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:
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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3) Filing Party:
4) Date Filed:
<PAGE 1>
MICROPOINT, INC.
6906 South 300 West
Midvale, UT 84047
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 16, 1999
NOTICE is hereby given that the Annual Meeting of Stockholders of
Micropoint, Inc. (the "Company") will be held at the University Park Marriott
Hotel, 500 South Wakara Way, Salt Lake City, Utah 84108, at 10:00 a.m. (local
time) on June 16, 1999, for the following purposes:
1. To elect one member of the board of directors.
2. To consider a proposal to amend the Certificate of Incorporation to
change the name of the Company to "Flexpoint Sensor Systems, Inc."
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 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 May 14, 1999
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
May 14, 1999
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 2>
PROXY STATEMENT
------------------
MICROPOINT, INC.
6906 South 300 West
Midvale, UT 84047
------------------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 16, 1999
------------------
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 University Park Marriott Hotel, 500 South Wakara Way, Salt Lake
City, Utah 84108, at 10:00 a.m. (local time) on June 16, 1999, 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 May 14, 1999.
VOTING AT THE ANNUAL MEETING
The Board of Directors of the Company (the "Board") has fixed the close
of business on May 14, 1999, 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 approximately
17,092,380 shares of the Company's Common Stock held by approximately 417
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 amendment 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 amendment to the Company's Certificate
of Incorporation and FOR the approval of the proposed amendments to the
Company's Omnibus Stock Option Plan.
<PAGE 3>
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
1. Election of Directors
Board of Directors
The Company's Board is divided into three classes. One class of directors
is elected at each annual meeting of stockholders for a three-year term. Each
year a different class of directors is elected on a rotating basis. The term
of Jeffrey A. Coleman expires in 1999. The terms of Don M. Jackson expires in
2000 and the term of Douglas M. Odom expires in 2001.
At this meeting one director has been nominated by the Board for election
to the class whose term expires at the 2002 annual meeting. The person
nominated is Jeffrey A. Coleman, who is currently a director 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 NOMINEE
NAMED HEREIN.
<PAGE 4>
Set forth below is certain information concerning each of the directors
and executive officers of the Company as of May 3, 1999.
With the
Name Age Position Company Since
- ---- --- -------- -------------
Douglas M. Odom 38 President, Chief Executive Officer
and Director 1995
Thomas E. Danielson 37 Vice-President 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 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 EEC, 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.
Thomas E. Danielson. Mr. Danielson has been the Vice-President of
Micropoint since 1995. Mr. Danielson was with Xymox Technologies, Inc.,
Milwaukee, WI from 1993-95, in an operations management and sales management
role. Prior to that, Mr. Danielson was with W.H. Brady Company, Milwaukee, WI
from 1986-93, in a variety of roles, including engineering, manufacturing and
sales. Mr. Danielson holds a bachelors of science degree in Civil Engineering
from the University of Wisconsin and a MBA in Production Operations Management
from the University of Wisconsin-Whitewater.
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., PhD. 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 Semiconductor Technology, LLC, in May 1996. Global
Semiconductor Technology, LLC is in the semiconductor materials and equipment
business and Dr. Jackson has been President and Chairman since inception of
that company. Dr. Jackson has been active in the founding and operating of a
number of semiconductor equipment and materials companies since 1976 when he
founded ASM America in Phoenix. From 1960 until 1976, Dr. Jackson held a
number of technical and management positions in the semiconductor industry,
specifically Motorola and General Electric Corporation. Dr. Jackson is a
director of M & I Thunderbird Bank in Phoenix and three other high-technology
corporations. He received a Ph.D. in
<PAGE 5>
Electrical Engineering from Arizona State University, an M.S. in Physics from
Iowa State University and a B.A. in Physics from William Jewell College.
Executive officers of the Company are elected by the Board on an annual
basis and serve at the discretion of the Board.
Board Committees
The Board has an Audit Committee and Compensation Committee. The Board
does not have a nominating committee.
The Company's Audit Committee was organized in November, 1999 and, thus,
did not meet in 1998. The function of the Audit Committee is (a) to review the
professional services and independence of the Company's independent auditors
and the scope of the annual external audit as recommended by the independent
auditors, (b) to ensure that the scope of the annual external audit is
sufficiently comprehensive, (c) to review, in consultation with the
independent auditors, the plan and results of the annual external audit and
the adequacy of the Company's internal control systems, (d) to review, with
management and the independent auditors, the Company's annual financial
statements, financial reporting practices and the results of each external
audit, and (e) to undertake reasonably related activities to those set forth
in clauses (a) through (d) above.
