSE TURNER
Rose Turner
Secretary
August 25, 2000
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<PAGE> 24
EXHIBIT A
PROPOSED AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF BOLLINGER INDUSTRIES, INC.
Section 1 of Article FOURTH is amended to read in full as follows:
FOURTH.
Section 1. Capitalization. The Corporation is authorized to issue
Twenty-one Million (21,000,000) shares of capital stock. Twenty Million
(20,000,000) of the authorized shares shall be common stock, one cent ($0.01)
par value each ("Common Stock"), and One Million (1,000,000) of the authorized
shares shall be preferred stock, one cent ($0.01) par value each ("Preferred
Stock").
Each holder of shares of capital stock of the Corporation shall at
every meeting of the stockholders be entitled to one vote in person or by proxy
for each share of the capital stock of the Corporation held by the stockholder,
unless otherwise specifically provided pursuant to this Certificate of
Incorporation.
<PAGE> 25
EXHIBIT B
BOLLINGER INDUSTRIES, INC.
2000 STOCK OPTION PLAN
<PAGE> 26
EXHIBIT B
BOLLINGER INDUSTRIES, INC.
2000 STOCK OPTION PLAN
SECTION 1. PURPOSE; DEFINITIONS
The purpose of the Plan is to give the Corporation a competitive
advantage in attracting, retaining and motivating officers and employees and to
provide the Corporation and its subsidiaries with a stock plan providing
incentives more directly linked to the profitability of the Corporation's
businesses and increases in shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
(a) "Board" means the Board of Directors of the Corporation, as duly
elected from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended and
interpreted by the regulations thereunder from time to time, and any successor
thereto.
(c) "Commission" means the Securities and Exchange Commission or any
successor agency.
(d) "Common Stock" means common stock, par value $0.01 per share, of the
Corporation.
(e) "Corporation" means Bollinger Industries, Inc., a Delaware corporation.
(f) "Date of Grant" means the date on which the Board resolves to grant a
Stock Option to a Participant.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended
and as interpreted by the rules and regulations promulgated thereunder from time
to time, and any successor thereto.
(h) "Exercise Price" means the amount for which one Share may be purchased
upon the exercise of a Stock Option, as specified by the Board in the applicable
Stock Option Agreement, but in no event less than the par value per Share.
(i) "Fair Market Value" means as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on any national
securities exchange on which the Common Stock is listed or on the NASDAQ. If
there is no regular public trading market for such Common Stock, the Fair Market
Value of the Common Stock shall be determined by the Board in good faith.
(j) "Incentive Stock Option" means any Stock Option designated as, and
qualified as, an "incentive stock option" within the meaning of Section 422 of
the Code.
(k) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(l) "Participant" means an individual who is eligible and selected by the
Board for grants of Stock Options under the Plan.
<PAGE> 27
(m) "Plan" means the Bollinger Industries, Inc. 2000 Stock Option Plan, as
set forth herein and as hereinafter amended from time to time.
(n) "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
(o) "Share" means one share of Common Stock of the Corporation, as adjusted
in accordance with SECTION 3 of the Plan.
(p) "Stock Option" means an option granted under SECTION 5.
(q) "Stock Option Agreement" means the agreement executed between the
Corporation and a Participant that contains the terms, conditions, and
restrictions pertaining to the granting of a Stock Option. Any inconsistencies
between the Plan and any Stock Option Agreement shall be controlled by the Plan.
(r) "Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. "Subsidiary" also means any partnership in which the
Corporation and/or any Subsidiary owns more than 50% of the capital or profits
interest.
(s) "Ten-Percent Shareholder" means a person that owns more than ten
percent of the total combined voting power of all classes of outstanding stock
of the Corporation or any Subsidiary, taking into account the attribution rules
set forth in Section 424 of the Code. For purposes of this definition the term
"outstanding stock" includes all stock actually issued and outstanding at the
time the Stock Option is granted to a Participant. "Outstanding stock" does not
include reacquired Shares or Shares authorized for issuance under outstanding
Stock Options held by the Participant or by any other person.
(t) "Termination of Employment" means the termination of the Participant's
employment with the Corporation and any Subsidiary for any reason whatsoever,
whether with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement, but
excluding (i) terminations where there is a simultaneous reemployment by the
Corporation or a Subsidiary or (ii) except with respect to Incentive Stock
Options, terminations where the Participant continues a relationship (e.g., as a
director or consultant) with the Corporation or a Subsidiary. Temporary absences
from employment because of illness, vacation or leave of absence shall not
constitute a Termination of Employment unless, with respect to Incentive Stock
Options only, such temporary absences interrupt employment for purposes of
Section 422(a)(2) of the Code and the then applicable regulations and revenue
rulings under Section 422(a)(2).
