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
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
RCM TECHNOLOGIES, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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5) Total fee paid:
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/ / 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:
___________________________________________________________________________
[RCM LETTERHEAD LOGO]
April 25, 2001
Dear Stockholder:
You are cordially invited to attend the RCM Technologies, Inc. Annual Meeting
of Stockholders. The meeting will be held at the Hilton Cherry Hill, 2349 W.
Marlton Pike (Route 70), Cherry Hill, New Jersey 08002, on Thursday, June 21,
2001, at 6:00 p.m. local time. We look forward to personally greeting those
stockholders able to attend.
At the meeting, you will be asked to:
o elect two directors;
o consider and approve RCM's 2001 Employee Stock Purchase Plan;
o consider and approve RCM's Nonqualified Deferred Compensation Plan;
o ratify our Board's appointment of Grant Thornton LLP as our independent
auditors for our fiscal year ending December 31, 2001; and
o consider all other matters which come before the meeting or any
adjournment(s) of the meeting.
These matters are discussed in greater detail in the accompanying Proxy
Statement.
Our Board of Directors recommends a vote:
o FOR the election of the directors we have nominated;
o FOR the approval of RCM's 2001 Employee Stock Purchase Plan;
o FOR the approval of RCM's Nonqualified Deferred Compensation Plan; and
o FOR the ratification of Grant Thornton LLP as our independent auditors.
We encourage you to vote your shares regardless of the number of shares you
own or whether you plan to attend the meeting. Please sign and date the
enclosed proxy card and promptly return it in the postage-paid envelope we
have provided.
We wish to thank you for your participation and support.
Sincerely,
/s/ Stanton Remer
----------------------------------------------
Stanton Remer
Secretary
RCM TECHNOLOGIES, INC.
2500 MCCLELLAN AVENUE
SUITE 350
PENNSAUKEN, NEW JERSEY 08109
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 21, 2001
--------------------
To Our Stockholders:
The RCM Technologies, Inc. Annual Meeting of Stockholders will be held at the
Hilton Cherry Hill, 2349 W. Marlton Pike (Route 70), Cherry Hill, New Jersey
08002, on Thursday, June 21, 2001, at 6:00 p.m. local time.
The purposes of the meeting are to:
1. Elect two Class B directors, each to serve until his term expires and
until his successor is elected and qualified;
2. Consider and approve the adoption of RCM's 2001 Employee Stock
Purchase Plan;
3. Consider and approve the adoption of RCM's Nonqualified Deferred
Compensation Plan;
4. Ratify the appointment by our Board of Directors of Grant Thornton LLP
as our independent auditors for our fiscal year ending December 31, 2001;
and
5. Transact such other business as may properly come before the meeting
or any adjournment(s) of the meeting.
We have fixed April 23, 2001 as the record date for determining the
stockholders entitled to vote at the meeting. You are not entitled to notice
of, or to vote at, the meeting if you were not a stockholder of
record at the close of business on that date.
You are cordially invited to attend the meeting. Whether or not you expect
to attend the meeting in person, please sign, date and return the enclosed
proxy to ensure that your shares will be represented at the meeting. Please
return your proxy promptly in the enclosed envelope, which requires no postage
if mailed within the United States. If you attend the meeting, you may vote
your shares personally, even though you have sent in your proxy, if you revoke
your proxy at or prior to the meeting.
By Order of the Board of Directors,
/s/ Stanton Remer
---------------------------------------------------
Stanton Remer
Secretary
Pennsauken, New Jersey
April 25, 2001
RCM TECHNOLOGIES, INC.
2500 McClellan Avenue
Suite 350
Pennsauken, New Jersey 08109
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 21, 2001
About this Proxy Statement
Our Board of Directors is soliciting proxies to be used at our 2001 Annual
Meeting of Stockholders. The meeting will be held at the Hilton Cherry Hill,
2349 W. Marlton Pike (Route 70), Cherry Hill, New Jersey 08002, on Thursday,
June 21, 2001, at 6:00 p.m. local time. This proxy statement, the notice of
annual meeting and the form of proxy will be mailed to stockholders beginning
on or about April 25, 2001.
VOTING PROCEDURES
Who Can Vote
Only RCM common stockholders at the close of business on the record date,
April 23, 2001, may vote at the annual meeting. You are entitled to cast one
vote for each share of RCM common stock you owned as of the record date. At
the close of business on the record date, there were 10,499,651 shares of RCM
common stock outstanding.
How You Can Vote
You can vote by:
o marking your proxy, dating and signing it, and returning it in the
postage-paid envelope we have provided, or
o attending the meeting and voting in person.
How You Can Revoke Your Proxy or Change Your Vote
You can revoke your proxy at any time before it is voted at the meeting by:
o sending a written notice that you have revoked your proxy to our
Secretary, Stanton Remer, at 2500 McClellan Avenue, Suite 350,
Pennsauken, New Jersey 08109
o submitting a later-dated proxy card, or
o attending the meeting, giving our Secretary written notice of your
revocation and voting your shares.
If a bank, broker or other holder of record holds your shares in its name,
you must obtain a proxy, executed in your favor, from the holder of record to
be able to vote your shares at the meeting.
General Information on Voting
A quorum must exist for voting to take place at the meeting. A quorum exists
if holders of a majority of the outstanding shares of our common stock are
present at the meeting in person or are represented at the meeting by proxy.
Shares represented by a proxy marked "abstain" or "withheld" on any matter
will be considered present at the meeting for purposes of determining whether
there is a quorum, but will not be considered as votes FOR or AGAINST that
matter. Shares represented by a proxy as to which there is a "broker non-vote"
(that is, where a broker holding your shares in "street" or "nominee" name
indicates to the Company on a proxy that you have given the broker the
discretionary authority to vote your shares on some but not all matters), will
be considered present at the meeting for purposes of determining a quorum but
will not be voted on matters as to which there is a "broker non-vote."
The director nominees will be elected by a plurality of the votes cast for
the election of directors at the meeting. Thus, the two nominees who receive
the most votes will be elected as directors. All other matters to be voted
upon at the meeting must be approved by a majority of the votes cast on those
matters.
Shares that have been properly voted and not revoked will be voted at the
meeting in accordance with the instructions on your proxy card. If you sign
your proxy card but do not mark your choices, Leon Kopyt or Stanton Remer, the
persons named on the enclosed proxy card, will vote the shares represented by
your proxy card:
o FOR the persons we nominated for election as directors;
o FOR the approval of RCM's 2001 Employee Stock Purchase Plan;
o FOR the approval of RCM's Nonqualified Deferred Compensation Plan; and
o FOR the ratification of our Board's appointment of Grant Thornton LLP
as our independent auditors for our fiscal year ending December 31,
2001.