The Company's Compensation Committee was organized in November, 1999 and,
thus, did not meet in 1998. The Compensation Committee administers the
Company's stock option plan, establishes a general compensation policy for the
Company and, except as prohibited by applicable law, may take any and all
actions that the Board could take relating to the compensation of employees,
directors and other parties.
Board Meetings and Directors' Attendance
The Board held 8 meetings and took action by unanimous consent on 19
occasions during the fiscal year ended December 31, 1998. No director attended
fewer than 75 percent of the Board meetings held during the fiscal year ended
December 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 for 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.
Sens Partnership, LLC, which is beneficially owed by Mr. Coleman who is a
director of the Company, was issued 30, 303 shares of the Company's Common
Stock in December 1998. These shares were issued to satisfy in full certain
obligations that the Company made to Mr. Coleman in connection with his
investment in the Company in December 1997.
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 May 3, 1999,
for: (i) each person who is known by the Company to beneficially own more than
five 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 May 3,
1999, the Company had 17,092,380 shares of Common Stock outstanding.
<PAGE 6>
<TABLE>
Name and Address Shares Beneficially Percentage of
of Beneficial Owner(1) Owned(2) Total(2) Position
- ---------------------- -------- -------- --------
<S> <C> <C> <C>
Douglas Odom 650,000(3) 3.8% President, CEO and
Director
Jeffrey A. Coleman 245,303(4) 1.5% Director
Don M. Jackson, Jr. 20,000(5) * Director
All offices and directors
as a group (3 persons) 915,303
Bull Ventures, Ltd.
Katerina Court
101 E Hill Place
Nassau, Bahamas 832,654(6) 5.0%
Northridge Investment, LLC
47 E. 7200 South, #221
Midvale, UT 84047 1,647,750(7) 10.0%
John Sindt
47 E. 7200 South, #221
Midvale, UT 84047 1,366,620(8) 8.1%
Jules A. deGreef
47 E. 7200 South, #201
Midvale, UT 84047 2,152,667(9) 13%
* Less than 1%.
_______________
</TABLE>
(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 the
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 5,000 shares and vested options to purchase 645,000 shares.
Does not include options to acquire an additional 130,000 shares of Common
Stock vest on January 1, 2000.
(4) Includes 225,303 shares owned by a limited liability company
controlled by Sens Partners, LLC, of which Mr. Coleman is a Member of and
options to acquire 20,000 shares of Common Stock. Does not include options to
acquire 60,000 shares of Common Stock that vests in equal installments in July
1999, 2000 and 2001.
(5) Includes options to acquire 20,000 shares of Common Stock. Does not
include options to acquire 60,000 shares of Common Stock that vests in equal
installments in July 1999, 2000 and 2001.
(6) Represents the number of shares of Common Stock held of record by Bull
Ventures, Ltd. Bull Ventures, Ltd. filed a Schedule 13D, dated April 9, 1998,
but has not made any subsequent filing under Section 13(d) or 13(g) reporting
a change in beneficial ownership although it appears that such filing was
required. As a result, the Company makes no representation concerning the
number of shares beneficially owned by Northridge Investments, LLC.
(7) Represents 1,647,750 shares. Does not include shares, warrants or
options ned by Messrs. Sindt and DeGreef, as to which Northridge disclaims
beneficial ownership.
(8) Represents 297,000 shares held by Mr. Sindt, 895,750 shares held by
Northridge Investment LLC, and 455,000 shares underlying warrants held in the
name of Jules A. DeGreef. Does not include 825,987
<PAGE 7>
shares held by Bull Ventures, Ltd. with which Mr. Sindt is affiliated and as
to which Mr. Sindt disclaims beneficial ownership.
(9) Represents 1,386,917 shares held by Mr. DeGreef and 765,750 shares
held by Northridge Investment LLC. Does not include 825,987 shares held by
Bull Ventures, Ltd. with which Mr. DeGreef is affiliated and as to which Mr.