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
SECTION 2. ADMINISTRATION
The Plan shall be administered by the Board, which may from time to time
delegate all or any part of its authority under the Plan to a committee or
subcommittee of not less than two directors appointed by the Board who are
"non-employee directors" within the meaning of that term as defined in Rule
16b-3 under the Exchange Act. To the extent of any delegation by the Board under
this Plan, references in this Plan to the Board shall also refer to the
applicable committee or subcommittee. The Board shall have authority to grant
Stock Options pursuant to the terms of the Plan to officers and
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<PAGE> 28
employees of the Corporation and its Subsidiaries. Among other things, the Board
shall have the authority, subject to the terms of the Plan:
(a) To select the officers and employees to whom Stock Options may from
time to time be granted;
(b) Determine whether and to what extent Incentive Stock Options and
Nonqualified Stock Options or any combination thereof are to be granted
hereunder;
(c) Determine the number of Shares to be covered by each Stock Option
granted hereunder;
(d) Determine the terms and conditions of any Stock Option granted
hereunder including, but not limited to, the Exercise Price (subject to SECTION
5(a)), any vesting condition, restriction or limitation (which may be related to
the performance of the Participant, the Corporation or any Subsidiary), and any
vesting acceleration or forfeiture waiver regarding any Stock Option and the
Shares relating thereto, based on such factors as the Board shall determine;
(e) Modify, amend or adjust the terms and conditions of any Stock Option,
at any time or from time to time; and
(f) Determine to what extent and under what circumstances Common Stock and
other amounts payable with respect to a Stock Option shall be deferred.
The Board shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Stock Option issued under the Plan (and any agreement relating
thereto), and to otherwise supervise the administration of the Plan.
With respect to the Plan or any Stock Options granted thereunder, the acts
of a majority of the Board members present at meetings at which a quorum exists,
or acts reduced to or approved in writing by a unanimous consent of all the
Board members, shall be the valid acts of the Board, except that the members
thereof may (i) delegate to an officer of the Corporation the authority to make
decisions pursuant to paragraphs (c), (f), (g), (h) and (i) of SECTION 5
(provided that no such delegation may be made that would cause Stock Options or
other transactions under the Plan to cease to be exempt from Section 16(b) of
the Exchange Act) and (ii) authorize any one or more of their number or any
officer of the Corporation to execute and deliver documents on behalf of the
Board. A majority of the Board shall constitute a quorum.
Any determination made by the Board or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Stock Option shall be
made in the sole discretion of the Board or such delegate at the time of the
grant of the Stock Option or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Board or any
appropriately delegated officer pursuant to the provisions of the Plan shall be
final and binding on all persons, including the Corporation and Participants.
All expenses and liabilities incurred by members of the Board in connection
with the administration of the Plan shall be borne by the Corporation. The Board
may employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Board, the Corporation and its officers and directors shall be
entitled to rely upon the advice, opinions, or valuations of any such persons.
No member of the Board shall be personally liable for any action, determination,
or interpretation made in good faith with respect to the Plan or the Stock
Options, and all members of the Board shall be fully protected by the
Corporation in respect to any such action, determination or interpretation.
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<PAGE> 29
SECTION 3. COMMON STOCK SUBJECT TO PLAN
The total number of Shares reserved and available for grant under the Plan
shall be 500,000, subject to adjustment as provided in SECTION 5(i). For
purposes of determining the number of Shares with regard to which Stock Options
may be granted under the Plan, such number shall increase by the number of
Shares tendered or relinquished to the Corporation (a) in connection with the
exercise of a Stock Option or (b) in payment of federal, state or local income
tax withholding liabilities upon exercise of a Stock Option.
Shares subject to a Stock Option under the Plan may be authorized and
unissued Shares or may be treasury Shares.
If any Stock Option expires or is cancelled without being fully exercised,
unexercised Shares subject to such Stock Option shall again be available for
distribution in connection with Stock Options under the Plan.
SECTION 4. ELIGIBILITY
All officers and employees of the Corporation and its Subsidiaries who are
responsible for or contribute to the management, growth and profitability of the
business of the Corporation and its Subsidiaries are eligible to be granted
Stock Options under the Plan. No grant shall be made under this Plan to a
director who is not an officer or a salaried employee of the Corporation and its
Subsidiaries.
