LETTERHEAD OFSECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
/_/ Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
RCM TECHNOLOGIES, INC.
February 25, 1997- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0.11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
5) Total fee paid:
_____________________________________________________________________________
/_/ Fee paid previously with preliminary materials.
/_/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
____________________________________________________________________________
2) Form, Schedule or Registration No.:
____________________________________________________________________________
3) Filing Party:
____________________________________________________________________________
4) Date filed:
____________________________________________________________________________
[LOGO]
March 9, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Meeting") of RCM Technologies, Inc. (the "Company") which will be held at the
Philadelphia Marriott Hotel, 1201 Market Street, Philadelphia, Pennsylvania on
Friday,Thursday, April 25, 199723, 1998 at 6:00 P.M. Your Board of Directors and management
look forward to personally greeting those stockholders able to attend.
At the Meeting, stockholders will be asked to elect two directors, to
consider and approve an amendment to the Company's 1992 Incentive Stock Option
Plan, to consider and approve an amendment to the Company's 1994 Nonemployee
Director Stock Option Plan, to ratify the appointment of Grant Thornton LLP as
the Company's independent auditors, and to consider such other matters as may
properly come before the Meeting or at any adjournment(s) thereof. These matters
are discussed in greater detail in the accompanying Proxy Statement.
Your Board of Directors recommends a vote FOR the election of directors,
FOR the amendment to the 1992 Incentive Stock Option Plan, FOR the amendment to
the 1994 Nonemployee Director Stock Option Plan, and FOR the ratification of
Grant Thornton LLP as the Company's independent auditors.
Regardless of the number of shares you own or whether you plan to attend,
it is important that your shares be represented and voted at the Meeting. You
are requested to sign, date and mail the enclosed proxy promptly.
We wish to thank our stockholders for their participation and support.
Sincerely,
/s/ Leon Kopyt
-----------------------------------
Leon Kopyt
Chairman of the Board and
Chief Executive Officer
[LOGO]
RCM TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS
APRIL 25, 199723, 1998
TO OUR STOCKHOLDERS:SHAREHOLDERS:
The Annual Meeting of StockholdersShareholders (the "Meeting") of RCM TECHNOLOGIES,
INC. (the "Company") will be held on Friday,Thursday, April 25, 199723, 1998 at 6:00 P.M., at
the Philadelphia Marriott Hotel, 1201 Market Street, Philadelphia, Pennsylvania,
for the following purposes:
1. To elect two (2) Class B directors to serve until the expiration of
their respective terms and until their respective successors shall be elected
and qualified;
2. To consider and approve an amendment to the Company's 1992 Incentive
Stock Option Plan (the "1992 Plan") to increase the number of shares of common
stock the Company is authorized to issue under the 1992 Plan;
3. To consider and approve an amendment to the Company's 1994 Nonemployee
Director Stock Option Plan (the "Director Option Plan") to increase the number
of shares of common stock the Company is authorized to issue under the Director
Option Plan and to authorize future awards to be made by the Board of Directors
on a discretionary basis rather than on a formula basis;
4. To ratify the appointment of Grant Thornton LLP as independent auditors
for the Company for the fiscal year ending October 31, 1997;1998; and
3.5. To transact such other business as may properly come before the Meeting
or any postponement or adjournment thereof.
The Board of Directors has fixed February 24, 1997,March 6, 1998, as the record date for the
determination of stockholdersshareholders entitled to vote at the Meeting. Only stockholdersshareholders
of record at the close of business on that date will be entitled to notice of,
and to vote at, the Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING. STOCKHOLDERSSHAREHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR SHARES
PERSONALLY, EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
By order of the Board of Directors
Leon Kopyt, Chief Executive Officer
February 25, 1997March 9, 1998
RCM TECHNOLOGIES, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS
APRIL 25, 199723, 1998
This Proxy Statement is being furnished to StockholdersShareholders by the Board of
Directors of RCM Technologies, Inc. (the "Company") whose principal executive
offices are located at 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey
08109, in connection with the solicitation of the accompanying proxy to be voted
at the Annual Meeting of StockholdersShareholders of the Company (the "Meeting") to be held
on April 25,
199723, 1998 at 6:00 P.M. at the Philadelphia Marriott Hotel, 1201 Market
Street, Philadelphia, Pennsylvania, and at any postponement or adjournment
thereof. The approximate date on which this Proxy Statement, the Notice of
Meeting and accompanying proxy are first being sent to stockholdersshareholders is February 25, 1997.March 9,
1998.
Sending in a signed proxy will not affect the stockholder'sshareholder's right to attend
the Meeting and vote in person since the proxy is revocable. Any stockholdershareholder
giving a proxy has the power to revoke it by, among other methods, giving
written notice to Leon Kopyt, Chief Executive Officer of the Company, at any
time before the proxy is exercised.
The expense of the proxy solicitation will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone, telegraph or teletype by directors, officers or employees of the
Company and its subsidiaries who will receive no additional compensation
therefor. The Company is required to pay the reasonable expenses incurred by
record holders of the Company's Common Stock who are brokers, dealers, banks or
voting trustees, or their nominees, for mailing proxy material and annual
shareholder reports to any beneficial owners of Common Stock of the Company.
A form of proxy is enclosed. If properly executed and received in time for
voting, and not revoked, the enclosed proxy will be voted as indicated in
accordance with the instructions thereon. If no directions to the contrary are
indicated, the persons named in the enclosed proxy will vote all shares of the
Company's Common Stock FOR each of the matters specified and in accordance with
the judgment of the persons voting the proxies on any matter that may properly
be brought before the Meeting.
Election of Directors will be by a plurality of the votes of the holders of
shares of common stock voting in person or by proxy at the Meeting. RatificationApproval of
the amendments to the 1992 Plan and the Director Option Plan, as well as the
ratification of the appointment of the independent auditors shall be by the
affirmative vote of a majority of those shares voted at the Meeting. Under
Nevada law abstaining votes and broker non-votes are deemed to be present for
purposes of determining whether a quorum is present at a meeting. On any matter
voted upon, an abstention will have the same effect as a negative vote.
The enclosed proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the Meeting: (i)
matters which the Company does not know, a reasonable time before the proxy
solicitation, are to be presented at the Meeting; (ii) the election of any
person to any office for which a bona fide nominee is unable to serve or for
good cause will not serve; and (iii) matters incident to the conduct of the
Meeting. In connection with such matters, the persons named in the enclosed
proxy will vote in accordance with their best judgment.
2
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with respect to term
of office, with each class to include one-third of the whole number of the Board
of Directors or as near thereto as possible. The term of office of Class A
Directors (Norman S. Berson and Barry S. Meyers), Class B Directors (Robert B.
Kerr and Woodrow B. Moats, Jr.) and Class C Directors (Martin Blaire, Leon Kopyt
and Stanton Remer) expires as of the date of the 2000, 1998 and 1999 annual
meetings of the shareholders, respectively. At each annual meeting of the
shareholders, that number of directors whose terms shall then expire shall be
elected to serve for a term of three years and until their successors shall be
duly elected and qualified.
The two persons listed below are Class B directors who have been nominated
by the Board of Directors to serve as directors until the 20002001 Annual Meeting of
Stockholders.Shareholders. The directors will be elected by a plurality of the votes of the
holders of shares of Common Stock meeting in person or represented by proxy at
the Meeting. It is the intention of the persons named in the accompanying proxy
to vote each proxy executed and returned by a stockholdershareholder for the election of
the two nominees as directors of the Company, unless authority to do so is
withheld on such proxy. All of the nominees are now directors of the Company.
Should any candidate for director become unavailable for any reason, such
proxies will be voted for the alternate candidate, if any, chosen by the Board
of Directors. Each nominee has consented to serve if elected and the Company has
no reason to believe that any of the nominees will be unable to serve.
Nominees For Election ToNOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
Age as of Term
Class B Directors Director since March 2, 1998 Expires
- ----------------- -------------- ------------- -------
Robert B. Kerr 1994 55 2001
Woodrow B. Moats, Jr. 1994 65 2001
Mr. Kerr is a founder and partner of Everingham & Kerr, Inc., a merger and
acquisition consulting firm located in Haddon Heights, New Jersey, which
provides professional intermediary services and other consulting services to
small and middle market manufacturing, distribution and service businesses. Mr.
Kerr's prior experience includes serving as Vice President-Sales, for
Shieldalloy Corporation, a specialty metals producer, from 1974 to 1987. Mr.
Kerr holds a B.S. in Mechanical Engineering, a B.A. in Arts and Sciences from
Pennsylvania State University and a M.B.A. in Management from Wayne State
University. Mr. Kerr has been a director of the Company since 1994.
Mr. Moats is President of W.B. Moats & Associates, Berwyn, Pennsylvania, a
marketing communications organization specializing in business-to-business
marketing. Mr. Moats prior experience includes serving as Senior Vice
President - Corporate Marketing and Public Relations of National Railway
Utilization Corporation from 1975 to 1980. Mr. Moats is a graduate of the
3
University of Miami, Florida, as a marketing major specializing in advertising.
Mr. Moats has been a director of the Company since 1994.
DIRECTORS NOT CURRENTLY SUBJECT TO RE-ELECTION
Age as of Term
Class C Directors Director since March 2, 1998 Expires
- ----------------- -------------- ------------- -------
Leon Kopyt 1991 51 1999
Stanton Remer 1992 47 1999
Martin Blaire 1996 56 1999
Mr. Kopyt was appointed President and Chief Executive Officer on January
23, 1992 and from May 1, 1990 to that date served as Chief Operating Officer of
the Company. Additionally, Mr. Kopyt served as Chief Financial Officer and
Treasurer of the Company from 1992 to 1994. Mr. Kopyt's prior experience
includes serving as the President and Chief Executive Officer of Socimi
International, a European transportation and defense products manufacturing
company from 1981 to 1990. Mr. Kopyt holds a B.S. degree in Electrical
Engineering from Drexel University. Mr. Kopyt has been a director of the Company
since 1991 and Chairman of the Board since 1992.
Mr. Remer was appointed Chief Financial Officer and Treasurer in May 1994.
Mr. Remer's prior experience includes serving as Chief Financial Officer for
Sterling Supply Corporation from 1991 to 1993 and serving as managing partner of
a regional accounting firm from 1983 to 1991. Mr. Remer is a Certified Public
Accountant and holds an M.B.A. in Finance from Temple University and a B.S. in
Textile Science from the Philadelphia College of Textiles & Science. Mr. Remer
has a diverse accounting and financial background. Mr. Remer has been a director
of the Company since 1992.
Mr. Blaire was appointed Executive Vice President in March 1996.
Previously, he was a co-founder of The Board OfConsortium, a business acquired by the
Company in 1996, and served as its Executive Vice President, Secretary and
Treasurer since its inception in 1975. Mr. Blaire's prior experience includes
serving as a branch manager for Stromberg Datagraphix, a General Dynamics
subsidiary and serving as district sales manager for ITT Data Services. Mr.
Blaire holds a B.B.A. in Accounting from the University of Miami, Florida. Mr.
Blaire has been a director of the Company since 1996.
Age as of Term
Class A Directors
Age as of Term
Class A Directors Director since February 24, 1997 Expires
- ----------------- -------------- ----------------- -------
Norman S. Berson 1987 70 2000
Barry S. Meyers 1996 56Director since March 2, 1998 Expires
- ----------------- -------------- ------------- -------
Norman S. Berson 1987 71 2000
Barry S. Meyers 1996 57 2000
4
Mr. Berson has been a shareholder in the law firm of Fineman & Bach, P.C.,
of Philadelphia, Pennsylvania, and its predecessors since 1981. The Company has
retained Fineman & Bach, P.C. to represent it on various legal matters. From
1967 to 1982, Mr. Berson was a member of the House of Representatives of the
Commonwealth of Pennsylvania. Mr. Berson has been a director of the Company
since 1987.
Mr. Meyers was appointed theserved as Chief Operating Officer on March 29, 1996.