If any other matters are properly presented at the meeting for
consideration, Mr. Kopyt and Mr. Remer will have the discretion to vote on
those matters for you. Currently, we are not aware of any such matters.
Costs of Solicitation
We will pay for preparing, assembling and mailing this proxy statement. Our
directors, officers and employees may solicit proxies through the mails,
direct communication or otherwise. None of our directors, officers or
employees will receive additional compensation for soliciting proxies. We may
reimburse brokerage firms and other custodians, nominees or fiduciaries for
their reasonable expenses for forwarding proxy and solicitation materials to
stockholders.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table lists the persons we know to be beneficial owners of at
least five percent of our common stock as of April 4, 2001:
Approximate
Percentage
of Outstanding
Name and Address of Beneficial Owner Number of Shares Common Stock
------------------------------------ ---------------- --------------
Leon Kopyt ................................ 926,662(1) 8.24%
c/o RCM Technologies, Inc.
2500 McClellan Avenue
Suite 350
Pennsauken, NJ 08109
Liberty Wanger Asset Management, L.P. ..... 1,835,300(2) 17.48%
227 West Monroe Street
Suite 3000
Chicago, IL 60606
State of Wisconsin Investment Board ....... 1,493,600(3) 14.23%
P.O. Box 7842
Madison, WI 53707
Dimensional Fund Advisors Inc. ............ 882,900(4) 8.41%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Heartland Advisors, Inc. ................. 754,480(5) 7.19%
789 North Water Street
Milwaukee, WI 53202
Wellington Management Company, LLP ........ 750,000(6) 7.14%
75 State Street
Boston, MA 02109
FMR Corp. ................................. 739,700(7) 7.04%
82 Devonshire Street
Boston, MA 02109
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(1) Includes 750,000 shares issuable upon the exercise of options under our
stock option plans. Also includes 164,562 shares as to which Mr. Kopyt
has sole voting power in the election of directors. Mr. Kopyt disclaims
beneficial ownership of these shares.
(2) Based on a Schedule 13G, dated February 14, 2001, filed with the
Securities and Exchange Commission by Liberty Wanger Asset Management,
L.P., a registered investment advisor, on behalf of itself, its general
partner, Wanger Asset Management, Ltd., and its client, Liberty Acorn
Investment Trust. The Schedule 13G states that Wanger Asset Management,
L.P. and Wanger Asset Management, Ltd. share voting and dispositive power
as to all of these shares. The Schedule 13G also states that Liberty
Acorn Trust has shared voting and dispositive power as to 1,251,000 of
these shares, or 11.9% of RCM's outstanding common stock.
(3) Based on a Schedule 13G, dated February 14, 2001, filed with the
Securities and Exchange Commission. The Schedule 13G states that the
State of Wisconsin Investment Board has sole voting and dispositive power
as to all of these shares.
(Footnotes continued on next page)
3
(Footnotes continued from previous page)
(4) Based on a Schedule 13G, dated February 2, 2001, filed with the
Securities and Exchange Commission. The Schedule 13G states that
Dimensional Fund Advisors, Inc. has sole voting and investment power as
to all of these shares. Dimensional Fund Advisors, Inc. disclaims
beneficial ownership of these shares.
(5) Based on a Schedule 13G, dated January 22, 2001, filed with the
Securities and Exchange Commission. The Schedule 13G states that
Heartland Advisors, Inc. has sole voting power as to 677,980 of these
shares and sole dispositive power as to all of these shares.
(6) Based on a Schedule 13G, dated February 14, 2001, filed with the
Securities and Exchange Commission. The Schedule 13G states that
Wellington Management Company, LLP has shared voting and dispositive
power as to all of these shares.
(7) Based on a Schedule 13G, dated February 14, 2001, filed with the
Securities and Exchange Commission by FMR Corp., a parent holding
corporation, on behalf of itself, Edward C. Johnson III and Abigail
Johnson. The Schedule 13G states that Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR Corp. and a registered
investment advisor, is the beneficial owner of all of these shares as a
result of acting as investment adviser to various registered investment
companies, including Fidelity Low Priced Stock Fund which owns all of the
shares listed in the table. FMR Corp. and its chairman, Edward C. Johnson
III, through FMR Corp.'s control of Fidelity Management & Research
Company and Fidelity Low Priced Stock Fund, each have sole dispositive
power as to all of these shares. The Schedule 13G also states that
Fidelity Low-Priced Stock Fund's Board of Trustees has sole voting power
as to all of these shares.
Security Ownership of Management
The following table lists the number of shares of our common stock
beneficially owned, as of April 4, 2001, by each director and director
nominee, each of our executive officers, certain members of our senior
management, and by our directors, nominees and executive officers as a group.
In general, beneficial ownership includes those shares a person has the power
to vote or transfer, as well as shares owned by immediate family members who
live with that person.
Approximate
Percentage
of Outstanding
Name Number of Shares Common Stock
---- ---------------- --------------
Leon Kopyt (1).......................... 926,662 8.24%
Stanton Remer (2)(3).................... 102,000 *
Brian A. Delle Donne (4)................ 62,000 *
Norman S. Berson (2).................... 70,000 *
Robert B. Kerr (5)...................... 72,000 *
Woodrow B. Moats, Jr. (5)............... 72,000 *
Dennis Berkey........................... 0 --
Rocco Campanelli (6).................... 58,000 *
Lawrence Hart........................... 0 --
Kenneth Kutz (7)........................ 20,000 *
Leonard Lufrano (8)..................... 10,000 *
Kevin D. Miller (3)(9).................. 83,000 *
All directors and executive officers as
a group (12 persons) (10) ............. 1,475,662 12.6%
- ---------------
* Represents less than one percent of our outstanding common stock.
(Footnotes continued on next page)
4
(Footnotes continued from previous page)
(1) Includes 750,000 shares issuable upon the exercise of options under our
stock option plans and 164,562 shares as to which Mr. Kopyt has sole
voting power in the election of directors, and excludes 100,000 shares
issuable upon the exercise of options under our stock option plans, none
of which were exercisable within 60 days after the record date. Mr. Kopyt
disclaims beneficial ownership of these shares.
(2) Consists of 90,000 shares issuable upon the exercise of options under our
stock option plans.
