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NOTICE OF ADJOURNMENT OF
ANNUAL MEETING
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WESTERN POWER & EQUIPMENT CORP.
4601 N.E. 77TH AVENUE
SUITE 200
VANCOUVER, WA 98662
Notice is hereby given that the Annual Meeting of Stockholders of Western
Power & Equipment Corp.("the Company"), held on January 29, 1998 (the "Annual
Meeting"), has been adjourned to Wednesday, February 18, 1998 at the Company's
headquarters office located at 4601 N.E. 77th Avenue, Suite 200, Vancouver, WA
98662, at 10:00 a.m. Pacific Standard Time (the "Adjourned Meeting") for the
consideration only of the following proposal which had been brought before the
Annual Meeting but on which no vote was taken:
"To authorize and ratify an increase in the number of shares of common stock
of the Company, $.01 par value (the "Common Stock"), underlying and available
for the granting of options under the Company's 1995 Employee Stock Option Plan
(the "Employee Plan"), from 1,500,000 shares of Common Stock to 2,500,000 shares
of Common Stock."
The reason for holding the Adjourned Meeting to consider the above Proposal
is to give Company stockholders additional time to consider the information
contained in the ERRATA SHEET recently delivered to Company stockholders. The
ERRATA SHEET provided additional information relevant to the Proposal that was
not contained in the Company's Notice of Annual Meeting of Stockholders and
Proxy Statement originally delivered to stockholders with respect to the Annual
Meeting (the "Proxy Statement"). A copy of the text of the Proposal, which now
incorporates the information contained in the ERRATA SHEET, is annexed to this
Notice of Adjournment of Annual Meeting. At the Annual Meeting, all other
proposals identified in the Proxy Statement were adopted by the stockholders.
For your convenience, and to permit you to:
i) revoke any proxy previously delivered by you which cast your vote on
the Proposal; or
ii) cast your vote on the Proposal if you have not previously voted on
the Proposal
a proxy card with respect to the Proposal only and a return envelope are
included along with this Notice of Adjournment of Annual Meeting.
If a proxy is properly executed and returned at or before the Adjourned
Meeting, the shares represented thereby will be voted in accordance with the
specifications made, or if no specification is made the shares will be voted to
approve the Proposal. Any shareholder giving a proxy has the power to revoke it
at any time before it is voted by filing with the Secretary of the Company a
notice in writing revoking it. A proxy may also be revoked by any shareholder
present at the Adjourned Meeting who expresses a desire in writing to revoke a
previously delivered proxy and to vote his or her shares in person. The mere
presence at the Adjourned Meeting of the person appointing a proxy does not
revoke the appointment. In order to revoke a properly executed and returned
proxy, the Company must receive a duly executed written revocation of that proxy
before it is voted at the Adjourned Meeting. A proxy received after a vote is
taken at the Adjourned Meeting will not revoke a proxy received prior to the
Adjourned Meeting; and a subsequently dated proxy received prior to the vote
will revoke a previously dated proxy.
As of January 29, 1998, American United Global, Inc., the parent of the
Company, held 2,000,000 shares of Company Common Stock. Such holdings give it
the right to cast 2,000,000 of the votes represented by shares of the voting
stock of the Company, in the aggregate constituting approximately 56.6% of the
total votes represented by shares entitled to vote at the Adjourned Meeting.
American
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United Global, Inc. has voted in favor of the Proposal to be submitted for
consideration at the Adjourned Meeting, which vote will result in adoption of
the Proposal by Company stockholders.
By order of the Board of Directors
Robert M. Rubin, CHAIRMAN OF THE BOARD
Date: January 29, 1998
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WESTERN POWER & EQUIPMENT CORP.
4601 NE 77TH AVENUE, SUITE 200
VANCOUVER, WASHINGTON 98662
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AUTHORIZATION AND RATIFICATION OF THE INCREASE IN THE
NUMBER OF SHARES OF COMMON STOCK UNDERLYING
THE 1995 EMPLOYEE STOCK OPTION PLAN
At the Adjourned Meeting a vote will be taken on a proposal to approve the
Amendment to the Company's 1995 Employee Stock Option Plan (the "1995 Plan"),
which increases the number of shares of Common Stock underlying stock options
available for grant thereunder from the existing 1,500,000 shares of Common
Stock to 2,500,000 shares of Common Stock. A COPY OF THE AMENDMENT TO THE 1995
PLAN IS ANNEXED AS EXHIBIT A. As of December 1, 1997, stock options to purchase
1,500,000 shares of Common Stock have been granted under the 1995 Plan to the
Company's employees and directors. That number of granted options constitutes
100% of the number of shares currently available for the granting of options
under the 1995 Plan as currently approved by Company stockholders.
The 1995 Plan was authorized and adopted by the stockholders and the
directors of the Company in 1995. The purpose of the 1995 Plan is to provide
additional incentive to the directors, officers, employees and consultants of
the Company who are primarily responsible for the management and growth of the
Company. Each option granted pursuant to the 1995 Plan shall be designated at
the time of grant as either an "incentive stock option" or as a "non-qualified
stock option."
