SCHEDULE 14A(Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATIONProxy Statement Pursuant to Section 14(a) of the Filed by the Registrant [X] Check the appropriate box: |
[_] Preliminary Proxy Statement | [_] Soliciting Material Under Rule 14a-12 |
[_] Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[X] Definitive Proxy Statement |
[_] Definitive Additional Materials |
Semotus Solutions, Inc. —————————————————————————————— 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 Statement No.: ——————————————————————————————————————— |
(3) | Filing Party: ——————————————————————————————————————— |
(4) | Date Filed: ——————————————————————————————————————— |
1. Elect five (5) directors to the Board of Directors of the Company to serve for a one-year term; |
2. Ratify the appointment of BDO Seidman LLP as the Company’s independent accountants for the fiscal year ending March 31, 2002; and |
3. Approve an amendment to the Company’s 1996 Stock Option Plan to increase the number of shares of common stock issuable upon the exercise of stock options granted under the Plan from 3,500,000 to 4,345,000 shares; and |
4. Transact such other business as may properly come before the meeting or any adjournment thereof. |
Enclosed with this letter is a Proxy Statement, a proxy card and a return envelope. Also enclosed is Semotus Solutions’ Annual Report on Form 10-KSB for the fiscal year ended March 31, 2001. Only holders of common stock of the Company of record at the close of business on July 20, 2001 are entitled to notice of and to vote at the Annual Meeting. The Board of Directors of the Corporation is soliciting the proxies. Your vote is very important to us. All stockholders, whether or not you expect to attend the Annual Meeting of Stockholders in person, are urged to sign and date the enclosed Proxy and return it promptly in the enclosed postage-paid envelope which requires no additional postage if mailed in the United States. If you attend the meeting, you may vote in person, even though you have previously returned your proxy. |
BY ORDER OF THE BOARD OF DIRECTORS /s/ Anthony N. LaPine Anthony N. LaPine President |
San Jose, California |
TABLE OF CONTENTS |
1. Elect five directors, each for a one-year term; |
2. Ratify the appointment by the Board of Directors of the firm of BDO Seidman LLP as independent public accountants of Semotus for the fiscal year ending March 31, 2002; |
3. Approve an amendment to the Company’s 1996 Stock Option Plan to increase the number of shares of common stock issuable upon the exercise of stock options granted under the Plan from 3,500,000 to 4,345,000 shares; and |
4. Such other matters as may properly come before the meeting. |
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THESE PROPOSALS. On July 27, 2001, we began mailing this proxy statement to people who, according to our records, owned shares of common stock in Semotus as of the close of business on July 20, 2001. We have mailed with this proxy statement a copy of Semotus’ Annual Report on Form 10-KSB for the fiscal year ended March 31, 2001. 1 |
— | You may notify the Secretary of Semotus Solutions in writing that you wish to revoke your proxy. Please contact: Semotus Solutions, Inc., 1735 Technology Drive, Suite 790, San Jose, California 95110, Attention: Tali Durant, General Counsel and Secretary. We must receive your notice before the time of the Annual Meeting. |
— | You may submit a proxy dated later than your original proxy. |
— | You may attend the Annual Meeting and vote. Merely attending the Annual Meeting will not by itself revoke a proxy; you must obtain a ballot and vote your shares to revoke the proxy. |
3 |
Audit Fees | $203,316 | ||
All Other Fees | $ 3,610 |
5 |
— | each person (or group of affiliated persons) known by us to own beneficially more than five percent of our common stock; |
— | each of our directors, our chief executive officer and the five other most highly paid executive officers; and |
— | all our directors and officers as a group. |
7 |
Information as to beneficial ownership is based upon statements furnished to the Company by such persons. Each individual has sole voting and investment power over the shares, except as otherwise noted. For the purposes of calculating percentage ownership as of July 6, 2001, 16,948,917 shares were issued and outstanding and, for any individual who beneficially owns shares represented by options or warrants exercisable on or before September 4, 2001, these shares are treated as if outstanding for that person, but not for any other person. Unless otherwise indicated, the address of each of the individuals and entities named below is: c/o Semotus Solutions, Inc., 1735 Technology Drive, Suite 790, San Jose, CA 95110. |