(3) Excludes 75,000 shares, issuable upon the exercise of options under our
stock option plans, none of which were exercisable within 60 days after
the record date.
(4) Includes 50,000 shares issuable upon the exercise of options under our
stock option plans and excludes 100,000 shares, issuable upon the
exercise of options under our stock option plans, none of which were
exercisable within 60 days after the record date.
(5) Includes 70,000 shares issuable upon the exercise of options under our
stock option plans and excludes 30,000 shares, issuable upon the exercise
of options under our stock option plans, none of which were exercisable
within 60 days after the record date.
(6) Includes 47,000 shares issuable upon the exercise of options under our
stock option plans.
(7) Includes 20,000 shares issuable upon the exercise of options under our
stock option plans.
(8) Includes 10,000 shares issuable upon the exercise of options under our
stock option plans and excludes 60,000 shares, issuable upon the exercise
of options under our stock option plans, none of which were exercisable
within 60 days after the record date.
(9) Includes 69,000 shares issuable upon the exercise of options under our
stock option plans.
(10) Includes 1,246,000 shares issuable upon the exercise of options under our
stock option plans.
Voting Arrangements
On February 5, 1996, we issued and sold 276,625 shares of our common stock
to Limeport Investments, LLC in a private placement transaction. In
conjunction with this transaction, Limeport granted Mr. Kopyt an irrevocable
proxy entitling him to vote those shares solely in connection with the
election of our directors. We believe that, as of April 4, 2001 Limeport
beneficially owned 38,312 shares of our common stock.
The former stockholders of Cataract, Inc. executed a voting trust agreement
granting RCM the right to vote the shares of RCM's common stock the former
Cataract stockholders received as part of the consideration given to them upon
RCM's acquisition of Cataract. In 1998, the former Cataract stockholders
executed irrevocable proxies in favor of Mr. Kopyt, giving him the power of
attorney to vote the shares.
In general, the proxies expire with respect to any shares of our common
stock the former Cataract stockholders sell to third parties in public or
private open market transactions. Further, the number of shares subject to the
powers of attorney granted to Mr. Kopyt will be reduced on August 30, 2001.
After August 30, 2002, none of the shares will be subject to powers of
attorney.
If Mr. Kopyt ceases to serve as our Chairman, Chief Executive Officer and
President, all proxies will expire immediately.
Based on documentation provided to the Company by the former Cataract
stockholders, we believe that as of April 4, 2001 the former Cataract
stockholders had sold 186,061 shares of our common stock in open market
transactions. Consequently, as of such date, we believe that Mr. Kopyt is the
attorney-in-fact with respect to 126,250 shares of our common stock owned by
former Cataract stockholders.
5
PROPOSAL 1
---------------------
ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes. Each of the three
classes has two directors. Directors are elected to staggered three-year terms
and will serve until their successors have been elected and qualified.
The terms of our Class B directors, Robert B. Kerr and Woodrow B. Moats,
Jr., expire at this year's annual meeting. The Class C directors, Leon Kopyt
and Stanton Remer, will serve until the annual meeting in 2002. The Class A
directors, Norman S. Berson and Brian A. Delle Donne, will serve until the
annual meeting in 2003.
Two Class B directors will be elected at this year's annual meeting to serve
for three-year terms expiring at our annual meeting in 2004. Our Board has
nominated Robert B. Kerr and Woodrow B. Moats, Jr. to serve as Class B
directors. Both Mr. Kerr and Mr. Moats have consented to serve a term on our
Board of Directors. The persons named as proxy holders on the enclosed proxy
card, Mr. Kopyt and Mr. Remer, intend to vote FOR the election of Mr. Kerr and
Mr. Moats unless you mark a contrary instruction on your proxy card. Unless
you indicate otherwise on your proxy card, if either Mr. Kerr or Mr. Moats is
unable to serve as a director at the time of this year's annual meeting, Mr.
Kopyt or Mr. Remer will vote FOR the election of another person that the Board
may nominate in his place.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ROBERT B. KERR
AND WOODROW B. MOATS AS CLASS B DIRECTORS.
Nominees for Election as Director
Class B Director Nominees
- -------------------------
Robert B. Kerr, Director Since 1994, Age 58
Mr. Kerr is a founding partner of Everingham & Kerr, Inc., a merger &
acquisition consulting firm located in Haddon Heights, New Jersey, which has
served small and medium-sized manufacturing, distribution and service
businesses since 1987.
Woodrow B. Moats, Jr., Director Since 1994, Age 68
Mr. Moats is President of W.B. Moats & Associates, a marketing and
communications firm located in Berwyn, Pennsylvania, which specializes in
business-to-business marketing. Mr. Moats served as Senior Vice President-
Corporate Marketing and Public Relations of National Railway Utilization
Corporation from 1975 to 1980.
Current Board Members
Class A Directors
- -----------------
Norman S. Berson, Director Since 1987, Age 74
Mr. Berson has been a shareholder in the law firm of Fineman & Bach, P.C. of
Philadelphia, Pennsylvania since 1981. Previously, Mr. Berson was a member of
the House of Representatives of the Commonwealth of Pennsylvania for 16 years.
Brian A. Delle Donne, Director Since 2000, Age 44
Mr. Delle Donne has been our Chief Operating Officer since June 1999 and
served as our Executive Vice President of Operations from April 1998 to June
1999. Mr. Delle Donne served as President of Knight Facilities Management, a
global planning, engineering and management consulting firm from 1997 to 1998
where he was responsible for strategic outsourcing services. From 1989 to
1995, Mr. Delle Donne served as Senior Vice President of Ogden Projects, Inc.
and as President and Chief Operating Officer of its subsidiary, Ogden
Environmental Services. Mr. Delle Donne currently serves on the Board of
Directors of UMS Group, Inc., a privately held international management
consulting firm providing services to power utilities around the world.
6
Class C Directors
- -----------------
Leon Kopyt, Director Since 1991, Age 56
Mr. Kopyt has been our President, Chief Executive Officer and Chairman of
the Board since 1992. Previously, Mr. Kopyt served as our Chief Financial
Officer and Treasurer from 1992 to 1994, and as our Chief Operating Officer
from May 1990 to January 1992. From 1977 to 1990, Mr. Kopyt served as
President and Chief Executive Officer of a subsidiary of a European-based
company that specialized in the design and manufacture of defense products.