ADMINISTRATION OF THE PLAN. The 1995 Plan is administered by the
Compensation Committee, which determines whom among those eligible will be
granted options, the time or times at which options will be granted, the number
of shares to be subject to options, the durations of options, any conditions to
the exercise of options and the manner in and price at which options may be
exercised. The Compensation Committee is authorized to amend, suspend or
terminate the 1995 Plan, except that it is not authorized without stockholder
approval (except with regard to adjustments resulting from changes in
capitalization) to (i) increase the maximum number of shares that may be issued
pursuant to the exercise of options granted under the 1995 Plan; (ii) permit the
grant of a non-qualified stock option under the 1995 Plan with an option
exercise price less than 85% of the fair market value of the shares at the time
such option is granted; (iii) change the eligibility requirements for
participation in the 1995 Plan; (iv) extend the term of any option or the period
during which any option may be granted under the 1995 Plan; or (v) decrease an
option exercise price (although an option may be canceled and a new option
granted at a lower exercise price).
SHARES SUBJECT TO THE PLAN. The 1995 Plan currently provides that options
may be granted with respect to a total of 1,500,000 shares of Common Stock,
subject to adjustment upon certain changes in capitalization without receipt of
consideration by the Company. In addition, if the Company is involved in a
merger, consolidation, dissolution or liquidation, the options granted under the
1995 Plan will be adjusted or, under certain conditions, will terminate, subject
to the right of the option holder to exercise his option or a comparable option
substituted at the discretion of the Company prior to such event. If any option
expires or terminates for any reason, without having been exercised in full, the
unpurchased shares subject to such option will be available again for the
purposes of the 1995 Plan.
PARTICIPATION. Any employee, consultant or representative of the Company is
eligible to receive incentive stock options or non-qualified stock options
granted under the 1995 Plan. Non-employee directors may only receive
non-qualified stock options.
OPTION PRICE. The exercise price of each option shall be determined by the
Stock Option Committee. However, the exercise price of each option on the date
the option is granted may not be less than (i) 100% of the fair market value of
the shares of Common Stock covered by an incentive stock option, or (ii) 85% of
the fair market value of the shares of Common Stock covered by a non-qualified
stock option. If an
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incentive stock option is to be granted to an employee who owns over 10% of the
total combined voting power of all classes of the Company's stock, then the
exercise price may not be less than 110% of the fair market value of the Common
Stock covered by the option of the date the option is granted.
TERMS OF OPTIONS. The Compensation Committee shall, in its discretion, fix
the term of each option, provided that the maximum term of each option shall be
10 years. Incentive options granted to an employee who owns over 10% of the
total combined voting power of all classes of stock of the Company shall expire
not more than five years after the date of grant. The 1995 Plan will provide for
the earlier expiration of options of a participant in the event of certain
terminations of employment.
RESTRICTIONS ON GRANT AND EXERCISE. An Option may not be transferred other
than by will or the laws of descent and distribution and, during the lifetime of
the option holder, may be exercised solely by him. The aggregate fair market
value (determined at the time the option is granted) of the shares as to which
an employee may first exercise incentive stock options in any one calendar year
may not exceed $100,000. The Compensation Committee may impose other conditions
to exercise as it deems appropriate.
OPTION GRANTS. The Company has granted an aggregate of 1,500,000 Options
under the 1995 Plan as amended, other than options granted that are subject to
approval of the Amendment to the 1995 Plan as reflected in the Proposal.
TERMINATION. The 1995 Plan, unless sooner terminated by the Board of
Directors or Compensation Committee, will terminate in February 2005.
TAX TREATMENT OF OPTIONS. The Federal income tax treatment of non-qualified
stock options under the 1995 Plan is generally less favorable to employees than
the treatment accorded incentive stock options under the 1995 Plan. The option
grantee realizes taxable income, if any, upon his exercise of a non-qualified
stock option, not only upon sale of the shares acquired upon option exercise as
would be the case for incentive stock options granted under the 1995 Plan. The
tax treatment of non-qualified stock options is more favorable to the Company
than the treatment accorded to the Company with respect to incentive stock
options, because the Company is entitled to a tax deduction with respect to the
grant of a non-qualified stock option. With respect to granting a non-qualified
stock option, the Company would be entitled to a tax deduction and the optionee
would realize taxable income upon being granted a non-qualified stock option,
equal to the difference between the option exercise price and the fair market
value of the underlying stock on the date of grant.
The Company currently has no obligation to grant additional options under
the 1995 Plan to any person, including any members of the Company's management,
other than the options granted with respect to 906,000 shares of Common Stock
subject to approval of the Amendment by the Company's stockholders. Included in
such options for 906,000 shares of Common Stock are the following options
granted to members of the Company's Management: (i) an option for 350,000 shares
of Common Stock granted to C. Dean McLain at $4.562 per share; (ii) an option
for 250,000 shares of Common Stock granted to Robert M. Rubin at $4.562 per
share, and (iii) an option for 150,000 shares of Common Stock granted to Mark J.