NAME AND ADDRESS OF BENEFICIAL OWNERS | NUMBER OF SHARES | PERCENT | |||
---|---|---|---|---|---|
Directors and Executive Officers: | |||||
Anthony LaPine | 2,115,424 | (1) | 11.7 | % | |
Charles K. Dargan, II | 40,000 | (2) | * | ||
Fredrick M. Hoar | 3,334 | (3) | * | ||
555 Twin Dolphin Drive | |||||
Suite 650 | |||||
Redwood City, CA 94065 | |||||
Jason Pavona | 40,000 | (4) | * | ||
400-2 Totten Pond Rd | |||||
Waltham, MA 02451 | |||||
Scott Goodsell | 10,000 | (5) | * | ||
55 S. Market St., Ste. 1660 | |||||
San Jose, CA 95113 | |||||
Pamela LaPine | 2,115,424 | (6) | 11.7 | % | |
Tony Travis | 3,333 | (7) | * | ||
All Officers and Directors as a Group | 2,289,918 | (8) | 12.6 | % | |
(10 Persons) | |||||
5% Stockholders: | |||||
Brown Simpson Partners I, Ltd | 2,565,308 | (9) | 13.5 | % |
8 |
* | Less than 1% |
(1) | Includes 1,003,000 shares of common stock owned directly by Mr. LaPine; exercisable warrants to purchase 700,000 shares of common stock; exercisable options to purchase 335,064 of common stock;and 1,000 shares of common stock and exercisable options to purchase 76,360 shares of common stock owned by Mr. LaPine’s wife, Pamela LaPine, the Company’s President of Financial Services, as set forth below. |
(2) | Includes exercisable options to purchase 40,000 shares of common stock. |
(3) | Includes exercisable options to purchase 3,334 shares of common stock. |
(4) | Includes exercisable options to purchase 40,000 shares of common stock. |
(5) | Includes exercisable options to purchase 10,000 shares of common stock. |
(6) | Includes 1,000 shares of common stock owned directly by Pamela LaPine; exercisable options to purchase 76,360 shares of common stock; and 1,003,000 shares of common stock, exercisable options to purchase 335,064 shares of common stock, and exercisable warrants to purchase 700,000 shares of common stock owned by Mrs. LaPine’s husband, Anthony LaPine, President and Chief Executive Officer of the Company, as set forth above. |
(7) | Includes exercisable options to purchase 3,333 shares of common stock. |
(8) | Includes the shares listed above as beneficially owned by Messrs. LaPine, Dargan, Hoar, Pavona, Goodsell and Travis and Mrs. LaPine, and 71,161 shares of common stock underlying currently exercisable options held by other executive officers of the Company. |
(9) | Includes 473,000 shares of common stock owned directly by Brown Simpson Partners I, Ltd.; exercisable warrants to purchase 1,153,846 shares of common stock; and 469,231 shares of Series B convertible preferred shares that convert into 938,462 shares of common stock. |
9 |
NAME | AGE | POSITIONS | |||
---|---|---|---|---|---|
Anthony N. LaPine | 59 | Chairman of the Board, President, and Chief Executive Officer | |||
Charles K. Dargan, II | 46 | Director, Chief Financial and Accounting Officer | |||
Frederick M. Hoar(1) | 55 | Director | |||
Jason Pavona(1) | 29 | Director | |||
Scott Goodsell(1) | 43 | Director | |||
Taliesin Durant | 30 | Secretary and General Counsel | |||
Cornel R. Fota | 34 | Chief Technical Officer | |||
Pamela B. LaPine | 43 | Executive Vice President and President -Financial Services | |||
Tony Travis | 32 | Vice President -Sales | |||
Valerie Goodwin | 39 | Vice President -Marketing |
(1) | Member of the Audit Committee |
There is no family relationship between any Director or Executive Officer of the Company except that Anthony N. LaPine and Pamela B. LaPine are husband and wife. There are no known arrangements or understandings between any director or executive officer and any other person pursuant to which any of the above-named executive officers or directors was selected as an officer or director of the Company. 10 |