DeGreef disclaims 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 under Section 16(a) applicable to the
Company's executive officers, directors and more than 10% stockholders were
complied with during the fiscal year ended December 31, 1998, except that (i)
Mr. Thomas E. Danielson filed a Form 5 reporting the exercise of stock options
in October 1998 which should have previously been reported on a Form 4, (ii)
30,303 shares of Common Stock were issued to an entity that, on information
and belief, Jeffrey A. Coleman is deemed to beneficially own, for which Mr.
Coleman filed an amended Form 5 in March 1999 reporting the transaction, (iii)
the Company has not received Form 5 filings or written representations that
such no such filing in required for Jules A. DeGreef and Northridge
Investment, LLC.
Change in Control
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.
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 $100,000 (determined for the
year ended December 31, 1998) (the "Named Executive Officers"). The tables
include information related to stock options granted to the Named Executive
Officers.
Summary Compensation Table. The following table provides certain
information regarding compensation paid by the Company to the Named Executive
Officers.
<PAGE 8>
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long-Term Compensation Awards
------------------- -----------------------------
Securities
Restricted Underlying All Other
Name and Other Annual Stock Options/ LTIP Compensation
Principal Position Year Salary($) Bonus($) Compensation($) Awards SARs(#) Payouts($) ($)
- ------------------ ---- --------- -------- --------------- ------ ------- ---------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Douglas M. Odom (1) 1996 103,750 -- -- -- -- -- --
President, CEO and 1997 120,000 -- -- -- 520,000(2) -- --
Director 1998 120,000 10,000 -- -- -- -- --
</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) These options were granted by Sensitron and converted into
outstanding obligations of Micropoint as part of the Acquisition. Options to
acquire 5,000 shares were exercised in October 1998, options to acquire
385,000 shares are currently exercisable and options to acquire 130,000 shares
do not become exercisable until January 1, 2000.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Fiscal Options/SARs at Fiscal
Shares Year-End Year-End($)
Acquired On Value (Exercisable/ (Exercisable/
Name Exercise(#) Realized($) Unexercisable) Unexercisable(1)
- ---- ------------ ----------- ------------- ----------------
<S> <C> <C> <C> <C>
Douglas M. Odom 5,000 $35,550(2) 515,000/260,000(3) $2,797,950/826,800
</TABLE>
(1) The closing price of the Company's Common Stock on December 31, 1998 was
$6.75 per share.
(2) Options exercisable for 5,000 shares of the Company's Common Stock at
$.16 per share were exercised on October 11, 1998.(3) Represents options
currently exercisable for 125,000 shares of Common Stock at an exercise price
of $.16 per share; options currently exercisable for 130,000 shares of Common
Stock at $.39 per share; options to acquire 260,000 shares of Common Stock at
an exercise price of $.39 per share vest in equal increments on January 1,
1999 and 2000; and options currently exercisable for 260,000 shares of Common
Stock at $.77 per share.
Compensation of Directors
Non-employee directors are each being 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 are exercisable at $.75 per share.
An initial 20,000 options vested on the date of grant during 1998 and the
remaining options to acquire 60,000 shares of Common Stock vest equally in
three annual installments in July 1999, 2000 and 2001. During 1998 directors
of the Company who are also officers or employees of the Company did not
receive and are not expected to receive in the future 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.
<PAGE 9>
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 successive one-year terms (the "Renewal Terms")
unless terminated by either party. The Employment Agreement also provides Mr.
Odom with options to acquire 780,000 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"). As of December 31, 1998, options to acquire
515,000 shares of Common Stock were exercisable and options to acquire 5,000
shares had been exercised. Options to acquire an additional 260,000 shares of
Common Stock at $.39 per share vest in equal installments in January 1999 and
2000. All of the above described 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. The grant of
options to acquire an aggregate of 6,000,000 shares of Common Stock 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 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 grant and in all cases the term of the
stock option shall not exceed ten years. Options to acquire 5,658,550 shares
of Common Stock at exercise prices ranging from $.16 to $ 4.00 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
change the name of the Company to Flexpoint Sensor Systems, Inc.
The name of the Company is currently Micropoint, Inc. At a meeting held
on April 24, 1999, the Board adopted a resolution to amend, subject to
stockholder approval, the Certificate of Incorporation to change the name of
the Company to Flexpoint Sensor Systems, Inc. The amendment would be effected
by amending Article First of this Company's Certificate of Incorporation to
read in its entirety substantially as follows:
<PAGE 10>
FIRST: The name of the corporation is Flexpoint Sensor Systems, Inc.