Wright at $4.562 per share. The vesting of all of such options is subject to
approval of the Amendment by the Company's stockholders.
As of the close of business on December 9, 1997, the market value of the
shares of Common Stock underlying all options outstanding under the 1995 Plan
(not including those subject to stockholder approval of the Amendment) was
approximately $8,062,500.
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As of December 9, 1997, the persons or groups listed below hold outstanding
stock options granted under the 1995 Plan (including those subject to
stockholder approval of the Amendment) to acquire shares of Common Stock, as
follows:
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1,225,000
C. Dean McLain............................................. shares
Robert M. Rubin............................................ 550,000 shares
Mark J. Wright............................................. 248,500 shares
All current executive officers and directors of the Company 2,023,500
as a group............................................... shares
1.775,000
All directors and nominees for directors as a group........ shares
All employees or consultants who are not executive officers
of the Company, as a group............................... 377,500 shares
</TABLE>
MANAGEMENT BELIEVES APPROVAL OF THE AMENDMENT OF THE COMPANY'S 1995 STOCK OPTION
PLAN IS IN THE BEST INTEREST OF THE COMPANY AND RECOMMENDS THAT IT BE AUTHORIZED
AND RATIFIED.
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EXHIBIT A
AMENDMENT TO
WESTERN POWER & EQUIPMENT CORP.
1995 EMPLOYEE STOCK OPTION PLAN
I. AMENDMENT
Section 5 of the Western Power & Equipment Corp. 1995 Employee Stock Option
Plan (the "Plan") is hereby amended (the "Amendment") to increase the number of
shares of Common Stock of Western Power & Equipment Corp. available for the
grant of options under the Plan from 1,500,000 shares to 2,500,000 shares by
deleting existing Section 5(a) thereof in its entirety and substituting the
following therefor:
"5. OPTION SHARES
a. The shares subject to Options granted under this Plan shall be
shares of Common Stock and, except as otherwise required or permitted by
Subsection 5(b) below, the aggregate number of shares with respect to which
Options may be granted shall not exceed 2,500,000 shares. If an Option
expires, terminates or is otherwise surrendered, in whole or in part, the
shares allocable to the unexercised portion of such Option shall again
become available for grants of Options hereunder. As determined form time to
time by the Board of Directors, the shares available under this Plan for
grants of Options may consist either in whole or in part of authorized but
unissued shares of Common Stock or shares of Common Stock which have been
reacquired by the Company or a subsidiary following original issuance."
II. EFFECTIVE DATE
Upon approval by the holders of a majority of the outstanding shares of
Common Stock of the Company, the Amendment will become effective on the date
upon which such approval is obtained (the "Effective Date").
III. EFFECT OF AMENDMENT
Except as amended by the specific terms of this Amendment, the remaining
terms and conditions of the Plan shall remain in full force and effect.
/s/ C. Dean McLain
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C. Dean McLain, President
Date: December 19, 1997
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WESTERN POWER & EQUIPMENT CORP.
ADJOURNED ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 18, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS IN CONNECTION WITH THE
ADJOURNED ANNUAL MEETING OF SHAREHOLDERS OF WESTERN POWER & EQUIPMENT CORP. TO
BE HELD ON FEBRUARY 18, 1998. THE SHAREHOLDER HAS THE RIGHT TO APPOINT AS HIS
PROXY A PERSON (WHO NEED NOT BE A SHAREHOLDER) OTHER THAN ANY PERSON DESIGNATED
BELOW, BY INSERTING THE NAME OF SUCH OTHER PERSON IN ANOTHER PROPER FORM OF
PROXY.
The undersigned, a shareholder of Western Power & Equipment Corp. (the
"Corporation"), hereby revoking any proxy hereinbefore given, does hereby
appoint Robert M. Rubin and C. Dean McLain, or either of them, as his proxy with
full power of substitution, for and in the name of the undersigned to attend the
Adjourned Annual Meeting of the Stockholders to be held on February 18, 1998 at
4601 N.E. 77th Avenue, Suite 200, Vancouver, Washington 98662, at 10:00 a.m.,
local time, and at any adjournments thereof, and to vote upon all matters
specified in the notice of said adjourned meeting, as set forth herein, all
shares of stock of said Corporation which the undersigned would be entitled to
vote if personally present at the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, SUCH SHARES
WILL BE VOTED FOR THE PROPOSAL.
1. Authorize and ratify an increase in the number of shares underlying the 1995
Employee Stock Option Plan, from 1,500,000 shares of Common Stock to
2,500,000 shares of Common Stock / / FOR / / AGAINST / / ABSTAIN
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Dated __________________________, 199_
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Signature Print Name
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Signature, if Jointly held Print Name
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PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS HEREIN, if signing as
attorney, executor, administrator,
trustee or guardian, indicate such
capacity. All joint tenants must sign.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
The Board of Directors requests that
you fill in the date and sign the
Proxy and return it in the enclosed
envelope.
IF THE PROXY IS NOT DATED IN THE ABOVE
SPACE, IT IS DEEMED TO BE DATED ON THE
DAY ON WHICH IT WAS MAILED BY THE
CORPORATION.
