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:
[ ] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as
permitted by Rule 14-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CENTENNIAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CENTENNIAL TECHNOLOGIES, INC.
7 Lopez Road
Wilmington, Massachusetts 01887
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of Centennial Technologies, Inc. ("Centennial") to be held at
9:00 a.m., local time, on Tuesday, June 20, 2000 at the Andover Inn, Chapel
Avenue, Andover, Massachusetts.
At the Annual Meeting, you will be asked to (i) elect seven (7) nominees to
the Board of Directors of Centennial and (ii) approve the 1999 Stock Incentive
Plan in order to permit incentive stock options to be granted under the Plan.
Details of the matters to be considered at the Annual Meeting are contained
in the attached formal notice of annual meeting of stockholders and proxy
statement that we urge you to consider carefully. Centennial's 2000 Annual
Report to Stockholders, which is not part of the enclosed Proxy Statement, is
also enclosed and provides additional information regarding, among other things,
the financial results of Centennial. Holders of Centennial's common stock are
entitled to vote at the Annual Meeting on the basis of one vote for each share
held and holders of Centennial's Series B Convertible Preferred Stock are
entitled to vote at the Annual Meeting on the basis of one vote for each share
of common stock which would be issuable upon conversion of the Series B
Convertible Preferred Stock.
Whether or not you plan to attend the Annual Meeting, it is important that
you promptly complete, date, sign and return your proxy in the enclosed
envelope, which requires no postage if mailed in the United States. If you
attend the Annual Meeting, you may vote in person if you wish, even if you have
previously returned your proxy.
Sincerely,
L. Michael Hone
President and Chief Executive Officer
Wilmington, Massachusetts
May 19, 2000
<PAGE>
CENTENNIAL TECHNOLOGIES, INC.
7 Lopez Road
Wilmington, Massachusetts 01887
-----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held Tuesday, June 20, 2000
-----------------------
To the Stockholders of CENTENNIAL TECHNOLOGIES, INC.:
The Annual Meeting of Stockholders (together with all adjournments and
postponements thereof, the "Annual Meeting") of CENTENNIAL TECHNOLOGIES, INC., a
Delaware corporation ("Centennial"), will be held on Tuesday, June 20, 2000, at
9:00 a.m., local time, at the Andover Inn, Chapel Avenue, Andover, Massachusetts
for the following purposes:
1. To elect seven (7) individuals to serve on the Board of Directors of
Centennial for a term of one year and until their respective
successors have been duly elected and qualified;
2. To approve the adoption of the 1999 Stock Incentive Plan which
provides for the issuance of up to 1,000,000 shares of Centennial's
Common Stock in order to permit incentive stock options to be granted
under the 1999 Stock Incentive Plan; and
3. To consider and act upon any matters incidental to the foregoing and
any other matters that may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors has no knowledge of any other business to be
transacted at the Annual Meeting.
All stockholders are invited to attend the Annual Meeting. Stockholders of
record at the close of business on May 17, 2000, the record date fixed by the
Board of Directors, are entitled to notice of and to vote at the Annual Meeting.
Holders of Common Stock and Series B Convertible Preferred Stock (on the basis
of one vote for each share of Common Stock which would be issuable upon
conversion of the Series B Convertible Preferred Stock) as of the record date
will have the right to vote on the above proposals. A list of Stockholders
entitled to vote at the Annual Meeting will be available during normal business
hours at Centennial's executive offices at 7 Lopez Road, Wilmington,
Massachusetts, at least ten (10) days prior to the Annual Meeting for
examination by any Stockholder for purposes germane to the Annual Meeting.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE
WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL
BE APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK
PERSONALLY EVEN THOUGH THEY HAVE SENT THEIR PROXIES.
By Order of the Board of Directors
Richard J. Pulsifer
Vice President, Chief Financial Officer
and Secretary
Wilmington, Massachusetts
May 19, 2000
<PAGE>
CENTENNIAL TECHNOLOGIES, INC.
7 Lopez Road
Wilmington, Massachusetts 01887
-----------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
-----------------------
TO BE HELD TUESDAY, JUNE 20, 2000
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of CENTENNIAL TECHNOLOGIES, INC., a Delaware corporation
("Centennial"), of proxies for use at the Annual Meeting of Stockholders
(together with all adjournments and postponements thereof, the "Annual Meeting")
to be held on, Tuesday, June 20, 2000, at 9:00 a.m., local time, at the Andover
Inn, Chapel Avenue, Andover, Massachusetts.
A report containing financial and other information for the fiscal year
ended March 25, 2000 is being mailed herewith to all stockholders entitled to
vote. References to fiscal 2000, 1999 and 1998 are to the fiscal years ended
March 25, 2000, March 31, 1999 and March 31, 1998, respectively.
The shares represented by all properly executed proxies received prior to
the Annual Meeting will be voted as specified therein. In the absence of a
special notice, shares will be voted in favor of the election as Directors of
those persons named in this Proxy Statement, in favor of the approval of the
1999 Stock Incentive Plan and in favor of all other items set forth herein.
Execution of a proxy will not in any way affect a stockholder's right to attend
the Annual Meeting and vote in person. The proxy may be revoked at any time
before it is exercised by written notice to the Secretary prior to the meeting,
by giving the Secretary a duly executed proxy bearing a later date, or by voting
in person at the meeting by written ballot.
The Notice of Meeting, this Proxy Statement and the enclosed Proxy Card are
being mailed to stockholders on or about May 22, 2000.
VOTING SECURITIES AND VOTES REQUIRED
Stockholders of record at the close of business on May 17, 2000 will be
entitled to vote at the Annual Meeting. On that date, 3,189,874 shares of common
stock, $0.01 par value per share, of Centennial (the "Common Stock") and 60,000
shares of Series B Convertible Preferred Stock, $0.01 par value per share, of
Centennial (the "Series B Preferred Stock") were issued and outstanding. Each
share of Common Stock entitles the holder to one vote with respect to all
matters submitted to stockholders at the Annual Meeting and each share of Series
B Preferred Stock entitles the holder to one vote per share of Common Stock
which would be issuable upon conversion of such share of Series B Preferred
Stock (the number of shares that each share of Common Stock or Series B
Preferred Stock may vote being referred herein as "Voting Shares"). Presently
ten (10) shares of Common Stock would be issuable for each share of Series B
Preferred Stock upon conversion thereof. There are no other voting securities of
Centennial.
The holders of a majority of the issued and outstanding Voting Shares
entitled to vote at the Annual Meeting shall constitute a quorum for the
transaction of business at the meeting. Voting Shares present in person or
represented by a properly executed proxy (including shares which abstain or do
not vote with respect to one or more of the matters set forth therein) will be
counted for purposes of determining whether a quorum exists at the Annual
Meeting.
<PAGE>
The affirmative vote of a plurality of the votes cast is necessary to elect
a nominee as a Director. The passage of any other proposal to be voted upon by
the stockholders of Centennial requires the affirmative vote of a majority of
the votes cast.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter, and will also not
be counted as votes cast or shares voting on such matter. Accordingly,
abstentions and "broker non-votes" will have no effect on the election of
Directors or approval of the 1999 Stock Incentive Plan.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Directors of Centennial are elected annually and hold office until the
next Annual Meeting of Stockholders and until their successors have been duly
elected and qualified. Shares represented by all proxies received by the Board
of Directors and not so marked as to withhold authority to vote for an
individual nominee for Director, or for all nominees for Director, will be voted
(unless one or more nominees are unable or unwilling to serve) for the election
of the nominees named below. The Board of Directors is aware of no reason why
any such nominee should be unwilling to serve, but if such should be the case,
proxies will be voted for the election of some other person nominated by the
Board of Directors or for fixing the number of Directors at a lesser number.
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
The following table sets forth the positions and offices currently held by
each nominee to the Board of Directors of Centennial, each nominee's principal
occupation and business experience for the past five years, the names of other
publicly held companies of which each nominee serves as a director, and each
nominee's age and length of service as a Director of Centennial. For information
about the ownership of the Common Stock held by each nominee, see "Securities
Ownership of Certain Beneficial Owners and Management."
William J. Shea................ Chairman of the Board of Directors since
November 1997; Chairman of the Board and
Founder of Agility, Inc., a Massachusetts based
company involved in developing proprietary
software to integrate major business processes
for financial service companies; former Chief
Executive Officer of View Tech, Inc., a
publicly-traded single-source provider of
voice, video and data equipment, network
services and communications consulting
services, from April 1998 to 2000; director of
View Tech, Inc. since February 1998; Vice
Chairman, Chief Financial Officer and Treasurer
of BankBoston Corporation, a registered bank
holding company with national and international
operations, from 1993 to 1997; various
positions with Coopers & Lybrand L.L.P., a
public accounting firm, from 1974 to 1993,
including most recently Vice Chairman and
Senior Partner. Age 52; director of Centennial
since 1996.