Prior to its acquisition byof the Company onfrom March 11, 1996
to February 1998. Mr. Meyers was a founderco-founder of The Consortium, a business
acquired by the Company in 1996, and served as its President since its inception
in 1975. Prior to founding The Consortium, Mr. Meyers wasMeyers' prior experience includes serving as New York Branch Managerbranch
manager for InformationInformatics Data Services. Before that, he was
Regional DirectorServices, regional director of Salessales and Systems for nine yearssystems
with ITT Data Services. He
was alsoServices and serving as a Communications Consultantcommunications consultant with AT&T. Mr.
Meyers holds a B.A. in Psychology from Hunter College, and has completed graduate course work in Data
Processing and Business Administration.College. Mr. Meyers has been a
director of the
Company since 1996.
Directors Not Currently Subject To Re-Election
Age as of Term
Class B Directors Director since February 24, 1997 Expires
- ----------------- -------------- ----------------- -------
Robert B. Kerr 1994 54 1998
Woodrow B. Moats, Jr. 1994 64 1998
Mr. Kerr is a founder and partner of Everingham & Kerr, Inc., a merger and
acquisition consulting firm located in Haddon Heights, New Jersey which provides
professional intermediary services and other consulting services to small and
middle market manufacturing, distribution and service businesses. From 1974 to
1987, Mr. Kerr was Vice President-Sales, for Shieldalloy Corporation, a
specialty metals producer. Mr. Kerr received a B.S. in Mechanical Engineering
and a B.A. in Arts and Sciences from Pennsylvania State University in 1965 and
an M.B.A. in Management from Wayne State University in 1970. Mr. Kerr has been a
Director of the Company since 1994.
Mr. Moats is President of W.B. Moats & Associates, Berwyn, Pennsylvania, a
marketing communications organization specializing in business to business
marketing. From 1975 to 1980 he was Senior Vice President - Corporate Marketing
and Public Relations of National Railway Utilization Corporation. Mr. Moats is a
graduate of the University of Miami, Florida as a marketing major specializing
in advertising. Mr. Moats has been a Director of the Company since 1994.
Age as of Term
Class C Directors Director since February 24, 1997 Expires
- ----------------- -------------- ----------------- -------
Leon Kopyt 1991 50 1999
Stanton Remer 1992 45 1999
Martin Blaire 1996 55 1999
Mr. Kopyt was appointed President and Chief Executive Officer on January
23, 1992 and from May 1, 1990 to that date served as Chief Operating Officer of
the Company. His prior positions with the Company were that of Chief Financial
Officer and Treasurer. Mr. Kopyt's prior experience includes serving as the
President and Chief Executive Officer of a transportation and defense products
manufacturing company. Mr. Kopyt holds a B.S. degree in Electrical Engineering
and has attended M.B.A. course work. Mr. Kopyt has been a Director of the
Company since 1991.
Mr. Remer was appointed Chief Financial Officer and Treasurer on May 19,
1994. Mr. Remer is a Certified Public Accountant with an M.B.A. in Finance from
Temple University and a B.S. in Textile Science from the Philadelphia College of
Textiles & Science. Mr. Remer has a diverse accounting and financial background.
Prior experiences include Chief Financial Officer for Sterling Supply
Corporation (1991-1992) and Managing Partner of a regional accounting firm
(1983-1991). Mr. Remer has been a Director of the Company since 1992.
Mr. Blaire was appointed the Executive Vice President on March 29, 1996.
Prior to its acquisition by the Company on March 11, 1996, Mr. Blaire was a
founder of The Consortium and Executive Vice President, Secretary and Treasurer
since its inception in 1975. Prior to founding The Consortium, Mr. Blaire was a
Branch Manager for Stromberg Datagraphix, a General Dynamics subsidiary that
manufacturers and sells computer output microfilm. He also held the position of
District Sales Manager for ITT Data Services. His previous experience was
heavily involved in accounting and finance. Mr. Blaire holds a B.B.A. in
Accounting from the University of Miami, Florida. Mr. Blaire has been a Director of the Company since 1996.
EXECUTIVE OFFICERS OF THE COMPANY
The following are the executive officers of the Company as of February 24, 1997March 2, 1998
who will serve until the next annual meeting of stockholdersshareholders or until their
successors are elected or appointed and qualified:
Name Age Position
---- --- --------
Leon Kopyt 5051 Chairman, Chief Executive Officer and Director
Barry S. Meyers 56 Chief Operating Officer, Executive Vice President
and Director
Martin Blaire 5556 Executive Vice President and Director
Stanton Remer 4547 Chief Financial Officer, Treasurer, Secretary and
Director
Peter R. Kaminsky 5758 Senior Vice President
For a summary of the business experience of Messrs.Kopyt, Meyers,Messrs. Kopyt, Blaire and
Remer, see "Proposal 1 - Election of Directors."
Peter R. Kaminsky became awas appointed Senior Vice President onin May 1, 1996. After
service in the U.S. Army during the Vietnam Era, Mr.
Kaminsky received his B.S.was the founder in Science from American University where he also completed graduate courses1985 of The Consortium of Maryland, Inc., a business
acquired by the Company in Information Systems. From 1965 to 1974,1996. Mr. Kaminsky wasKaminsky's prior experience includes
serving as Assistant to the President of a subsidiary of the Equitable Life
Assurance Society from 1965 to 1974, where his responsibilities included
management recruitment, acquisitions, marketing literature development and
public relations. Mr. Kaminsky was one of three
founders of The Consortium (New Jersey)holds a B.S. in 1974. In 1985, Mr. Kaminsky founded
The Consortium of Maryland, Inc. which was acquired by the Company in 1996.
Science from American University.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended October 31, 1996,1997, there were four (4) formal
meetings of the Board of Directors. Numerous other actions were undertaken by
consent resolutions. The Board of Directors has designated from among its
members an executiveExecutive Committee, which consists of
5
Messrs. Kopyt, Remer, Meyers and Blaire; a Compensation Committee, which
consists of Messrs. Moats and Kerr; and an Audit Committee, which consists of
Messrs. Kerr and Berson. The Executive Committee, which has the authority of the
Board of Directors to manage the business of the Company between formal meetings
of the full Board, held six (6) meetings during the fiscal year. The
Compensation Committee, which reviews and recommends salaries for officers and
administers certain of the Company's various stock option plans, held three (3)four 4
meetings during the fiscal year. The Audit Committee, which reviews the
Company's financial and accounting practices and controls, held three (3)
meeting during the fiscal year.
Directors who are in the employ of the Company do not receive any
directors' fees. Directors who are non-salaried received $750.00 for each
director's meeting they attend and $300.00 for each special committee meeting or
special assignment. Special assignments are duties performed by Board members in
addition to regularly assigned tasks as Board members. Mr. Berson waived all
fees related to his service on the Board. Fineman & Bach, P.C. of which Mr.
Berson is a shareholder, rendered legal services to the Company during 1996.
Report of the Compensation Committee1997.
REPORT OF THE COMPENSATION COMMITTEE
GENERAL. The Company's executive compensation program is administered by
the Compensation Committee of the Board of Directors of the Company (the
"Committee"), which is comprised of two independent directors, Robert B. Kerr
and Woodrow B. Moats, Jr. The Committee has oversight responsibility for the
implementation of executive compensation and the executive benefit programs of
the Company. The primary functions of the Committee include: (i) review, approvereviewing,
approving and determine,determining, in its discretion, the annual salary, bonus and other
benefits, direct and indirect, of the chief executive officer, other management
directors, all executive officers and designated other members of senior
management; (ii) reviewreviewing and submitsubmitting to the full Board, recommendations
concerning amendments to existing or the proposed adoption of any new stock
option plans; (iii) negotiate, review, approvenegotiating, reviewing, approving and determine,determining, in its
discretion, the adoption of any compensatory plans, arrangements or agreements
between the Company and any of the chief executive officer, other management
directors, all executive officers, and designated other members of senior
management (collectively, the "Key Executives") or any amendments thereto; and
(iv) establishestablishing and periodically reviewreviewing the Company's policies in the area
of management perquisites. GOALS. In determining the amount and composition of
executive compensation for the Key Executives and administering certain of the
various stock option plans, the Committee is guided by the following goals:
1 .1. Attract, motivate and retain the Key Executives necessary to the
Company's success by providing an executive compensation program comparable to
that offered by companies with which the Company competes for such Key
Executives;
2. Afford the Key Executives an opportunity to acquire or increase their
proprietary interest in the Company through the grant of options, stock
appreciation rights, and restricted stock awards to align the interests of the
Key Executives more closely with thatthose of the overall goals of the Company; and
6
3. Insuring that a substantial portion of the Key Executives' compensation
is variable and is tied to quantifiable short-term goals (annual performance)
and long-term measures (stock-based incentives awards) of the Company's
performance.
These principles are implemented through the Committee's application of
several factors which are considered in establishing the components of the Key
Executives' compensation package. As a general rule, the Company attempts to
structure a Key Executives' compensation package through the use of essentially
three elements: (i) a base salary which reflects individual performance and is
designed primarily to be competitive with salary levels of similar companies
with which the Company competes; (ii) annual discretionary bonuses, if any, tied
to the Company's achievement of performance goals; and (iii) long-term
incentives in the form of stock options or other Company securities which
strengthen the mutuality of interest between the Key Executives and the
Company's stockholders.shareholders. Additional factors are also taken into consideration,
but to a lesser extent. The Committee may, in its discretion, apply entirely
different factors, particularly different measures of financial performance, in
recommending and/or setting executive compensation for future fiscal years, but
all compensation decisions will be designed to further the general goals as
indicated above.
Base Salary. As a general matter, the Company attempts to establish base
salaries for each of its Key Executives based upon their individual performance
and contribution to the organization, as measured against executives of
comparable position in similar industries and companies. Many of the Company's
Key Executives, however, are employed under employment agreements that were
established in connection with certain of the Company's more recent acquisition
transactions. Accordingly, these arrangements were negotiated in the context of
an acquisition transaction and are generally based upon the executive's level of
compensation prior to the acquisition.
Annual Incentive Compensation. As a general matter, the Company attempts to
award bonuses on a discretionary basis based upon what the Committee views as
extraordinary contributions to the organization when measured against the
Company's achievement of certain performance goals. Since many of the Company's
Key Executives are employed under fixed rate employment agreements, awards of
incentive compensation have not been material to the Company. During fiscal
1996,1997, the only bonus granted was to Leon Kopyt for $50,900,$100,000, pursuant to his
employment agreement. No other incentive bonuses were granted to Key Executives
during fiscal 1996.1997.
Long-Term Incentives. The Committee intends to periodically consider the
grant of stock options or other Company securities to certain of its Key
Executives. The grants are designed to align the interests of each Key Executive
with those of the stockholdersshareholders and provide each individual with a significant
incentive to manage the Company from the perspective of an owner with an equity
stake in the business. Each grant is intended to permit the Key Executive to
acquire shares of the Company's common stockCommon Stock at a fixed price per share
(typically, the market price on the grant date) over a specified period of time
(typically up to ten years), thus providing a return to the Key Executive only
if the market price of the shares appreciates over the option term. The size of
the option grant to each Key Executive would be set to achieve a potential
7
percentage ownership stake in the Company that the Committee deems appropriate
in order to create a meaningful opportunity for stock ownership based upon the
individual's current position with the Company, but also takes into account the
individual's potential for future responsibility over the option term, the
individual's personal performance in recent periods and the individual's current
holdings of the Company's stock and options. 11,720During fiscal 1997, 500,000 options
were granted to Leon Kopyt pursuant to the terms and conditions of the 1996
Executive Stock Plan. These options were granted at an exercise price equal to
the fair market value of the Company's Common Stock on the date of grant and
were designed to incrementally vest based upon years of employment, subject to
full vesting in the event the Company's market capitalization reached $75.0
million. At the time of grant, the Company's market capitalization was
approximately $34.3 million. These options vested during fiscal 1997 as the
Company's market capitalization increased to over $130.0 million. These Options
were granted primarily to: (i) provide Mr. Kopyt with a material equity interest
in the Company in order to further align his interests with those of the
shareholders; and (ii) provide adequate recompense to Mr. Kopyt under whose
executive management the Company's revenues have grown from $26.9 million in
fiscal 1996.