Stanton Remer, Director Since 1992, Age 51
Mr. Remer has been our Chief Financial Officer, Secretary and Treasurer
since 1994. In 1993, he served as a director of auditing of a Philadelphia
regional accounting firm. From 1991 to 1992, Mr. Remer served as Chief
Financial Officer of Sterling Supply Corporation. From 1986 to 1991, Mr. Remer
was an audit partner in a regional accounting firm. Mr. Remer is a Certified
Public Accountant.
7
OUR EXECUTIVE OFFICERS
The following table lists our executive officers as of December 31, 2001 and
certain members of our senior management. Our Board elects our executive
officers annually for terms of one year and may remove any of our executive
officers with or without cause.
Name Age Position
---- --- --------
Executive Officers:
Leon Kopyt .............. 56 Chairman, Chief Executive Officer, President and
Director
Stanton Remer ........... 51 Chief Financial Officer, Treasurer, Secretary and
Director
Brian A. Delle Donne .... 44 Chief Operating Officer
Senior Management:
Dennis Berkey ........... 52 Senior Vice President
Rocco Campanelli ........ 50 Executive Vice President
Lawrence Hart ........... 55 Senior Vice President
Kenneth Kutz ............ 59 Senior Vice President
Leonard Lufrano ......... 50 Senior Vice President
Kevin D. Miller ......... 34 Senior Vice President
The business experience of Messrs. Kopyt, Remer and Delle Donne is
summarized in "Proposal 1 - Election of Directors."
Dennis Berkey has served as a Senior Vice President of RCM since May 1999.
Previously, Mr. Berkey was a founder of Business Support Group of Michigan,
Inc., a business we acquired in 1999. Mr. Berkey has in excess of 15 years of
experience in software development, information systems management, ERP
consulting and related project management.
Rocco Campanelli has served as an Executive Vice President of RCM since June
1999. From September 1995 until June 1999, Mr. Campanelli served as a Senior
Vice President of RCM and our General Manager of Professional Engineering.
Previously, Mr. Campanelli was a Senior Vice President of Operations and
Marketing for Cataract, Inc., a business we acquired in August 1995. From the
time he joined Cataract in 1988 until August 1995, Mr. Campanelli held the
position of Northeast Regional Manager and Vice President of Operations.
Lawrence Hart has served as a Senior Vice President of RCM since June 2000.
From March 1993 to June 2000, Mr. Hart was the President and founder of
Management Systems Integrators, Inc., a business we acquired in June 2000. Mr.
Hart previously served as an independent consultant to major
telecommunications companies as well as Vice President and General Manager of
CXR Corporation, Director of Marketing and Product Management for Northern
Telecom's Spectron Divison.
Kenneth Kutz has served as a Senior Vice President of RCM since January
1997. Mr. Kutz has over 30 years of Information Technology sales and marketing
experience with IBM, Control Data and Camax Systems as well as Programming
Alternatives of Minnesota, Inc., a business acquired by RCM in January 1997.
Mr. Kutz has managed business units that sold software, computer services and
professional services in the United States, Canada, Europe and the Far East.
Leonard Lufrano has served as a Senior Vice President of RCM since August
1999. From 1995 to July 1999, Mr. Lufrano was President and Founder of Seaview
Consulting, Inc., a business we acquired in August 1999. Mr. Lufrano
previously served as a founding partner of Funaro-Lufano Associates, Inc. for
the period 1973 to 1994 where his responsibilities included management,
marketing, strategic development and business planning.
Kevin D. Miller has served as a Senior Vice President of RCM since January
1998. Previously, Mr. Miller was a consultant to RCM from July 1997 through
December 1997. From 1996 until July 1997, Mr. Miller served as an Associate in
the corporate finance department of Legg Mason Wood Walker, Incorporated. From
1995 to 1996, Mr. Miller was a business consultant for the Wharton Small
Business Development Center. Mr. Miller previously served as a member of both
the audit and corporate finance groups at Ernst & Young, LLP. Mr. Miller is a
Certified Public Accountant.
8
EXECUTIVE COMPENSATION
Summary of Executive Compensation
The following table lists cash and other compensation paid to, or accrued by
the Company for, our chief executive officer and each of the persons who,
based upon total annual salary and bonus, was one of our other four most
highly compensated executives for our fiscal year ended December 31, 2000. The
information is presented for each individual for our last three fiscal years
and for the two months ended December 31, 1999 (See note 3 below).
Summary Compensation Table
Long-Term
Annual Compensation Compensation
-------------------------------------- ----------------------------
Awards
Securities
Underlying
Fiscal Other Annual Options/ All Other
Name and Principal Position Year Salary Bonus Compensation(1) SARs Compensation(2)
- --------------------------- ------ -------- -------- --------------- ---------- ---------------
Leon Kopyt .................................... 2000 $350,000 $236,399 0 100,000 $11,930
President and CEO 1999(3) 350,000 260,965 0 60,000 13,318
1999 58,333 0 0 0 1,988
1998 342,309 358,760 0 190,000 12,068
Stanton Remer ................................. 2000 $150,000 $ 94,559 0 75,000 $ 4,627
CFO, Treasurer and 1999(3) 125,000 114,202 0 30,000 4,173
Secretary 1999 20,833 0 0 0 771
1998 124,236 71,752 0 10,000 2,788
Brian A. Delle Donne (4) ....................... 2000 $240,865 $125,000 0 100,000 $ 9,798
Chief Operating Officer 1999(3) 186,538 100,000 0 20,000 5,750
1999 33,333 0 0 0 1,633
1998 93,272 50,000 0 30,000 4,500
Rocco Campanelli ............................... 2000 $145,000 $ 89,295 0 15,000 $ 9,798
Executive Vice President 1999(3) 101,135 132,438 0 0 5,750
1999 25,000 0 0 0 1,633
1998 100,618 100,216 0 20,000 4,500
Kevin D. Miller ................................ 2000 $175,000 $ 80,000 0 75,000 $ 1,408
Senior Vice President 1999(3) 120,000 30,000 0 30,000 1,250
1999 29,167 0 0 0 0
1998 60,584 10,000 0 39,000 0
- ---------------
(1) During fiscal 1998, 1999 and 2000, certain of the officers named in this
table received personal benefits not reflected in the amounts of their
respective annual salaries or bonuses. The dollar amount of these
benefits did not, for any individual in any fiscal year, exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported
for that individual in any year.