L. Michael Hone................ President and Chief Executive Officer of
Centennial since August 1997; Chairman and
Chief Executive Officer of PSC Inc., a
publicly-held manufacturer of hand-held and
fixed-position laser based bar code scanners,
scan engines and other scanning products, from
1992 to 1997; director of Telxon Corporation, a
publicly-traded company engaged in the global
design and manufacture of wireless networks for
mobile computing solutions and information
systems; director of Rochester Healthcare
Information Group, Inc., a company principally
engaged in providing data processing management
to the health care industry; director of
Association for the Blind and Visually
Impaired, Inc., a company principally engaged
in assisting the blind and visually impaired to
achieve vocational and social independence. Mr.
Hone is a named inventor on 6 United States
patents. Age 50; director of Centennial since
1997.
2
<PAGE>
Eugene M. Bullis............... Chief Financial Officer, ManagedOps.com, Inc.,
an end-to-end applications service provider for
middle-market businesses, since April, 2000;
from October 1999 to March 2000, Executive Vice
President and Chief Financial Officer of
Manufacturers' Services, Ltd., a provider of
electronics manufacturing services; from March
1998 to October 1999, Senior Vice President and
Chief Financial Officer of Physicians Quality
Care, a company that provides a physician
practice management services; Interim Chief
Financial Officer of Centennial from February
1997 to June 1998; Chief Financial Officer of
Computervision Corporation, a publicly-traded
company (now a subsidiary of Parametric
Technology Corporation) that provided
computer-aided design solutions for complex
mechanical and electrical systems, from October
1997 to January 1998; President of NYNEX
Information Technologies, Inc., a subsidiary of
NYNEX Corporation (now Bell Atlantic), a
publicly-traded global communications and media
corporation, from 1994 to 1996; Senior Vice
President, Finance and Strategy of AGS
Computers, Inc., also a subsidiary of NYNEX
Corporation, from 1993 to 1994; Interim
Executive and Business Consultant, since 1990.
Age 55; director of Centennial since 1998.
Steven M. DePerrior............ Principal of Burke Group, a firm specializing
in employee benefits and compensation
consulting, since 1997; various positions with
William M. Mercer, Inc., an international human
resource consulting firm, from 1991 to 1997,
most recently as Principal; director of Daniel
Green Company, a publicly-held shoe
manufacturer located in central New York State.
Age 41; director of Centennial since 1998.
Jay M. Eastman, Ph.D........... President and Chief Executive Officer of Lucid,
Inc., a manufacturer of confocal diagnostic
medical imaging systems and OEM color and
optical density measurement systems, since
1991; Senior Vice President of Strategic
Planning of PSC Inc., a publicly-held
manufacturer of hand-held and fixed-position
laser based bar code scanners, scan engines and
other scanning products, from 1996 to 1997;
Executive Vice President of PSC Inc., from 1986
to 1995; director of PSC Inc.; director of
Electric Fuel Corporation, a publicly-held
manufacturer of batteries for electric vehicles
and portable equipment; director of Chapman
Instruments, Inc., a manufacturer of precision
surface profiling instruments; director of
Dimension Technologies, Inc., a developer and
manufacturer of 3D computer and video displays.
Fellow of the Optical Society of America;
honorary member of the Rochester Chapter of the
Optical Society of America. Dr. Eastman is a
named inventor on 17 United States patents and
1 European patent. Age 52; director of
Centennial since 1997.
David A. Lovenheim............. Attorney at the law firm of Harris Beach &
Wilcox, L.L.P., since 1979, currently as a
Partner in its Corporate and International
Departments; Chairman of the Board of Lucid,
Inc., a manufacturer of confocal diagnostic
medical imaging systems and OEM color and
optical density measurement systems; Chairman
of the Board of Intercon Associates, Inc., a
computer software company; director of Lenel
Systems International, Inc., a developer and
marketer of security and access control
systems; director of Dimension Technologies,
Inc., a developer and manufacturer of 3D
computer and video displays; director of
Infrared Components Corp., a developer and
marketer of infrared sensor systems and
cyro-packaging subsystems; director and
secretary of Waste Reduction by Waste
Reduction, Inc., a developer, manufacturer and
marketer of biological and regulated medical
waste disposal systems; director of MedNetWorx,
Inc. a medical records software company. Age
57, director of Centennial since 1998.
3
<PAGE>
John J. Shields................ General Partner of Boston Capital Ventures, a
firm engaged in investing fund assets in
private equities, since January 1998; President
and Chief Executive Officer of King's Point
Holdings, Inc., a company principally engaged
in venture capital, technical consulting and
cranberry cultivation, since 1993; President
and Chief Executive Officer of Computervision
Corporation, a developer of CAD/CAM software
for the design and manufacture of complex
mechanical products, form 1990 to 1993; 28
years at Digital Equipment Corporation, a
manufacturer of computer hardware, peripherals
and software, serving as Senior Vice President
from 1986 to 1989; director of Ionics, Inc., a
publicly-traded company principally engaged in
separations technology. Age 61; director of
Centennial since 1996.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors maintains an Executive Committee, an Audit
Committee, a Compensation Committee, a Nominating Committee and a Stock Option
Committee. There were four meetings of the Board of Directors held during fiscal
2000. Each Director attended at least 75 percent of the total number of meetings
of the Board of Directors. Each Director attended at least 75 percent of the
total number of meetings of the committees of the Board of Directors on which he
also served.
The Executive Committee is currently composed of Messrs. Hone (Chairman),
Shea and Lovenheim and Dr. Eastman. The Executive Committee is authorized to act
on behalf of the Board on all corporate actions for which applicable law does
not require participation of the full Board. All actions taken by the Executive
Committee are reported at the next Board meeting. The Executive Committee held
no formal meetings during fiscal 2000.
The Audit Committee is currently composed of Messrs. Bullis (Chairman) and
DePerrior. The Audit Committee is responsible primarily for reviewing (i)
Centennial's financial results and recommending the selection of Centennial's
independent auditors; (ii) the effectiveness of Centennial's accounting
policies, financial reporting and internal controls; and (iii) the scope of
independent audit coverage, the fees charged by independent auditors, any
transactions that may involve a potential conflict of interest and internal
control systems. The Board of Directors approved an Audit Committee Charter in
January 1998. The Audit Committee met on four occasions during fiscal 2000.
The Compensation Committee and the Stock Option Committee are currently
composed of Messrs. DePerrior (Chairman) and Lovenheim and Dr. Eastman. The
Compensation Committee is responsible for establishing the policies that govern
compensation for Centennial's senior management team and for approving
compensation arrangements for members of management and Directors of Centennial.
The Compensation Committee and the Stock Option Committee collectively are
responsible for the granting of options pursuant to Centennial's 1994 Stock
Option Plan and 1999 Stock Incentive Plan. These Committees met on two occasions
in fiscal 2000 and acted by written consent on numerous occasions.
The Nominating Committee is currently composed of Dr. Eastman (Chairman)
and Messrs. Hone and Lovenheim. The Nominating Committee generally recommends to
the Board candidates for nomination for election to the Board. The Nominating
Committee will consider stockholder recommendations for director sent to the
Nominating Committee, c/o Richard J. Pulsifer, Vice President, Chief Financial
Officer and Secretary, Centennial Technologies, Inc., 7 Lopez Road, Wilmington,
Massachusetts 01887.
No Director or executive officer is related to any other Director or
executive officer by blood or marriage.
4
<PAGE>
COMPENSATION FOR DIRECTORS
As of January 1, 2000, each non-employee Director is compensated at a rate
of $1,000 for each Board of Directors meeting attended, $500 for a telephonic
Board Meeting attended and $500 for each committee meeting attended and also
receives an annual stipend of $4,000. Prior to January 1, 2000, each
non-employee Director was compensated at a rate of $500 for each Board of
Directors meeting attended and received an annual stipend of $1,000. The annual
stipend is pro-rated for the number of months served on the Board of Directors.
Messrs. Bullis, DePerrior, Lovenheim, Shea and Shields and Dr. Eastman each
received, $6,917, $7,417, $6,917, $6,500, $6,000 and $7,000, respectively, from
Centennial as compensation for their services to Centennial as a Director during
fiscal 2000. In addition, Directors are reimbursed for travel and other expenses
incurred in attending Board and committee meetings.
On June 10, 1999, Messrs. Bullis, DePerrior, Lovenheim, Shea and Shields
and Dr. Eastman were each granted an option under the 1994 Stock Option Plan to
purchase up to 9,375, 9,375, 9,375, 18,750, 9,375 and 9,375 shares of Common
Stock, respectively, at a price of $5.84 per share, which vests ratably on each
of the first, second and third anniversaries of the date of grant. On July 21,
1999, Messrs. Bullis, DePerrior, Lovenheim, Shea and Shields and Dr. Eastman
were each granted an option under the 1994 Formula Stock Option Plan to purchase
up to 375 shares of Common Stock, at a price of $7.28 per share, all of which
vested immediately. On December 15, 1999, Messrs. Bullis, DePerrior, Lovenheim,
Shea and Shields and Dr. Eastman were each granted an option under the 1999
Stock Incentive Plan to purchase up to 40,000, 35,000, 35,000, 50,000, 35,000
and 35,000 shares of Common Stock, respectively, at a price of $3.50 per share
that vested fully in fiscal 2000 upon the achievement of certain stock price
targets.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires executive officers and directors, and persons who
beneficially own more than 10% of a company's equity securities that are
registered under Section 12 of the Exchange Act to file initial reports of
ownership of Form 3 and reports of changes in ownership on Form 4 with the
Commission and any national securities exchange on which Centennial's securities
are registered. Executive officers, Directors and greater than 10% beneficial
owners are required by the Commission's regulations to furnish Centennial with
copies of all forms they file pursuant to Section 16(a).
