SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X ] Preliminary Proxy
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
MICROPOINT, 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:
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4) Date Filed:
<PAGE>
MICROPOINT, INC.
6906 South 300 West
Midvale, UT 84047
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
October 14, 1998
NOTICE is hereby given that the Annual Meeting of Stockholders of
Micropoint, Inc. (the "Company") will be held at the Courtyard by Marriott,
10701 South Holiday Park Drive, Sandy, Utah 84070, at 9:00 a.m. (local time)
on October 14, 1998, for the following purposes:
1. To consider a proposal to amend the Certificate of Incorporation to
provide that the board of directors of the corporation is to consist of three
classes of directors, with one class elected at each annual meeting of the
stockholders for a term of three years.
2. To elect three members of the board of directors.
3. To consider a proposal to increase the number of shares of common stock
that may be issued under the Micropoint, Inc. Omnibus Stock Option Plan.
4. To consider a proposal to amend the Certificate of Incorporation to
eliminate the ability of the Company's stockholders to act by written consent.
5. To transact such other business as may properly come before such
meeting or any adjournments thereof.
The record date for the meeting is the close of business on September 14,
1998 and only the holders of Common Stock of the Company on that date will be
entitled to vote at such meeting or any adjournment thereof.
By order of the Board of Directors
/s/ Douglas M. Odom
-------------------
President
September 19, 1998
Please Return Your Signed Proxy
PLEASE COMPLETE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE. THIS
WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE MEETING. IT WILL, HOWEVER,
HELP ASSURE A QUORUM AND AVOID ADDED PROXY SOLICITATION COSTS.
<PAGE>
PROXY STATEMENT
---------------
MICROPOINT, INC.
6906 South 300 West
Midvale, UT 84047
-----------------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 14, 1998
---------------------------
INTRODUCTION
This Proxy Statement is being furnished to holders of Micropoint, Inc.
(the "Company") common stock, par value $0.001 per share ("Common Stock"), in
connection with the solicitation of proxies by the Company for use at the
Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be
held at the Courtyard by Marriott, 10701 South Holiday Park Drive, Sandy, Utah
84070, at 9:00 a.m. (local time) on October 14, 1998, and at any
adjournment(s) or postponement(s) thereof. This Proxy Statement, the enclosed
Notice and the enclosed form of proxy are being first mailed to stockholders
of the Company on or about September 18, 1998.
VOTING AT THE ANNUAL MEETING
The Board of Directors of the Company (the "Board") has fixed the close
of business on September 14, 1998, as the record date (the "Record Date") for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. As of the Record Date, there were outstanding 15,864,779
shares of the Company's Common Stock held by approximately 397 holders of
record. On the Record Date there were no shares of the Company's Common Stock
held as treasury stock by the Company. Holders of record of the Company's
Common Stock on the Record Date are entitled to cast one vote per share,
exercisable in person or by properly executed proxy, with respect to each
matter to be considered by them at the Annual Meeting. The presence, in person
or by properly executed proxy, of the holders of a majority of the outstanding
shares of the Company's Common Stock is necessary to constitute a quorum at
the Annual Meeting.
Common Stock will be voted in accordance with the instructions indicated
in a properly executed proxy. If no instructions are indicated, such stock
will be voted as recommended by the Board. If any other matters are properly
presented to the Annual Meeting for action, the person(s) named in the
enclosed form(s) of proxy and acting thereunder will have discretion to vote
on such matters in accordance with their best judgment. Broker non-votes and
abstentions are not treated as votes cast for purposes of any of the matters
to be voted on at the meeting. A stockholder who has given a proxy may revoke
it by voting in person at the meeting, or by giving written notice of
revocation or a later-dated proxy to the Secretary of the Company at any time
before the closing of the polls at the meeting. Any written notice revoking a
proxy should be sent to Micropoint, Inc., 6906 South 300 West, Midvale, UT
84047, Attention: Secretary.
The Company's Bylaws require the affirmative vote of a plurality of the
votes cast at the meeting for the election of directors and the affirmative
vote of a majority of the votes cast at the meeting for the approval of the
proposed amendments to the Company's Certificate of Incorporation and Omnibus
Stock Option Plan. The Board recommends that holders of the Company's Common
Stock vote FOR the approval of election of the directors proposed by the
Board, FOR the approval of the proposed amendments to the Company's
Certificate of Incorporation and FOR the approval of the proposed amendments
to the Company's Omnibus Stock Option Plan.
<PAGE>
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
1. Election of Directors
Board of Directors
The Company's three member Board is currently elected annually. It is
proposed that the Board be divided into three classes. One class of directors
would be elected at each annual meeting of stockholders for a three-year term.
Each year a different class of directors will be elected on a rotating basis.
At this meeting Jeffrey A. Coleman, Don M. Jackson and Douglas M. Odom
have been nominated by the Board for election to the class whose terms expire
at the 1999, 2000 and 2001 annual meetings, respectively. The persons
nominated are currently directors of the Company.
Unless otherwise specified, proxy votes will be cast for the election of
the nominee as directors for the periods specified. If any such person should
be unavailable for election, the Board may designate a substitute nominee. It
is intended that proxy votes will be cast for the election of such substitute
nominees. Stockholder nominations of persons for election as directors are
subject to the notice requirements described under the caption "Other Matters"
appearing later in this proxy statement. Election of the nominee director
requires the affirmative vote of a plurality of the votes cast at the meeting
for the election of directors.
The following pages contain information concerning the nominees. Unless
the context otherwise requires, all references in this Proxy to the "Company"
shall mean Micropoint, Inc. ("Micropoint") and its wholly owned subsidiary,
Sensitron, Inc. ("Sensitron"), a Utah corporation, and the wholly owned
subsidiaries of Sensitron, Flexpoint, Inc. ("Flexpoint"), a Utah corporation
and Technology and Machine Company, Inc. ("Tamco"), a Utah corporation, on a
consolidated basis and, where the context so requires, shall include their
predecessors.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION AS A DIRECTOR OF THE NOMINEES
NAMED HEREIN.
<PAGE>
Directors and Executive Officers of the Company.
Set forth below is certain information concerning each of the directors
and executive officers of the Company as of September 1, 1998.
With the
Name Age Position Company Since
- ---- --- -------- -------------
Douglas M. Odom 38 President, Chief Executive Officer
and Director 1995
Jeffrey A. Coleman 37 Director 1998
Don M. Jackson, Jr. 63 Director 1998
Douglas M. Odom. Mr. Odom has been the President, Chief Executive Officer
and of director of Micropoint since April 1998, and has held the same
positions with respect to Flexpoint since 1995 and with respect to Sensitron
since 1996. From 1993 to 1995, Mr. Odom served as the Marketing and Sales
Manufacturing Director of Xymox Technologies, Inc. Xymox Technologies, Inc. is
one of the world's largest manufacturers of membrane switches and related
electronic interface devices. Prior to his employment at Xymox Technologies,
Inc., Mr. Odom was a key executive in the reorganization of EECO, Inc. from a
public company in bankruptcy to private company posting profits and positive
cash flow. From 1985 to 1990, Mr. Odom was Vice president of Operations of
Comptec, Inc., a world-wide plastic injection molder and electronic device
corporation. From 1983 to 1985, Mr. Odom was the manager of manufacturing
engineering at AMP Keyboard Technologies. Mr. Odom received a bachelors degree
in General Science/Chemistry from Grinnell College, Grinnell, Iowa in 1982. He
completed his masters studies at the American Graduate School of International
Management in Glendale, Arizona and furthered graduate studies at Harvard
University, Cambridge, MA.
Jeffrey A. Coleman. Mr. Coleman has been a director of Micropoint since
April 1998, and served as a director of Sensitron since January 1998. Mr.