Compensation1992 to $114 million in fiscal 1997, and whose operating income during
the same period has increased from $92,000 in 1992 to $5.6 million in 1997.
Furthermore, the use of Chief Executive Officeroptions was undertaken as a means in which to compensate
Mr. Kopyt without the use of Company capital which could otherwise be deployed
in operations and in a manner that, upon grant, resulted in no charge to the
Company's earnings.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Leon Kopyt is the Chairman of the Board and Chief Executive Officer of the
Company. Mr. Kopyt's compensation is determined pursuant to the goals and
principles described above and by the terms of his employment agreement. Following the review of the Company's performance duringDuring
fiscal 1996,1997, the Committee concluded that it was in the best interest of the
Company to provide Mr. Kopyt with a significant incentive to remain the
Company's Chairman and Chief Executive Officer on a long-term basis without
being subject to the risks associated with a change of control transaction.
Accordingly, effective as of
November 30, 1996,during fiscal 1997, the Company amended and restated an existing
termination benefits agreement dated December 1993 with Mr. Kopyt. See
"EXECUTIVE COMPENSATION - Change in Control Arrangements." The Committee
believes that Mr. Kopyt's compensation and other arrangements with the Company
fairly compensate him for his vision and leadership in developing the Company,
overseeing the successful acquisition and integration of several temporary
staffing service companies and generally guiding the Company to achieve its
goals and objectives.
Executive Compensation PolicyEXECUTIVE COMPENSATION POLICY
The Committee believes the Company's executive compensation program has
enabled the Company to attract, motivate and retain Key Executives by providing
competitive total compensation opportunity based on performance. Competitive
basedbase salaries that reflect each individual's level of responsibility and annual
variable performance-based incentive awards are important elements of the
Company's cash compensation policy. The Committee also believes that the grant
of options under the Company's various stock option plans not only aligns the
interests of the Key Executives with shareholders, but creates a competitive
advantage for the
8
Company as well. The Committee believes the Company's executive compensation
program strikes an appropriate balance between short and long-term performance
objectives. The Committee believes that the overall compensation package of the
Company's Key Executives is consistent with the Committee's stated goals and
objectives.
Compensation Committee of the Board of Directors
Robert B. Kerr
Woodrow B. Moats, Jr.
9
EXECUTIVE COMPENSATION
The following table sets forth the compensation of the Company's principal
executive officers for the fiscal year ended October 31, 1996.1997. Further, the
Company was not a party to any plans or arrangements providing cash or non-cash
forms of compensation to its principal executive officers, other than as listed
below.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options/SARs (#) Compensation($)
Leon Kopyt- ------------------ ---- ------ ----- ---------------- ---------------
Leon Kopyt(1) 1997 $300,000(2) $100,000(2) 500,000 $10,019(3)
President and CEO, 1996 $291,923 $50,900 11,720(*) $12,068(1)$ 50,900 11,720 $12,068(3)
(Principal Executive 1995 $249,161 $26,300$ 26,300 40,300 $11,062(1)$11,062(3)
Officer) 1994 $209,955 $40,500 30,000 $ 9,262(1)
Barry S. MeyersMeyers(4) 1997 $275,080 50,000 $ 9,105(3)
Executive Vice 1996 $159,351(5) $ 9,047(3)
President, COO
1996 $159,351(2) $ 9,047(1)
Stanton Remer 1997 $120,000 50,000 $ 2,650(3)
CFO, Treasurer,
Secretary 1996 $120,000 $ 2,544(1)
(Principal Accounting2,544(3)
Secretary 1995 $100,000 10,000 $ 2,345(1)2,345(3)
(Principal Accounting
Officer)
1994Martin Blaire(1) 1997 $275,080 50,000 $ 80,000 10,000 $ 2,334(1)
Martin Blaire2,662(3)
Executive Vice President 1996 $159,351(2)$159,351(5) $ 8,468(1)8,468(3)
President
Peter R. KaminskyKaminsky(1) 1997 $226,697 15,000
Senior Vice President 1996 $100,000(2) $ 5,000(1)$100,000(5)
(1) Pursuant to Employment Agreements with the Company.
(2) Mr. Kopyt's employment agreement was amended, effective January 1,1998,
providing for a base salary of $350,000. Mr. Kopyt's employment agreement
provided for bonuses during fiscal 1996 based upon a percentage of the
Company's consolidated operating profits before taxes. Effective for fiscal
1998 and thereafter, Mr. Kopyt is to receive a bonus of 2% of the Company's
consolidated operating profits before interest, taxes, depreciation and
amortization.
(3) Represents premiums paid for life and disability insurance.
(2)(4) Former Chief Operating Officer through February 1998.
(5) Reflects compensation for partial year employment.
10
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realized Value
of Assumed Rates of Stock
Price Appreciation for
Individual Grants Option Term
---------------------------------------- ------------------------Individual Grants
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or
Option/SARs Employees in Base Price Expiration
Name Granted(#)(1) Fiscal Year ($/Sh) Date 5% 10%
- ---- ------------- ----------- ------ ---- -- --------------- ---------- ---------- ---------- ----------
Leon Kopyt 11,720(*) 37.7% $5.00 3/1/500,000 68.2% $7.125 11/21/06 $36,853 $93,393$2,240,437 $5,667,708
Stanton Remer 50,000 6.8% $10.125 06/21/07 $318,378 $806,832
Barry S. Meyers 50,000 6.8% $10.125 06/21/07 $318,378 $806,832
Martin Blaire 50,000 6.8% $10.125 06/21/07 $318,378 $806,832
Peter R. Kaminsky 15,000 2.0% $10.125 06/21/07 $95,513 $242,050
(1) Options are exercisable one year from the date of the grant. Shares
received upon exercise of the option may not be sold for at least one year
from the date of exercise.
OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
Number of Securities
Underlying
ExercisedUnexercised Value of Unexercised
Options/SARs In-the-Money
at FY-End (#) Options/SARs at
Shares Shares FY-End ($)
Acquired on Exercisable/ Exercisable/
Name Exercise(#) Value Realized ($) Unexercisable Unexercisable
- ---- ----------- ------------------ ------------- --------------------------------- --------------------
Leon Kopyt 0 0 92,300/ $658,128/
11,720(*) $ 53,443604,020/0 $4,915,456/0
Stanton Remer 0 0 30,000/ $199,22550,000 $347,500/$218,750
Barry S. Meyers 0 - -----------------------0 0/50,000 0/$218,750
Martin Blaire 0 0 0/50,000 0/$218,750
Peter R. Kaminsky 0 0 0/15,000 0/$65,625
(*) Subsequent to the fiscal year end, the Board of Directors of the
Company adopted the Company's 1996 Executive Stock Plan which provides
for the issuance of Options, SAR's and Restricted Stock to qualifying
individuals. On November 21, 1996, Mr. Kopyt was granted 500,000
Options (of which 375,000 Options are not currently exercisable and are
subject to certain performance criteria). See "Stock Option Plans."11
Details of number of shares and value of unexercised "in the money" options
follows:
Name # Shares Option Price Price 10/31/9697 Per Share Total Value
- ---- -------- ------------ -------------- ----------------------- -----------
Leon Kopyt 104,020604,020 $1.09 - $5.00 $9.56 $4.56$7.125 $14.50 $7.38 - $8.47 $711,571$13.41 $4,915,456
Stanton Remer 30,00080,000 $2.66 - $3.44 $9.56 $6.12$10.125 $14.50 $4.38 - $6.90 $199,225$11.06 $566,250
Barry S. Meyers 50,000 $10.125 $14.50 $4.38 $218,750
Martin Blaire 50,000 $10.125 $14.50 $4.38 $218,750
Peter R. Kaminsky 15,000 $10.125 $14.50 $4.38 $65,625
Director Compensation
Members of the Board of Directors who are nonsalariednon-salaried receive $750 for
each Directors meeting they attend and $300 for each special committee meeting
or special assignment. The following table sets forth amounts payable to members
of the Board of Directors for the fiscal year ended October 31, 1996
Board of Directors Special
Director Meetings Assignments (a)
Leon Kopyt -- --
Barry S. Meyers -- --
Martin Blaire -- --
Stanton Remer -- --
Norman S. Berson (b) -- --
Robert B. Kerr $ 3,000 --
Woodrow B. Moats, Jr. 3,000 $ 4,060
-------- -------
$ 6,000 $ 4,060
======= =======
1997
Board of Directors Special
Director Meetings Assignments (a)
-------- ------------------ ---------------
Leon Kopyt
Barry S. Meyers
Martin Blaire
Stanton Remer
Norman S. Berson (b)
Robert B. Kerr $3,000
Woodrow B. Moats, Jr. 3,000 $4,060
$6,000 $4,060
====== ======
(a) Special assignments are duties performed by Board Members in addition to
regularly assigned tasks as Board Members.
(b) Mr. Berson does not receive fees for Directors or Committee meetings.
Executive Employment Agreements
The Company has employment agreements with each of Messrs. Kopyt, Meyers,
Blaire and Kaminsky which provide each executive officer with aan annual base
salary, vacation time and other standard benefits. Each of the employment agreements
provide for terms of employment as identified below and are terminable upon the
death of the executive officer or if the executive officer is discharged for
"good and sufficient cause." The employment agreements also include standard
non-disclosure/non-competition provisions governing the conduct of the executive
officer during and after employment.
Name Term
Barry S. Meyers March 11, 1996 to March 11, 1998 Martin Blaire March 11, 1996 to
March 11, 1998 Peter Kaminsky May 2, 1996 to May 2, 1998 Leon Kopyt March 1,
1996 to February 28, 1999 (*)
-----------------------
(*) The employment agreement isof
Mr. Blaire has a term of two years which commenced in March 1996 and provides
for a period of three years and contains
provisions for the automatic extension of his employment for additional
periods of one year.
In addition to base salary, certain of the employment agreements
provide for additional payments. Messrs. Blaire and Meyers' employment
agreements provide that each is to receive severance payments upon the earlier of the expiration of theirhis employment term
or the date they arehe is otherwise terminated without "goodfor good and sufficient cause." In such ancause, in which
event, the individualhe shall be entitled to continue to receive a salary at the level of his
existing salary for a period of one (1) year. Additionally, underyear, and Mr. Kaminsky's employment
agreement has a term of two years which commenced in May 1996. Mr. Kopyt's
agreement provides for a term of three years which commenced in March 1996, with
an automatic extension for additional periods of one year. Each of the
employment agreement, heagreements is to receive a bonus based onterminable upon the consolidated operating profits
before taxesdeath of the executive officer or
if the executive officer is discharged for each fiscal year as follow: (i) up to $750,000 - 3% bonus; (ii)
over $750,000cause. The employment agreements also
include non-disclosure/non-competition provisions governing the conduct of the
executive officer during and up to $1,500,000 - 2% bonus; and (iii) in excess of $1,500,000
- - 1% bonus. The bonus earned for fiscal 1996 amounted to $50,900.after employment.
12
Change in Control Arrangements
In December 1993, the Company entered into a termination benefits
agreementsTermination Benefits Agreement
with Leon Kopyt. This Agreement, asMr. Kopyt that was subsequently amended and restated effective
November 30, 1996, automatically extendsas of March 18, 1997
(the "Benefits Agreement"). Pursuant to the Benefits Agreement, following a
Change in Control (as defined therein), the remaining term of hisMr. Kopyt's
employment following a
"change in control"is extended for a period of five (5) years (the "Extended Term"). During
the Extended Term, the executive may terminate hisIf Mr. Kopyt's
employment for "good reason"
in the event of, among other things: (i) any change in executive's reporting
responsibilities and title; (ii) any change in the terms of executive's
employment; and (iii) any change in corporate strategy, direction of the
business or standing in the industry which in the executive's discretion renders
his continued employmentis terminated thereafter by the Company inconsistent withother than for cause, or by
Mr. Kopyt for good reason (including, among other things, a material change in
his employment goals
and objectives.
Uponsalary, title, reporting responsibilities or a termination for "good reason": (i)change in office location
which requires Mr. Kopyt to relocate), the Company shallis obligated to pay to executiveMr. Kopyt
a lump sum cash payment equal to the remaininghis salary and bonus otherwise due
duringfor the remainder of the Extended Term; (ii)
the exercise price of any stock option held by
the executive shalloptions to purchase 500,000 shares granted to Mr.