SECTION 5. STOCK OPTIONS
Stock Options may be of two types: Incentive Stock Options and Nonqualified
Stock Options. Any Stock Option granted under the Plan shall be in such form as
the Board may from time to time approve.
The Board shall have the authority to grant any Participant Incentive Stock
Options, Nonqualified Stock Options or both types of Stock Options. To the
extent that any Stock Option is not designated as an Incentive Stock Option or
even if so designated does not qualify as an Incentive Stock Option, it shall
constitute a Nonqualified Stock Option.
Stock Options shall be evidenced by the Stock Option Agreements, the terms
and provisions of which may differ for each Participant and for each grant of a
Stock Option to the same Participant. A Stock Option Agreement shall indicate on
its face whether it is intended to be an agreement for an Incentive Stock Option
or a Nonqualified Stock Option. The grant of a Stock Option shall occur on the
Date of Grant. Written notice of the Board's determination to grant a Stock
Option to a Participant, evidenced by a Stock Option Agreement, dated as of the
Date of Grant and executed by the Corporation, shall be given to such
Participant within a reasonable period of time after the Date of Grant.
The Board may, in its discretion and on such terms as it deems appropriate,
require as a condition to the grant of a Stock Option to a Participant that the
Participant surrender for cancellation some or all of the unexercised Stock
Options which have been previously granted to him. A Stock Option the grant of
which is conditioned upon such surrender may have a per Share Exercise Price
lower (or higher) than the per Share Exercise Price of the surrendered Stock
Option, may cover the same (or a lesser or greater) number of Shares as the
surrendered Stock Option, may contain such other terms as the Board deems
appropriate and shall be exercisable in accordance with its terms, without
regard to the number of Shares, Exercise Price, term or any other term or
condition of the surrendered Stock Option.
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<PAGE> 30
Additionally, the Board may, in its discretion and on such terms as it
deems appropriate, require as a condition to the grant of a Stock Option to a
Participant that the Participant agree not to sell or otherwise dispose of the
Stock Option, any Shares of Common Stock acquired pursuant to the Stock Option,
for a period of time determined by the Committee including, without limitation,
a period of six months following the Date of Grant of the Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
Participant affected, to disqualify any previously granted Incentive Stock
Option as such under such Section 422.
To the extent that the aggregate Fair Market Value of Shares with respect
to which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under the Plan and all other incentive
stock option plans of the Corporation or any Subsidiary) exceeds $100,000, such
Incentive Stock Options shall be deemed to be Nonqualified Stock Options. The
rule set forth in the preceding sentence shall be applied by taking Incentive
Stock Options into account in the order in which they were granted. For purposes
of this SECTION 5, the Fair Market Value of Shares shall be determined as of the
time the Incentive Stock Option with respect to such Shares is granted.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Board shall deem desirable:
(a) Exercise Price. The Exercise Price per Share purchasable under a Stock
Option shall be determined by the Board and set forth in the Stock Option
Agreement, and in the case of an Incentive Stock Option granted to a
Participant, the Exercise Price shall not be less than 100% of the Fair Market
Value of the Common Stock subject to the Stock Option on the Date of Grant (or
110% in the case of a Stock Option granted to a Participant who is a Ten-Percent
Shareholder on the Date of Grant).
(b) Option Term. The term of each Stock Option shall be ten years from the
Date of Grant or such shorter term as may be determined by the Board; provided,
however, in the case of an Incentive Stock Option granted to a Ten-Percent
Shareholder, the term of the Incentive Stock Option shall be five years from the
Date of Grant or such shorter term as may be determined by the Board; provided
further, however, a Stock Option granted under the Plan shall be subject to
earlier termination upon the Termination of Employment of the Participant, as
provided in SECTIONS 5(f), (g) and (h).
(c) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Board. If the Board provides that any
Stock Option is exercisable only in installments, the Board may at any time
waive such installment exercise provisions, in whole or in part, based on such
factors as the Board may determine. In addition, the Board may at any time
accelerate the exercisability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this SECTION 5, Stock
Options may be exercised, in whole or in part, at any time during the term of
the Stock Option by giving written notice of exercise to the Corporation
specifying the number of Shares subject to the Stock Option to be purchased. A
Stock Option may not be exercised for a fraction of a Share and the Board may,
by the terms of the Stock Option, require any partial exercise to be with
respect to a specified minimum number of Shares.