Coleman has been managing member of Coleman Capital Partners, a private equity
investment group, since 1996. From 1985 to 1997 he was Director of Operations
for the Pyramid Group, a national real estate development, investment and
management firm. From 1982 to 1983 he was a consultant in the Management
Information Consulting Division of Arthur Andersen & Co. Mr. Coleman received
an MBA from the Amos Tuck School of Business at Dartmouth College and a BA
(honors) from Stanford University.
Don M. Jackson, Jr. Dr. Jackson has been a director of Micropoint since
April 1998, and served as a director of Sensitron since January 1998. Dr.
Jackson founded Global Semi-conductor Technology, LLC, in May 1995. Global
Semi-conductor Technology, LLC is in the semiconductor business and Dr.
Jackson has been President and Chairman since inception of that company. From
August 1992to May 1995, he was President and Chief Executive Officer of
Westech Systems, a microelectronics processing equipment company. Dr. Jackson
was also President and COO of IPEC, which merged with Westech Systems. From
January 1992 to July 1992 he was COO of Brockson Investment Corporation, an
investment banking firm. From 1990 to 1992 he was President and CEO of the
Arana Group, Inc., a microelectronics automation consulting firm. Dr. Jackson
was President and CEO of Microelectronic Packaging, Inc., a microelectronics
packaging company, from 1987 to 1990. From 1985 to 1987 he was President and
CEO of Superwave Technology, Inc., a semiconductor equipment business and was
Founder and President of Advanced Semiconductor Materials America, Inc., which
operated in the semiconductor field. From 1959 to 1984 he held various
research and management positions in the semiconductor industry. Dr. Jackson
is a director of M & I Thunderbird Bank and Advanced Control Technologies and
received a Ph.D. in Physics from Iowa State University.
Executive officers of the Company are elected by the Board on an annual
basis and serve at the discretion of the Board.
<PAGE>
The Board presently does not have any committees.
Board Meetings and Directors' Attendance
The members of Micropoint's present Board were not appointed until April
1998, upon completion of an acquisition whereby Micropoint acquired Sensitron
(the "Acquisition"). As a result, no incumbent director attended fewer than 75
percent of the Board meetings during Micropoint's fiscal year ended March 31,
1998. The prior Board took action by unanimous consent on three occasions and
did not hold any meetings during the fiscal year ended March 31, 1998.
Certain Relationships And Related Transactions
Mr. Jehu Hand, an officer and director of Micropoint prior to the April
1998 Acquisition, acted as legal counsel Micropoint. In December 1997, the
Company issued 726,200 shares of Common Stock in connection with the
conversion of certain convertible debentures held by Mr. Hand, dated April 1,
1995, in the principal amount of $2,421.
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock of the Company as of September 1,
1998, for: (i) each person who is known by the Company to beneficially own
more than 5 percent of the Company's Common Stock, (ii) each of the Company's
directors, (iii) each of the Company's Named Executive Officers (defined
below), and (iv) all directors and executive officers as a group. As of
September 1, 1998, the Company had 15,864,779 shares of Common Stock
outstanding.
Shares
Name and Address Beneficially Percentage of
of Beneficial(1) Owned(2) Total(2) Position
- ---------------- -------- -------- --------
Douglas Odom 390,000(3) 2.4% President, CEO and
Director
Jeffrey A. Coleman 195,000(4) 1.2% Director
Don M. Jackson, Jr. -- -- Director
All officers and
directors as
a group (3 persons) 585,000 3.6%
Bull Ventures, Ltd.
Katerina Court
101 E Hill Place
Nassau, Bahamas 890,445 5.6%
Northridge Investment, LLC
47 E. 7200 South, #221
Midvale, UT 84047 1,661,500(5) 10.5%
John Sindt
47 E. 7200 South, #221
Midvale, UT 84047 1,366,610(6) 8.4%
Jules A. DeGreef
47 E. 7200 South, #201
Midvale, UT 84047 2,202,042(7) 13.9%
<PAGE>
(1) Except where otherwise indicated, the address of the beneficial owner is
deemed to be the same address as the Company.
(2) Beneficial ownership is determined in accordance with SEC rules and
generally includes holding voting and investment power with respect to
he securities. Shares of Common Stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for
computing the percentage of the total number of shares beneficially owned by
the designated person, but are not deemed outstanding for computing the
percentage for any other person.
(3) Includes vested options to purchase 390,000 shares. Does not include
options to acquire an additional 130,000 shares of Common Stock vest on each
of the following dates, March 31, 1999, 2000 and 2001, provided Company
achieves certain performance criteria to be determined by the Board.
(4) Includes 195,000 shares owned by a limited liability company controlled
by Coleman Capital Partners, of which Mr. Coleman is a partner.
(5) These shares are also beneficially owned by Mr. John Sindt and Mr. Jules
A. DeGreef as described in footnotes 6 and 7 below. These shares do not
include shares, warrant or options owned by Messrs. Sindt and DeGreef, as
to which shares Northridge Investment LLC has disclaimed beneficial ownership.
(6) Includes warrants to purchase 15,860 shares owned by Mr. Sindt, warrants
to purchase 455,000 shares held of record by Mr. DeGreef and 895,750 shares
held by Northridge Investment LLC. Does not include any shares held by Bull
Ventures, Ltd., a Bahamas company with which Mr. Sindt is affiliated, and as
to which shares Mr. Sindt has disclaimed beneficial ownership.
(7) Includes 461,292 shares and options and warrants to purchase 975,000
shares owned by Mr. Sindt and 765,750 shares held by Northridge Investment
LLC. Does not include warrants to acquire 455,000 shares that are held of
record by Mr. DeGreef, but which Messrs. Sindt and DeGreef report to be
beneficially owned by Mr. Sindt and any shares held by Bull Ventures, Ltd., a
Bahamas company with which Mr. DeGreef is affiliated, and as to which shares
Mr. DeGreef has disclaimed beneficial ownership.
The Company is not aware of any arrangements, the operation of which may,
at a subsequent date, result in a change in control of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officer, directors and persons who beneficially own more
than 10% of the Company's Common Stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange
Commission ("SEC"). Such persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms filed by such persons.
Based solely on the Company's review of such forms furnished to the
Company and representations from certain reporting persons, management
believes that all filing requirements applicable to the Company's executive
officers, directors and more than 10% stockholders were complied with during
the fiscal year ended March 31, 1998, except that Mr. Jehu Hand has not
reported the conversion of an outstanding promissory note into approximately
242,066 shares of the Company's Common Stock in December 1997.
Change in Control
<PAGE>
In April 1998, Micropoint consummated an Agreement and Plan of
Reorganization (the "Agreement") with Sensitron pursuant to which Sensitron
became a wholly owned subsidiary of Company. As a result of the Agreement, the
former stockholders of Sensitron became the controlling stockholders of
Micropoint when their Sensitron securities were exchanged for Micropoint
securities. In addition, the officers and directors of Sensitron became the
officers and directors of Micropoint.
Report on Executive Compensation
The Company does not have a compensation committee. As a result, the
following report was prepared by the Board.
Executive Compensation Philosophy
The Company attempts to design executive compensation to achieve two
principal objectives. First, the program is intended to be fully competitive
so that the Company may attract, motivate and retain talented executives.
Second, the program is intended to create an alignment of interests between
the Company's executives and stockholders such that a significant portion of
each executive's compensation varies with business performance.
The Committee's philosophy is to pay competitive annual salaries, coupled
with a leveraged incentive system that pays more than competitive total
compensation for performance exceeding financial goals and Company objectives.
The leveraged incentive system consists of annual compensation, bonuses and
stock compensation consisting primarily of stock options.