Kopyt under the 1996 Executive Stock Plan will be reduced to $.0150% of the average
market price of the Common Stock for the 60 days prior to the date of
termination if the resulting exercise price is less than the original exercise
price of $7.125 per share; and (iii) the Company shall be obligated to pay to executive an additionalMr.
Kopyt the amount sufficient to payof any excise or other
taxes incurred (in excess of ordinary income taxes) bytax associated with the benefits provided to him
by virtue of any ofunder the foregoing.
For the purpose of this agreement, a "change of control" shall be deemed to
occur if: (i) a person or group of persons become the beneficial owners of 20%
or more of the Company's voting stock; (ii) there occurs a contested proxy
solicitation of the Company's shareholders that results in the contesting party
obtaining the ability to vote 20% or more of the Company's voting stock; (iii) a
sale, exchange or disposition of substantially all of the assets of the Company,
or a merger, consolidation or reorganization of the Company; (iv) during any
period of two consecutive years there is a change in the majority of the Board
of Directors; or (v) if executive no longer serves as Chairman of the Company's
Board of Directors. Exceptions to the "change of control" rules apply in the
event of certain private placements, public offerings and other share issuances
approved by the Board of Directors.Benefits Agreement. Had there been a change in control as of January 1,October
31, 1997, andthe Company would have had he elected to terminate his employment immediately thereafter,pay Mr. Kopyt would have been
entitledan amount equal to
a payment of $2,950,000.approximately $2.1 million.
Compensation Pursuant to Stock Option Plans
Employee Benefit Plans
The Company maintains 401(k) plans as of October 31, 19961997 for the benefit
of eligible employees. The 401(k) plan is a profit-sharing plan, including a
cash or deferred arrangement pursuant to Section 401(k) of the Internal Revenue
Code of 1986, as amended (the "Code"), sponsored by the Company for purposes of
providing eligible employees an opportunity to defer compensation and have such
deferred amounts contributed to the 401(k) plan on a pre-tax basis, subject to
certain limitations. The Company may, at the discretion of the Board of
Directors, make contributions of cash to match deferrals of compensation by
participants. The Company made no contributions of cash to the 401(k) plans to
match deferrals of compensation by participants in the fiscal years ending
October 31, 1997, 1996, 1995, or 1994.1995. Amounts contributed to the 401(k) plans by
executive officers during the fiscal years ended October 31, 1997, 1996 and 1995
were $69,736, $13,380, and 1994 were $13,380,
$11,035, and $0, respectively. The amounts contributed by all
employee participants, excluding executive officers, during the period November
1, 1993 to October 31, 19961997 totaled $798,436.
Stock Option Plans
The Company believes that a key component to the compensation of its
executive officers should be through stock options. Stock options utilized by
the Company for this purpose have been designed to provide an incentive to these
employees by allowing them to directly participate in any increase in the
long-term value of the Company. This incentive is intended to reward, motivate
and retain the services of executive employees. Stock options are allocated to
both executive and non-executive employees on an annual basis by the
Compensation Committee.
13
The Company also attracts, rewards and retains the services of nonemployee
directors through the use of stock options. These awards are administered by the
full Board of Directors.
On February 27, 1986, the shareholders of the Company approved the RCM
Technologies, Inc. 1986 Incentive Stock Option Plan ("1986 Plan") which
authorized the issuance not later than October 30, 1995 of up to 60,000 shares
of Common Stock to officers, directors and key employees of the Company and its
subsidiaries. No options remain available for issuance under the 1986 Plan.
On April 23, 1992, the shareholders of the Company approved the RCM
Technologies, Inc. 1992 Incentive Stock Option Plan ("1992 Option Plan") which
authorized the issuance not later than February 13, 2002 of up to 100,000 shares
of Common Stock to officers, directors and key employees of the Company and its
subsidiaries. The 1986 and 1992 Option Plans contain substantially the same
terms.
Options under the 1986 and 1992 Plans are intended to be incentive stock options
pursuant to Section 422A of the Code. The option terms for the 1986 and 1992 Option Plans cannot exceed ten
years and the exercise price cannot be less than 100% of the fair market value
of the shares at the time of grant. ThreeNine hundred (300)(900) options remain available
for issuance under the 1992 Plan.Option Plan, however, the Board has submitted for
shareholder approval, an amendment to the 1992 Option Plan which would increase
the number of shares of common stock issuable under the plan from 100,000 to
500,000. See "Proposal 2 - APPROVAL OF AMENDMENT TO 1992 OPTION PLAN."
On May 19, 1994, the shareholders approved the RCM Technologies, Inc. 1994
Nonemployee DirectorsDirector Stock Option Plan ("1994Director Option Plan") as a means of
recruiting and retaining nonemployee directors of the Company. There are 80,000
shares of Common Stock authorized under this Plan for issuance no later than
July 19, 2004. All director stock options are granted at fair market value at
the date of grant. The exercise of options granted is contingent upon service as
a director for a period of one year. If the optionee ceases to be a director of
the Company before the end of the appropriate vesting period, any option granted
shall terminate. Ten thousand (10,000)No options remain available for issuance under the 1994 Plan.Director
Option Plan, however, the Board has submitted for shareholder approval, an
amendment to the Director Option Plan which would increase the number of shares
of common stock issuable under the plan from 80,000 to 180,000 and grant the
Board of Directors the ability to make discretionary awards thereunder. See
"Proposal 3 - APPROVAL OF AMENDMENT TO THE DIRECTOR OPTION PLAN."
On August 15, 1996, the Board of Directors approved the RCM Technologies,
Inc. 1996 Executive Stock Plan ("Executive Stock Plan") which authorized the
issuance not later than August 15, 2006 of up to 750,000 shares of the Company's Common Stock, and which amount
was later increased to 1,250,000 shares. Under its terms, key management
employees of the Company and its subsidiaries and members of the Board of
Directors of the Company and its subsidiaries are eligible to acquire or
increase their proprietary interest in the Company by the grant to such
individual of stock options, stock appreciation rights and awards of restricted
common stock. TheThree hundred eighty one thousand five hundred (381,500) options
remain available for issuance under the Executive Stock Plan isPlan.
The 1986, 1992 Option and Executive Stock Plans are administered by the
Compensation Committee (the "Compensation Committee") which is appointed by the
Board of Directors of the
14
Company and consists solely of two or more "non-employee"nonemployee directors" as defined
in Rule 16b-3(b)(3)(i) of the Securities Exchange Act of 1934 (the "Exchange
Act"). On November 21, 1996, the Company issued 500,000 options to its Chief
Executive Officer at an exercise price of $7.25. Of these, 125,000 are currently
exercisable and the remainder are subject to conditions to vesting relating to
certain performance criteria. Seven hundred and fifty thousand (750,000) options
remain available for issuance under the Executive Stock Plan.
Collectively, the 1986 Plan, 1992 Plan, 1994 Plan and the Executive Stock Plan
shall be referred to as the "Plans." The Compensation Committee employs no particular set of mechanical
criteria in awarding stock options under the Plans. Rather, it evaluates a
series of factors including: (i) the overall performance of the Company for the
fiscal year in question; (ii) the performance of the individual in question;
(iii) the anticipated contribution by the individual to the Company on an
overall basis; (iv) the historical level of compensation of the individual; (v)
the level of compensation of similarly situated executives in the Company's
history; and (vi) that level of combination of cash compensation and stock
options that would be required from a competitive point of view to retain the
services of a valued executive officer.
ComparisonThe Director Option Plan, as proposed to be amended herein, is administered
by the Board of Five-Year Cumulative Total ReturnsDirectors. The Board has the authority to interpret the
provisions of the plan, to determine all questions thereunder, and to adopt and
amend such rules and regulations for its administration as it deems advisable.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
The following graph comparesPerformance Graph sets forth the performanceCompany's total stockholder
return (i) as compared to the University of Chicago Graduate School of Business
CRSP Total Return Index for the Nasdaq Stock Market ("CRSP Index"), (ii) a Peer
Group selected in good faith by the Company, for October 31, 1992 through
October 31, 1997, the last day of the Company's Common Stock
withlast completed fiscal year and
(iii) an index of former peer companies selected by the performanceCompany for use in its
Proxy Statement for the 1997 Annual Meeting of Shareholders. The corporations
making up the Standard & Poor's 500 Composite Stock Price Index
("S&P 500 Index")current peer group consist of Alternative Resources Corp.; Data
Processing Corp.; Interim Services Inc.; Kelly Services; Registry, Inc.; Butler
International, Inc.; Headway Corporate Resources; Judge Group, Inc.; Olsten
Corp. and aSCB Computer Technology, Inc. These companies were selected based on
similarities in their service lines and their competitive position in the
industry. The corporations which were included in the Company's previous year's
peer group index by measuring the changes in common
stock prices from October 31, 1991, plus assumed reinvested dividends. The
Securities and Exchange Commission's rules require, if a published peer group
does not exist, that a company create a peer group index with which to compare
its stock performance by selecting a group of companies in lines of business
similar to its own. The Company has found no published peer group which
accurately mirrors the Company's business. Accordingly, the Company has created
a special peer group index that includes companies in the principal lines of
business in which the Company does business. The common stocks of the following
companies have been included in the Peer Group Index:were: American Consolidated Growth Corp.; Consolidated
Technology Group Ltd.; Digital Solutions, Inc.; Hospital Staffing Services,
Inc.; Joule, Inc.; Personnel Management, Inc.; Solomon Page Group Ltd.; and Winston
Resources, Inc. The chart assumes that $100 was invested on October 31, 19911992 in
the Company's Common Stock, the S&P 500CRSP Index and the Peer Group Index,peer group index, and that
all dividends were reinvested. In addition, the graph weighs the peer group on
the basis of its respective market capitalization, measured at the beginning of
each relevant time period.
[GRAPHIC OMITTED][RCM Technologies, Inc. Chart]
Comparison of 5 Year Cumulative Total Returns
Total Return Analysis
10/31/91
10/31/92 10/31/93 10/31/94 10/31/95 10/31/96 10/31/97
RCM Technologies, Inc.Inc $100 $17.50 $36.80 $36.80 $38.60 $108.10$210.00 $210.00 $220.00 $616.00 $928.00
Peer Group 1997 $100 $40.80 $30.80 $23.80 $14.90 $20.40
Nasdaq Composite (US)$101.10 $129.50 $141.10 $140.90 $151.70
Peer Group 1996 $100 $112.80 $145.30 $146.10 $196.70 $232.10$ 75.50 $ 58.40 $ 36.50 $ 50.10 $ 43.40
CRSP Index $100 $128.80 $129.60 $174.50 $205.90 $271.20
15
The Performance Graph above is presented in accordance with SEC
requirements. Stockholders are cautioned against drawing any conclusions from
the data contained herein, as past results are not necessarily indicative of
future stock performance. The Performance Graph in no way reflects the Company's
forecast of future stock price performance.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
The following table sets forth, as of the Record Date,March 2, 1998, information with
respect to the securities holdings of all persons which the company,Company, by virtue
of filings with the Securities and Exchange Commission, has reason to believe
may be deemed the beneficial owner of more than 5% of the Company's Common Stock
and the number of shares of the Company's Common
16
Stock owned by each director or nominee for director of the Company, and all
directors and officers of the Company as a group. Unless otherwise indicated,
each person set forth below has sole voting and investment power on the shares
reported. In addition, a person is deemed to have beneficial ownership of the
shares that such person has the right to acquire within sixty (60) days after the Record Date.
of
March 2, 1998.