Based solely on a review of the copies of such forms furnished to
Centennial and written representations from its executive officers and
Directors, Centennial believes that all Section 16(a) filing requirements
applicable to its executive officers, Directors and greater than 10% beneficial
owners were complied with during fiscal 2000, with the exception of Mr. Boehme
whose Form 3 was inadvertently filed late. This report has been filed prior to
the date of this Proxy Statement.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to Mr. Hone,
Centennial's President and Chief Executive Officer with respect to services
rendered to Centennial during fiscal 2000, 1999 and 1998 and the four most
highly compensated executive officers during fiscal 2000, as well as one
executive officer who would have been one of the four most highly compensated
officers during fiscal 2000 except that such officer joined Centennial in June
1999 (each a "Named Executive Officer"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
---------------------
Long-Term
Compensation
Securities
Fiscal Underlying
Name and Principal Position Year Salary Bonus Options
------ ------ ----- --------
<S> <C> <C> <C> <C>
L. Michael Hone (1).......................... 2000 $ 50,000 $150,000 358,406
President and Chief Executive Officer 1999 51,923 361,000 158,406
1998 28,846 175,000 115,625
Richard N. Stathes (2)(3).................... 2000 $252,781 $ 37,500 128,531
Executive Vice President, Worldwide Sales and 1999 215,171 26,450 38,531
Marketing 1998 83,200 -- 28,125
Jacques Assour, Ph.D. (4).................... 2000 $163,360 $101,750 108,906
Senior Vice President, Operations 1999 160,000 72,000 21,406
1998 62,500 -- 15,625
Richard J. Pulsifer (5) ..................... 2000 $ 86,187 $ 58,000 46,250
Vice President, Chief Financial Officer and 1999 -- -- --
Secretary 1998 -- -- --
Douglas S. Boehme (6)(7)..................... 2000 $153,754 $ 2,625 21,875
Vice President of North American Sales 1999 132,743 2,250 10,625
1998 43,200 -- 9,375
John C. Nugent (8)........................... 2000 $154,053 $ 51,000 45,156
Managing Director of Centennial 1999 149,013 48,390 21,406
Technologies International Limited 1998 33,720 -- 15,625
- ----------
</TABLE>
(1) Mr. Hone joined Centennial as President and Chief Executive Officer in
August 1997.
(2) Mr. Stathes joined Centennial as Senior Vice President, Sales and Marketing
in September 1997.
(3) Mr. Stathes's amounts shown as salary for 2000 and 1999 include $76,176 and
$43,919 of sales-based commissions, respectively.
(4) Dr. Assour joined Centennial as Senior Vice President, Operations in
September 1997.
(5) Mr. Pulsifer joined Centennial as Vice President, Chief Financial Officer
and Secretary in June 1999.
(6) Mr. Boehme joined Centennial in December 1998.
(7) Mr. Boehme's amounts shown as salary for 2000, 1999 and 1998 include
$57,144, $52,343 and $20,250 of sales-based commissions, respectively.
(8) Mr. Nugent joined Centennial as Managing Director of Centennial Technologies
International Limited in January 1998.
6
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 2000
Individual Grants Potential Realizable
----------------------------------------------------- Value At Assumed Annual
Number Of Percent Of Rates Of Stock Price
Securities Total Options Appreciation For Option
Underlying Granted To Exercise Term (3)
Options Employees In or Base -------
Name Granted (#) Fiscal Year (1) Price (2) Expiration Date 5% 10%
---- ----------- --------------- --------- --------------- -- ---
<S> <C> <C> <C> <C> <C> <C>
L. Michael Hone......... 125,000 15.0% $3.50 12/14/09 $275,141 $697,262
75,000 9.0% 5.84 06/09/09 275,456 698,059
Richard N. Stathes...... 75,000 9.0% $3.50 12/14/09 $165,085 $418,357
15,000 1.8% 5.84 06/09/09 55,091 139,612
Jacques Assour, Ph.D.... 75,000 9.0% $3.50 12/14/09 $165,085 $418,357
12,500 1.5% 5.84 06/09/09 45,909 116,343
Richard J. Pulsifer..... 25,000 3.0% $3.50 12/14/09 $ 55,028 $139,452
5,000 0.6% 4.88 09/08/09 15,345 38,887
16,250 1.9% 7.76 06/27/09 45,423 147,021
Douglas S. Boehme....... 10,000 1.2% $3.50 12/14/09 $22,011 $55,781
1,250 0.1% 5.84 06/09/09 4,590 11,634
John C. Nugent.......... 15,000 1.8% $3.50 12/14/09 $33,016 $83,671
8,750 1.0% 5.84 06/09/09 32,137 81,440
</TABLE>
- --------------------
(1) The number of options granted in fiscal 2000 include (i) options to
purchase 253,125 shares of Common Stock that were granted under the 1994
Stock Option Plan, which include options to purchase 65,625 shares of
Common Stock that were granted to non-employee directors, (ii) options to
purchase 585,500 shares of Common Stock that were granted under the 1999
Stock Incentive Plan, which include options to purchase 230,000 shares of
Common Stock that were granted to non-employee directors and (iii)
options to purchase 2,250 shares of Common Stock that were granted to
non-employee directors under the 1994 Formula Stock Option Plan. In
fiscal 2000, options to purchase 7,847 shares of Common Stock were
exercised, and options to purchase 61,845 shares of Common Stock were
cancelled under the 1994 Stock Option Plan and made available for future
grant. No options were exercised or cancelled under the 1994 Formula
Stock Option Plan or the 1999 Stock Incentive Plan.
(2) Options were granted by the Compensation Committee pursuant to the 1994
Stock Option Plan and 1999 Stock Incentive Plan at fair market value
determined on the date of the grant.
(3) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compound rates of appreciation (5% and 10%)
on the market value of Centennial's Common Stock on the date of option
grant over the term of the options. These numbers are calculated based on
rules promulgated by the Securities and Exchange Commission and do not
reflect Centennial's estimate of future stock price growth. Actual gains,
if any, on exercise of stock options and Common Stock holdings are
dependent on the timing of the exercise and the future performance of
Centennial's Common Stock. There can be no assurance that the rates of
appreciation assumed in this table can be achieved or that the amounts
reflected will be received by the individuals.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Number of
Securities Securities Value of Value of
Underlying Underlying Unexercised Unexercised
Unexercised Unexercised In-the-Money In-the-Money
Shares Options at Options at Options(1) at Options(1) at
Acquired Value March 25, 2000 March 25, 2000 March 25, 2000 March 25, 2000
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------------ --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
L. Michael Hone............ 0 0 244,865 113,541 $1,664,549 $625,298
Richard N. Stathes......... 0 0 104,156 24,375 745,145 134,944
Jacques Assour, Ph..D. 0 0 91,198 17,708 668,304 97,008
Richard J. Pulsifer........ 0 0 25,000 21,250 190,750 86,012
Douglas S. Boehme.......... 0 0 16,667 5,208 115,835 30,083
John C. Nugent............. 0 0 31,198 13,958 210,504 77,171
</TABLE>
(1) In-the-money options are those options for which the fair market value of
the underlying Common Stock is greater than the exercise price of the
option. The fair market value of the Common Stock as of March 25, 2000 was
$11.13 per share, based on information reported by certain internet-based
bulletin board services purporting to monitor trading activities.
Centennial is unable to verify the accuracy or completeness of such
information.
-------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 30, 2000, the number of shares
of Common Stock beneficially owned and the percentage of the Common Stock owned
by (i) all persons known by Centennial to be the beneficial owner of more than
five percent (5%) of the outstanding Common Stock, (ii) the Chief Executive
Officer, each Named Executive Officer and each Director, and (iii) all Directors
and Executive Officers of Centennial as a group.
The number of shares beneficially owned by each Director or Named Executive
Officer is determined under the rules of the Securities and Exchange Commission
(the "Commission"), and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares that the individual has the
right to acquire within sixty days of the date specified above through the
exercise of any stock option or other right. Unless otherwise indicated, each
person has sole investment and voting power (or shares such power with his or
her spouse) with respect to the shares set forth in the following table. The
inclusion herein of any shares deemed beneficially owned does not constitute an
admission of beneficial ownership of those shares.