(2) This amount represents (i) premiums we paid for life and disability
insurance on certain of the officers named in this table as follows: Leon
Kopyt: 2000-$2,357, 1999-$7,568, and 1998-$7,568; and Stanton Remer:
2000-$3,377, 1999-$2,923 and 1998-$2,788, (ii) premiums we paid for
medical insurance for Leon Kopyt, Brian A. Delle Donne and Rocco
Campanelli in the amount of $7,400 each, and (iii) matching contributions
we made during our fiscal years ended December 31, 2000 and October 31,
1999 up to a maximum of $1,250 for each of the officers named in this
table in accordance with RCM's retirement savings plan adopted pursuant
to Section 401(k) of the Internal Revenue Code of 1986, as amended. We
did not make any matching contributions in fiscal 1998.
(3) In January 2000, the Company changed its fiscal year end from October 31
to December 31. As a result of this change, the two months ended December
31, 1999 are presented as a transitional period.
(4) Mr. Delle Donne became an employee of RCM in March 1998.
9
Options Granted to Our Executives in Fiscal 2000
The following table lists information on the options to purchase our common
stock we granted to our executive officers and certain members of our senior
management during our fiscal year ended December 31, 2000 and the two months
ended December 31, 1999. During our fiscal year ended December 31, 2000 and
the two months ended December 31, 1999, we did not grant any other options to
any of our executive officers or members of our senior management listed in
the summary compensation table of this proxy statement. We have never granted
any stock appreciation rights.
OPTION/SAR GRANTS IN FISCAL 2000
Potential
Value at Assumed
Individual Grants Annual Rates of
------------------------------------------------------- Stock Price
Number of % of Total Appreciation
Securities Options/SARs For the Option
Underlying Granted to Exercise or Term(1)
Options/SARs Employees in Base Price Expiration -------------------
Name Granted(2) Fiscal Year ($/SH) Date 5% 10%
- ---- ------------ ------------ ----------- ---------- -------- --------
Leon Kopyt ...................................... 100,000 12.6% $ 3.00 10/26/10 $188,668 $478,123
Stanton Remer ................................... 75,000 9.5 4.75 8/29/10 224,044 567,771
Brian A. Delle Donne ............................ 100,000 12.6 4.75 8/29/10 298,725 757,028
Rocco Campanelli ................................ 15,000 1.9 11.93 4/04/10 112,541 285,200
Kevin D. Miller ................................. 75,000 9.5 4.75 8/29/10 224,044 567,771
- ---------------
(1) Potential realizable value is reported net of option exercise price but
before taxes associated with exercise. These amounts represent assumed
rates of appreciation only. Actual gains, if any, on the options are
dependent upon the future performance of our common stock, and the
amounts reflected in the table will not necessarily be achieved.
(2) These options are exercisable one year from the date of the grant.
OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES
The following table lists the number of options exercised during our fiscal
year ended December 31, 2000 and the two months ended December 31, 1999 and
the number and value of options held by our executive officers and certain
members of our senior management at the end of our fiscal year ended December
31, 2000 and the two months ended December 31, 1999. No other options were
exercised, during our fiscal year ended December 31, 2000 and the two months
ended December 31, 1999, by any of our executive officers or members of our
senior management listed in the summary compensation table of this proxy
statement. RCM does not have any outstanding stock appreciation rights. The
values listed relate solely to outstanding stock options.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
Shares at Fiscal Year End at Fiscal Year End(1)
Acquired Value --------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
Leon Kopyt ................................ 0 $0 750,000 100,000 $0 $62,500
Stanton Remer ............................. 0 0 90,000 75,000 0 0
Brian A. Delle Donne ...................... 0 0 50,000 100,000 0 0
Rocco Campanelli .......................... 0 0 32,000 15,000 0 0
Kevin D. Miller .......................... 0 0 69,000 75,000 0 0
- ---------------
(1) These values represent the difference between the closing price of our
common stock on The Nasdaq National Market on December 31, 2000 and the
exercise price of each option, multiplied by the number of shares
underlying each option.
10
Compensation of Directors
Our employee directors do not receive any compensation for serving on our
Board or its committees, other than the compensation they receive for serving
as employees of RCM.
The Board of Directors has approved a compensation package which became
effective in May 2000. Under the arrangement, each non-employee director
receives a retainer fee of $24,000 per year as compensation for the director's
service on the Board.
In addition to the retainer fee, each eligible director is paid meeting
attendance fees of $750 for each Board Meeting and $300 for each Committee
Meeting held on a date other than the date of a Board Meeting.
Directors are also eligible to receive options to purchase our common stock
and stock appreciation rights under our stock option plans.
Employment Agreements
We have an employment agreement with Leon Kopyt which pays him an annual
base salary of $350,000. The employment agreement also provides Mr. Kopyt with
vacation time and other customary benefits. The agreement provides that Mr.
Kopyt's annual bonus will be based on our EBITDA, defined as earnings before
interest, taxes, depreciation and amortization.
Mr. Kopyt's employment agreement is for a term of three years. The term of
the Agreement automatically extends each year for an additional one-year
period. The Agreement is terminable upon Mr. Kopyt's death or disability, or
the termination of Mr. Kopyt for cause.
Change in Control and Termination of Employment Arrangements for Mr. Kopyt
Mr. Kopyt has an agreement with the Company which provides him with benefits
upon a change in control of RCM. The remaining term of Mr. Kopyt's employment
is extended for five years upon a change in control. If, during the term of
Mr. Kopyt's employment following a change in control, RCM terminates Mr.
Kopyt's employment other than for cause, or Mr. Kopyt terminates his own
employment for good reason, the provisions below will apply. The agreement
includes as "good reason," among other things, a material change in Mr.
Kopyt's salary, title or reporting responsibilities, or a change in RCM's
office location which requires Mr. Kopyt to relocate.
o RCM must pay Mr. Kopyt a lump sum equal to the total amount of his
salary and bonus for the remainder of the five-year term.
o The exercise price of the 500,000 options granted to Mr. Kopyt under
our 1996 Executive Stock Plan will be reduced to 50% of the average
market price of our common stock for the 60 days prior to the date of
termination if that price is less than the original $7.125 per share
exercise price of the options.
o RCM must pay to Mr. Kopyt an amount equal to the sum of all penalties
he is assessed (including excise taxes imposed on certain parachute
payments) and taxes he incurs as a result of the benefits he will
receive under the agreement.
11
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
The graph below is presented in accordance with SEC requirements. You should
not draw any conclusions from the data in the graph, because past results do
not necessarily predict future stock price performance. The graph does not
represent our forecast of future stock price performance.