Number Percentage
Directors and Officers of Shares(1) of Class(2)
---------------------- ------------ -----------
Leon Kopyt(3) 447 Waring Street
Philadelphia, PA 19116 880,745 16.2%672,432 8.2%
Barry S. Meyers 384 Highview Terrace
Ridgewood, NJ 07450 607,468 12.6%595,468 7.8%
Martin Blaire
32 Lewis Road
Irvington, NY 10535 607,468 12.6%Blaire(4) 571,468 7.5%
Stanton Remer(5)
113 Beverly Road
Wynnwood, PA 19090 34,000Remer(4) 30,000 *
Peter R. Kaminsky
7315 Wisconsin Avenue
Bethesda, MD 20814 56,327 1.2%Kaminsky(6) 55,265 *
Norman S. Berson(4)
2421 Spruce Street
Philadelphia, PA 19103Berson(5) 20,000 *
Robert B. Kerr(6)
115 White Horse Pike
Haddon Heights, NJ 08035Kerr(5) 20,000 *
Woodrow B. Moats, Jr.(6)
745 Old State Road
Berwyn, PA 19312(5) 20,000 *
Limeport Investments, LLC(7)
1760 MarketOther
-----
Wellington Management
75 State Street, 12th19th Floor
Philadelphia, PA 19101 276,625 5.7%
Mr. and Mrs. Philip J. Hempleman
& Sanford B. Prater
c/o Ardsley Advisory Partners
646 Steamboat Road
Greenwich, CT 06830 472,500 9.5%Boston, MA 02109 750,700 9.9%
All Directors and Officers
as a group (8 persons) 2,246,008 40.7%1,984,633 25.4%
*Represents less than 1% of the Company's outstanding Common Stock.
(1) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in
the regulations promulgated under the Exchange Act and, accordingly,
may include securities owned by or for, among others, the spouse
and/or minor children of an individual and any other relative who has
the same home as such individual, as well as other securities as to
which the individual has or shares voting or investment power or which
each person has the right to acquire within 60 days through the
exercise of options, or otherwise. Beneficial ownership may be
disclaimed as to certain of the securities. Percentage of ownership is
based upon 4,816,6767,634,131 shares of Common Stock outstanding as of February 24, 1997.March 2,
1998.
(2) 62,800 sharesThe address of Common Stock held in treasury were deducted from the
total Common Stock outstanding at February 24, 1997 when computing the
percentage of Common Stock.all directors and officers is c/o RCM Technologies,
Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109.
17
(3) Includes vested options to purchase 604,020 options (386,720 of which are not presently
exercisable)shares under the Company's
Plans and includes 276,62568,312 shares held
by Limeport Investments, LLC over which Mr. Kopyt has voting power
solely
with regard to the election of directors of the Company.
(4) Includes 20,000Does not include unexercisable options (10,000 of which are not presently exercisable)to purchase 50,000 shares under
the Company's Plans.
(5) Includes 30,000vested options exercisable options under the Company's Plans
and includes 4,000 Class C Common Stock Warrants at an exercise price
of $3.00 per share.
(6) Includesto purchase 20,000 options (16,000 of which are not presently
exercisableshares under the Company's
Plans. (7) Limeport Investments, LLC has granted voting rights over theseDoes not include unexercisable options to purchase 50,000
shares under the Company's Plans.
(6) Does not includes options to Leon Kopyt with respectpurchase unexercisable options to purchase
15,000 shares under the election of
directors. On all other matters, voting rights have been
retained by Limeport Investments, LLC.
Certain Voting ArrangementsCompany's Plans.
CERTAIN VOTING ARRANGEMENTS
1. On February 5, 1996, the Company issued and sold 276,625 shares of
Common Stock to Limeport Investments, LLC ("Limeport") in a private placement
transaction. In conjunction with this transaction, Limeport granted Mr. Kopyt an
irrevocable proxy entitling him to vote such shares solely in connection with
the election of directors of the Company, at any regular or special meeting of
the stockholders.
2. Effective August 31, 1995, the Company completed the acquisition of
Cataract, Inc. ("Cataract") pursuant to a Merger Agreement dated July 31, 1995
(the "Cataract Merger Agreement"). Pursuant to the terms of the Cataract Merger
Agreement, the former Cataract shareholders pledged until November 30, 1998,
approximately 312,311 shares of the Company's common stock ("Cataract Shares")
they received as part of the merger consideration, in order to guarantee certain
performance criteria of Cataract established in the Cataract Merger Agreement.
Following the expiration of the pledge period, the Cataract Shares are to be
placed in a voting trust until the earlier of: (i) the public or private sale of
such shares in open market transactions to unaffiliated third parties; or (ii)
the resignation or removal from office of Leon Kopyt, currently Chief Executive
Officer and President of the Company. Notwithstanding the above, one-third of
the Cataract Shares shall be released from trust commencing August 31, 2000, and
thereafter an additional one-third of the Cataract Shares shall be released from
trust upon each of August 31, 2001 and August 31, 2002. During the period in
which the Cataract Shares are subject to pledge and the voting trust, the
Cataract Shares are to be voted by the Company's Board of Directors on behalf of
the former shareholders of Cataract.
2. Effective March 11, 1996 the Company completed the acquisition of The
Consortium ("Consortium") pursuant to a Stock Purchase Agreement dated March 1,
1996 (the "Consortium Purchase Agreement"). Pursuant to the terms of the
Consortium Purchase Agreement, the former Consortium shareholders, which include
Messrs. Blaire and Meyers, directors and officers of the Company, agreed, among
other things, to vote the approximately 1,300,000 shares received by them in the
aggregate, under the Consortium Purchase Agreement ("Consortium Shares") in
connection with the election of directors of the Company for all of the
individuals nominated by a majority of the Board of Directors of the Company
and, unless the Company otherwise consents in writing, on all other matters to
be voted on by the shareholders of the Company, in accordance with the
recommendation of the majority of the Board of Directors; provided that the
Consortium Shares may be voted as such holders determine in their sole
discretion on any "Significant Event." The term "Significant Event" means any:
(i) sale of substantially all of the assets of the Company; (ii) acquisition of
the Company by a third party through a merger transaction in which the Company
is the target company; or (iii) transaction or series of related transactions
which results in the issuance and/or sale by the Company of more
18
than 20% of the outstanding capitalization on a fully diluted basis, if on a pro
forma basis, the proportionate net shareholders' equity of the former Consortium
shareholders after such proposed transaction would be diluted. These provisions
shall remain in effect until the earlier of: (i) the date upon which Mr. Leon
Kopyt no longer serves as an officer of the Company; or (ii) six months
following the date upon which both Messrs. Blaire and Meyers are terminated
without cause.
Mr. Blaire sold 36,000 shares of the Company on June 13, 1997, and Mr.
Meyers sold 12,000 shares during January 1998. Accordingly, approximately
1,252,000 shares remain subject to this voting arrangement.
Additionally, the Company has agreed to: (i) continue to nominate Messrs.
Blaire and Meyers to the Board of Directors; and (ii) cause Messrs. Blaire and
Meyers to be appointed to the Executive Committee of the Board of Directors, for
so long as: (A) the former Consortium shareholders, in the aggregate, continue
to own, directly or beneficially, 50% or more of the Consortium Shares (as
adjusted by any stock splits, recapitalization or other adjustments to the
capital stock of the Company), and (B) either of Messrs. Blaire or Meyers remain
as a management level employee of the Company; provided, however, that: (x) in
the event only one of Messrs. Blaire or Meyers is a management level employee,
then only that individual shall be entitled to the rights set forth in clauses
(i) and (ii) hereof; and (y) the provisions of clause (B) above shall not be
effective to abrogate the Company's obligations in clauses (i) and (ii) above if
the employment of either or both of Messrs. Blaire and Meyers is terminated by
the Company without cause; in which case the Company shall remain obligated to
undertake those actions identified in clauses (i) and (ii) hereof for the
remaining period of any employment agreements pursuant to which Messrs. Blaire
or Meyers were employed upon such termination.
3. Effective May 2, 1996, the Company completed the acquisition of The
Consortium of Maryland, Inc. ("Consort MD") pursuant to a Merger Agreement dated
April 23, 1996 (the "Consort MD Merger Agreement"). Pursuant to the terms of the
Consort MD Merger Agreement, Peter Kaminsky, the former sole shareholder of
Consort MD and an executive officer of the Company, agreed, among other things,
to vote the 55,265 shares received by him in connection with all matters to be
voted on by the shareholders of the Company, in accordance with the
recommendation of the majority of the Board of Directors. These provisions shall
remain in effect until the earlier of: (i) May 2, 1998; or (ii) the termination
of Mr. Kaminsky's employment agreement with the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Berson, a Director of the Company, is a shareholder in the law firm of
Fineman & Bach, P.C., which serves as counsel to the Company. The Company paid
legal fees of $65,887$68,000 during 1996fiscal 1997 to Fineman & Bach, P.C.
The Company has adopted a policy which requires that all transactions with
affiliates of the Company be approved by a majority of the disinterested
Directors of the Company and be on terms no less favorable to the Company than
can be obtained from unaffiliated persons. There have been
no transactions in excess of $60,000 with affiliates during the fiscal years
ended October 31, 1997, 1996 1995 or 1994,1995, except as set forth above.
19
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Based solely on its review of the copies of forms filed pursuant to Section
16(a) of the Securities Exchange Act of 1934, requires directors
and written representations from
certain officers ofreporting persons that no Forms 5 were required for those persons, the Company, as well as persons who own more than 10% of
a registered class of the Company's equity securities ("Reporting Persons"), to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission. The
Company believes that all Reporting
Personsfilings required to be made by reporting persons under
Section 16(a) were made on a timely basis.
PROPOSAL 2
APPROVAL OF AMENDMENT TO
1992 INCENTIVE STOCK OPTION PLAN
The Shareholders are being asked to vote on a proposal to amend the 1992
Incentive Stock Option Plan (the "1992 Option Plan") to increase the number of
shares of Company common stock issuable thereunder by 400,000 shares to 500,000
shares. The Board of Directors believes that the share increase is necessary in
order to ensure that the Company will continue to have timely compliedthe ability in the future
to attract and retain the services of highly qualified officers and other
employees by providing them with adequate equity incentives in the form of stock
option grants. As of February 6, 1998, 900 shares were available for future
issuance under the 1992 Option Plan. Although executive officers are eligible to
receive awards under the 1992 Option Plan, the Board currently intends that the
1992 Option Plan be utilized primarily, although not exclusively, to compensate
officers and other employees who are not executive officers. The Board currently
intends that the Company's 1996 Executive Stock Plan will be the primary vehicle
by which stock incentive awards are made to executive officers.
The terms and provisions of the 1992 Option Plan, as proposed to be
amended, are described more fully below. The description, however, is not
intended to be a complete summary of all filing requirementsthe terms of the 1992 Option Plan. The
1992 Option Plan, as it is proposed to be amended, is attached to this Proxy
Statement as Exhibit A. The statements made in this Proxy Statement with respect
to the 1992 Option Plan and the proposed amendments should be read in
conjunction with and are qualified in their entirety by reference to Exhibit A.
Because executive officers (who may also be members of the Board) are
eligible to receive awards under the 1992 Option Plan, each of them has a
personal interest in the approval of these amendments.
Purpose. The Board believes that it is in the best interests of the Company
to maintain an equity incentive program which will provide a meaningful
opportunity for officers, employees and directors who are also full-time
employees to acquire a substantial proprietary interest in the enterprise and
thereby encourage such individuals to remain in the Company's service and more
closely align their interests with those of the shareholders.
Administration. The 1992 Option Plan is administered by a committee of the
Board of Directors or the full Board of Directors (in either case, the "Plan
Administrator"). The Plan Administrator shall construe and interpret the 1992
Option Plan and establish such rules as it deems necessary for the proper
administration of the 1992 Option Plan. The Plan Administrator has authority
(subject to full Board review) to determine which eligible individuals are to
receive
20
option grants, the number of shares to be covered by each granted option, the
date or dates on which the option is to become exercisable, and the price of the
option.
Eligibility. Under the 1992 Option Plan, all full-time employees of the
Company or its subsidiaries (including those who are officers and directors),
non-employee directors and independent consultants are eligible to receive
options pursuant to the 1992 Option Plan, if selected.