The proposed revisions to Article First are proposed because it is
believed that the name "Flexpoint" has more name recognition than the name
"Micropoint" and, therefore, the adoption of the new name will benefit the
Company in its efforts to commercialize its products and to further promote
its name recognition. The operations of the Company are commonly recognized
under the name Flexpoint. The name Flexpoint continues to receive both
magazine and television coverage and recognition in the automotive industry.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE "FOR"
APPROVAL OF THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO CHANGE
THE NAME OF THE COMPANY TO FLEXPOINT, INC.
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"). Due to the anticipated increase in demand for its products under
development, the Company must rapidly expand its operations. The Company needs
to hire experienced and qualified employees who are experts and skilled in
automotive design and manufacturing procedures. The Company believes that the
retention of skilled employees provides part of the foundation upon which the
Company can build value for its stockholders. The Company has been successful
in hiring experienced employees through the use of stock option incentives.
The stock incentives give the Company great flexibility to continue to attract
and hire qualified employees.
It is proposed that the Option Plan be amended to provide for the
issuance of up to an additional 1,000,000 shares of common stock under the
Option Plan. Currently there are options to acquire 341,450 shares of common
stock available from the 6,000,000 shares authorized for issuance under the
Option Plan. Combining the 6,000,000 shares with an additional 1,000,000
shares would result in an aggregate of 7,000,000 shares being authorized for
issuance under the Option Plan if this amendment is approved by the
stockholders. Of the 7,000,000 shares, there would be available options to
acquire 1,341,450 shares under the Option Plan. 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
One of the reasons for the increase in projected option requirements is
that the Company will be retaining more employees and consultants than it
previously anticipated due to the acceleration of its projected manufacturing
obligations. 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 assist the Company in
attracting and retaining employees, outside consultants and Board members, to
encourage optionees to devote their best efforts to the work 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
<PAGE 11>
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 Company and (ii) to create in effect a bonus
program for management which compensates designated individuals with shares of
the Company.
At the Company's 1998 annual stockholder's meeting, the Board requested
and the stockholders approved a 762,950 increase in the number of shares
issueable under the Option Plan. At the time the Board believed that the 1998
increase would be sufficient for the foreseeable future. While there are still
options to acquire 341,450 shares of common stock available under the Option
Plan, the Company now anticipates that it will need options to acquire an
additional 1,000,000 shares of the Common Stock in the foreseeable future to
continue to attract and retain qualified personnel.
It is intended that all of such shares that are issued under the Option
Plan 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 May 3, 1999, the Company had 35
employees, three Board members and was utilizing the services on at least of
part time basis of 16 consultants.
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.
<PAGE 12>
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 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
<PAGE 13>
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
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. 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 presented, the
persons named in the accompanying proxy form will vote such proxy in
accordance with their judgment.
Independent Public Accountants
On June 23, 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.
<PAGE 14>
Notice Requirements
Any stockholder who desires to have a proposal included in the Company's
proxy soliciting material relating to the Company's 2000 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 16, 2000.
Annual Report
This Proxy Statement has been preceded or accompanied by an Annual Report
for the fiscal year ended December 31, 1998. 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
<PAGE 15>
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.
<PAGE 16>
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
<PAGE 17>
(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 6,000,000 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.
<PAGE 18>
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
<PAGE 19>
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.
<PAGE 20>
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.
<PAGE 21>
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.
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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 be
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.
<PAGE 23>
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 May 14, 1999 at the annual meeting of stockholders to be
held on June 16, 1999, or any adjournment thereof.
1. Election of Nominee Director.
[ ] FOR Jeffrey A. Coleman [ ] WITHHOLD AUTHORITY to vote for Jeffrey A.
Coleman
2. Proposal to amend the Certificate of Incorporation to change the name of
the Company to "Flexpoint Sensor Systems, Inc."
[ ] For [ ] Against [ ] Abstain
3. Proposal to increase the number of shares of common stock that may be
issued under the Micropoint, Inc. Omnibus Stock Option Plan.
[ ] 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: ________________________, 1999
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))
<PAGE 24>