Anthony N. LaPine has been the Company’s President and one of its directors since June of 1996. In June of 1997 Mr. LaPine was elected Chief Executive Officer of the Company, and in August of 1997, Mr. LaPine was elected Chairman of the Board. Mr. LaPine’s career began at IBM where he served as a member of the engineering team that developed the modern disc drive. In 1969 he was recruited as one of the founders of Memorex’s Equipment Group where he was instrumental in developing the floppy disc drive. After the sale of Memorex to Unisys, Mr. LaPine was recruited to re-engineer the Irwin/Olivetti Company, where he orchestrated the invention of the first removable cartridge tape backup in personal computers. Subsequently, he formed LaPine Technology, raised thirty million dollars and launched the 31/2-inch Winchester disk drive technology that is now the industry standard. Mr. LaPine then sold LaPine Technology, and formed the LaPine Group, a private investment and management-consulting firm. Mr. LaPine received a BSEE Cum Laude, from San Jose State University, an MSEE from the University of Santa Clara and an MBA from the University of San Francisco. He later became an alumnus of Stanford’s Graduate School of Business through their Executive Program. Charles K. Dargan, II has been a member of the Company’s Board of Directors since March 1999. He was the Executive Vice President of Operations and Administration for the Company from April 2000 to January 2001, at which time Mr. Dargan became the Company’s Chief Financial and Accounting Officer. Prior to joining Semotus Solutions, Mr. Dargan served as a Managing Director of Corporate Finance for The Seidler Companies Incorporated, a private brokerage, investment banking and public finance firm. In addition, he was a partner and Chief Financial Officer of the investment banking firm of Ambient Capital, was a Managing Director of Corporate Finance at L.H. Friend, Weinress, Frankson & Presson, Inc., and a First Vice President at Drexel Burnham Lambert, Incorporated. His accounting and financial industry experience has made him an expert in public and private debt and equity finance, mergers and acquisitions and financial management of and planning for emerging growth companies. Mr. Dargan graduated from the University of Southern California with an MBA and an MS in Finance, and possesses an A.B. in Government and Economics from Dartmouth College. He also holds accounting and finance industry certifications of Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA). Mr. Hoar has served as a Director of the Company since March 1998. He has over 35 years of experience in public affairs, financial relations and marketing. Currently he is Chairman at Miller Shandwick Technologies. He has shaped and implemented communications strategies for some of America’s seminal technology-based companies, including Apple, Fairchild, Genentech, Raychem and RCA. Mr. Hoar joined Boston-based Miller Communications, a leading international high-tech public relations agency, in 1989. He subsequently became president of Miller/Shandwick Technologies West, with responsibility for offices in Silicon Valley, Los Angeles and Dallas. In 1997 he was named to the additional position of chairman of Shandwick Technologies. Mr. Hoar has provided strategic counsel for a wide range of clients, including Compaq Computer, Hewlett Packard, Motorola, Philips Electronics and Symantec. Mr. Hoar holds a B.A. degree cum laude in American history and literature from Harvard College and an M.A. in editorial journalism from the University of Iowa. Mr. Pavona has served on Semotus’ Board of Directors since February of 2000. In May of 2001, Mr. Pavona became Vice President, Corporate Strategy and Business Development at Wallaware, Inc., a wireless web company. Previously, from September 1998 to May 2001, Mr. Pavona was the Director of Wireless Strategy and Personalization for Lycos Network. Before tackling the wireless space, Mr. Pavona managed Lycos’two most challenging accounts: Microsoft and Netscape. Prior to joining Lycos, Mr. Pavona was instrumental in the creation of INPHO, Inc., a venture capital funded Internet real estate venture. Mr. Pavona holds a Bachelor of Science degree in Finance and Entrepreneurial Studies, Cum laude from Babson College. He currently serves on the Board of Directors of several other privately held Internet start-up companies. Scott Goodsell became a member of the Company’s Board of Directors in June of 2001. Mr. Goodsell has been a Certified Internal Auditor since 1982 and brings extensive accounting and financial experience to the Board. He has been a Principal and CFO at Campeau Goodsell Diemer since 1991. Mr. Goodsell holds a B.S. degree in Accounting and Management from Brigham Young University and a J.D. from the University of Santa Clara. 11 |