The graph below compares our total stockholder return over the five-year
period ended December 31, 2000, to the cumulative total return of two indices
over the same period: the University of Chicago Graduate School of Business
CRSP Total Return Index for the Nasdaq Stock Market, referred to in the graph
as the Nasdaq Composite, and a peer group of staffing companies that we
selected in good faith. In developing the index, each company we selected is
weighted based on its market capitalization measured on December 31, 2000.
The corporations making up the peer group are those listed below. Data
Processing Corp., Interim Services Inc. and Registry, Inc., each of which was
part of the peer group we used in last year's proxy, are no longer in business
and therefore have been omitted from the peer group. In their places, we have
added Modis Professional Services, Inc., Renaissance Worldwide, Inc. and
Spherion Corp., each of which does business in the staffing industry.
Alternative Resources Corp. Butler International, Inc.
Headway Corporate Resources IncJudge Com, Inc.
Kelly Services, Inc. Modis Professional Services, Inc.
Olsten Corp. Renaissance Worldwide, Inc.
SCB Computer Technology, Inc. Spherion Corp.
The graph assumes that $100 was invested on December 31, 1995 in each of our
common stock, the Nasdaq Composite and the peer group index, and that all
dividends were reinvested.
[GRAPH OMITTED]
Total Return Analysis
- --------------------- 1995 1996 1997 1998 1999 2000
------ ------ ------ ------ ------ ------
RCM Technologies, Inc. ................................................... $100.0 $280.0 $544.0 $848.0 $552.0 $116.0
Nasdaq Composite ......................................................... 100.0 123.0 150.7 212.5 394.9 237.6
Peer Group .............................................................. 100.0 90.3 103.4 70.0 68.4 30.7
12
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
We believe that, during our fiscal year ended December 31, 2000, our
executive officers and directors made all required filings under Section 16(a)
of the Securities Exchange Act on a timely basis. Our belief is based solely
on:
o our review of copies of forms filed pursuant to Section 16(a) and
submitted to the Company during and with respect to our fiscal year
ended December 31, 2000 and
o representations from our executive officers and directors that no Forms
5 were required for those persons.
BOARD MEETINGS AND COMMITTEES
Our Board of Directors has an executive committee, an audit committee and a
compensation committee. The committees report their actions to the full Board
at the Board's next regular meeting. The following table shows on which of our
Board's committees each of our directors served, and the number of meetings
held by each of our Board's committees, during our fiscal year ended December
31, 2000.
Committee
----------
Board Member Executive Audit Compensation
- ------------ --------- --------- ------------
Leon Kopyt............................................................. X
Stanton Remer.......................................................... X
Robert B. Kerr......................................................... X X
Woodrow B. Moats, Jr................................................... X X
Norman S. Berson....................................................... X
Brian Delle Donne...................................................... X
Meetings held in Fiscal 2000*
- ---------------
* Our Board of Directors held eight meetings in our fiscal year ended
December 31, 2000. Each of our directors attended all of those meetings
and all meetings of the committees on which he served. Our Board took
other actions during our fiscal year ended December 31, 2000 by consent
resolution.
General Duties of Each Committee
The general duties of each committee are as follows:
Executive Committee
o acts on behalf of our Board between meetings of the Board
Audit Committee
o reviews our financial and accounting practices, controls and results,
reviews the scope and services of our auditors and recommends
independent auditors to the Company
o see "Report of the Audit Committee"
Compensation Committee
o determines the compensation of our officers and employees
o administers our stock option plans
Our Board of Directors does not have a nominating committee. Our directors
recommend nominees for the election of directors, executive officers and
committee members.
13
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
This report summarizes the functions and philosophical principles of the
compensation committee, the compensation components of RCM's executives and
other factors the compensation committee considers in determining the
compensation of RCM's executives.
Functions of the Committee
The compensation committee's primary functions include:
o reviewing, approving and determining the salaries, bonuses and other
benefits of RCM's directors, executive officers and senior management
o recommending to RCM's Board amendments to existing stock option plans
and the adoption of new stock option plans
o negotiating, reviewing, approving and determining the adoption of, or
amendments to, any compensatory plans, arrangements or agreements
between RCM and its executives, and
o establishing and reviewing management perquisites.
Compensation Philosophy
The compensation committee determines executive compensation and administers
RCM's stock option plans with the following goals in mind:
o provide a competitive level of total compensation necessary to attract,
motivate and retain talented executives
o align the interests of RCM's executives with those of RCM by increasing
their interest in RCM through the grant of stock options, stock
appreciation rights and restricted stock awards, and
o emphasize variable, performance-based compensation which rewards
executives for achieving both short-term and long-term goals.
Components of Compensation
The compensation committee generally structures RCM executives' compensation
through a combination of the following:
o Base Salary: As a general rule, the compensation committee establishes
base salaries for RCM's executives based upon the individual's
performance and contribution to RCM. The Committee takes into account
base salaries of executives in comparable positions in companies
similar to RCM. Some of RCM's executives are parties to employment
agreements. The salaries of those executives are based on their
agreements.
o Annual Incentives: The compensation committee provides annual incentive
awards to RCM's executives to reward their contributions to RCM. Mr.
Kopyt's bonus is based solely on RCM's EBITDA. Mr. Remer's bonus is
determined based on a combination of EBITDA and certain other factors
at the discretion of the chief executive officer. The bonuses of all
other executives are determined based on RCM's operating income and
certain other factors at the discretion of the chief executive officer,
based on the guidelines established by the compensation committee.
o Long-Term Incentive Compensation: The compensation committee
periodically grants stock options and other RCM securities to RCM
executives. The compensation committee intends the grants to be a
significant portion of the total executive compensation. The grants are
designed to align the interests of each RCM executive with those of the
stockholders, and provide each executive with a significant incentive
to manage RCM from the perspective of an owner with an equity stake in
the business. Grants typically permit executives to acquire RCM's
common stock at a fixed price per share (generally, the market price on
the grant date) over a specified period of time (usually up to ten
years). The grants provide a return to the executive only if the market
price of the shares appreciates over the option term.
The compensation committee bases the size of each executive's option grant
upon the executive's:
o position with RCM
o potential for future responsibility over the option term
14
o performance in recent periods, and
o current holdings of RCM stock and options.
The compensation committee believes that RCM's financial performance is a
better indicator of executive achievement than its stock price. The
compensation committee examines a number of financial indicators in assessing
RCM's performance, including:
o net sales
o operating income
o net income, and
o earnings per share.
The compensation committee does not base compensation decisions upon any
precise formula or accord any one factor greater weight than the other
factors.