Based on assessments by the Board, the Board believes that the Company's
compensation program for the Named Executive Officer has the following
characteristics that serve to align executive interests with long-term
stockholder interests:
a. Emphasizes "at risk" pay such as bonuses, options and long-term
incentives.
b. Emphasizes long-term compensation in the form of options.
c. Rewards financial results and promotion of Company objectives rather
than individual performance against individual objectives.
The Omnibus Reconciliation Act of 1993 (OBRA) established certain
requirements in order for compensation exceeding $1 million earned by certain
senior executives to be deductible. The Company's executive compensation
programs have been structured to comply with OBRA. The actions of the Board
regarding the compensation paid, or to be paid, to executive management, have
also complied with OBRA. However, the Board reserve the right to forego
deductibility if in its discretion it believes a particular compensation
program or payment is consistent with the overall best interests of the
Company and its stockholders. In addition, the compensation received by
certain individuals under the Company's Omnibus Stock Option Plan (the "Plan")
may fall outside the deductibility limitations of OBRA if the Company is
highly successful as reflected in the Company's stock price and/or income.
Annual Salaries
Salary ranges and increases for executives, including the CEO/Named
Executive Officer, are established annually based on competitive data. Within
those ranges, individual salaries vary based upon the individual's work
experience, performance, level of responsibility, impact on the business,
tenure and potential for advancement within the organization. Annual salaries
for newly-hired executives are determined at time of hire taking into account
the above factors other than tenure.
Short-Term Incentives
<PAGE>
The Company provides short-term incentives in the form of discretionary
cash bonuses based on financial performance, promotion of the Company's
objectives and the Company's cash position. Bonuses are awarded to management
and others on the basis of the individual's work experience, performance,
level of responsibility, impact on the business, tenure and potential for
advancement within the organization.
Long-Term Incentives
Under the Plan, the Company is authorized to grant options to purchase up
to 5,237,050 shares of the Company's Common Stock. The Company has granted
Stock Options to purchase 5,237,050 shares of Common Stock pursuant to the
Plan. Of these Stock Options, approximately 3,380,105 are currently
exercisable and 1,852,500 vest over time. All of the Stock Options expire five
years after the date of grant.
The grant of options to key employees encourages equity ownership and
closely aligns management interests with the interests of stockholders.
Additionally, because options are subject to forfeiture if the employee leaves
the Company, options provide an incentive to remain with the Company long
term.
At least annually, the Board intends to review the advisability of
granting options to members of management having strategic impact on product,
staffing, technology, pricing, investment or policy matters. The aggregate
number of options granted to management is based on the value of each
individual's actual and potential contributions to the Company as well as
competitive norms.
Corporation Performance and CEO Pay
Certain significant events that relate to corporation performance and CEO
pay for the fiscal year ended March 31, 1998 are discussed below. Note that
during such fiscal year Mr. Odom received substantially all of his
compensation from Flexpoint and Micropoint had no operations and paid no
salaries.
In May 1997, the Company entered into a License Agreement whereby the
Company granted to Ohio Art the exclusive worldwide right to sell products
incorporating the Company's technology in the toy, traditional games and video
game markets. The Agreement provided for certain up-front fees and minimum
royalties in order for Ohio Art to maintain such exclusive rights. Ohio Art
has sublicensed the technology to other companies. Currently it is projected
over five million sensors will be purchased in 1998 for toys alone. While
there is no assurance, however, that any or all of the projected sensor sales
will occur the existing sensor production in this area has been a significant
achievement.
In November and December 1997 the technology was showcased as a seat
sensor by Lear Corporation in Germany, France and Spain. Other European
corporations have expressed interest in the seat sensor. In February 1998,
Lear demonstrated this technology in a new system and is currently being shown
around the world.
The Company has entered into a Purchase and Supply Agreement with Delphi
Automotive Systems ("Delco") for Flexpoint to supply its proprietary sensor
mats to Delco for integration into a weight based suppression system for use
in automotive applications. The sensor mat is currently in the development
stage and Flexpoint and Delco are working together to extensively develop the
sensor mat.
To date, five patents and four patents pending in the United States, four
patent applications in foreign countries are held by the Company and licensed
to Flexpoint. To date, during 1998 the Company has raised approximately
three (3) million dollars through the sale of equity and equity related
documents.
<PAGE>
The Board believes that Mr. Douglas M. Odom's compensation package aligns
his interests with those of the stockholders. During fiscal 1998, Mr. Odom
received an $120,000 salary, $10,000 bonus and options to acquire 65,000
shares of the Company's Common Stock under the Plan. See Summary Compensation
Table for description of other compensation amounts.
Members of the Board are Douglas M. Odom, Jeffrey A. Coleman and Don M.
Jackson, Jr.
Performance Graph
There is presently no trading market for the Company's securities.
Executive Compensation
The tables below set forth certain information concerning compensation
paid by the Company to its Chief Executive Officer and all other executive
officers with annual compensation in excess of $100,000 (determined for the
year ended March 31, 1998) (the "Named Executive Officers"). The tables
include information related to stock options granted to the Named Executive
Officers.
Summary Compensation Table. The following table provides certain
information regarding compensation paid by the Company to the Named Executive
Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long-Term Compensation Awards
------------------- -----------------------------
Securities
Name and Restricted Underlying LTIP All Other
Principal Other Annual Stock Options/ Payouts Compensation
Position Year Salary($) Bonus($) Compensation($) Awards($) SARs(#) ($) ($)
- -------- ---- --------- -------- --------------- --------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Douglas
M. Odom(1) 1996 103,750 -- -- -- 65,000(2) -- --
President,
CEO and 1997 120,000 -- -- -- 195,000(2) -- --
Director 1998 120,000 10,000 -- -- 65,000(3) -- --
</TABLE>
(1) Note Summary Compensation Table reflects salary and bonus compensation
paid by Flexpoint to Mr. Odom. Mr. Odom received no compensation from
Micropoint, Sensitron or TAMCO during the periods specified.
(2) All of said options have vested.
(3) All of said options vest on October 31, 1998.
Option/SAR Grants in Last Fiscal Year. The following table provides
certain information regarding option/SAR grants to the Named Executive
Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
FISCAL YEAR END OPTION VALUES
Number of Percent of
Securities total
Underlying options/SARs
Options/ granted to Exercise or
SARs employees in base price Expiration
Name granted(#) fiscal year ($/Sh) date
- ---- ---------- ----------- ------ ----
Douglas M. Odom(1) 130,000 3.89% $.16 2002
Douglas M. Odom(1) 65,000 1.94% $.77 2003
(1) Options to acquire 325,000 shares of Common Stock are currently vested and
options to acquire 65,000 shares of Common Stock vest on October 31, 1998.
Options to acquire an additional 130,000 shares of Common Stock vest on each
of the following dates, March 31, 1999, 2000 and 2001, provided Company
achieves certain performance criteria to be determined by the Board. These
options became obligations of Micropoint as part of the Acquisition.
Compensation of Directors
No cash fees or other consideration was paid to directors of Micropoint
for service on the Board during the fiscal year ended March 31, 1998. During
the fiscal year ended March 31, 1999 and for the next three years thereafter,
it is anticipated that the non-employee directors will be compensated for
service on the Board through the grant of stock options to purchase 80,000
shares of the Company's Common Stock which stock options will likely be
exercisable at fair market value on the date of grant. The options will vest
annually at a rate of 20,000 options per year. Directors of the Company who
are also officers or employees of the Company are not expected to receive any
additional compensation for their service as directors. All directors are
entitled to reimbursement for reasonable expenses incurred in the performance
of their duties as Board members. The Company has made no other agreements
regarding compensation of directors.