8
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares
Beneficially Percentage of
Beneficial Owner(1) Owned (2) Class
------------ -------------
<S> <C> <C>
Chief Executive Officer and Named Executive Officers:
L. Michael Hone (3)...................... 270,015 7.8%
Richard N. Stathes (3)................... 110,499 3.4%
Jacques Assour, Ph.D. (3)................ 95,942 2.9%
Richard J. Pulsifer (3).................. 30,910 *
John C. Nugent (3)....................... 34,115 1.1%
Douglas S. Boehme (3).................... 17,501 *
Non-Employee Directors:
William J. Shea (3)(4)................... 71,337 2.2%
Eugene M. Bullis (3)..................... 45,375 1.4%
Steven M. DePerrior (3).................. 40,375 1.3%
Jay M. Eastman, Ph.D. (3)................ 41,062 1.3%
David A. Lovenheim (3)................... 40,375 1.3%
John J. Shields (3)...................... 58,562 1.8%
All Directors and executive officers as a
group (14 persons)(5).................. 869,654 21.5%
Beneficial Owner of 5% or more of the Outstanding
Common Stock:
Intel Corporation (6).................... 600,000 15.9%
- ----------
</TABLE>
* Less than 1%.
(1) The address for all individuals is Centennial Technologies, Inc., 7 Lopez
Road, Wilmington, Massachusetts 01887. The address for Intel Corporation is
Robert Noyce Building, 2200 Mission College Boulevard, P.O. Box 58119,
Santa Clara, CA 95052-8119.
(2) Pursuant to the rules of the Commission, shares of Common Stock that an
individual or group has a right to acquire within 60 days of April 30, 2000
pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown on the
table.
(3) Includes the right to acquire, pursuant to the exercise of stock options,
within 60 days after April 30, 2000, the following number of shares:
249,865 shares for Mr. Hone; 109,156 shares for Mr. Stathes; 95,305 shares
for Dr. Assour; 25,000 shares for Mr. Pulsifer; 34,115 shares for Mr.
Nugent; 17,501 shares for Mr. Boehme; 68,125 shares for Mr. Shea; 45,375
shares for Mr. Bullis; 40,375 shares for Mr. DePerrior; 41,062 shares for
Dr. Eastman; 40,375 shares for Mr. Lovenheim and 58,562 shares for Mr.
Shields.
(4) Includes 3,150 shares held by Mr. Shea's wife, and 62 shares held by Mr.
Shea's son, as to both of which Mr. Shea disclaims beneficial ownership.
(5) Includes the securities identified in notes (2) through (4).
(6) Represents shares of Common Stock issuable upon conversion of the 60,000
Series B Convertble Preferred Stock received in connection with
Centennial's acquisition of Intel Corporation's flash memory card business
on December 29, 1999.
9
<PAGE>
PERFORMANCE GRAPH
The following table demonstrates a comparison of cumulative total returns
for (i) Centennial's Common Stock, (ii) NASDAQ Market Index, and (iii) a Peer
Group Index based upon Centennial's Standard Industry Classification Number (the
"SIC Code Index") for the period from June 30, 1995 through March 25, 2000. The
table assumes an investment of $100 on June 30, 1995, dividend reinvested and a
fiscal year ending March 25, 2000.
Centennial Technologies, Inc. SIC Code Index NASDAQ Market Index
6/30/95 100.00 100.00 100.00
6/30/96 198.06 146.93 125.88
3/31/97 46.41 119.90 128.55
3/31/98 29.83 190.41 194.27
3/31/99 8.62 346.87 253.87
3/31/00 18.44 951.15 467.50
THE STOCK PERFORMANCE SHOWN ON THE ABOVE DISPLAYED PERFORMANCE TABLE IS NOT
NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. CENTENNIAL WILL NOT AND DOES NOT
MAKE OR ENDORSE ANY PREDICTIONS AS TO FUTURE COMMON STOCK PERFORMANCE.
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
Centennial's Board of Directors has established the Compensation Committee
to oversee the administration of compensation matters as they relate to
Centennial's senior executives. The Compensation Committee is composed solely of
non-employee Directors. The Compensation Committee's responsibilities are to (i)
review with the President and Chief Executive Officer his performance and the
performance of other senior executive officers of Centennial, (ii) review and
establish the base salary of the President and Chief Executive Officer and other
senior executive officers of Centennial, (iii) review and approve the annual
incentive bonus compensation, (iv) issue and administer grants and awards to
employees under the 1994 Stock Option Plan and 1999 Stock Incentive Plan, and
(v) report periodically on its activities to the Board of Directors.
OBJECTIVE OF CENTENNIAL'S COMPENSATION PROGRAM. Centennial's executive
compensation program is intended to attract, retain and reward executives who
are capable of leading Centennial effectively and meeting Centennial's goals and
objectives. The Compensation Committee believes that a combination of cash and
equity-based compensation provides the most effective means of properly
incentivizing Centennial's executives while also better aligning their interests
with those of Centennial's stockholders.
Centennial uses a three-pronged approach to its compensation for its senior
executives. First, the executive's base salary is intended to maintain a
reasonably competitive minimum level of compensation for each executive for the
following twelve months. Second, Centennial offers annual incentives to senior
executive officers based upon the achievement of corporate and individual
performance goals, with the objective of rewarding executives for their past
twelve months' performance. Finally, Centennial utilizes stock options granted
under its 1994 Stock Option Plan and 1999 Stock Incentive Plan as a long-term
incentive for the senior executive officers of Centennial. The Compensation
Committee believes that stock options are important in aligning management and
stockholder interests and in encouraging management to adopt a longer-term
perspective. Accordingly, options generally provide for incremental vesting over
a three-year period, although in certain cases vesting may also be tied to stock
price appreciation.
COMPENSATION COMMITTEE PROCEDURES. The Compensation Committee reviews its
compensation policies on an annual basis and considers specific compensation
matters with regard to executives throughout the year. The Compensation
Committee meets periodically, and may consult by telephone at other times. The
determinations of the Compensation Committee relating to the compensation of
Centennial's senior executive officers are generally reported to the Board of
Directors.
FACTORS CONSIDERED IN SETTING COMPENSATION OF PRESIDENT AND CHIEF EXECUTIVE
OFFICER. The Compensation Committee considers numerous qualitative and
quantitative factors in setting the President and Chief Executive Officer's
compensation levels. These factors include the operating results (such as total
sales growth, gross margins and net income) for Centennial and the price of its
Common Stock for the preceding year as well as the expected operating results
for the coming year. In addition, the Compensation Committee considers a number
of other factors which are not subject to precise measurement and which can only
be properly assessed over the long term.
COMPENSATION DECISIONS FOR PRESIDENT AND CHIEF EXECUTIVE OFFICER. Mr. Hone
has served as the President, Chief Executive Officer and a Director of
Centennial since August 1997. The Compensation Committee believes that Mr.
Hone's performance in leading Centennial out of a critical period at a time of
significant losses was exceptional and that he has contributed significantly to
Centennial's strong results for fiscal 2000, including the successful
acquisition of the flash memory card business of Intel Corporation. Mr. Hone's
current base salary is $50,000. In addition, Mr. Hone has an employment
agreement pursuant to which he will be paid a retention bonus of $450,000 in
May, 2000.
By the Compensation Committee Members:
Steven M. DePerrior, Chairman
Jay M. Eastman, Ph. D.
David A. Lovenheim
11
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of Centennial's Compensation Committee are Messrs.
DePerrior and Lovenheim and Dr. Eastman. No executive officer of Centennial has
served as a Director or member of the compensation committee (or other committee
serving an equivalent function) of any other entity, one of whose executive
officers served as a Director of or member of Centennial's Compensation
Committee.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
On August 19, 1997, Centennial entered into an employment agreement with L.
Michael Hone, Centennial's President and Chief Executive Officer (the "Hone
Agreement"), as well as a non-competition and non-solicitation agreement, and an
invention and non-disclosure agreement. The Hone Agreement provides for: (i) a
salary of $50,000 per annum; (ii) a guaranteed bonus for the first twelve months
following execution of the Hone Agreement of $100,000; (iii) a signing bonus of
$175,000 payable in the amounts of $75,000 on January 1, 1998 and $100,000 on
April 28, 1998; and (iv) a retention bonus of $450,000 payable on May 15, 2000.
The Hone Agreement also provides for: (i) the awarding of an option to purchase
115,625 shares of Common Stock, which vests over the first, second and third
anniversaries of employment with Centennial; (ii) reimbursement of relocation
expenses; (iii) a monthly stipend of $1,000 for expenses associated with his
position; (iv) a loan of up to $25,000 if Mr. Hone should sell his home in
Rochester, New York at a loss as a result of his relocation to Massachusetts;
and (v) all benefits offered to Centennial's executive officers generally. If
Mr. Hone were discharged without cause, he would be entitled to his annual
salary and monthly stipend for a period of twelve months, as well as a pro-rata
portion of his retention bonus.
Centennial entered into an employment agreement, effective as of January
12, 1998, with John C. Nugent, Managing Director of Centennial Technologies
International Limited (the "Nugent Agreement"). The Nugent Agreement provides
for: (i) a salary of (pound)90,000 per annum; (ii) a bonus of (pound)30,000;
(iii) the awarding of an option to purchase 15,625 shares of Common Stock, which
vests over the first, second and third anniversaries of employment with
Centennial; (iv) use of a Centennial leased automobile, and (v) all benefits
offered to other executive officers of Centennial generally.