Type of Options, Price and Exercisability. Nonqualified and incentive stock
options may be granted under the 1992 Option Plan. The term of options granted
under the 1992 Option Plan will be fixed by the Plan Administrator provided,
however, that the maximum option term may not exceed ten (10) years from the
grant date and the exercise price per share may not be less than the fair market
value per share of the Company Common Stock on the grant date. Fair market value
shall mean the mean between the bona fide bid and asked prices as reported by
NASDAQ or the mean between the highest and lowest quoted price on the principal
national securities exchange on which the Common Stock is listed on the date of
grant or if there are no reported sales on such date, then the last reported
sales price on the next preceding day on which such a sale was transacted. The
exercise price may be paid in cash or in shares of Company Common Stock;
provided however that shares of common stock used to pay the exercise price must
have been owned by the participant for a six-month period prior to the exercise
date or such longer period as the Plan Administrator determines. No optionee is
to have any shareholder rights with respect to the option shares until such
optionee has exercised the option and paid the exercise price for the purchased
shares. Options are not assignable or transferable other than by will or the
laws of inheritance, and, during the optionee's lifetime, the option may be
exercised only by such optionee.
Termination of Employment. If the employee to whom an option is granted
shall cease to be employed by the Company or its subsidiaries for any reason,
including death, then, within the three (3) months next succeeding such
termination of employment, but in any event not later than the expiration date
of the option, the option holder, his executor, administrator, or any person or
persons to whom the option holder's rights under the option shall pass by
testamentary transfer, bequest or by the operation of the laws of descent and
distribution, may exercise the option rights granted to the option holder under
the option, but only to the extent that the option holder was entitled to
exercise the same on the date of such termination of employment. Notwithstanding
the foregoing, the Plan Administrator may, in its discretion, extend the
post-termination exercise period to a date not later than the original
expiration date of such option.
Amendment and Termination. Under the 1992 Option Plan, the Board of
Directors may modify, amend, or terminate the 1992 Option Plan at any time. No
modification, amendment, or termination of the 1992 Option Plan shall adversely
affect the rights of a participant under a grant previously made to him without
the consent of such participant..
Corporate Transaction. If the Company shall liquidate or dissolve, or shall
be a party to a merger or consolidation to which the Company shall be the
surviving corporation, other than a merger or consolidation involving only a
change in the state of incorporation or an internal
21
reorganization not involving a change in underlying ownership, the Company shall
give written notice thereof to all holders of options issued pursuant to the
1992 Option Plan at least thirty (30) days prior to the effective date thereof,
and the holders shall have the right within said thirty-day period to exercise
their options in full to the extent not previously exercised; provided, however,
that in no event shall such options be exercised after the specific expiration
date set forth in the option agreements applicable thereto. To the extent that
options shall not have been exercised on or prior to them.the effective date of such
liquidation, dissolution, merger or consolidation, they shall terminate on that
date.
New Plan Benefits and Closing Quotation. Because the grant of awards under
the 1992 Option Plan are at the discretion of the Plan Administrator, it is not
possible to indicate what awards will be made to eligible participants.
As of March 2, 1998, the closing price of the Company's Common Stock as
quoted on the Nasdaq National Market System was $21.00.
Federal Income Tax Consequences.
(a) Nonqualified Options. Under the current applicable provisions of the
Internal Revenue Code, no tax will be payable by the recipient of an option at
the time of grant. Upon exercise of a nonqualified option, the excess, if any,
of the fair market value of the shares with respect to which the option is
exercised over the total option exercise price of such shares will be treated
for Federal tax purposes as ordinary income. Any profit or loss realized on the
sale or exchange of any shares actually received will be treated as capital gain
or loss. The Company will be entitled to deduct the amount, if any, by which the
fair market value on the date of exercise of the shares with respect to which
the option was exercised exceeds the exercise price.
(b) Incentive Stock Options. With respect to an incentive stock option,
generally, no taxable gain or loss will be recognized when the option is granted
or exercised. Incentive stock options exercised more than three months after
termination of employment will be taxed in the same manner as nonqualified
options described above. Generally, upon exercise of an incentive stock option,
the spread between the fair market value and the exercise price will be an item
of tax preference for the purposes of the alternative minimum tax.
If the shares acquired upon the exercise of an incentive stock option are
held for at least one year, any gain or loss realized upon their sale will be
treated as long-term capital gain or loss. The Company will not be entitled to a
deduction. If the shares are not held for the one-year period, ordinary income
will be recognized in an amount equal to the difference between the exercise
price and the fair market value of the common stock on the date the option is
exercised. The Company will be entitled to a deduction equal to the amount of
ordinary income so recognized. If the shares are not held for the one-year-
period and the amount realized upon sale is less than the exercise price, such
difference will be a capital loss.
Shareholder Approval. The amendments are being submitted to the
shareholders of the Company in compliance with certain rules of the Nasdaq Stock
Market. The affirmative vote of a majority of the shares of the Company common
stock present or represented and entitled to
22
vote at the Annual Meeting is required for the approval of the amendment to the
1992 Option Plan. If the shareholders do not approve the proposal, then the 1992
Option Plan will continue in effect in accordance with its existing provisions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL TO AMEND THE 1992
OPTION PLAN.
PROPOSAL 3
APPROVAL OF AMENDMENT TO
1994 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
The shareholders are being asked to vote on a proposal to approve certain
amendments to the 1994 Nonemployee Director Stock Option Plan (the "Director
Option Plan"), including an amendment to increase the number of shares issuable
thereunder by 100,000 shares to 180,000 shares from 80,000 shares and an
amendment to grant the Board of Directors the discretion to determine the amount
and terms of stock option awards under the Director Option Plan in lieu of the
nondiscretionary, formulaic manner contained in the current version of the
Director Option Plan. The amendment to increase the number of shares of Common
Stock available for issuance under the Director Option Plan is being submitted
to shareholders to ensure that the Company has the continued ability to use
stock options as a way to more closely align the interests of nonemployee
directors with the shareholders and as a way to attract and retain highly
qualified nonemployee directors. As of March 2, 1998 all 80,000 shares reserved
for issuance were subject to outstanding options. The second amendment will
allow the Company to take advantage of recent amendments to Rule 16b-3 of the
Exchange Act which have eliminated the regulatory basis for requiring that stock
option grants to nonemployee directors be made on a formula basis.
The terms and provisions of the Director Option Plan, as proposed to be
amended, are described more fully below. The description, however, is not
intended to be a complete summary of all the terms of the Director Option Plan
and is qualified in its entirety by reference to terms of the Director Option
Plan. The Director Option Plan, as it is proposed to be amended, is attached to
this Proxy Statement as Exhibit B.
Purpose. The purpose of the Director Option Plan is to make service on the
Board more attractive to present and prospective nonemployee Board members. The
continued service of qualified nonemployee directors is considered essential to
the management, growth and sustained financial success of the Company and it is
in the Company's best interest to provide them with an increased incentive to
work for the success of the Company.
Administration. The Director Option Plan is administered by the Board of
Directors of the Company. The Board has the authority to interpret the
provisions of the Director Option Plan, to determine all questions thereunder
and to adopt and amend such rules and regulations for the administration of the
Director Option Plan as they deem desirable.
Eligibility. Options may be granted only to nonemployee directors of the
Company or of a subsidiary.
23
Option Grants. Under the terms of the Director Option Plan, as proposed to
be amended, the Board will have the authority to determine the number of options
granted to each nonemployee director and the terms of such grants. Currently
awards under the Director Option Plan are nondiscretionary and each individual
who is first elected or appointed to the Board of Directors as a nonemployee
Board member (other than pursuant to any contractual or other right or
arrangement) receives an automatic grant to purchase 10,000 shares of common
stock at the time of such initial election or appointment.
Type of Options, Price and Exercisability. Awards under the Director Option
Plan consist of Non-Qualified Stock Options. The option exercise price per share
for all options granted under the Director Option Plan will be 100% of the fair
market value of the Common Stock on the date of grant. An option shall terminate
and not be exercisable after ten (10) years from the date on which such option
is granted. If an optionee ceases to be a director of the Company or its
subsidiaries by reason of permanent or total disability, any option granted to
him may be exercised by him in whole or in part within one (1) year after the
date of termination as a director by reason of such disability whether or not
the option was otherwise exercisable at the date of termination. In the event of
death of an optionee while serving as a director, any option granted to him may
be exercised in whole or in part at any time after the date of such death by the
executor or administrator of his estate whether or not the option was otherwise
exercisable at the date of death. Upon exercise of the option, the option price
for the purchased shares must be paid in cash or in shares of Company common
stock valued at fair market value on the date of exercise.
Options granted under the Director Option Plan must be exercised for no
fewer than one hundred (100) shares (unless the remaining shares which have
become subject to purchase are fewer than one hundred (100)). No option may be
transferred by the optionee other than by will or by the laws of descent and
distributions, and each option is exercisable during the optionee's lifetime
only by the optionee.
New Plan Benefits and Closing Quotation. Because the grant of awards under
the Director Option Plan, as proposed to be amended, will be at the discretion
of the Board, it is not possible to indicate what awards will be made to persons
eligible for participation in the Director Option Plan.
As of March 2, 1998, the closing price of the Company's Common Stock as
reported on the Nasdaq National Market was $21.00.
Amendment and Termination. Under the Director Option Plan, the Board of
Directors may modify, amend, or terminate the Director Option Plan at any time
except that, to the extent then required by applicable law, rule, or regulation,
approval of the holders of a majority of shares of Common Stock represented in
person or by proxy at a meeting of the shareholders will be required to increase
the maximum number of shares of Common Stock available for distribution under
the Director Option Plan (other than increases due to adjustments in accordance
with the Director Option Plan). No modification, amendment, or termination of
the
24
Director Option Plan shall adversely affect the rights of a participant under a
grant previously made to him without the consent of such participant.
Federal Income Tax Consequences. Under the current applicable provisions of
the Internal Revenue Code, no tax will be payable by the recipient of a stock
option granted under the amended Director Option Plan at the time of grant. Upon
exercise of an option, the excess, if any, of the fair market value of the
shares with respect to which the option is exercised over the total exercise
price of such shares will be treated for Federal tax purposes as ordinary
income. Any profit or loss realized on the sale or exchange of any share
actually received will be treated as a capital gain or loss. The Company will be
entitled to deduct the amount, if any, by which the fair market value on the
date of exercise of the shares with respect to which the option was exercised
exceeds the exercise price.
Shareholder Approval. The amendments are being submitted to the
shareholders of the Company in compliance with certain rules of the Nasdaq Stock
Market and the terms of the Directors Option Plan as last approved. The
affirmative vote of a majority of the shares of Company Common Stock present or
represented and entitled to vote at the Annual Meeting is required for the
approval of the amendment to the Director Option Plan. If the shareholders do
not approve the amendment, then the Director Option Plan will continue in effect
in accordance with its existing provisions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL TO AMEND THE DIRECTOR
OPTION PLAN.
PROPOSAL 4
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has appointed Grant Thornton LLP, independent
certified public accountants, as independent auditors of the Company for the
fiscal year ending October 31, 1997.1998. Representatives of Grant Thornton LLP are
expected to be present at the Meeting to respond to appropriate questions.
Vote Required for Approval
The affirmative vote of a majority of the shares present in person or by
proxy is required for ratification of Grant Thornton LLP as the Company's
independent auditors for the fiscal year ending October 31, 1997.1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF GRANT THORNTON
LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE 19971998 FISCAL YEAR.
25
OTHER MATTERS
The Board of Directors does not know of any other matter which is intended
to be brought before the Meeting, but if such matter is presented, the persons
named in the enclosed proxy intend to vote the same according to their best
judgment.
The enclosed proxy may be revoked by a later-dated proxy, by giving notice
to the Secretary of the Company in writing prior to the meeting or by personal
notification at the Meeting prior to the voting.
EXPENSES OF SOLICITATION
The cost of this proxy solicitation will be borne by the Company. In
addition to the use of mail, proxies may be solicited in person or by telephone
by employees of the Company without additional compensation. The Company will
reimburse brokers and other persons holding stock in their names or in the names
of nominees for their expenses incurred in sending proxy material to principals
or obtaining their proxies.
1997 STOCKHOLDER1999 SHAREHOLDER PROPOSALS
In order for stockholdershareholder proposals for the 19971999 Annual Meeting of
StockholdersShareholder to be eligible for inclusion in the Company's 19971999 proxy statement,
they must be received by the Company at its principal office in Pennsauken, New
Jersey, on or before October 28, 1997.November 7, 1998.