Employment Agreements
Effective December 31, 1997, Flexpoint entered into an employment
agreement with Mr. Odom as its Chief Executive Officer. Under the Employment
Agreement, Flexpoint pays Mr. Odom an annual base salary of $120,000 per year
plus such discretionary bonus as the Flexpoint Board of Directors may deem
appropriate. The Employment Agreement has an initial term of three years and
will be automatically renewed for one or more successive one-year terms (the
"Renewal Terms") unless terminated by either party. The Employment Agreement
also provides the Mr. Odom with options to acquire 455,000 shares of Common
Stock of Micropoint at an exercise price between $.16 and $.77 per share under
the Micropoint Omnibus Stock Option Plan (the "Plan"). Of said options,
options to acquire 65,000 shares of Common Stock vested on October 31, 1998
and options to acquire 325,000 shares of Common Stock have vested. Options to
acquire an additional 130,000 of Common Stock vest on March 31, 1999, 2000 and
2001 provided Company achieves certain performance criteria to be determined
by the Board. These options became obligations of Micropoint as part of the
Acquisition. The Company does not have employment agreements with any of its
other employees.
Indemnification for Securities Act Liabilities
Delaware law authorizes, and the Company's Bylaws and Indemnity
Agreements provide for, indemnification of the Company's directors and
officers against claims, liabilities, amounts paid in settlement and expenses
in a variety of circumstances. Indemnification for liabilities arising under
the Act may be permitted for directors, officers and controlling persons of
the Company pursuant to the foregoing or otherwise. However, the Company has
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
Stock Options
The Company has adopted an Omnibus Stock Option Plan for the benefit of
officers, directors, employees and consultants of the Company. Options to
acquire an aggregate of 5,237,050 shares of Common Stock of Micropoint have
been authorized under the Plan. The Plan will permit the Company to grant
"non-qualified stock options" and/or "incentive stock options" to acquire
shares of the Company's
<PAGE>
Common Stock. The total number of shares authorized for the Plan may be
allocated between the non-qualified stock options and the incentive stock
options from time to time, subject to certain requirements of the Internal
Revenue Code of 1986, as amended (the "Code").
The Plan is currently being administered by the Board, which will select
optionees and determine the number of shares of Common Stock subject to each
option. The Plan provides that no option which is to be a qualified option may
be granted at an exercise price less than the fair market value of the Common
Stock of the Company on the date of a the grant and in all cases the term of
the stock option shall not exceed ten years. Options to acquire 5,237,050
shares of Common Stock at exercise prices ranging from $.16 to $.77 are
presently outstanding under the Plan.
Compensation Committee Interlocks and Insider Participation
No executive officers of the Company serve on the Compensation Committee
(or in a like capacity) for the Company or any other entity.
2. Approval of the proposal to amend the Certificate of Incorporation to
provide that the Board of Directors of the Corporation is to consist of three
classes of directors, with one class elected at each annual meeting of the
stockholders for a term of three years.
The Company's three Board members are currently elected annually. At a
meeting held on October 14, 1998, the Board adopted a resolution to amend,
subject to stockholder approval, the Certificate of Incorporation to divide
the Board into three classes. One class of directors would be elected at each
annual meeting of stockholders for a three-year term. Each year a different
class of directors will be elected on a rotating basis. Amendments to this
provision would be allowed only with the approval of a two-thirds vote of all
the outstanding stock entitled to vote. The amendment would be effected by
amending Article Fifth of this Company's Certificate of Incorporation to read
in its entirety substantially as follows:
FIFTH: The business and affairs of the corporation shall be managed under the
direction of the board of directors. The exact number of directors shall be
fixed from time to time by, or in the manner provided in, the Bylaws of the
corporation and may be increased or decreased as therein provided. Directors
of the corporation need not be elected by ballot unless required by the
bylaws.
The directors shall be divided into three classes. Each such class shall
consist, as nearly as may be possible, of one-third of the total number of
directors, and any remaining directors shall be included within such group or
groups as the board of directors shall designate. A class of directors shall
be elected for a one-year term, a class of directors for a two-year term and a
class of directors for a three-year term. At each succeeding annual meeting of
stockholders, successors to the class of directors whose term expires at that
annual meeting shall be elected for a three-year term. If the number of
directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly
equal an possible, but in no case shall a decrease in the number of directors
shorten the term or any incumbent director. A director may be removed from
office for cause only and, subject to such removal, death, resignation,
retirement or disqualification, shall hold office until the annual meeting for
the year in which his term expires and until his successor shall be elected
and qualified. No alteration, amendment or repeal of this Article FIFTH or the
bylaws of the corporation shall be effective to shorten the term of any
director holding office at the time of such alteration, amendment or repeal,
to permit any such director to be removed without cause, or to increase the
number of directors in any class or in the aggregate from that existing at the
time of such alteration, amendment or repeal, until the expiration of the
terms of office of all directors then holding office, unless (i) in the case
of this Article FIFTH, such alteration, amendment or repeal has been approved
by the affirmative vote of two-
<PAGE>
thirds of the shares of stock of the corporation outstanding and entitled to
vote thereon, or (ii) in the case of the bylaws, such alteration amendment or
repeal has been approved by either the affirmative vote of two-thirds the
holders of all shares of stock of the corporation outstanding and entitled to
vote thereon or by a vote of a majority of the entire board of directors.
To the extent that any holders of any class or series of stock other than
Common Stock issued by the corporation shall have the separate right, voting
as a class or series, to elect directors, the directors elected by such class
or series shall be deemed to constitute an additional class of directors and
shall have a term of office for one year or such other period as may be
designated by the provisions of such class or series providing such separate
voting right to the holders of such class or series of stock, and any such
class of directors shall be in addition to the classes designated above. Any
such directors so elected shall be subject to removal in such manner as may be
provided by law.
The proposed revisions to Article Fifth are intended to discourage
attempts at a non-negotiated takeover. The proposed amendment could have the
effect of (i) discouraging attempts at non-negotiated takeovers of the Company
which may provide for stockholders to receive a premium price for their stock
or (ii) delaying or preventing a change of control of the Company which some
stockholders may believe is in their interest.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE "FOR"
APPROVAL OF THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO PROVIDE
THAT THE BOARD OF DIRECTORS OF THE CORPORATION IS TO CONSIST OF THREE CLASSES
OF DIRECTORS, WITH ONE CLASS ELECTED AT EACH ANNUAL MEETING OF THE
STOCKHOLDERS FOR A TERM OF THREE YEARS.
3. Approval of proposal to increase the number of shares of common stock that
may be issued under the Micropoint, Inc. Omnibus Stock Option Plan.
At the Annual Meeting, stockholders will be asked to approve an increase
in the number of shares of the Company's common stock that may be issued
pursuant to the Micropoint, Inc. Omnibus Stock Option Plan (the "Option
Plan"). Currently the issuance of 5,237,050 shares are authorized under the
Option Plan and it is proposed that this number be increased to 6,000,000
shares. A copy of the Option Plan is attached to this Proxy Statement as
Appendix A and is incorporated herein by reference. The description below of
the Option Plan is qualified in its entirety by reference to the complete text
of the Option Plan. Terms not defined herein shall have the meanings set forth
in the Option Plan.
Description of Principal Features of the Option Plan
The Option Plan is intended to afford an incentive to employees, Board
members and consultants of the Company and its subsidiaries to acquire or
increase a proprietary interest in the Company, to become or continue as
employees, Board members or consultants, to devote their best efforts on
behalf of the Company and to align the interests of such persons with the
Company's stockholders to promote the success of the Company's business.
The Option Plan permits the Company to grant "non-qualified stock
options" and/or "incentive stock options" to acquire the Company's Common
Stock. The total number of shares authorized under the Option Plan may be
allocated by the Board between the non-qualified stock options and the
incentive stock options from time to time, subject to certain requirements of
the Internal Revenue Code of 1986, as amended (the "Code").