SEVERANCE AGREEMENTS
Centennial has entered into Executive Severance Agreements with Jacques
Assour, Mary A. Gallahan, Richard J. Pulsifer, and Richard N. Stathes (each, an
"Executive"). Under each of the Executive Severance Agreements, Centennial will
be obligated to pay an Executive a severance amount if Centennial terminates
such Executive without cause. Under the Executive Severance Agreement with Mr.
Stathes, the severance amount will be equal to six (6) months of his salary if
terminated after less than one year of employment, fifteen (15) months of his
salary if terminated after more than one year but less than two years of
employment and eighteen (18) months of his salary if terminated after more than
two years of employment. Under the Executive Severance Agreement with Dr.
Assour, the severance amount will be equal to six (6) months of his salary if
terminated after less than one year of employment, twelve (12) months of his
salary if terminated after more than one year but less than eighteen (18) months
of employment and fifteen (15) months of his salary if terminated after more
than eighteen (18) months of employment. Under the Executive Severance
Agreements with Ms. Gallahan and Mr. Pulsifer, the severance amount will be
equal to six (6) months of such Executive's salary if terminated after less than
one year of employment, nine (9) months of such Executive's salary if terminated
after more than one year but less than two years of employment and twelve (12)
months of his salary if terminated after more than two years of employment. If
it terminated an Executive without cause, Centennial would also be obligated to
provide such Executive with all of the health and insurance benefits to which
such Executive was entitled at the time of his or her termination for the period
equal to the number of months of salary to which he or she would be entitled
under his or her Executive Severance Agreement. Upon the date of termination,
such Executive's options to purchase stock of Centennial which would have vested
within 90 days following the date of termination had he or she remained an
employee of Centennial shall be deemed vested as of the date of termination.
Such Executive shall have the remaining option term to exercise all stock
options that were vested as of the date of termination, including those that
accelerate pursuant to the Executive Severance Agreement.
12
<PAGE>
RETENTION AGREEMENTS
Centennial has entered into Retention Agreements with L. Michael Hone,
Jacques Assour, Mary A. Gallahan, John Nugent, Richard J. Pulsifer and Richard
N. Stathes. The Retention Agreements continue through March 31, 2001, and
provide that they are to be automatically extended for additional one-year terms
unless Centennial gives prior notice of termination. The Retention Agreements
are intended to reinforce and encourage the continued employment and dedication
of Centennial's key personnel without distraction from the possibility of a
change in control of Centennial and related events and circumstances. The
Retention Agreements provide that covered executive officers could be entitled
to certain severance benefits following a change in control of Centennial. If,
following such a change in control, the executive officer is terminated for any
reason, other than for disability or for cause, or if such executive officer
terminates his or her employment for good reason (as defined in the agreements),
then the executive officer is entitled to a severance payment that will be equal
to the sum of the executive officer's highest annual base salary and highest
annual bonus from Centennial during the five-year period prior to the change in
control, multiplied by a factor of 2.5 (3.0 in the case of Mr. Hone). The
severance payments generally would be made in the form of a lump sum. In the
event that any severance payments made in connection with a change in control
would be subjected to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, Centennial would be required to "gross up" the
executive officer's compensation for all federal, state and local income and
excise taxes. Under the severance agreements, a change in control would occur if
and when: (i) any "person," as defined in the Exchange Act, acquires 30 percent
or more of Centennial's Common Stock; (ii) a majority of Centennial's Directors
are replaced, or (iii) shareholders approve certain mergers, or a liquidation or
sale of Centennial's assets. Pursuant to the terms of stock option awards to
these executive officers, upon a change in control (as defined therein), all
unvested options granted to such executive officers would vest and become
exercisable for the remainder of the term of the option.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 29, 1999, Centennial acquired the flash memory card business of
Intel Corporation. In exchange Centennial made a cash payment of $2.0 million,
issued a secured promissory note for $4.0 million and issued 60,000 shares of
Series B Convertible Preferred Stock which represents approximately 16% of the
outstanding shares of Common Stock of Centennial on an as-converted basis. The
note payable bears interest at the rate of 9% and the note and interest are due
and payable on December 29, 2000. The Series B Convertible Preferred Stock
currently converts at a ratio of 10 shares of Common Stock for each share of
Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock
has a liquidation preference of $4.8 million and entitles the holder to one vote
per share of Common Stock issuable upon conversion thereof. Intel Corporation
received registration rights with respect to the shares of Common Stock issuable
upon conversion of the Series B Convertible Preferred Stock. Centennial
regularly purchases in the ordinary course of its business a significant portion
of its raw materials (mostly memory chips) from Intel Corporation. Excluding
activity related to a transition period with Intel Corporation and its contract
manufacturer, Centennial had purchases from Intel Corporation of approximately
$0.5 million for fiscal 2000.
Centennial made two loans to L. Michael Hone, its President and Chief
Executive Officer of $144,845 and $204,500 bearing interest at the rate of 5.8%
and 6.45%, respectively. Both loans are due and payable on July 25, 2001.
13
<PAGE>
PROPOSAL NO. 2
APPROVAL OF 1999 STOCK INCENTIVE PLAN
PROPOSAL
The Board of Directors has adopted the 1999 Stock Incentive Plan (the "1999
Plan") for Directors, officers, employees and other key persons of Centennial
and its subsidiaries. The Board of Directors has proposed the approval of the
1999 Plan by the stockholders in order to permit the Board of Directors, or a
committee thereof, to grant incentive stock options to employees of Centennial
and its subsidiaries. The 1999 Plan does not require approval of the
stockholders in order to make any other types of grants permitted by the 1999
Plan and the Board of Directors, or a committee thereof, has made grants and
will continue to make grants under the 1999 Plan irrespective of whether
approval of this proposal is received, although incentive stock options will not
be able to be granted unless the approval of the stockholders is received.
The 1999 Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee"). The Committee, at its discretion, may grant a
variety of stock incentive awards based on the Common Stock of Centennial.
Awards under the 1999 Plan include stock options (both incentive options, in the
event the approval of this proposal by Centennial's stockholders is received,
and non-qualified options) and restricted stock. These awards are described in
greater detail below. The Board of Directors is also authorized to grant other
awards, including the grant of shares based on certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.
Subject to adjustment for stock splits, stock dividends and similar events,
1,000,000 shares of Common Stock can be issued under the 1999 Plan. Based solely
upon the closing price of the Common Stock as reported by certain internet-based
reporting services on May 8, 2000, the maximum aggregate market value of the
securities to be issued under the 1999 Plan would be $8,500,000. The shares
issued by Centennial under the 1999 Plan may be authorized but unissued shares,
or shares reacquired by Centennial. To the extent that awards under the 1999
Plan do not vest or otherwise revert to Centennial, the shares of Common Stock
represented by such awards may be the subject of subsequent awards.
To satisfy the requirements of Section 162(m) of the Code, awards with
respect to no more than 500,000 shares of Common Stock (subject to adjustment
for stock splits and similar events) may be granted to any one individual during
any one-calendar-year period.
RECOMMENDATION
The Board of Directors believes that stock options and other stock-based
incentive awards can play an important role in the success of Centennial by
encouraging and enabling the officers and other employees of Centennial and its
subsidiaries upon whose judgment, initiative and efforts Centennial largely
depends for the successful conduct of its business to acquire a proprietary
interest in Centennial. The Board of Directors anticipates that providing such
persons with a direct stake in Centennial will assure a closer identification of
the interests of participants in the 1999 Plan with those of Centennial, thereby
stimulating their efforts on Centennial's behalf and strengthening their desire
to remain with Centennial.
The Board of Directors believes that the proposed 1999 Plan will help
Centennial to achieve its goals by keeping Centennial's incentive compensation
program dynamic and competitive with those of other companies. Accordingly, the
Board of Directors believes that the 1999 Plan is in the best interests of
Centennial and its stockholders and recommends that the stockholders approve the
1999 Plan in order to permit the Committee to grant incentive stock options to
the employees of Centennial and its subsidiaries.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE 1999 PLAN BE APPROVED, AND
THEREFORE RECOMMENDS A VOTE FOR THIS PROPOSAL.
14
<PAGE>
SUMMARY OF THE 1999 PLAN
The following description of certain features of the 1999 Plan is intended
to be a summary only. The summary is qualified in its entirety by the full text
of the 1999 Plan which is attached to this Proxy Statement as Exhibit A.
PLAN ADMINISTRATION; ELIGIBILITY. The 1999 Plan may be administered by the
Board or a Committee of not fewer than two non-employee directors.
The Committee has full power to select, from among those eligible for
awards, the individuals to whom awards will be granted, to make any combination
of awards to participants, and to determine the specific terms and conditions of
each award, subject to the provisions of the 1999 Plan.
Persons eligible to participate in the 1999 Plan will be those employees
and other key persons, such as consultants and prospective employees, of
Centennial and its subsidiaries who are responsible for or contribute to the
management, growth or profitability of Centennial and its subsidiaries, as
selected from time to time by the Committee. Directors of Centennial who are not
employed by Centennial or its subsidiaries ("Independent Directors") will also
be eligible for certain awards under the 1999 Plan.