By order of the Board of Directors
Leon Kopyt, Chief Executive Officer
26
EXHIBIT A
RCM TECHNOLOGIES, INC.
1992 INCENTIVE STOCK OPTION PLAN
1. Purpose.
This Proxy1992 Incentive Stock Option Plan (the "Plan") is Solicitedintended as an
incentive to encourage stock ownership by key employees of RCM Technologies,
Inc., a Nevada corporation (the "Company"), or its subsidiaries by granting such
key employees options to purchase shares of Common Stock, par value $0.05 per
share (the "Common Shares"), of the Company so that they may acquire or increase
and retain a proprietary interest in the success of the Company and its
Subsidiaries. The Plan is intended to promote and advance the interest of the
Company and its stockholders by encouraging such key employees to enter into or
remain in the employment of the Company or its Subsidiaries and to put forth
maximum efforts for the success of the Company and its Subsidiaries.
2. Eligibility.
The following parties shall be eligible to receive options pursuant to the
Plan: (i) all full-time employees of the Company or its subsidiaries, including
those who are officers and directors; (ii) directors of the Company or its
Subsidiaries who are not employees of such entities; and (iii) independent
consultants whom the Plan Administrator believes have contributed, or will
contribute, to the success of the Company.
3. Shares Subject to the Plan.
Options may be granted under the Plan only for Common Shares of the Company
and in the form of Incentive Stock Options or in the form of Nonqualified Stock
Options (as defined herein). The maximum aggregate number of Common Shares for
which options may be granted under the Plan shall be 500,000. If during the term
of the Plan there shall be a stock split, stock dividend or other change in the
Company's capitalization, the aggregate number of Common Shares for which
options may be granted under this Plan, the number of Common Shares subject to
outstanding options and the price per Common Share of such options shall be
appropriately and proportionately adjusted to reflect the same. If any
outstanding option under the Plan for any reason expires or is terminated
without having been exercised in full, the Common Shares allocable to the
unexercised portion of such option shall (unless the Plan shall have been
terminated) become available for subsequent grants of options under the Plan.
Stock Options with respect to no more than 400,000 shares of Stock may be
granted to any one individual participant during any one calendar year period.
4. Administration of the Plan.
The Plan shall be administered by the full Board of Directors of the
Company or a committee of such Board of Directors comprised of two or more
"Nonemployee Directors" (the "Plan Administrator") within the meaning of Rule
16b-3(a)(3) promulgated under the Securities Exchange Act of 1934, as amended
(the "Act"). Subject to the provisions of the Plan, the Plan Administrator is
authorized to:
(a) construe the Plan and any award under the Plan;
(b) select the directors, officers, employees and consultants of the
Company and its Subsidiaries to whom awards may be granted;
(c) determine the number of shares of Stock to be covered by any award;
(d) determine and modify from time to time the terms and conditions,
including restrictions, of any award and to approve the form of
written instrument evidencing awards;
(e) accelerate at any time the exercisability or vesting of all or any
portion of any award and/or to include provisions in awards providing
for such acceleration;
(f) impose limitations on Behalfawards, including limitations on transfer and
repurchase provisions; and
(g) extend the exercise period within which the options may be exercised.
The determination of the Plan Administrator on any such matters shall be
conclusive.
5. Delegation of Authority to Grant Awards. The Plan Administrator, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Plan Administrator's authority and duties with respect to granting
awards to individuals who are not subject to the reporting provisions of Section
16 of the Act or "covered employees" within the meaning of Section 162(m) of the
Code. The Plan Administrator may revoke or amend the terms of such a delegation
at any time, but such revocation shall not invalidate prior actions of the Chief
Executive Officer that were consistent with the terms of the Plan.
6. Granting of Options.
The Plan Administrator shall, in its sole and absolute discretion, from
time to time, select those persons to whom options to purchase Common Shares may
be granted under this Plan, as well as the term and number of Common Shares
subject to each option, the exercise price of each option and such other terms
of options granted under the Plan as the Committee deems appropriate.
- 2 -
7. Terms and Conditions of Options.
Options granted pursuant to the Plan shall be evidenced by agreements in
such form as the Plan Administrator shall from time to time determine. All such
agreements shall incorporate this Plan by reference and shall be subject to all
the terms and conditions of the Plan, including, but not limited to, the
following:
(a) All options shall be granted on or before February 13, 2002. The date
on which the Plan Administrator grants an option to an employee of the
Company shall be considered the date of grant of the option. Each
option agreement shall state the date of grant of the option.
(b) Each option agreement shall state the number of Common Shares for
which the option is granted.
(c) Each option agreement shall state the period during which the option
may be exercised, which period shall end not more than ten (10) years
after the date the option is granted.
(d) The option price, which shall be stated in the option agreement, shall
not be less than the "Fair Market Value" of the Common Shares subject
to the option on the date the option is granted. Fair Market Value
shall be the mean between the bona fide bid and asked prices as
reported by NASDAQ or the mean between the highest and lowest quoted
selling price on the principal national securities exchange on which
the Common Shares are listed, on the date of grant or, if there are no
reported sales on such date, then the last reported sales price on the
next preceding day on which such a sale was transacted. If an optionee
owns (or is deemed to own under applicable provisions of the Code and
rules and regulations promulgated thereunder) more than ten percent
(10%) of the combined voting power of all classes of the stock of the
Company and an option granted to such optionee is intended to qualify
as an Incentive Stock Option, the option price shall be no less than
110% of the Fair Market Value of the Common Stock covered by the
Option on the date the Option is granted.
(e) No option shall be transferable by the person to whom it is granted,
except by will or the laws of descent and distribution, and shall be
exercisable during his or her lifetime only by such person. Any
attempted assignment, transfer, pledge, hypothecation or other
disposition of an option contrary to the provisions hereof, and the
levy of any execution, attachment or similar process upon an option,
shall thereupon cause the option to terminate and be canceled, and
such option shall then be null and void and without effect.
- 3 -
(f) Unless otherwise provided by the Plan Administrator, if the employee
to whom an option is granted shall cease to be employed by the Company
or its Subsidiaries for any reason, including death, then, within the
three (3) months next succeeding such termination or employment, but
in any event not later than the expiration date of the option, the
option holder, his executor, administrator, or any person or persons
to whom the option holder's rights under the option shall pass by
testamentary transfer, bequest or by the operation of the laws of
descent and distribution, may exercise the option rights granted to
the option holder under the option, but only to the extent that the
option holder was entitled to exercise the same on the date of such
termination of employment. Options not exercised within the period set
forth in the preceding sentence shall expire at the end of such period
and shall not be exercisable thereafter.
(g) If a participant who is a director of the Company shall cease to serve
as a director of the Company, any options then exercisable by such
director may be exercised only within three months after the cessation
of service and within the option period unless such cessation was due
to disability, in which case such optionee may exercise and within the
option period.
(h) The aggregate Fair Market Value of shares of Stock with respect to
which Incentive Stock Options are first exercisable by the optionee in
any calendar year (under all plans of the Company) shall not exceed
the limitations, if any, imposed by Section 422(d) of the Code (or any
successor provision). If any option designated as an Incentive Stock
Option, either alone or in conjunction with any other option or
options, exceeds the foregoing limitation, the portion of such option
in excess of such limitation shall automatically be reclassified (in
whole share increments and without fractional share portions) as a
Non-Qualified Stock Option, with later granted options being so
reclassified first.
(i) If the Company shall liquidate or dissolve, or shall be a party to a
merger or consolidation to which the Company shall not be the
surviving corporation, other than a merger or consolidation involving
only a change in the state of incorporation or an internal
reorganization not involving a change in underlying ownership, the
Company shall give written notice thereof to all holders of options
issued pursuant to the Plan at least thirty (30) days prior to the
effective date thereof, and the holders shall have the right within
said thirty-day period to exercise their options in full to the extent
not previously exercised; provided, however, that in no event shall
such options be exercised after the specific expiration date set forth
in the option agreements applicable thereto. To the extent that
options shall not have been exercised on or prior to the effective
date of such liquidation, dissolution, merger or consolidation, they
shall terminate on that date.
- 4 -
(j) The option exercise price of each share purchased pursuant to an
option shall be paid in full at the time of each exercise (the
"Payment Date") of the option (i) in cash; (ii) by delivering to the
Company a notice of exercise with an irrevocable direction to a
broker-dealer registered under the Act to sell a sufficient portion of
the shares and deliver the sale proceeds directly to the Company to
pay the exercise price; (iii) in the discretion of the Plan
Administrator, through the delivery to the Company of previously-owned
shares of Common Stock having an aggregate Fair Market Value equal to
the option exercise price of the shares being purchased pursuant to
the exercise of the option; provided, however, that shares of Common
Stock delivered in payment of the option price must have been held by
the participant for at least six (6) months in order to be utilized to
pay the option price; (iv) in the discretion of the Plan
Administrator, through an election to have shares of Common Stock
otherwise issuable to the optionee withheld to pay the exercise price
of such option; or (v) in the discretion of the Plan Administrator,
through any combination of the payment procedures set forth in
subsections (i)-(iv) of this Section 7(i).
8. General.
(a) For purposes of the Plan, the following terms shall have the following
meanings:
(i) "Parent" or "Subsidiary" shall have the meanings set forth in
Section 424 of the Internal Revenue Code of 1986, as amended, or
any comparable provision of any succeeding comparable federal tax
law.
(ii) "Incentive Stock Option" or "ISO" shall have the meaning set
forth in Section 422 of the Internal Revenue Code of 1986,
as amended, or any comparable provision of the succeeding
comparable federal tax law.
(iii) The "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(iv) "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(b) The Plan Administrator , subject to the approval of the Board, shall
have the sole right and authority to amend, modify or terminate the
Plan at any time and to construe and interpret the Plan and any option
granted hereunder, and to establish, amend and rescind rules and
regulations for its administration; provided however, that no such
action or amendment shall
- 5 -
deprive any person, without such person's consent, of any rights
theretofore granted with respect to outstanding options issued under
the Plan.
(c) No holder of an option granted under this Plan shall have any rights
as a stockholder or otherwise with respect to the Common Shares
subject to an option until the option shall have been exercised with
respect to such Common Shares as herein provided. No option granted
under this Plan shall be exercised before the Common Shares subject to
the Plan have been registered or qualified for sale under appropriate
federal and state securities laws.
(d) The Plan became effective on the date of its adoption by the Board.
The Plan shall terminate upon the earlier of (i) February 13, 2002; or
(ii) the date on which all Common Shares available for issuane under
the Plan have been issued pursuant to the exercise of options granted
hereunder; or (iii) the determination of the Board or the Plan
Administrator, subject to the approval of the Board, that the Plan
shall terminate. No options may be granted under the Plan after such
termination date, provided that options granted and outstanding on
such date shall continue to have force and effect in accordance with
the provision of the documents evidencing such options.
(e) The proceeds received by the Company from the sale of Common Shares
pursuant to the exercise of options granted under this Plan shall be
used for general corporate purposes. The expenses of the Plan shall be
borne by the Company.
(f) If any provision of this Plan shall cause the Plan to violate any
provision of any applicable law, rule or governmental regulation or to
be considered null and void, such provision shall be severed from the
Plan and shall be null and void or shall be deemed null and void ab
initio, as shall be appropriate or necessary, and the Plan shall
continue in full force and effect as if such provision were not part
of the Plan.
- 6 -
9. Compliance with Governmental Regulations.
Notwithstanding any provision of the Plan or the terms of any agreement
entered into pursuant to the Plan, the Company shall not be required to issue
any shares hereunder prior to registration of the shares subject to the Plan
under the Securities Act of 1933 or the Act, if such registration shall be
necessary, or before compliance by the Company or any participant with any other
provisions of either of those acts or of regulations or rulings of the
Securities and Exchange Commission thereunder, or before compliance with other
federal and state laws and regulations and rulings thereunder, including the
rules of any applicable exchange or of the Nasdaq Stock Market. The Company
shall use its best efforts to effect such registrations and to comply with such
laws, regulations and rulings forthwith upon advice by its counsel that any such
registration or compliance is necessary.