The principal objectives of the Option Plan are (i) to broaden the share
ownership of the staff of the
<PAGE>
Company and (ii) to create in effect a bonus program for management which
compensates designated individuals with shares of the Company.
It is proposed that a total of 6,000,000 shares will be allocated to the
Option Plan which options are anticipated to be sufficient for the foreseeable
future. Currently, 5,237,050 shares are authorized under the Option Plan and
options to acquire all of such shares have been granted. It is intended that
all of such shares will be drawn from the authorized stock. It is not
anticipated that any of such shares will be purchased on the open market or
allocated from treasury shares, if any.
Award Plan
The grant of options or awards is dictated by the achievement of a
mixture of individual and corporate performance goals determined by the Board
or, at the Board's election, the Compensation Committee (the body
administering the Option Plan is hereinafter referred to as either the Board
or the Compensation Committee). Awards under the Option Plan will be focused
on Company employees, Board members and consultants whose contribution and
achievement can make a difference to Company financial performance and hence,
indirectly, stockholder value creation. As of September 8, 1998, the Company
had 19 employees and Board members.
The Compensation Committee has made no determination with respect to who
may receive grants of stock options under the Option Plan in the future. The
specific structure of the Option Plan for this and subsequent years will be
determined by the Compensation Committee.
The Option Plan authorizes the Compensation Committee to grant "incentive
stock options," ("ISO's") within the meaning of Section 422 of the Internal
Revenue Code (the "Code"), and nonqualified stock options ("NQSO's"), pursuant
to the applicable terms and conditions of the Option Plan and of the agreement
evidencing such grant. The aggregate fair market value of the ISO's granted to
any one optionee under the Option Plan, or any similar plan, that first become
exercisable in any calendar year may not exceed $100,000.
The option exercise price per share may not be less than the fair market
value of a share of Common Stock on the date on which the option is granted
unless, in the case of NQSO's, the Compensation Committee determines
otherwise. Each option agreement shall provide the exercise schedule for the
option as determined by the Compensation Committee (which may include a
requirement for achieving performance goals), provided, that the Compensation
Committee shall have the authority to accelerate the exercisability of any
outstanding option at such time and under such circumstances as it, in its
sole discretion, deems appropriate. The exercise period shall be ten years
from the date of the grant of the option unless otherwise determined by the
Compensation Committee, provided, however, that in the case of an ISO, such
exercise period shall not exceed ten years from the date of grant of such
option. The exercise period is subject to early termination and accelerated
vesting as provided in the Option Plan.
Options granted under the Option Plan are not transferable other than by
will or by the laws of descent and distribution or to a beneficiary upon the
death of a grantee, and such options that may be exercisable shall be
exercised during the lifetime of the grantee only by the grantee or his or her
guardian or legal representative; except as otherwise provided in the Option
Plan.
General
The Option Plan is intended to satisfy the requirements of Rule 16b-3
promulgated under Section 16 of the Exchange Act ("Rule 16b-3") and, with
respect to ISO's, to generally serve as a qualified performance-based
compensation program under OBRA. However, the compensation received by certain
individuals under the Company's Option Plan may fall outside the deductibility
limitations of OBRA if the Company is successful as reflected in the Company's
stock price and/or income.
The Option Plan will be administered by the Compensation Committee of the
Board. The
<PAGE>
Compensation Committee determines (i) which employees/independent contractors
of the Company and its subsidiaries shall be granted an option to acquire of
stock; (ii) the number of shares into which the option is exercisable; (iii)
the amount to be paid by a grantee upon exercise of an option or award; (iv)
the time or times and the conditions subject to which options or awards may be
made and become exercisable; and (v) the form of consideration that may be
used to pay for shares issued upon exercise thereof. The Compensation
Committee is also responsible for other questions involving the administration
and interpretation of the Option Plan.
The Board may from time to time suspend, terminate, modify or amend the
Option Plan, but may not, without the approval of the Company's stockholders,
increase the aggregate number of shares of Common Stock subject to the Option
Plan (except for increases due to certain adjustments), decrease the minimum
exercise price specified by the Option Plan in respect of ISO's or change the
class of persons eligible to receive options or awards under the Option Plan
or adopt any amendment for which stockholder approval is required under
applicable Delaware law.
The Board may terminate the Option Plan at any time. The termination of
the Option Plan will not alter or impair any rights or obligations under any
option or award previously granted under the Option Plan.
The selection of the eligible individuals who will receive options under
the Option Plan and the size and type of options is generally to be determined
by the Compensation Committee in its discretion. The potential grant of
options or awards in the future is not now determinable. Thus, it is not
possible to predict the benefits or amounts that will be received by or
allocated to particular individuals or groups of employees in the future.
Certain Federal Tax Consequences
The following is a brief summary of the principal federal income tax
consequences under current federal income tax laws relating to options granted
under the Option Plan. This summary is not intended to be exhaustive and,
among other things, does not describe state, local or foreign income tax
consequences.
Incentive Stock Options
The Company understands the federal income tax consequences of ISO's to
be generally as follows: an employee receiving an ISO will not be in receipt
of taxable income upon the grant of the ISO or upon its timely excise.
Exercise of an ISO will be timely if made during its term and if the optionee
remains an employee of the Company or its subsidiaries at all times during the
period beginning on the date of the grant of the ISO and ending on the date
three months before the date of exercise (or one year before the date of
exercise in the case of a disabled optionee). Exercise of an ISO will also be
timely if made at any time (provided it is exercisable by its terms) by the
legal representative of an optionee who dies (i) while in the employ of the
Company or its subsidiaries or (ii) within three months after termination of
employment. The Option Plan, however, limits the right of the legal
representative of any optionee who has died within one month of his or her
termination of employment. Upon ultimate sale of the stock received upon such
exercise, except as noted below, the optionee will recognize capital gain or
loss (if the stock is a capital asset of the optionee) equal to the difference
between the amount realized upon such sale and the option exercise price. The
Company, under these circumstances, will not be entitled to any federal income
tax deduction in connection with either the exercise of the ISO or the sale of
such stock by the optionee.
If, however, the stock acquired pursuant to such exercise of an ISO is
disposed of by the optionee prior to the expiration of two years from the date
of grant of the option or one year from the date that such stock is
transferred to the optionee upon exercise (a "disqualifying disposition"), any
gain realized by the optionee generally will be taxable at the time of such
disqualifying disposition as follows: (i) as ordinary income to the extent of
the difference between the option exercise price and the lesser of the fair
market value of the stock on the date the ISO is exercised and the amount
realized on such disqualifying disposition and (ii) if the stock is a capital
asset of the optionee, as capital gain to the extent of any excess of the
<PAGE>
amount realized on such disqualifying disposition over the fair market value
of the stock on the date that governs the determination of his or her ordinary
income. In such case, the Company may claim a federal income tax deduction at
the time of such disqualifying disposition for the amount taxable to the
optionee as ordinary income, provided the Company satisfies certain tax
information reporting requirements.
The amount by which the fair market value of the stock on the exercise
date of an ISO exceeds the option exercise price will constitute an item of
tax preference for purposes of the "alternative minimum tax" set forth in the
Code.
Nonqualified Stock Options
In the case of NQSO's, the Company understands that the optionee will not
generally be taxed upon grant of any such option. Rather, at the time of
exercise of an NQSO, the optionee will, except as noted below, realize
ordinary income for federal tax purposes in an amount equal to the excess of
the fair market value of the shares purchased over the option exercise price.
The Company will generally be entitled to a tax deduction at such time and in
the same amount that the optionee realizes ordinary income, provided the
Company satisfies certain tax information reporting requirements. If stock so
acquired is later sold or exchanged, then the difference between the sales
price and the fair market value of such stock on the date of exercise of the
option is generally taxable as long-term capital gain or loss if such stock is
held for a sufficient period of time.