STOCK OPTIONS. The 1999 Plan permits the granting of (i) options to
purchase Common Stock intended to qualify as incentive stock options ("Incentive
Options") under Section 422 of the Code and (ii) options that do not so qualify
("Non-Qualified Options"). The option exercise price of each option will be
determined by the Committee but may not be less than 100% of the fair market
value of the Common Stock on the date of grant.
The term of each option will be fixed by the Committee and may not exceed
ten years from the date of grant. The Committee will determine at what time or
times each option may be exercised and, subject to the provisions of the 1999
Plan, the period of time, if any, after retirement, death, disability or
termination of employment during which options may be exercised. Options may be
made exercisable in installments.
Upon exercise of options, the option exercise price must be paid in full
either in cash or by certified or bank check or other instrument acceptable to
the Committee or, if the Committee so permits, by delivery (or attestation to
the ownership) of shares of Common Stock which are not subject to any
restrictions imposed by Centennial and which have been held by the optionee for
at least six months or which were purchased in the open market by the optionee.
The exercise price may also be delivered to Centennial by a broker pursuant to
irrevocable instructions to the broker from the optionee. If permitted by the
Board, the exercise price may also be paid by a promissory note of the optionee.
To qualify as Incentive Options, options must meet additional Federal tax
requirements, including limits on the value of shares subject to Incentive
Options which first become exercisable in any one calendar year, and a shorter
term and higher minimum exercise price in the case of certain large
stockholders.
RESTRICTED STOCK. The Committee may also award shares of Common Stock to
participants subject to such conditions and restrictions as the Committee may
determine ("Restricted Stock"). The purchase price of shares of Restricted Stock
will be determined by the Committee. If the performance goals and other
restrictions are not attained, the employees will forfeit their awards of
Restricted Stock.
ADJUSTMENTS FOR STOCK DIVIDENDS, MERGERS, ETC. The Committee will make
appropriate adjustments in outstanding awards to reflect stock dividends, stock
splits and similar events. In the event of a liquidation or dissolution of
Centennial, the Board shall provide that all unexercised options shall become
fully exercisable as of a specific time at least 10 days before the effective
date of such liquidation or dissolution and that the options shall terminate as
of the effective date. The Board may specify the effect of a liquidation or
dissolution on any restricted stock or other award at the time of grant.
15
<PAGE>
In the event of a merger or consolidation of Centennial with or into
another entity or an exchange of shares of Centennial pursuant to a statutory
share exchange transaction (an "acquisition event"), the Board shall provide
that all outstanding options be assumed or substituted for options in the
acquiring or succeeding entity. However, if the acquiring or succeeding entity
does not agree to assume or substitute for the options, then the Board shall
provide that all unexercised options shall become exercisable prior to the
consummation of the acquisition event and that they shall terminate upon the
acquisition event to the extent not exercised. In addition, the Board may
provide that participants shall receive the cash value of their options if
shareholders of Centennial are to receive such a payment for their shares.
Restricted stock awards shall be converted and the succeeding or acquiring
entity shall succeed to all of the rights of Centennial in such restricted
stock. As to any other type of award, at the time of grant the Board shall
specify the effect of an acquisition event on such award.
Amendments and Termination. The Board of Directors may at any time amend or
discontinue the 1999 Plan and the Committee may at any time amend or cancel
outstanding awards for the purpose of satisfying changes in the law or for any
other lawful purpose. However, no such action may be taken which adversely
affects any rights under outstanding awards without the holder's consent.
Further, Plan amendments shall be subject to approval by Centennial's
stockholders if and to the extent determined by the Committee to be required by
the Code to preserve the qualified status of Incentive Options or to ensure that
compensation earned under Plan awards qualifies as performance-based
compensation under Section 162(m) of the Code.
EFFECTIVE DATE OF 1999 PLAN
The 1999 Plan became effective upon its adoption on November 11, 1999,
although the affirmative vote of a majority of the shares of Common Stock cast
at the Annual Meeting will permit the Committee to grant incentive stock
options. Awards of Incentive Stock Options may be granted under the 1999 Plan
until November 10, 2009.
NEW PLAN BENEFITS
Approximately 130 employees and Independent Directors are currently
eligible to participate in the 1999 Plan. The number of shares that may be
granted to executive officers and non-executive officers is undeterminable at
this time, as such grants are subject to the discretion of the Committee.
Non-Qualfied Options to purchase the following number of shares were granted on
December 15, 1999 to the following Named Executive Officers as well as to
Independent Directors and other employees.
1999 Stock Incentive Plan
Name Number of Shares
Underlying Stock Options
NAMED EXECUTIVE OFFICERS:
L. Michael Hone 125,000
Richard N. Stathes 75,000
Jacques Assour Ph.D. 75,000
Richard J. Pulsifer 25,000
Douglas S .Boehme 10,000
John C. Nugent 15,000
Independent Directors (6 persons) 230,000
Non-Named Executive Officers and Employees (9 persons) 30,500
-------
585,500
16
<PAGE>
TAX ASPECTS UNDER THE U.S. INTERNAL REVENUE CODE
The following is a summary of the principal Federal income tax consequences
of option grants under the 1999 Plan. It does not describe all Federal tax
consequences under the 1999 Plan, nor does it describe state or local tax
consequences.
INCENTIVE OPTIONS
Under the Code, an employee will not realize taxable income by reason of
the grant or the exercise of an Incentive Option. If an employee exercises an
Incentive Option and does not dispose of the shares until the later of (a) two
years from the date the option was granted or (b) one year from the date the
shares were transferred to the employee, the entire gain, if any, realized upon
disposition of such shares will be taxable to the employee as long-term capital
gain, and Centennial will not be entitled to any deduction. If an employee
disposes of the shares within such one-year or two-year period in a manner so as
to violate the holding period requirements (a "disqualifying disposition"), the
employee generally will realize ordinary income in the year of disposition, and
Centennial will receive a corresponding deduction, in an amount equal to the
excess of (1) the lesser of (x) the amount, if any, realized on the disposition
and (y) the fair market value of the shares on the date the option was exercised
over (2) the option price. Any additional gain realized on the disposition of
the shares acquired upon exercise of the option will be long-term or short-term
capital gain and any loss will be long-term or short-term capital loss depending
upon the holding period for such shares. The employee will be considered to have
disposed of his shares if he sells, exchanges, makes a gift of or transfers
legal title to the shares (except by pledge or by transfer on death). If the
disposition of shares is by gift and violates the holding period requirements,
the amount of the employee's ordinary income (and Centennial's deduction) is
equal to the fair market value of the shares on the date of exercise less the
option price. If the disposition is by sale or exchange, the employee's tax
basis will equal the amount paid for the shares plus any ordinary income
realized as a result of the disqualifying distribution. The exercise of an
Incentive Option may subject the employee to the alternative minimum tax.
Special rules apply if an employee surrenders shares of Common Stock in
payment of the exercise price of his Incentive Option.
An Incentive Option that is exercised by an employee more than three months
after an employee's employment terminates will be treated as a Non-Qualified
Option for Federal income tax purposes. In the case of an employee who is
disabled, the three-month period is extended to one year and in the case of an
employee who dies, the three-month employment rule does not apply.
NON-QUALIFIED OPTIONS
There are no Federal income tax consequences to either the optionee, or
Centennial on the grant of a Non-Qualified Option. On the exercise of a
Non-Qualified Option, the optionee (except as described below) has taxable
ordinary income equal to the excess of the fair market value of the Common Stock
received on the exercise date over the option price of the shares. The
optionee's tax basis for the shares acquired upon exercise of a Non-Qualified
Option is increased by the amount of such taxable income. Centennial will be
entitled to a Federal income tax deduction in an amount equal to such excess.
Upon the sale of the shares acquired by exercise of a Non-Qualified Option, the
optionee will realize long-term or short-term capital gain or loss depending
upon his or her holding period for such shares.
Special rules apply if an optionee surrenders shares of Common Stock in
payment of the exercise price of a Non-Qualified Option.
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RESTRICTED STOCK AWARDS
There are generally no federal income tax consequences on the grant of
Restricted Stock Awards. When the Restricted Stock is no longer subject to a
substantial risk of forfeiture (as defined in the Code) or becomes transferable,
the grantee will realize taxable ordinary income in an amount equal to the fair
market value of the number of shares of Common Stock which have become
nonforfeitable or transferable, less the amount paid for the shares, and
Centennial will be entitled to a deduction for tax purposes in the same amount.
However, the grantee may make an election with the Internal Revenue Service
under Section 83(b) of the Code within thirty days of the grant of Restricted
Stock and recognize taxable ordinary income in the year the shares of Restricted
Stock are awarded, in an amount equal to the fair market value of such shares at
the time of the award determined without regard to the restrictions, less the
amount paid for the shares. In that event, Centennial will be entitled to a
corresponding tax deduction.
Any dividends with respect to the shares of Restricted Stock that are paid
or made available to the grantee while the shares remain forfeitable will be
treated as additional compensation which is taxable as ordinary income, and will
be deductible by Centennial when paid. However, if the grantee made an 83(b)
Election with respect to the restricted shares, the dividends represent ordinary
dividend income to the grantee, and are not deductible by Centennial
PARACHUTE PAYMENTS
The vesting of any portion of any award that is accelerated due to the
occurrence of a change of control may cause a portion of the payments with
respect to such accelerated award to be treated as "parachute payments" as
defined in the Code. Any such parachute payments may be non-deductible to
Centennial, in whole or in part, and may subject the recipient to a
non-deductible 20% Federal excise tax on all or portion of such payment (in
addition to other taxes ordinarily payable).