Compensation of Leon Kopyt, RCM's Chief Executive Officer
Leon Kopyt, RCM's Chief Executive Officer, participates in the same programs
as RCM's other executives, and receives compensation based on: the same
factors as RCM's other executives, his employment agreement and a termination
benefits agreement. Mr. Kopyt's overall compensation reflects his degree of
policy and decision-making authority and his level of responsibility with
respect to RCM's strategic direction and financial and operational results.
Mr. Kopyt's compensation was determined based on a study of the compensation
of chief executive officers of other companies in the information technology
industry which have financial and corporate characteristics similar to those
of RCM. Mr. Kopyt's compensation components for RCM's fiscal year ended
December 31, 2000 were as follows:
o Base Salary: Mr. Kopyt received a base salary of $350,000.
o Annual Incentive: Pursuant to Mr. Kopyt's incentive compensation
arrangement, Mr. Kopyt received a $236,399 bonus for the fiscal year
ended December 31, 2000.
o Long-Term Incentive: Mr. Kopyt received options to purchase 100,000
shares of RCM's common stock. The options become exercisable in October
2001. The compensation committee awarded Mr. Kopyt these options based
on:
o RCM's financial performance during its fiscal year ended December 31,
2000;
o RCM's stockholder return for its fiscal year ended December 31, 2000;
o the value of awards granted to chief executive officers of other
companies in the information technology industry which have financial
and corporate characteristics similar to those of RCM; and
o the number of stock options granted by the compensation committee in
prior years.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code limits the amount of executive
compensation RCM may deduct for federal income tax purposes. In general,
Section 162(m) only allows a publicly held corporation to deduct up to one
million dollars per year of compensation paid to certain executives. The
executives whose compensation is subject to limitation under Section 162(m)
are those executives who, as of the close of a corporation's taxable year, are
either the chief executive officer (or an individual acting in such capacity),
or an executive whose compensation is required to be reported to shareholders
under the Securities Exchange Act of 1934 by reason of that executive being
among the four highest compensated officers of a corporation for the taxable
year (other than the chief executive officer). Performance-based compensation
is not, however, subject to this deduction limitation if it meets certain
requirements. One of the requirements is that performance-based compensation
be payable only on the attainment of performance goals that have been approved
by a corporation's stockholders. Compensation attributable to the exercise of
options that are granted with an exercise price at or above the fair market
value of the stock subject to the option under a stockholder-approved stock
option plan meeting certain requirements is also qualified as performance-
based compensation. The compensation committee has generally attempted to
structure the compensation it pays to RCM's executives subject to Section
162(m) so that compensation that would exceed the one million dollar
15
limitation otherwise imposed under Section 162(m) will qualify for the
exemption noted above for performance-based compensation.
Respectfully submitted by the members of the compensation committee of the
Board of Directors:
Woodrow B. Moats, Jr.
Robert B. Kerr
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our compensation committee consists of Robert B. Kerr and Woodrow B. Moats,
Jr. Neither Mr. Kerr nor Mr. Moats is or has been an officer or employee of
RCM or any of its subsidiaries.
PROPOSAL 2
---------------------
APPROVAL OF THE RCM TECHNOLOGIES, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
At the 2001 Annual Meeting, the stockholders will be asked to consider and
vote on a proposal to approve and adopt the RCM Technologies, Inc. 2001
Employee Stock Purchase Plan (the "Stock Purchase Plan"). The Plan was
approved by our Board of Directors on December 4, 2000, and is subject to
approval by the stockholders.
The following is a summary of the terms and provisions of the Stock Purchase
Plan as of April 23, 2001, and of certain tax effects of participation in the
Stock Purchase Plan. The Board of Directors may, at any time and from time to
time, amend the Stock Purchase Plan in any respect, except that any amendment
that is required to be approved by the stockholders under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), shall be submitted to
the stockholders for approval. This summary is qualified in its entirety by
reference to the full text of the Stock Purchase Plan as amended from time to
time. A copy of the Stock Purchase Plan will be made available without charge
to any person upon his or her written request, which request should be
directed to the Director of Investor Relations at our address appearing on the
first page of this proxy statement. To the extent that there is a conflict
between this summary and the Stock Purchase Plan, the terms of the Stock
Purchase Plan will govern.
Purpose
The purpose of the Stock Purchase Plan is to provide eligible employees of
the Company and our subsidiaries an opportunity to purchase shares of the
common stock. The Board of Directors believes that employee participation in
stock ownership will be to the mutual benefit of the employees and the
Company. The Stock Purchase Plan is intended to comply with the provisions of
the Code.
The Stock Purchase Plan became effective on January 1, 2001. Subject to
adjustment upon an increase or decrease in the amount of issued shares of
common stock resulting from a subdivision or consolidation of shares of other
capital adjustments, we reserved and made available for issuance and purchase
under the Stock Purchase Plan 500,000 shares of the common stock.
Eligibility
In general, all employees of the Company or any of our subsidiaries who
customarily work more than 20 hours per week and more than five months a year
are eligible to participate in the Stock Purchase Plan after working for the
Company or a subsidiary for at least one full year. Employees who already own
5% or more of the common stock are not eligible to participate. Generally, an
election to participate in the Stock Purchase Plan must be made 30 days before
each July 1 and January 1 or such other dates as may be established by the
compensation committee (the "Purchase Period").
16
Administration
The Stock Purchase Plan is administered by the compensation committee. The
compensation committee has the authority and power to make, adopt, institute
and enforce rules and regulations not inconsistent with the provisions of the
Stock Purchase Plan. The compensation committee shall adopt and prescribe the
contents of all forms required in connection with the administration of the
Stock Purchase Plan, including the agreement by which an eligible employee may
enroll as a participant in the Stock Purchase Plan, payroll withholding
authorizations, requests for distributions of shares and all other required
notices under the Stock Purchase Plan. The compensation committee shall have
the fullest discretion permissible under law in the discharge of its duties.
The compensation committee's interpretations and decisions with respect to the
Stock Purchase Plan shall be final and conclusive.
Purchase of Stock
Each eligible employee may authorize payroll deductions from his or her
compensation for the purpose of funding the purchase of the common stock
pursuant to an instrument prescribed by the compensation committee, pursuant
to which the eligible employee may purchase his or her shares from the Company
(the "Purchase Agreement"). In the Purchase Agreement, each eligible employee
shall authorize an after-tax payroll deduction from each payment of
compensation during the Purchase Period in integral percentage amounts ranging
from 1% to 10% of such eligible employee's compensation, but in no event shall
any such eligible employee be able to authorize more than $10,000 per year
toward the purchase of the common stock pursuant to his or her Purchase
Agreement. An eligible employee may change the deduction to any permissible
level effective as of 30 days prior to any Purchase Period. A change shall be
made by filing with the compensation committee a notice in such form and at
such time in advance of the Election Date on which the change is to be
effective as the compensation committee shall prescribe. An eligible employee
may not change his or her percentage amounts during the Purchase Period.