THE BOARD HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE "FOR" APPROVAL
OF THE PROPOSAL TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK THAT MAY BE
ISSUED UNDER THE OPTION PLAN.
4. Approval of proposal to amend the Certificate of Incorporation to
eliminate the ability of the Company's stockholders to act by written consent.
On September 5, 1998, the Board adopted a resolution to amend, subject to
stockholder approval, the Certificate of Incorporation to state that "no
action required to be taken or which may be taken at any annual or special
meeting of stockholders of the Corporation may be taken without a meeting, and
the power of stockholders to consent in writing, without a meeting, to the
taking of any action is specifically denied." Similarly, the Board approved
changes to the Bylaws that have or will be effective to make the Bylaws
consistent with the proposed amendment to the Certificate of Incorporation.
The Certificate of Incorporation is currently silent on the issue of
stockholder action without a meeting and Section 9 of the Company's Bylaws
specifically authorizes such action. The purpose proposed revision is intended
to discourage attempts at a non-negotiated takeover without a stockholder
meeting. The proposed amendment could have the effect of (i) discouraging
attempts at non-negotiated takeovers of the Company which may provide for
stockholders to receive a premium price for their stock or (ii) delaying or
preventing a change of control of the Company which some stockholders may
believe is in their interest.
THE BOARD HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE "FOR" APPROVAL OF THE
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO ELIMINATE THE ABILITY OF
THE COMPANY'S STOCKHOLDERS TO ACT BY WRITTEN CONSENT.
Other Matters
Discretionary Authority
At the time of mailing of this proxy statement, the Board was not aware
of any other matters which might be presented at the meeting. If any matter
not described in this Proxy Statement should properly be
<PAGE>
presented, the persons named in the accompanying proxy form will vote such
proxy in accordance with their judgment.
Independent Public Accountants
On June 24, 1998, the Board elected to retain Hansen Barnett & Maxwell
("HBM") as its independent auditor. Micropoint did not have a prior
independent auditor. The decision to retain HBM was recommended by the Board.
Notice Requirements
Any stockholder who desires to have a proposal included in the Company's
proxy soliciting material relating to the Company's 1999 annual meeting of
stockholders should send to the Secretary of the Company a signed notice of
intent. This notice, including the text of the proposal, must be received no
later than February 1, 1998.
Annual Report
This Proxy Statement has been preceded or accompanied by an Annual Report
for the fiscal year ended March 31, 1997. Stockholders are referred to such
report for financial and other information about the activities of the
Company, but such report is not to be deemed a part of the proxy soliciting
material.
Expenses and Methods of Solicitation
The expenses of soliciting proxies will be paid by the Company. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone or other means of communications, by directors, officers and
employees of the Company and its subsidiaries, who will not receive additional
compensation therefor. Arrangements will also be made with brokerage firms and
other custodians, nominees and fiduciaries for the forwarding of proxy
solicitation material to certain beneficial owners of the Company's Common
Stock, and the Company will reimburse such forwarding parties for reasonable
expenses incurred by them.
By order of the Board of Directors,
By /s/ Douglas M. Odom
-------------------
President
APPENDIX A
MICROPOINT, INC.
OMNIBUS STOCK OPTION PLAN
ARTICLE I
Purpose
The purpose of the Omnibus Stock Option Plan (the "Plan") is to enable
Micropoint, Inc. (the "Company") to offer employees and directors of, and
consultants to, the Company and its subsidiaries, options to acquire equity
interests in the Company, thereby attracting, retaining and rewarding such
persons, and strengthening the mutuality of interests between such persons and
the Company's stockholders.
ARTICLE II
Definitions
For purposes of the Plan, the following terms shall have the following
meanings:
2.1 "Award" shall mean an award under the Plan of any Stock Option.
2.2 "Board" shall mean the Board of Directors of the
Company.
2.3 "Change of Control" shall mean the occurrence of any one of the
following: (i) the Company enters into an agreement of reorganization, merger
or consolidation pursuant to which the Company or a Subsidiary is not the
surviving corporation, (ii) the Company sells substantially all its assets to
a purchaser other than a Subsidiary, or (iii) other than in a transaction that
has been approved by the Board, shares of stock of the Company representing in
excess of 25% of the total combined voting power of all outstanding classes of
stock of the Company or Parent are acquired, in one transaction or a series of
transactions, by a single purchaser or group of related purchasers.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.5 "Committee" shall mean the Compensation Committee of the Board
consisting of two or more Directors of the Company. If the Board has not
established a Compensation Committee, the Committee shall consist of the
Board.
2.6 "Common Stock" shall mean the Common Shares, without par value, of
the Company.
2.7 "Consultant" shall mean any individual who is a consultant to the
company or a subsidiary.
2.8 "Director" shall mean any individual who is a member of the Board or
the Board of Directors of a Subsidiary.
2.9 "Disability" shall mean a disability that results in the termination
of a Participant's employment with the Company or a Subsidiary, as determined
pursuant to standard Company
procedures.
2.10 "Fair Market Value" for purposes of the Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the average of the high and low sales
prices of a share of Common Stock as reported on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or traded on any such exchange, the Nasdaq Stock
Market ("Nasdaq"), or, if such sales prices are not available, the average of
the bid and asked prices per share reported on Nasdaq, or, if such quotations
are not available, the fair market value as determined by the Board, which
determination shall be conclusive.
2.11 "Incentive Stock Option" shall mean any Stock
Option awarded under the Plan intended to be and designated as an "Incentive
Stock Option" within the meaning of Section 422 of the Code.
2.12 "Non-Qualified Stock Option" shall mean any Stock Option awarded
under the Plan that is not an Incentive Stock Option.
2.13 "Participant" shall mean an employee, Director or Consultant to
whom an Award has been made pursuant to the Plan.
2.14 "Stock Option" or "Option" shall mean any option to purchase shares
of Common Stock granted pursuant to Article VI.
2.15 "Subsidiary" shall mean any subsidiary of the Company, 80% or more
of the voting stock of which is owned, directly or indirectly, by the Company.
2.16 "Termination for Cause" shall mean a Termination of Employment that
has been designated as a "termination for cause" pursuant to standard Company
procedures.
2.17 "Termination of Employment" shall mean a termination of employment
with, or service as a Director or Consultant of, the Company and all of its
Subsidiaries for reasons other than a military or personal leave of absence
granted by the Company or any subsidiary.
ARTICLE III
Administration
3.1 The Committee. The Plan shall be administered and interpreted by
the Committee.
3.2 Awards. The Committee shall have full authority to grant Stock
Options, pursuant to the terms of the Plan, to persons eligible under Article
V. In particular, the Committee shall have the authority:
(a) to select the persons to whom Stock Options may from time to
time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock Options
and Non-Qualified Stock Options, or any combination thereof, are to be granted
hereunder to one or more persons eligible to receive Awards under Article V;
(c) to determine the number of shares of Common Stock to be covered
by each such Award granted hereunder; and
(d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder (including, but not limited
to, the option price, the term of the option, and any provision affecting the
exercisability or acceleration of, any Award).
3.3 Guidelines. Subject to Article VII hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any agreements relating thereto); and to otherwise
supervise the administration of the Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in
any Award granted in the manner and to the extent it shall deem necessary to
carry the Plan into effect. Notwithstanding the foregoing, no action of the
Committee under this Section 3.3 shall impair the rights of any Participant
without the Participant's consent, unless otherwise
required by law.
3.4 Decisions Final. Any decision, interpretation or other action made
or taken in good faith by the Committee arising out of or in connection with
the Plan shall be final, binding and conclusive on the Company, all
Participants and their respective heirs, executors, administrators, successors
and assigns.