LIMITATION ON COMPANY'S DEDUCTIONS
As a result of Section 162(m) of the Code, Centennial's Federal tax
deduction for certain awards under the Plan may be limited to the extent that
the President and Chief Executive Officer or other executive officer whose
compensation is required to be reported in the summary compensation table
receives compensation (other than performance-based compensation) in excess of
$1 million a year.
INDEPENDENT ACCOUNTANTS
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, will have an opportunity to make a statement if they desire to
do so, and are expected to be available to respond to appropriate questions from
stockholders.
OTHER MATTERS
At the time this proxy statement was printed, Centennial's management was
unaware of any proposals to be presented for consideration at the Annual Meeting
other than those set forth herein. If other matters are properly presented at
the Annual Meeting, it is the intention of the persons named in the proxy to
vote the shares represented by such proxy according to their best judgment.
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SOLICITATION OF PROXIES
The solicitation of proxies is made by Centennial, and the cost of
solicitation of proxies will be borne by Centennial. In addition to the
solicitation of proxies by mail, officers, Directors and employees of
Centennial, without additional remuneration, may solicit proxies in person or by
telephone, and Centennial reserves the right to retain outside agencies for the
purpose of soliciting proxies. Centennial may reimburse brokers or persons
holding Common Stock in their names, or in the names of their nominees, for
their expenses in sending proxies and proxy material to beneficial owners.
REVOCATION OF PROXIES
Subject to the terms and conditions set forth herein, all proxies received
by Centennial will be effective, notwithstanding the transfer of the shares to
which such proxies relate, unless prior to the Annual Meeting Centennial
receives written notice of revocation signed by the person who, as of the record
date, was the registered holder of such shares. Such notice of revocation must
indicate the certificate number or numbers of the shares to which such
revocation relates and the aggregate number of shares represented by such
certificate(s).
STOCKHOLDER PROPOSALS
A proposal by a stockholder for inclusion in Centennial's proxy statement
and form of proxy for the 2001 annual meeting of stockholders must be received
by Centennial at 7 Lopez Road, Wilmington, Massachusetts 01887, Attention:
Richard J. Pulsifer, Vice President, Chief Financial Officer and Secretary of
Centennial, on or before January 18, 2001 in order to be eligible for inclusion.
ANNUAL REPORTS
Centennial is providing to each stockholder, without charge, a copy of its
annual report to stockholders, including the financial statements and related
schedules for fiscal 2000.
In addition, Centennial will provide, without charge, a copy of its annual
report on Form 10-K, including the financial statements and the financial
statement schedules, for the fiscal year-end March 25, 2000. Written requests
should be made to Centennial Technologies, Inc., 7 Lopez Road, Wilmington,
Massachusetts 01887, Attn: Secretary.
By Order of the Board of Directors,
Richard J. Pulsifer
Vice President, Chief Financial Officer
and Secretary
Wilmington, Massachusetts
May 19, 2000
THE MANAGEMENT HOPES THAT THE STOCKHOLDERS WILL ATTEND THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT THEIR PROXIES.
<PAGE>
EXHIBIT A
CENTENNIAL TECHNOLOGIES, INC.
1999 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 1999 Stock Incentive Plan (the "Plan") of Centennial
Technologies, Inc., a Delaware corporation (the "Company"), is to advance the
interests of the Company's stockholders by enhancing the Company's ability to
attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company's stockholders.
Except where the context otherwise requires, the term "Company" shall include
any of the Company's present or future subsidiary corporations as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code").
2. ELIGIBILITY
All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock awards, or other stock-based
awards (each, an "Award") under the Plan. Each person who has been granted an
Award under the Plan shall be deemed a "Participant".
3. ADMINISTRATION, DELEGATION
ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered by the
Board of Directors of the Company (the "Board"). The Board shall have authority
to grant Awards and to adopt, amend and repeal such administrative rules,
guidelines and practices relating to the Plan as it shall deem advisable. The
Board may correct any defect, supply any omission or reconcile any inconsistency
in the Plan or any Award in the manner and to the extent it shall deem expedient
to carry the Plan into effect and it shall be the sole and final judge of such
expediency. All decisions by the Board shall be made in the Board's sole
discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to
the authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.
DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by applicable
law, the Board or any Committee (as defined in Section 3(c)) may delegate to one
or more executive officers of the Company the power to make Awards to new
employees of the Company, excluding directors and officers, and to exercise such
other powers under the Plan as the Board may determine, provided that the Board
shall fix the maximum number of shares subject to Awards and the maximum number
of shares for any one Participant to be made by such executive officers.
APPOINTMENT OF COMMITTEES. To the extent permitted by applicable law, the
Board shall appoint a committee or subcommittee of the Board (a "Committee") of
not less than two members, each member of which shall be an "outside director"
within the meaning of Section 162(m) of the Code and a "non-employee director"
as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934
(the "Exchange Act"). All references in the Plan to the "Board" shall mean the
Board or a Committee of the Board or the executive officer referred to in
Section 3(b) to the extent that the Board's powers or authority under the Plan
have been delegated to such Committee or executive officer.
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4. STOCK AVAILABLE FOR AWARDS
NUMBER OF SHARES. Subject to adjustment under Section 8, Awards may be made
under the Plan for up to 1,000,000 shares of common stock, $.01 par value per
share, of the Company (the "Common Stock"). If any Award expires or is
terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan, subject, however, in the case of Incentive Stock
Options (as hereinafter defined), to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.
PER-PARTICIPANT LIMIT. Subject to adjustment under Section 8, the maximum
number of shares of Common Stock with respect to which Awards may be granted to
any Participant under the Plan shall be 500,000 per calendar year. The
per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code ("Section 162(m)").
5. STOCK OPTIONS
GENERAL. The Board may grant options to purchase Common Stock (each, an
"Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".
INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
EXERCISE PRICE. The Board shall establish the exercise price at the time
each Option is granted and specify it in the applicable option agreement;
provided, however, that the exercise price shall be not less than 100% of the
fair market value of the Common Stock, as determined by the Board, at the time
the Option is granted.
DURATION OF OPTIONS. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
option agreement; provided, however, that no Option will be granted for a term
in excess of 10 years.
EXERCISE OF OPTION. Options may be exercised by delivery to the Company of
a written notice of exercise signed by the proper person or by any other form of
notice (including electronic notice) approved by the Board together with payment
in full as specified in Section 5(f) for the number of shares for which the
Option is exercised. No Option that is classified as an Incentive Stock Option
may be exercised within one year of the date of grant of such Option.
PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may, in its sole discretion, otherwise provide
in an option agreement, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (ii) delivery by the Participant
to the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price;
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(3) by delivery of shares of Common Stock owned by the Participant
valued at their fair market value as determined by (or in a manner approved by)
the Board in good faith ("Fair Market Value"), provided (i) such method of
payment is then permitted under applicable law and (ii) such Common Stock was
owned by the Participant at least six months prior to such delivery;
(4) to the extent permitted by the Board, in its sole discretion and
consistent with applicable law, by (i) delivery of a promissory note of the
Participant to the Company on terms determined by the Board, or (ii) payment of
such other lawful consideration as the Board may determine; or
(5) by any combination of the above permitted forms of payment.
6. RESTRICTED STOCK
GRANTS. The Board may grant Awards entitling recipients to acquire shares
of Common Stock, subject to the right of the Company to repurchase all or part
of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").
TERMS AND CONDITIONS. The Board shall determine the terms and conditions of
any such Restricted Stock Award, including the conditions for repurchase (or
forfeiture) and the issue price, if any. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
7. OTHER STOCK-BASED AWARDS
The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.
8. ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS
CHANGES IN CAPITALIZATION. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a normal cash dividend, (i)
the number and class of securities available under this Plan, (ii) the
per-Participant limit set forth in Section 4(b), (iii) the number and class of
securities and exercise price per share subject to each outstanding Option, (iv)
the repurchase price per share subject to each outstanding Restricted Stock
Award, and (v) the terms of each other outstanding Award shall be appropriately
adjusted by the Company (or substituted Awards may be made, if applicable) to
the extent the Board shall determine, in good faith, that such an adjustment (or
substitution) is necessary and appropriate. If this Section 8(a) applies and
Section 8(c) also applies to any event, Section 8(c) shall be applicable to such
event, and this Section 8(a) shall not be applicable.
LIQUIDATION OR DISSOLUTION. In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
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exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.
ACQUISITION EVENTS
DEFINITION. An "Acquisition Event" shall mean: (a) any merger or
consolidation of the Company with or into another entity as a result of which
the Common Stock is converted into or exchanged for the right to receive cash,
securities or other property or (b) any exchange of shares of the Company for
cash, securities or other property pursuant to a statutory share exchange
transaction.