Such notice shall be accompanied by payment in full of the purchase
price for the Shares subject to the Stock Option being purchased by certified or
bank check or such other instrument as the Board may accept. Payment, in full or
in part, may also be made in the form of Shares owned by the Participant duly
endorsed for transfer to the Corporation, or, Shares issuable to the Participant
upon
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<PAGE> 31
exercise of the Stock Option, in each case with a Fair Market Value on the date
the Stock Option is exercised equal to the aggregate Exercise Price of the
Shares with respect to which such Stock Option or portion is thereby exercised.
Additionally, such notice shall be accompanied by payment to the
Corporation (or other employer Subsidiary) of all amounts which the Corporation
(or other employer Subsidiary) is required to withhold under federal, state or
local law in connection with he exercise of the Stock Option. With the consent
of the Board, (i) Shares owned by the Participant duly endorsed for transfer,
or, (ii) Shares issuable to the Participant upon exercise of the Stock Option,
valued at Fair Market Value as of the date of the exercise of the Stock Option,
may be used to make all or part of such payment.
No Shares shall be issued until full payment therefor has been made. A
Participant shall have all the rights of a shareholder of the Corporation
holding Shares (including, if applicable, the right to vote the Shares and the
right to receive dividends), when the Participant has given written notice of
exercise, has paid in full for such Shares and, if requested, has given the
representation described in SECTION 8(a).
(e) Nontransferability of Stock Options. No Stock Option granted under the
Plan may be sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent and distribution, and no
Stock Option granted under the Plan is assignable by operation of law or subject
to execution, attachment or similar process. Any Stock Option granted under the
Plan can only be exercised during the Participant's lifetime by such
Participant. Any attempted sale, pledge, assignment, hypothecation or other
transfer of the Stock Option contrary to the provisions hereof and the levy of
any execution, attachment or similar process upon the Stock Option shall be null
and void and without force or effect. No transfer of the Stock Option by will or
by the laws of descent and distribution shall be effective to bind the
Corporation unless the Corporation shall have been furnished written notice
thereof and an authenticated copy of the will and/or such other evidence as the
Board may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of the
Stock Option. The terms of any Stock Option transferred by will or by the laws
of descent and distribution shall be binding upon the executors, administrators,
heirs and successors of the Participant.
(f) Termination by Death. Unless otherwise determined by the Board, if a
Participant incurs a Termination of Employment by reason of death, any Stock
Option held by such Participant may thereafter be exercised by the estate of the
Participant or by a person who acquired the right to exercise the Stock Option
by will or by the laws of descent and distribution, to the extent then
exercisable, or on such accelerated basis as the Board may determine, for a
period of one year (or such other period as the Board may specify in the Stock
Option Agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g) Termination by Reason of Disability. Unless otherwise determined by the
Board, if a Participant incurs a Termination of Employment by reason of his
total and permanent disability (as defined in Section 22(e)(3) of the Code), any
Stock Option held by such Participant may thereafter be exercised by the
Participant, to the extent it was exercisable on the date of Termination of
Employment, or on such accelerated basis as the Board may determine, for a
period of six months (or such other period as the Board may specify in the Stock
Option Agreement) from the date of Termination of Employment or until the
expiration of the stated term of such Stock Option, whichever period is shorter;
provided, however, that if the Participant dies within such period, any
unexercised Stock Option held by such Participant shall, notwithstanding the
expiration of such period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of 12 months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is shorter.
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<PAGE> 32
(h) Other Termination. If a Participant incurs a Termination of Employment
for any reason other than death or disability, any Stock Option held by such
Participant, to the extent then exercisable, or on such accelerated basis as the
Board may determine, may be exercised, for the lesser of three months from the
date of such Termination of Employment or the balance of such Stock Option's
term; provided, however, that if the Participant dies within such three-month
period, any unexercised Stock Option held by such Participant shall,
notwithstanding the expiration of such three-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(i) Adjustments in Outstanding Stock Options. In the event that the
outstanding shares of Common Stock subject to Stock Options are changed into or
exchanged for a different number or kind of shares of the Corporation or other
securities of the Corporation by reason of a merger, consolidation,
recapitalization, reclassification, or the number of shares of Common Stock is
increased or decreased by reason of a stock split-up, stock dividend,
combination of shares or any other increase or decrease in the number of such
shares of Common Stock effected without receipt of consideration by the
Corporation (provided, however, that conversion of any convertible securities of
the Corporation shall not be deemed to have been "effected without receipt of
consideration"), the Board shall make appropriate adjustments in the number and
kind of shares as to which all outstanding Stock Options, or portions thereof
then unexercised, shall be exercisable with respect to any such Stock Options,
to the end that after such event the Participant's proportionate interest shall
be maintained as before the occurrence of such event. Such adjustment in an
outstanding Stock Option shall be made without change in the total exercise
price applicable to the Stock Option or the unexercised portion of a Stock
Option (except for any change in the aggregate price resulting from rounding-off
of share quantities or prices) and with any necessary corresponding adjustment
in the Exercise Price per Share; provided, however, that each such adjustment
shall be made in such manner as not to constitute a "modification" within the
meaning of Section 424(h)(3) of the Code. Any such adjustment made by the Board
shall be final and binding upon all Participants, the Corporation and all other
interested persons.