ARTICLE IV
Share Limitation
4.1 Shares. The maximum aggregate number of shares of Common Stock
which may be issued under the Plan shall be ____________ shares of Common
Stock (subject to any increase or decrease pursuant to Section 4.2), which may
be either authorized and unissued Common Stock or issued Common Stock
reacquired by the Company. If any Option granted under the Plan shall expire,
terminate or be canceled for any reason without having been exercised in full,
the number of unpurchased shares shall again be available for the purposes of
the Plan.
4.2 Changes. In the event of any merger, reorganization, consolidation,
recapitalization, dividend (other than a dividend or its equivalent which is
credited to a Participant or a regular cash dividend), stock split, or other
change in corporate structure affecting the Common Stock, such substitution or
adjustment shall be made in the maximum aggregate number of shares which may
be issued under the Plan, in the number and option price of shares subject to
outstanding options granted under the Plan as may be determined to be
appropriate by the Committee, in its sole discretion, provided that the number
of shares subject to any Award shall always be a whole number.
ARTICLE V
Eligibility
5.1 Employees. Officers and other employees of the Company and its
Subsidiaries are eligible to be granted Awards under the Plan.
5.2 Directors and Consultants. Directors and Consultants are eligible
to be granted Awards under the Plan, provided that Directors and Consultants
who are not employees of the Company or a Subsidiary may not be granted
Incentive Stock options.
ARTICLE VI
Stock Options
6.1 Options. Each Stock Option granted under the Plan shall be either
an Incentive Stock Option or a Non-Qualified Stock Option.
6.2 Grants. The Committee shall have the authority to grant to any
person eligible under Article V one or more Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options. To the extent
that any Stock Option does not qualify as an Incentive Stock Option (whether
because of its provisions or the time or manner of its exercise or otherwise),
such Stock Option or the portion thereof which does not qualify as an
Incentive Stock Option shall constitute a separate Non-Qualified Stock Option.
6.3 Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of the Participants affected,
to disqualify any Incentive Stock Option under such Section 422.
6.4 Terms of Options. Options granted under the Plan shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem desirable:
(a) Stock Option Contract. Each Stock Option shall be evidenced by,
and subject to the terms of, a Stock Option Contract executed by the Company
and the Participant. The Stock Option Contract shall specify whether the
Option is an Incentive Stock Option or a Non-Qualified Stock Option, the
number of shares of Common Stock subject to the Stock Option, the option
price, the option term, and the other terms and conditions applicable to the
Stock Option.
(b) Option Price. Subject to section (1) below, the option price
per share of Common Stock purchasable upon exercise of a Stock Option shall be
determined by the Committee at the time of grant but shall be not less than
100% of the Fair Market Value of the Common Stock on the date of grant if the
Stock Option is intended to be an Incentive Stock Option.
(c)Option Term. Subject to section (1) below, the term of each
Stock Option shall be fixed by the Committee, but no Stock Option shall be
exercisable more than ten years after the date it is granted.
(d) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by
the Committee at the time of grant; provided, however, that the Committee may
waive any installment exercise or waiting period provisions, in whole or in
part, at any time after the date of grant, based on such factors as the
Committee shall deem appropriate in its sole discretion.
(e) Method of Exercise. Subject to such installment exercise and
waiting period provisions as may be imposed by the Committee, Stock Options
may be exercised in whole or in part at any time during the option term by
giving written notice of exercise to the Company specifying the number of
shares of Common Stock to be purchased and the option price therefor. The
notice of exercise shall be accompanied by payment in full of the option price
in such form as the Committee may accept and, if requested, by the
representation described in Section 9.2. The option price may be paid in cash
or check acceptable to the Company or by any other consideration as the
Committee deems acceptable. Unless otherwise determined by the Committee in
its sole discretion at or after grant, if there is an established trading
market in the Common Stock, payment in full or in part may be made in the form
of Common Stock duly owned by the Participant (and for which the Participant
has good title free and clear of any liens and encumbrances), based on the
Fair Market Value of the Common Stock on the last trading date preceding
payment. Upon payment in full of the option price, as provided herein, a stock
certificate or stock certificates representing the number of shares of Common
Stock to which the Participant is entitled shall be issued and delivered to
the Participant. A Participant shall not be deemed to be the holder of Common
Stock, or to have the rights of a holder of Common Stock, with respect to
shares subject to the Option, unless and until a stock certificate or stock
certificates representing such shares of Common Stock are issued to such
Participant.
(f) Death. If a Participant's employment by the Company or a
Subsidiary terminates by reason of death, unless otherwise determined by the
Committee at the time of grant, any Stock Option held by such Participant
which was exercisable at the date of death may be exercised by the legal
representative of the Participant's estate at any time or times during the
period beginning on the date of death and ending one year after the date of
death or until the expiration of the stated term of such Stock option,
whichever period is shorter, and any Stock Option not exercisable at the date
of death shall be forfeited.
(g) Disability. If a Participant's employment by the Company or a
Subsidiary terminates by reason of Disability, unless otherwise determined by
the Committee at the time of grant, any Stock Option held by such Participant
which was exercisable on the date of such Termination of Employment may
thereafter be exercised by the Participant at any time or times during the
period beginning on the date of such termination and ending one year after the
date of such termination or until the expiration of the stated term of such
Stock Option, whichever period is shorter, and any Stock Option not
exercisable on the date of such Termination of Employment shall be forfeited.
If an Incentive Stock Option is exercised after the expiration of the exercise
period that applies for purposes of Section 422 of the Code, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
(h) Termination of Employment. In the event of a Termination of
Employment by reason of retirement or for any reason other than death,
Disability or Termination for Cause, unless otherwise determined by the
Committee at the time of grant, any Stock Option held by such Participant
which was exercisable on the date of such Termination of Employment may be
exercised by the Participant at any time or times during the period beginning
on the date of such Termination of Employment and ending one month after such
date or until the expiration of the stated term of such Stock Option,
whichever period is shorter, and any Stock Option not exercisable on the date
of such Termination of Employment shall be forfeited.
(i) Termination for Cause. In the event of a Termination for Cause,
any Stock Option held by the Participant which was not exercised prior to the
date of such Termination for Cause shall be forfeited.
(j) Change of Control. In the event of a Change of Control, all
outstanding Stock Options shall immediately become fully exercisable, and upon
payment by the Participant of the option price (and, if requested, delivery of
the representation described in Section 9.2), a stock certificate or
certificates representing the Common Stock covered thereby shall be issued and
delivered to the Participant.
(k) Incentive Stock option Limitations. To the extent that the
aggregate Fair Market Value (determined as of the date of grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year under the Plan and/or
any other stock option plan of the Company or any subsidiary or parent
corporation (within the meaning of Section 424 of the Code) exceeds $100,000,
such Options shall be treated as Options which are not Incentive Stock
Options.
Should the foregoing provisions not be necessary in order for the
Stock Options to qualify as Incentive Stock options, or should any additional
provisions be required, the Committee may amend the Plan accordingly, without
the necessity of obtaining the approval of the stockholders of the Company.
(1) Ten-Percent Stockholder Rule. Notwithstanding any other
provision of the Plan to the contrary, no Incentive Stock Option shall be
granted to any person who, immediately prior to the grant, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company, unless the option price is at least 110% of
the Fair Market Value of the Common Stock on the date of grant and the option,
by its terms, expires no later than five years after the date of grant.
ARTICLE VII
Termination or Amendment
7.1. Termination or Amendment of the Plan. The Committee may at any time
amend, discontinue or terminate the Plan or any part thereof (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in Article IX); provided, however, that,
unless otherwise required by law, the rights of a Participant with respect to
Awards granted prior to such amendment, discontinuance or termination, may not
be impaired without the consent of such Participant and, provided further,
without the approval of the Company's stockholders, no amendment may be made
that would (i) materially increase the aggregate number of shares of Common
Stock that may be issued under the Plan (except by operation of Section 4.2);
(ii) materially modify the requirements as to eligibility to participate in
the Plan; or (iii) materially increase the benefits accruing to Participants.