CONSEQUENCES OF AN ACQUISITION EVENT ON OPTIONS. Upon the occurrence of an
Acquisition Event, or the execution by the Company of any agreement with respect
to an Acquisition Event, the Board shall provide that all outstanding Options
shall be assumed, or equivalent options shall be substituted, by the acquiring
or succeeding corporation (or an affiliate thereof). For purposes hereof, an
Option shall be considered to be assumed if, following consummation of the
Acquisition Event, the Option confers the right to purchase, for each share of
Common Stock subject to the Option immediately prior to the consummation of the
Acquisition Event, the consideration (whether cash, securities or other
property) received as a result of the Acquisition Event by holders of Common
Stock for each share of Common Stock held immediately prior to the consummation
of the Acquisition Event (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received
as a result of the Acquisition Event is not solely common stock of the acquiring
or succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration received
by holders of outstanding shares of Common Stock as a result of the Acquisition
Event.
Notwithstanding the foregoing, if the acquiring or succeeding corporation
(or an affiliate thereof) does not agree to assume, or substitute for, such
Options, then the Board shall, upon written notice to the Participants, provide
that all then unexercised Options will become exercisable in full as of a
specified time prior to the Acquisition Event and will terminate immediately
prior to the consummation of such Acquisition Event, except to the extent
exercised by the Participants before the consummation of such Acquisition Event;
provided, however, that in the event of an Acquisition Event under the terms of
which holders of Common Stock will receive upon consummation thereof a cash
payment for each share of Common Stock surrendered pursuant to such Acquisition
Event (the "Acquisition Price"), then the Board may instead provide that all
outstanding Options shall terminate upon consummation of such Acquisition Event
and that each Participant shall receive, in exchange therefor, a cash payment
equal to the amount (if any) by which (A) the Acquisition Price multiplied by
the number of shares of Common Stock subject to such outstanding Options
(whether or not then exercisable), exceeds (B) the aggregate exercise price of
such Options.
CONSEQUENCES OF AN ACQUISITION EVENT ON RESTRICTED STOCK AWARDS. Upon the
occurrence of an Acquisition Event, the repurchase and other rights of the
Company under each outstanding Restricted Stock Award shall inure to the benefit
of the Company's successor and shall apply to the cash, securities or other
property which the Common Stock was converted into or exchanged for pursuant to
such Acquisition Event in the same manner and to the same extent as they applied
to the Common Stock subject to such Restricted Stock Award.
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CONSEQUENCES OF AN ACQUISITION EVENT ON OTHER AWARDS. The Board shall
specify the effect of an Acquisition Event on any other Award granted under the
Plan at the time of the grant of such Award.
9. GENERAL PROVISIONS APPLICABLE TO AWARDS
TRANSFERABILITY OF AWARDS. Except as the Board may otherwise determine or
provide in an Award, Awards shall not be sold, assigned, transferred, pledged or
otherwise encumbered by the person to whom they are granted, either voluntarily
or by operation of law, except by will or the laws of descent and distribution,
and, during the life of the Participant, shall be exercisable only by the
Participant. References to a Participant, to the extent relevant in the context,
shall include references to authorized transferees.
DOCUMENTATION. Each Award shall be evidenced by a written instrument in
such form as the Board shall determine; such written instrument may be in the
form of an agreement signed by the Company and the Participant or a written
confirming memorandum to the Participant from the Company. Each Award may
contain terms and conditions in addition to those set forth in the Plan.
BOARD DISCRETION. Except as otherwise provided by the Plan, each Award may
be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.
TERMINATION OF STATUS. The Board shall determine the effect on an Award of
the disability, death, retirement, authorized leave of absence or other change
in the employment or other status of a Participant and the extent to which, and
the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
WITHHOLDING. Each Participant shall pay to the Company, or make provision
satisfactory to the Board for payment of, any taxes required by law to be
withheld in connection with Awards to such Participant no later than the date of
the event creating the tax liability. Except as the Board may otherwise provide
in an Award, when the Common Stock is registered under the Exchange Act,
Participants may, to the extent then permitted under applicable law, satisfy
such tax obligations in whole or in part by delivery of shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.
AMENDMENT OF AWARD. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
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ACCELERATION. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of restrictions in full or in part or that any other Awards
may become exercisable in full or in part or free of some or all restrictions or
conditions, or otherwise realizable in full or in part, as the case may be.
10. MISCELLANEOUS
NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any claim or
right to be granted an Award, and the grant of an Award shall not be construed
as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on the
date on which it is adopted by the Board, but the classification of an Option
granted to a Participant under the Plan as an Incentive Stock Option shall be
conditioned upon the approval of the Plan by the Company's stockholders within
one year of the effective date of the Plan. No Award granted to a Participant
after the first anniversary of the effective date of the Plan that is intended
to comply with Section 162(m) shall become exercisable, vested or realizable, as
applicable to such Award, unless and until the Plan has been approved by the
Company's stockholders to the extent stockholder approval is required by Section
162(m) in the manner required under Section 162(m) (including the vote required
under Section 162(m)). No Awards shall be granted under the Plan after the
completion of ten years from the earlier of (i) the date on which the Plan was
adopted by the Board or (ii) the date the Plan was approved by the Company's
stockholders, but Awards previously granted may extend beyond that date.
AMENDMENT OF PLAN. The Board may amend, suspend or terminate the Plan or
any portion thereof at any time, provided that to the extent required by Section
162(m), no Award granted to a Participant after the first anniversary o the
effective date of the Plan and after the date of such amendment that is intended
to comply with Section 162(m) shall become exercisable, realizable or vested, as
applicable to such Award, unless and until such amendment shall have been
approved by the Company's stockholders are required by Section 162(m) (including
the vote required under Section 162(m)).
GOVERNING LAW. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to any applicable conflicts of law.
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PROXY PROXY
CENTENNIAL TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS - JUNE 20, 2000
The undersigned hereby appoints L. Michael Hone and Richard J. Pulsifer, and
each of them with full power to appoint his substitute and proxies to represent
the shareholder and to vote and act with respect to all shares that the
shareholder would be entitled to vote on all matters which come before the
Annual Meeting of Stockholders of Centennial Technologies, Inc. ("Centennial")
referred to above and at any adjournment of that meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CENTENNIAL. IF
THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATIONS ARE MADE, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS ON THIS PROXY. THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS
ON ANY OTHER MATTER, INCLUDING SUBSTITUTION OF DIRECTOR NOMINEES, WHICH MAY COME
BEFORE THE MEETING.
<PAGE>
CENTENNIAL VOTE BY PHONE - 1-800-690-6903 Use
any touch-tone telephone to
PROXY SERVICES transmit your voting instructions.
P.O. BOX 9079 Have your voting instruction card
FARMINGDALE, NY 11735 in hand when you call. You will be
prompted to enter your 12-digit
Control Number which is located
below and then follow the simple
instructions the Vote Voice
provides you.
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<S> <C>
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS
====================================================================================================================================
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CENTENNIAL TECHNOLOGIES, INC.
To the Stockholders of CENTENNIAL TECHNOLOGIES, INC.:
The Annual Meeting of Stockholders (together with
all adjournments and postponements thereof the "Annual
Meeting") of CENTENNIAL TECHNOLOGIES, INC., a Delaware
corporation, ("Centennial"), will be held on Tuesday,
June 20, 2000, at 9:00 a.m., local time, at the
Andover Inn, Chapel Avenue, Andover Massachusetts for
the following purposes:
FOR WITHHOLD FOR ALL To withhold authority to vote, mark "For All
VOTE ON DIRECTORS ALL ALL EXCEPT Except" and write the nominee's number on
the line below.
1. To elect (7) individuals to serve on the Board of [ ] [ ] [ ]
Directors of Centennial for a term of one year and --------------------------------------------
until their respective successors have been duly
elected and qualified; 01) Eugene M. Bullis, 02)
Steven M. DePerrior, 03) Jay M. Eastman, Ph.D., 04)
L. Michael Hone, 05) David A. Lovenheim, 06) William
J. Shea, 07) John J. Shields
VOTE ON PROPOSAL
FOR WITHHOLD FOR ALL
2. To approve the adoption of the 1999 Stock Incentive Plan (the "1999 Plan") ALL ALL EXCEPT
which provides for the issuance of up to 1,000,000 shares of Centennial's
Common Stock in order to permit incentive stock options to be granted under [ ] [ ] [ ]
the 1999 Plan; and
All stockholders are invited to attend the Annual Meeting. Stockholders of record at the close of business on May 17, 2000, the
record date fixed by the Board of Directors, are entitled to notice of and to vote at the Annual Meeting. Holders of Common Stock
and the holders of Series B Convertible Preferred Stock (on the basis of one vote for each share of Common Stock which would be
issuable upon conversion of the Series B Convertible Preferred Stock) as of the record date will have the right to vote on the above
proposals.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE.
A PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE APPRECIATED. STOCKHOLDERS WHO
ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT THEIR PROXIES.
By Order of the Board of Directors
Richard J. Pulsifer
Vice President, Chief Financial Officer and Secretary
Wilmington, Massachusetts
May 19, 2000
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Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
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