10. Compliance with Section 16.
With respect to persons subject to Section 16 of the Act, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 (or its successor rule and shall be construed to the fullest extent
possible in a manner consistent with this intent). To the extent that any award
fails to so comply, it shall be deemed to be modified to the extent permitted by
law and to the extent deemed advisable by the Plan Administrator in order to
comply with Rule 16b-3.
11. Governing Law.
The terms of any options granted hereunder and the rights and obligations
hereunder of the Company, the holders of such options and their successors in
interest shall, except to the extent governed by federal law, be governed by
Nevada law.
12. Government and Other Regulations.
The obligations of the Company to issue or transfer and deliver shares
under the options granted under the Plan shall be subject to compliance with all
applicable laws, governmental rules and regulations and administrative action.
- 7 -
EXHIBIT B
RCM TECHNOLOGIES, INC.
1994 NONEMPLOYEE DIRECTOR
STOCK OPTION PLAN
1. Purpose.
The purpose of the RCM Technologies, Inc., Nonemployee Director Stock
Option Plan (the "Plan") is to provide to certain nonemployee directors of RCM
Technologies, Inc. (the "Corporation") and any majority-owned or wholly-owned
subsidiary (individually a "Subsidiary" and collectively the "Subsidiaries") who
are materially responsible for the overall direction of the business of the
Corporation or a Subsidiary, a favorable opportunity to acquire shares of Common
Stock of the Corporation, thereby providing them with an increased incentive to
work for the success of the Corporation and the Subsidiaries and better enabling
each such entity to attract and retain capable directors.
2. Administration of the Plan.
The Plan shall be administered by the entire Board of Directors of the
Corporation (the "Board"). The Board shall have the power to, among other
things, to:
(a) select the nonemployee directors to whom stock options under the
Plan may be granted, and
(b) determine the number of shares and terms granted to individual
nonemployee directors under the Plan.
The Board shall have the power to interpret the Plan, to determine all questions
thereunder and to adopt and amend such rules and regulations for the
administration of the Plan as it deems desirable. Any interpretation,
determination or other action made or taken by the Board shall be final, binding
and conclusive. No member of the Board shall be personally liable for any
interpretation, determination or other action made in good faith with respect to
the Plan or any option granted hereunder.
3. Awards.
Awards under the Plan shall consist of Non-Qualified Stock Options.
4. Eligibility.
Options may be granted only to nonemployee directors of the Corporation or
of a Subsidiary ("Optionees").
5. Stock Subject to the Plan.
There shall be reserved for issuance upon the exercise of options granted
under the Plan, One Hundred and Eighty Thousand (180,000) shares of Common
Stock, $.05 par value (the "Reserved Shares"), of the Corporation which may be
authorized but unissued shares or treasury shares of the Corporation. Subject to
Section 7 hereof, the shares for which options may be granted under the Plan
shall not exceed that number. If any option shall expire or terminate for any
reason without having been exercised in full, then the shares allocable to the
unexercised portion of such option shall not be charged against the limitation
of this Section 5 and may again become the subject of an option granted under
this Plan.
6. Terms of Option.
Each option granted under the Plan shall be evidenced by a Stock Option
Agreement between the Corporation and the Optionee and shall be subject to the
following terms and conditions:
(a) Option Price. The price to be paid for shares of stock upon the
exercise of each option shall be the "Fair Market Value" on the date of
grant. As used herein, Fair Market Value shall be the last reported sales
price of the Common Stock of the Corporation, or, if there are no reported
sales on such date, then the last reported sales price on the next
preceding day on which a sale is transacted, in either case on the
principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the last sale price reported
on the National Association of Securities Dealers Automated Quotation
System on such date.
(b) Period for Exercise of Option. Except where other provisions of
the Plan provide for a different exercise period, each option will become
exercisable at such times as may be determined by the Board at the time of
grant; however, such term may not exceed ten years from the date of grant.
(c) Purchase of Shares. The option price of each share of stock
purchased upon exercise of an option shall be paid in full (i) in cash, at
the time of such exercise; (ii) by delivering to the Company a notice of
exercise with an irrevocable direction to a broker-dealer registered
under the Securities Exchange Act of 1934, as amended, to sell a sufficient
portion of the shares and deliver the sale proceeds directly to the Company
to pay the exercise price; (iii) with a combination of the Corporation's
Common Stock, $.05 par value, owned by him, and cash, provided that such
previously owned shares delivered for payment have been owned by the
Optionee for at least six months; (iv) in the discretion of the Board,
through an election to have shares of Common Stock otherwise issuable to
the optionee withheld to pay the exercise
- 2 -
price of such option; or (v) in the discretion of the Board, through any
combination of the payment procedures set forth in subsections (i)-(iv) of
this Section 6(c). For this purpose, any shares so tendered by an Optionee
shall be deemed to have a Fair Market Value equal to the average of the
closing sales price for the shares on any national securities exchange on
which such shares are listed (or, if listed on more than one such exchange,
then on the one located in New York City) or, if not so listed, the closing
price reported on the National Association of Securities Dealers, Inc.
Automated Quotation System (NASDAQ), for the five trading days preceding
the date of exercise of the option. An option may be exercised at any time
and from time to time during the term of the option as to any or all whole
shares which have become subject to purchase pursuant to the terms of the
option or the Plan, but not at any time as to fewer than one hundred (100)
shares unless the remaining shares which have become subject to purchase
are fewer than one hundred (100) shares. An option may be exercised only by
written notice to the Corporation, mailed to the attention of the Secretary
of the Corporation, signed by the Optionee (or such other persons as shall
demonstrate to the Corporation his or their right to exercise the Option),
specifying the number of shares in respect of which it is being exercised,
and accompanied by payment of the option price for such shares. The
certificate or certificates for the shares as to which the option is
exercised shall be registered in the name of the person or persons so
exercising the option and shall be delivered to or upon the order of such
person or persons as soon as practicable after such written notice is
received by the Corporation. An Optionee shall not have any rights of a
shareholder in respect of the shares subject to an option until a
certificate representing such shares has been issued.
(d) Termination of Option. If an Optionee ceases to be a nonemployee
director of the Corporation or the Subsidiaries for any reason other than
permanent and total disability (within the meaning of Section 22(e)(3) of
the Code), or death, any option granted to him shall forthwith terminate.
Leave of absence approved by the Board of Directors The undersigned
hereby appoints Leon Kopytshall not constitute
cessation of such directorship for the purposes of the Plan. If an Optionee
ceases to be a director of the Corporation or its Subsidiaries by reason of
permanent or total disability (within the meaning of Section 22(e)(3) of
the Code), any option granted to him may be exercised by him in whole or in
part within one (1) year after the date of termination as a director by
reason of such disability whether or not the option was otherwise
exercisable at the date of such termination of his director services. In
the event of the death of an Optionee while serving as a director, any
option granted to him may be exercised in whole or in part at any time
after the date of such death by the executor or administrator of his estate
or by the person or persons entitled to the option by will or by applicable
laws of descent and Stanton Remerdistribution until the expiration of the option term,
whether or not the option was otherwise exercisable at the date of death.
Notwithstanding the foregoing provisions of this subsection (d) no option
shall, in any event, be exercisable after the expiration of the period set
out in subsection (b) above.
(e) Nontransferability of Option. An option may not be transferred by
the Optionee otherwise than by will or the laws of descent and
distribution, and during the lifetime of the Optionee shall be exercisable
only by him (or by his guardian or legal representative, should one be
appointed).
- 3 -
(f) Investment Representations. Unless the shares subject to an option
are registered under the applicable federal and state securities laws, each
of them Proxies with powerOptionee by accepting the option shall be deemed to appoint a substituteagree for himself and
hereby authorizes themhis legal representatives that any option granted to representhim and to voteany and all
shares of Common Stock purchased upon the exercise of RCM Technologies, Inc. heldoption shall be
acquired for investment and not with a view to, or for the sale in
connection with, any distribution thereof, and each notice of recordthe exercise
of any portion of an option shall be accompanied by a representation in
writing, signed by the undersigned on February 17, 1997 atOptionee or his legal representatives, as the Annual Meetingcase
may be, that the shares of StockholdersCommon Stock are being acquired in good faith
for investment and not with a view to, or for the sale in connection with,
any distribution thereof (except in case of RCM
Technologies, Inc.the Optionee's legal
representatives for distribution, but not for sale, to be held on April 25, 1997his legal heirs,
legatees and atother testamentary beneficiaries). Any shares issued pursuant
to an exercise of an option may bear a legend evidencing such
representation and limitation.
7. Adjustment of Shares.
In the event of any adjournments thereof,change after the effective date of the Plan in the
outstanding stock of the Corporation by reason of any reorganization,
recapitalization, stock split, stock dividend, combination of shares, exchange
of shares, merger or consolidation, liquidation, or any other change after the
effective date of the Plan in the nature of the shares of stock of the
Corporation, the Corporation shall make a corresponding adjustment in the number
and to vote as directed onkind of shares reserved under the reverse side of this formPlan, and in their
discretion, upon such other matters not specifiedthe option price and the
number and kind of shares covered by outstanding options granted under the Plan
as may properly come before
said meeting.
1. Proposal 1 -
Election of Directors
Nominees: Norman S. Berson and Barry S. Meyers
FOR all nominees listed above, except vote withheld fromdetermined by the following
nominee(s):
__________________________________
WITHHELDBoard. Any determination by the Board hereunder shall be
conclusive.
8. Amendment.
The Board of Directors recommends a vote FOR Proposal 1
2. Proposal 2 -
Ratification of Grant Thornton LLP as the Company's independent
auditors for the 1997 Fiscal Year.
FOR AGAINST ABSTAIN
The Board of Directors recommends a vote FOR Proposal 2
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN, IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED, FOR THE ELECTION OF DIRECTORS AND FOR APPROVAL OF THE
RATIFICATION OF GRANT THORNTON LLP AS INDEPENDENT AUDITORS FOR
THE COMPANY.
The undersigned hereby acknowledges receipt of the noticeCorporation may modify, amend or terminate
the Plan at any time except that, to the extent then required by applicable law,
rule or regulation, approval of the holders of a majority of shares of Common
Stock represented in person or by proxy at a meeting of the shareholders will be
required to increase the maximum number of shares of Common Stock available for
distribution under the Plan (other than an increase due to adjustments in
accordance with the Plan). No amendment of the Plan, however, may, without the
consent of the Optionees, make any change in any outstanding options therefor
granted under the Plan which would adversely affect the rights of such
Optionees.
9. Termination.
The Plan shall terminate upon the earlier to occur of (a) the date on which
all shares available for issuance under the Plan have been issued pursuant to
the exercise of options granted hereunder, or (b) the determination of the Board
that the Plan shall terminate; or (c) ten years and two months after the date of
approval of the Plan by the shareholders of the Corporation, as originally
adopted. Any termination by the Board shall not affect the validity of any
option therefor granted under the Plan.
- 4 -
10. Governing Law.
The terms of any options granted hereunder and the rights and obligations
hereunder of the Corporation, the Optionees and their successors in interest
shall, except to the extent governed by federal law, be governed by Nevada law.
11. Government and Other Regulations.
The obligations of the Corporation to issue or transfer and deliver shares
under the options granted under the Plan shall be subject to compliance with all
applicable laws, governmental rules and regulations and administrative action.
12. Effective Date.
The Plan became effective on the date of the approval of the Plan at the
1994 Annual Meeting nd Proxy Statement.
PLEASE SIGN, DATE AND RETURN YOUR
PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE REQUIRED IF
MAILED IN THE UNITED STATES.
NOTE: Please sign name(s) exactly as printed
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee
or guardian, please give full title as such.
_________________________________________
Signature
_________________________________________
Dateof Shareholders. Any options granted pursuant to the Plan
may not be exercised until all applicable Federal and State securities
requirements pertaining to the offer and sale of securities issued pursuant to
the Plan have been met and the Corporation has been advised by counsel that all
applicable legal requirements have been met.
- 5 -