Taliesin (Tali) Durant joined the Company in August 1999 and became the Corporate Secretary in January 2000. Ms. Durant provides legal counsel for all of Semotus Solutions’corporate, financial and business matters. This includes the drafting and negotiation of agreements connected to the development as well as the distribution, sale and licensing of the Company’s services and technology. She also plays a crucial role in the Company’s business development and merger and acquisition strategy. Ms. Durant possesses expertise in a number of business and legal issues including those related to merger and acquisition agreements, intellectual property licensing, as well as in software development and service contracts. Durant has experience providing legal guidance in the areas of consumer protection, small business development and contracts, telecommunications, and intellectual property safeguards. Ms. Durant is a member of the American Corporate Counsel Association, the American Bar Association, and the California State Bar Association. She is an alumna of the Northwestern School of Law at Lewis and Clark College, and has specific legal expertise in the area of high technology. Durant holds a Bachelor of Arts in Economics from Connecticut College. Cornel Fota has been employed with the Company since 1996 and currently serves as our Chief Technical Officer (CTO). Mr. Fota joined the Company in 1996 as a senior software engineer and was involved in developing Semotus’ core products and technologies. From July 1997 to August 1998 he was a Software Development Manager for the Company. Mr. Fota moved to the position of Director of Engineering from August to October of 1998, and then became Semotus’ Vice President of Engineering until he was promoted to CTO in January 2001. Mr. Fota has experience in the analysis, design, implementation and management of software-based projects. His areas of expertise include real-time systems, Internet technologies, serial communications, paging protocols and object-oriented analysis and design. Mr. Fota is responsible for managing the Company’s development, production and information systems groups. Before joining the Company, he was involved with the development of various Microsoft-based systems. Mr. Fota has a Master of Science in Software Engineering from the Technical University of Bucharest, Romania. He also holds a post-graduate management degree from Ecole Nationale des Ponts et Chaussees, Paris, France. Pamela LaPine began with the Company in 1996 and currently serves as Executive Vice President and President of Financial Services. She is responsible for the sales, account management and strategic direction behind the Company’s Financial Services division and product line. Mrs. LaPine began as the Company’s Director of Administration in 1996 and then moved to Vice President of Operations in 1997. In October of 1998 she moved into the position of Vice President of Marketing, and in 2000 was promoted to Executive Vice President and President of Financial Services. Pamela LaPine is a seasoned business professional with over 20 years of management experience in Silicon Valley high tech companies. She has extensive experience in corporate operations, finance, marketing and business development. Mrs. LaPine started her management career as Marketing Director at Digital Recording Corporation, and then transitioned to LaPine Technologies, where she was responsible for strategic planning. She has also held executive positions with Partners Petroleum and Olympiad Corporation. Mrs. LaPine did her undergraduate studies at the University of Utah. Valerie Goodwin became the Company’s Vice President of Marketing in June 2000. Ms. Goodwin manages the Company’s entire marketing efforts, which consists of overseeing Semotus Solutions’ product development, marketing, Internet technology, public relations, and corporate communication divisions. Prior to joining Semotus Solutions, Ms. Goodwin served as Vice President of Marketing at GetMedia, Inc., a San Jose based pre-IPO, new media company. In this role she was responsible for the development and execution of the company’s marketing strategies and public relations activities. Goodwin also has experience as a marketing consultant, developing marketing strategies for pre-IPO companies on behalf of venture capitalists for portfolio companies. In addition, she has held strategic positions in a marketing capacity for Cadence Design Systems, Inc. and Madge Networks in Silicon Valley, CA. Ms. Goodwin possesses a B.A. in Advertising from San Jose State University. 12 |