7.2. Amendment of Awards. The Committee may amend the terms of any
Award theretofore granted, prospectively or retroactively, but, subject to
Article IV, no such amendment or other action by the Committee shall impair
the rights of any holder without the holder's consent. The Committee may also
substitute new Stock-Options for previously granted Stock Options having
higher option prices.
ARTICLE VIII
Unfunded Plan
8.1. Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payment not
yet made to a Participant by the Company, nothing contained herein shall give
any such Participant any rights that are greater than those of a general
creditor of the Company.
ARTICLE IX
General Provisions
9.1. Nonassignment. Except as otherwise provided in the Plan, Awards
made hereunder and the rights and privileges conferred thereby shall not be
sold, transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of such Award, right or privilege contrary to
the provisions hereof, or upon the levy of any attachment or similar process
thereon, such Award and the rights and privileges conferred hereby shall
immediately terminate and the Award shall immediately be forfeited to the
Company.
9.2. Legend. The Committee may require each person acquiring shares
pursuant to an Award under the Plan to represent to the Company in writing
that the Participant is acquiring the shares without a view to distribution
thereof. The stock certificates representing such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer.
All certificates representing shares of Common Stock delivered under the
Plan shall be subject to such stock transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange or
stock market upon which the Common Stock is then listed or traded, any
applicable Federal or state securities law, and any applicable corporate law,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
9.3. Other Plans. Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may
be either generally applicable or applicable only in specific cases.
9.4. No Right to Employment. Neither the Plan nor the grant of any
Award hereunder shall give any Participant or other employee any right with
respect to continuance of employment by the Company or any Subsidiary, nor
shall there be a limitation in any way on the right of the Company or any
Subsidiary by which a Participant is employed to terminate such Participant's
employment at any time. Neither the Plan nor the grant of any Award hereunder
shall give any Director or Consultant any right with respect to continued
service as a director or consultant, nor shall the Plan impose any limitation
on the right of the Company to terminate a Consultant's services at any time
or constitute evidence of any agreement or understanding by the Company's
stockholders that the Company will nominate any director for reelection.
9.5. Withholding of Taxes. The Company shall have the right to reduce
the number of shares of Common Stock otherwise deliverable pursuant to the
Plan by an amount that would have a Fair Market Value equal to the amount of
all Federal, state and local taxes required to be withheld, or to deduct the
amount of such taxes from any cash payment otherwise to be made to the
Participant. In connection with such withholding, the Committee may make such
arrangements as are consistent with the Plan as it may deem appropriate.
9.6. Listing and Other Conditions.
(a) If the Common Stock is listed on a national securities exchange,
the issuance of any shares of Common Stock pursuant to an Award shall be
conditioned upon such shares being listed on such exchange. The Company shall
have no obligation to issue such shares unless and until such shares are so
listed, and the right to exercise any Option shall be suspended until such
listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to an Award is or
may in the circumstances be unlawful or result in the imposition of excise
taxes under the statutes, rules or regulations of any applicable jurisdiction,
the Company shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or registration
under the Securities Act of 1933, as amended, or otherwise with respect to
shares of Common Stock or Awards, and the right to exercise any option shall
be suspended until, in the opinion of such counsel, such sale or delivery
shall be lawful or shall not result in the imposition of excise taxes.
(c) Upon termination of any period of suspension under this Section
9.6, any Award affected by such suspension which shall not then have expired
or terminated shall be reinstated as to all shares available before such
suspension and as to shares which would otherwise have become available during
the period of such suspension, but no such suspension shall extend the term of
any option.
9.7. Governing Law. The Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of
Utah.
9.8. Construction. Wherever any words are used in the Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they
were also used in the plural form in all cases where they would so apply.
9.9. Liability Of the Board and the Committee. No member of the Board
or the Committee nor any employee of the Company or any of its subsidiaries
shall be liable for any act or action hereunder, whether of omission or
commission, by any other member or employee or by any agent to whom duties in
connection with the administration of the Plan have been delegated or, except
in circumstances involving bad faith, gross negligence or fraud, for anything
done or omitted to be done by himself.
9.10. Other Benefits. No payment pursuant to an Award under the Plan
shall be deemed compensation for purposes of computing benefits under any
retirement plan of the Company or any Subsidiary nor affect any benefits under
any other benefit plan now or hereafter in effect under which the availability
or amount of benefits is related to the level of compensation.
9.11. Costs. The Company shall bear all expenses incurred in
administering the Plan, including expenses of issuing Common Stock upon the
exercise of options granted.
9.12. Severability. If any part of the Plan shall b determined to be
invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify remaining provisions of the Plan which shall continue in
full force and effect.
9.13. Successors. The Plan shall be binding upon and inure to the
benefit of any successor or Successors of the Company.
9.14. Headings. Article and section headings contained in the Plan are
included for convenience only and are not to be used in construing or
interpreting the Plan.
ARTICLE X
Effective Date of Plan
10.1. The Plan shall be effective as of the earlier of (i) the date of
first issuance of any Award under the Plan and (ii) the date of its approval
by the Company's stockholders ("Stockholder Approval); provided, that any
issuance of an Award prior to Stockholder Approval will be subject to
Stockholder Approval being obtained within one year of the date of the Plan
was approved by the Company's board of directors.
ARTICLE XI
Term of Plan
11.1. No Stock option shall be granted pursuant to the Plan on or after
the tenth anniversary of its approval by the Company's stockholders, but
Awards granted prior to such tenth anniversary may extend beyond that date.
APPENDIX B
PROXY CARD
for
ANNUAL MEETING OF STOCKHOLDERS
of
MICROPOINT, INC
This Proxy is Solicited on Behalf of the Board Of Directors. The undersigned
hereby appoints Douglas M. Odom as Proxy, with the power to appoint his
substitute and hereby authorize them to represent and to vote, as designated
below, all the shares of common stock of Micropoint, Inc. held on record by
the undersigned on September 14, 1998 at the annual meeting of stockholders to
be held on October 14, 1998, or any adjournment thereof.
1. Proposal to amend the Certificate of Incorporation to provide that the
board of directors of the corporation is to consist of three classes of
directors, with one class elected at each annual meeting of the stockholders
for a term of three years.
[ ] For [ ] Against [ ] Abstain
2. Election of Nominee Directors.
Term ending in 2001
[ ] FOR Douglas M. Odom
[ ] WITHHOLD AUTHORITY to vote for Douglas M. Odom
Term ending in 2000
[ ] FOR Don M. Jackson
[ ] WITHHOLD AUTHORITY to vote for Don M. Jackson
Term ending in 1999
[ ] FOR Jeffrey A. Coleman
[ ] WITHHOLD AUTHORITY to vote for Jeffrey A. Coleman
3. Proposal to increase to 6,000,000 the number of shares of common stock that
may be issued under the Micropoint, Inc. Omnibus Stock Option Plan.
[ ] For [ ] Against [ ] Abstain
4. Proposal to amend the Certificate of Incorporation to eliminate the
ability of the Company's stockholders to act by written consent.
[ ] For [ ] Against [ ] Abstain
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder(s). If no directions are made, this proxy will
be voted for the above Proposals.
Please sign below. When shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporation name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated: ________________________, 1998
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope or proxy cards may be sent by facsimile to Colonial Stock at (801)
355-6505.
_____________________________________________
(signature)
_____________________________________________
(signature if held jointly)
_____________________________________________
(print name of stockholder(s))