(j) Merger, Consolidation, Acquisition, Liquidation or Dissolution.
Notwithstanding the provisions of SECTION 5(i), in its absolute discretion, and
on such terms and conditions as it deems appropriate, the Board may provide by
the terms of any Stock Option that such Stock Option cannot be exercised after
the merger or consolidation of the Corporation with or into another corporation,
the acquisition by another corporation or person (excluding any employee benefit
plan of the Corporation or any trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation) of all or substantially all
of the Corporation's assets or fifty-one percent (51%) or more of the
Corporation's then outstanding voting stock, or the liquidation or dissolution
of the Corporation; and if the Board so provides, it may, in its absolute
discretion and on such terms and conditions as it deems appropriate, also
provide, either by the terms of such Stock Option or by a resolution adopted
prior to the occurrence of such merger, consolidation, acquisition, liquidation
or dissolution, that, for some period of time prior to such event, such Stock
Option shall be exercisable as to all Shares covered thereby, notwithstanding
anything to the contrary in the Plan or the Stock Option Agreement.
(k) Additional Transfer Restrictions. The Board, in its absolute
discretion, may impose such restrictions on the transferability of the Shares
purchasable upon the exercise of a Stock Option as it deems appropriate. Any
such other restrictions shall be set forth in the Stock Option Agreement and may
be referred to on the certificates evidencing the Shares. The Board may require
the Participant to give the Corporation prompt notice of any disposition of
Shares acquired by exercise of an Incentive Stock Option within two years from
the date of granting of such Incentive Stock Option or one year after the
transfer of such Shares to such Participant. The Board may direct that the
certificates evidencing Shares acquired by exercise of an Incentive Stock Option
refer to such requirement to give prompt notice of disposition.
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<PAGE> 33
SECTION 6. TERM, AMENDMENT AND TERMINATION
The Plan will terminate ten years after the effective date of the Plan.
Under the Plan, Stock Options outstanding as of such date shall not be affected
or impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the rights of
a Participant under a Stock Option without the Participant's or recipient's
consent, except such an amendment made to cause the Plan to qualify for the
exemption provided by Rule 16b-3, or (ii) disqualify the Plan from the exemption
provided by Rule 16b-3. In addition, no such amendment shall be made without the
approval of the Corporation's shareholders to the extent such approval is
required by Rule 16b-3 or otherwise.
The Board may amend the terms of any Stock Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any holder without the holder's consent except such an amendment made to cause
the Plan or Stock Option to qualify for the exemption provided by Rule 16b-3.
Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in law and tax and accounting rules
as well as developments, and to grant Stock Options which qualify for beneficial
treatment under such rules without stockholder approval.
SECTION 7. UNFUNDED STATUS OF PLAN
It is presently intended that the Plan constitute an "unfunded" plan
for incentive and deferred compensation. The Board may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that unless the Board
otherwise determines, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.
SECTION 8. GENERAL PROVISIONS
(a) The Board may require each person purchasing or receiving Shares
pursuant to a Stock Option to represent to and agree with the Corporation in
writing that such person is acquiring the Shares without a view to the
distribution thereof. The certificates for such Shares may include any legend
which the Board deems appropriate to reflect any restrictions on transfer.
Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Corporation shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to fulfillment of
all of the following conditions:
(1) Listing or approval for listing upon notice of issuance, of
such Shares on the NASDAQ, or such securities exchange as may at the
time be the principal market for the Common Stock;
(2) Any registration or other qualification of such Shares of the
Corporation under any state or federal law or regulation, or the
maintaining in effect of any such registration or other qualification
which the Board shall, in its absolute discretion upon the advice of
counsel, deem necessary or advisable;
(3) Obtaining any other consent, approval, or permit from any
state or federal governmental agency which the Board shall, in its
absolute discretion after receiving the advice of counsel, determine
to be necessary or advisable; and
-8-
<PAGE> 34
(4) The payment to the Corporation (or other employer Subsidiary)
by the Participant of all amounts which the Corporation (or other
employer Subsidiary) is required to withhold under federal, state or
local law in connection with the exercise of the Stock Option.
(b) Nothing contained in the Plan shall prevent the Corporation or any
Subsidiary from adopting other or additional compensation arrangements for its
employees.
(c) Adoption of the Plan shall not confer upon any employee any right
to continued employment, nor shall it interfere in any way with the right of the
Corporation or any Subsidiary to terminate the employment of any employee at any
time.
(d) The Plan is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Commission thereunder, including
without limitation Rule 16b-3. Notwithstanding anything herein to the contrary,
the Plan shall be administered, and the Stock Options shall be granted and may
be exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and the Stock
Options granted hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
(e) The Plan and all Stock Options made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Texas, without reference to principles of conflict of laws.
SECTION 9. EFFECTIVE DATE OF PLAN
The Plan shall be effective as of June 22, 2000, provided that it is
approved and adopted by the shareholders of the Corporation within 12 months
after such date.
-9-
<PAGE> 35
BOLLINGER INDUSTRIES, INC.
Proxy Solicited on Behalf of the Board of Directors of the Corporation
For Annual Meeting of Stockholders
September 21, 2000
The undersigned hereby constitutes and appoints Glenn D. Bollinger and
Bobby D. Bollinger, and each of them, proxies with full power of substitution,
to vote, as directed below, all the shares of common stock of Bollinger
Industries, Inc. (the "Corporation") held of record by the undersigned at the
close of business on August 15, 2000 at the Annual Meeting of Stockholders to be
held at the Hilton Hotel, 2401 East Lamar Boulevard, Arlington, Texas 76006 at
10:00 a.m. local time, on September 21, 2000, and at any adjournment or
adjournments thereof.
1. ELECTION OF DIRECTORS--Nominees: Glenn D. Bollinger, Bobby D.
Bollinger, John L. Maguire, and Stephen L. Parr.
MARK ONLY ONE BOX VOTE FOR all nominees listed above, except
--- vote to be withheld from the following
nominees, if any:
------------------------------------------
VOTE TO BE WITHHELD from all nominees.
---
2. APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK. Proposal to approve an amendment to the Company's
Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 8,000,000 shares to 20,000,000 shares.
FOR___ AGAINST___ ABSTAIN___
3. RATIFICATION OF THE ADOPTION OF THE 2000 STOCK OPTION PLAN OF THE
CORPORATION. FOR___ AGAINST___ ABSTAIN___
4. APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Proposal to approve the appointment of King, Griffin & Adamson,
P.C. as independent public accountants of the Corporation for the
fiscal year ending March 31, 2001. FOR___ AGAINST___ ABSTAIN___
5. OTHER BUSINESS. In their discretion upon such other business as
may properly come before the meeting, or any adjournment or
adjournments thereof. FOR___ AGAINST___ ABSTAIN___
This proxy when properly executed will be voted as directed herein by
the undersigned. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR all the
nominees listed above and FOR proposals 2, 3 and 4, in the discretion of the
persons named herein as proxies, upon such other business as may come before the
meeting and any adjournment or adjournments thereof. The undersigned hereby
revokes any proxy or proxies heretofore given and hereby confirms all that said
attorneys and proxies, or any of them, or their substitutes may do by virtue
hereof. In addition, receipt of the 2000 Annual Report, the Notice of Annual
Meeting and the Proxy Statement of Bollinger Industries, Inc. dated August 25,
2000 is hereby acknowledged.
<TABLE>
<S> <C>
SHARES OF COMMON STOCK: DATED , 2000
---------------- ------------------------------
--------------------------------------------
--------------------------------------------
Signature of Shareholder (s)
--------------------------------------------
Street Address
Please date this proxy and sign your name exactly as it --------------------------------------------
appears hereon, and mail today. When signing on behalf of City State Zip
a corporation, partnership, estate, trust or the like,
indicate title of persons signing. For joint accounts,
each joint owner should sign.
NOTE: I ______ WILL ______ WILL NOT ATTEND THE STOCK HOLDERS' MEETING ON SEPTEMBER 21, 2000.
</TABLE>