ANNUAL COMPENSATION | LONG-TERM COMPENSATION AWARDS | PAYOUTS | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
NAME AND PRINCIPAL POSITION | YEAR | SALARY | BONUS | OTHER ANNUAL COMPENSATION | RESTRICTED STOCK AWARD(S) | SECURITIES UNDERLYING OPTIONS/ SARS (NUMBER) | LTIP PAYOUTS | ALL OTHER COMPEN- SATION | |||||||||
Anthony LaPine | 2001 | $240,000 | — | 11,000 | (1) | — | 300,000 | — | — | ||||||||
CEO and President and | 2000 | $240,000 | — | 11,000 | (1) | — | 810,000 | (2) | — | — | |||||||
Chairman of the Board | 1999 | $140,000 | — | 11,000 | (1) | — | — | — | — | ||||||||
Charles K. Dargan, II | 2001 | $155,000 | — | — | — | 140,000 | — | — | |||||||||
Chief Financial and | 2000 | $155,000 | $25,000 | (3) | — | — | 220,000 | — | — | ||||||||
Accounting Officer | 1999 | — | — | — | — | — | — | — | |||||||||
and Director | |||||||||||||||||
Valerie Goodwin | 2001 | $117,000 | $16,000 | (4) | — | — | 70,000 | — | — | ||||||||
Vice President of | 2000 | — | — | — | — | — | — | — | |||||||||
Marketing | 1999 | — | — | — | — | — | — | — | |||||||||
Tony Travis | 2001 | $ 80,000 | $40,000 | 12,000 | (1) | — | 25,000 | — | — | ||||||||
Vice President of | 2000 | $ 60,000 | $22,500 | 6,050 | (1) | — | 20,000 | — | — | ||||||||
Sales(5) | 1999 | — | — | — | — | — | — | — | |||||||||
Pamela LaPine | 2001 | $ 98,000 | — | 7,500 | (1) | — | 250,000 | — | — | ||||||||
Executive Vice President | 2000 | $ 80,000 | — | 6,000 | (1) | — | 50,000 | — | — | ||||||||
And President, Financial | 1999 | $ 70,000 | — | 6,000 | (1) | — | — | — | — | ||||||||
Services | |||||||||||||||||
Stas Wolk | 2001 | $149,000 | $70,000 | (3) | — | — | 160,000 | — | — | ||||||||
Chief Operating | |||||||||||||||||
Officer (6) |
(1) | Represents automobile allowances. |
(2) | Represents options to purchase 510,000 shares of common stock and warrants to purchase 300,000 shares of common stock. |
(3) | Represents moving expense allowance. |
(4) | Represents a signing bonus. |
(5) | Mr. Travis became Vice President of Sales in June 2001 and was not an executive officer as of March 31, 2001. |
(6) | Mr. Wolk was Chief Operating Officer from May 30, 2000 to January 2001 and was not an executive officer as of March 31, 2001. |
14 |
NAME | NUMBER OF SECURITIES UNDERLYING OPTIONS GRANTED (#)(*) | % OF TOTAL OPTIONS GRANTED TO EMPLOYEES IN FISCAL YEAR | EXERCISE PRICE PER SHARE ($) | EXPIRATION DATE | |||||
---|---|---|---|---|---|---|---|---|---|
Anthony LaPine | 300,000 | (1) | 8.6 | % | $2.25 | 03/05/11 | |||
Charles K. Dargan, II | 140,000 | (2) | 4.0 | % | $2.00 | 12/27/10 | |||
Pamela LaPine | 50,000 | (2) | 1.4 | % | $2.00 | 12/27/10 | |||
200,000 | (1) | 5.7 | % | $2.25 | 03/05/11 | ||||
Tony Travis | 25,000 | (1) | 0.7 | % | $2.00 | 12/27/10 | |||
Valerie Goodwin | 70,000 | (2) | 2.0 | % | $2.00 | 12/27/10 | |||
Stas Wolk | 160,000 | (3) | 4.6 | % | $5.44 | 02/28/01 |
* | Options expire 90 days after the termination of employment of the option holder. |
(1) | One-third of the options become exercisable beginning January 12, 2001. Thereafter, the remaining two-thirds of the options become exercisable monthly in equal increments over a two-year period thereafter. These options are contingent upon Shareholder approval. |
(2) | One-fourth of the options become exercisable one year after the date of grant. Thereafter, the remaining three-fourths of the options become exercisable monthly in equal increments over a three-year period. |
(3) | All of these options expired on February 28, 2001 due to termination of employment of the option holder. |
Aggregate Option Exercises. The following table sets forth certain information concerning individual exercises of stock options during the fiscal year ended March 31, 2001, and the shares represented by outstanding options held by each of the named executive officers as of March 31, 2001. 15 |
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR |
NAME | SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ($) | NUMBER OF SHARES UNDERLYING UNEXERCISED OPTIONS AT MARCH 31, 2001 EXERCISABLE/ UNEXERCISABLE (#) | VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS AT MARCH 31, 2001 EXERCISABLE/ UNEXERCISABLE ($) | |||||
---|---|---|---|---|---|---|---|---|---|
Anthony N. LaPine | -0- | -0- | 1,014,566/495,434 | $143,200/-0- | |||||
Charles K. Dargan, II | -0- | -0- | 40,000/180,000 | $17,000/$14,000 | |||||
Valerie Goodwin | -0- | -0- | -0-/70,000 | -0-/$7,000 | |||||
Stas Wolk | -0- | -0- | -0-/-0- | -0-/-0- | |||||
Pamela LaPine | -0- | -0- | 73,590/276,410 | -0-/$5,000 | |||||
Tony Travis | 13,333 | $173,046 | 3,333/28,334 | -0-/$2,500 | |||||
(1) | Options were “in the money” to the extent the closing price of Semotus’common stock on March 31, 2001 exceeded the exercise price of the options. The value of unexercised options represents the difference between the exercise price of net options and $2.10 which was the last reported sale price of Semotus common stock on March 30, 2001. |
NON-EMPLOYEE DIRECTOR | NUMBER OF SHARES UNDERLYING OPTIONS (#) | EXERCISE PRICE ($) | |||
---|---|---|---|---|---|
Frederick H. Hoar | 20,000 | $1.56 | |||
10,000 | $8.50 | ||||
Jason Pavona | 40,000 | $3.50 |
16 |
• | Reviewed and discussed the audited financial statements with management, |
• | Discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), and |
• | Received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and discussed with the independent auditors their independence. |
Based on the review and discussions referred to above, our committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2001, for filing with the SEC. Audit Committee Of The Board Of Directors /s/ Jason Pavona /s/ Frederick Hoar 18 |
(a) to determine to which of the eligible individuals, and the time or times at which, options to purchase Common Stock of the Company shall be granted; |
(b) to determine the number of shares of Common Stock to be subject to options granted to each eligible individual; |
(c) to determine the price to be paid for the shares of Common Stock upon the exercise of each option; |
A-1 |
(d) to determine the term and the exercise schedule of each option; |
(e) to determine the terms and conditions of each stock option grant (which need not be identical) entered into between the Company and any eligible individual to whom the Administrator has granted an option, subject to Section 14 hereof; |
(f) to interpret the Plan; |
(g) to accelerate the exercise date or schedule with respect to any option granted under the Plan or, with the consent of the holder thereof, to modify or amend any such option; |
(h) to make all determinations deemed necessary or advisable for the administration of the Plan; |
(i) to determine whether Optionee has ceased to be employed by the Company or any Parent, Subsidiary or Affiliate of the Company and the effective date on which such employment terminated; and |
(j) to determine whether an Optionee, who is a director, consultant or advisor of the Company, is “employed by the Company or any Parent, Subsidiary or Affiliate of the Company” pursuant to the foregoing Sections. |
4. Eligibility.Options may be granted to employees, officers, directors, consultants and advisers (provided such consultants and advisers render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction) of the Company or any Parent, Subsidiary or Affiliate of the Company. Incentive Stock Options may be granted only to employees of the Company or a Parent or Subsidiary of the Company. The Administrator in its sole discretion shall select the recipients of Options (“Optionees”). An Optionee may be granted more than one Option under this Plan. The Company may also, from time to time, assume outstanding options granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (a) granting an Option under this Plan in replacement of the option assumed by the Company, or (b) treating the assumed option as if it had been granted under this Plan if the terms of such assumed option could be applied to an Option granted under this Plan. Such assumption shall be permissible if the holder of the assumed option would have been eligible to be granted an Option hereunder if the other company had applied the rules of this Plan to such grant. A-2 |
(a) the election must be made on or prior to the applicable Tax Date; |
(b) once made, the election shall be irrevocable as to the particular Shares as to which the election is made; and |
(c) all elections shall be subject to the consent or disapproval of the Administrator. |
A-4 |
(a) increase the number of shares of Common Stock except as provided in Section 11 hereof; |
(b) change the class of persons eligible to participate in the Plan under Section 4 hereof; |
(c) extend the term of the Plan under Section 13 hereof; |
(d) amend this Section 14 to defeat its purpose; or |
(e) amend this Plan in any manner that requires shareholder approval pursuant to the Code or the regulations promulgated thereunder as such provisions apply to ISO plans, without obtaining such shareholder approval. |
15. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of shares of its Common Stock as shall be sufficient to satisfy the requirements of the Plan. 16. Effective Date. This Plan was adopted by the Board of Directors of the Company on June 14, 1996, and shall be effective on said date, provided the Plan is approved within twelve (12) months of said date by the shareholders of the Company in accordance with the requirements of the Code and other applicable law. Options may be granted, but may not be exercised, prior to the date of such shareholder approval. 17. Certain Definitions. As used in this Plan, the following terms shall have the following meanings: 17.1 “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if, at the time of the granting of the Option, each of such corporations other than the Company owns stock possession 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 17.2 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A-8 |
17.3 “Affiliate” means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise. 17.4 “Fair Market Value” shall mean the fair market value of the Shares as determined by the Administrator from time to time in good faith. If a public market exists for the Shares, the Fair Market Value shall be the average of the last reported bid and asked prices for common stock of the Company on the last trading day prior to the date of determination (or the average closing price over the number of consecutive working days preceding the date of determination as the Administrator shall deem appropriate) or, in the event the common stock of the Company is listed on a stock exchange or on the NASDAQ National Market System, the Fair Market Value shall be the closing price on such exchange or quotation system on the last trading day prior to the date of determination (or the average closing price over the number of consecutive working days preceding the date of determination as the Administrator shall deem appropriate). 17.5 “Exchange Act” shall mean Securities and Exchange Act of 1934, as amended. A-9 |
1. Hold no less than three regularly scheduled meetings each year, normally in February, June and November, and other meetings from time to time as may be called pursuant to the Company’s Bylaws. A majority shall constitute a quorum of the Audit Committee. A majority of the members in attendance shall decide any question brought before any meeting of the Committee. |
2. Recommend to the Board, annually, the appointment of a firm of independent public accountants as the Company’s outside auditors. |
3. Review with representatives of the independent accountants: |
• | The plan for and scope of its annual audit of the Company’s financial statements. |
• | The Results of the annual audit. |
• | Any recommendations with respect to internal controls and other financial matters, including any perceived weaknesses in the Company’s internal controls, policies, and procedures. |
• | Any significant changes made by management in the basic accounting principles and reporting standards used in the preparation of the Company’s financial statements. |
• | Review the Annual Report in detail with the outside auditors. |
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4. | Review the extent of any services outside the audit area performed for the Company by its independent accountants. |
5. | Review the fees proposed by the Company’s independent accountants for their services. |
6. | Review whether management has sought a second opinion regarding a significant accounting issue, and, if so, obtain the rationale for the particular accounting treatment chosen. |
7. | Review compliance by officers and employees with the Company’s policies on business ethics and public responsibility. |
8. | Make such other recommendations to the Board on such matters, within the scope of its functions, as may come to its attention and which in its discretion warrant consideration by the Board. |
9. | Meet privately from time to time with representatives of the independent accountants, the Chief Financial Officer and management. |
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