Unless the compensation committee determines otherwise, the purchase price
per share of the common stock of the Company to be sold to eligible employees
under the Stock Purchase Plan shall be the lower of (i) 85% of the market
value of such share on the first day of the Purchase Period or (ii) 85% of the
market value of such share on the last day of the Purchase Period.
In accordance with the procedures established by the compensation committee,
an eligible employee may request a distribution of shares of the common stock
purchased for the eligible employee under the Stock Purchase Plan or order the
sale of such shares. However, an eligible employee may not receive a
distribution of any shares of the common stock of the Company acquired under
the Stock Purchase Plan within two years after the beginning of the Purchase
Period in which the common stock is purchased. In accordance with the
procedures established by the compensation committee, the eligible employee
may elect to sell the shares of stock from the stockholder account established
under the Stock Purchase Plan.
If an eligible employee terminates his or her employment with for any reason
or ceases to be an eligible employee, the compensation committee may (i)
require the eligible employee to sell the shares from the account established
under the Stock Purchase Plan, or (ii) receive a distribution of his or her
shares of common stock held in any stockholder account unless the eligible
employee elects (or, if the eligible employee terminates employment with the
Company on account of death, the eligible employee's executor, administrator
or other personal representative elects) to have the shares of stock sold in
accordance with such procedures as the compensation committee shall prescribe.
Federal Income Tax Consequences
The Stock Purchase Plan is intended to qualify for favorable income tax
treatment under Section 421 and 423 of the Code. Payroll deductions will be
made on an after tax basis. Thus, eligible employees will have to pay income
tax on the dollars withheld from their paychecks under the Stock Purchase
Plan.
No income will be recognized because payroll deductions are used to buy the
common stock at a discount. The 15% discount will not be taken into account
for income tax purposes until the common stock is sold. The income tax
consequences associated with a sale of the common stock depend upon when the
sale occurs. The Stock Purchase Plan has been designed with the intent that if
the sale occurs more than two years
17
after the date the stock is purchased, then an eligible employee will realize
taxable gain or loss equal to the difference between the selling price and the
amount paid for the stock. If the stock is sold at a gain, then the gain will
be treated as ordinary income to the extent of the 15% discount received when
the stock was purchased, and the balance of the gain, if any, will be treated
as long-term capital gain. If the stock is sold at a loss, then no ordinary
income is realized and the entire loss will be treated as a long-term capital
loss.
If the common stock purchased under the Stock Purchase Plan is sold within
two years after the date it is purchased, then, regardless of whether the
eligible employee has a profit or loss on the sale, it is expected that the
15% purchase price discount received when the stock was purchased will be
taxable as ordinary income. We are entitled to a deduction for the amounts
taxable to an eligible employee as ordinary income. The eligible employee will
also recognize taxable capital gain or loss (which will be short-term or long-
term, depending upon the holding period) on the sale equal to the difference
between the selling price and the fair market value of the stock at the time
it was purchased.
Additional special tax rules may apply to those eligible employees who are
subject to the rules set forth in Section 16 of the Securities Exchange Act of
1934, as amended.
The foregoing tax discussion is a general description of certain expected
federal income tax results under current law, and all affected individuals
should consult their own advisors if they wish any further details or have
special questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RCM TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN PROPOSAL.
PROPOSAL 3
---------------------
APPROVAL OF THE RCM TECHNOLOGIES, INC. NONQUALIFIED
DEFERRED COMPENSATION PLAN
At the 2001 Annual Meeting, the stockholders will be asked to consider and
vote on a proposal to approve and adopt the RCM Technologies, Inc.
Nonqualified Deferred Compensation Plan (the "Deferred Compensation Plan").
The Deferred Compensation Plan was approved by the Board of Directors on
December 4, 2000, and is subject to approval by the stockholders.
The following is a summary of the terms and provisions of the Deferred
Compensation Plan as of April 23, 2001, and of certain tax effects of
participation in the Deferred Compensation Plan. This summary is qualified in
its entirety by reference to the full text of the Deferred Compensation Plan
as amended from time to time. A copy of the Deferred Compensation Plan will be
made available without charge to any person upon his or her written request,
which request should be directed to the Director of Investor Relations at our
address appearing on the first page of this proxy statement. To the extent
that there is a conflict between this summary and the Deferred Compensation
Plan, the terms of the Deferred Compensation Plan will govern.
Purpose
The purpose of the Deferred Compensation Plan is to permit a certain select
group of our management or highly compensated employees (the "Participants")
to defer a portion of their compensation so that such amounts may be paid to
the Participants (or their beneficiaries) as specified in the Deferred
Compensation Plan, and to allow the Company to make certain discretionary
contributions as provided in the Deferred Compensation Plan.
General Provisions
Employees selected by the Company from time to time shall be eligible to
participate in the Deferred Compensation Plan. Only individuals who are
members of a select group of management or higher compensated employees may
participate in the Deferred Compensation Plan. Participants may elect to
commence their participation in the Deferred Compensation Plan by executing a
written document ("Participation Agreement") and delivering said Participation
Agreement to the Company.
Under the Deferred Compensation Plan, the Participants can voluntarily elect
to defer all or a portion of their base salaries, commissions and bonuses for
any year. Participants could elect to defer up to fifty percent
18
(50%) of their base salary and may defer up to one hundred percent (100%) of
their bonuses for any year. At times designated by the Company, each
Participant may execute and deliver a written election to the Company in the
form and manner directed by the Company to increase or decrease the amount
deferred under the Preferred Compensation Plan.
In addition to other amounts that are voluntarily deferred by a Participant,
we have discretion to defer additional amounts under the Deferred Compensation
Plan based on our profits for the previous year (the "Company Contributions").
The Company Contributions may be allocated among the Participants based on
their respective levels of compensation. We shall also credit (or reduce) a
Participant's deferred compensation by an amount equal to the amount that
would have been earned (or lost) if the amounts deferred under this Deferred
Compensation Plan had been invested in hypothetical investments provided by
the Company from time to time, based on a list of hypothetical investments
provided by the Company from time to time ("Earnings"). A Participant shall be
one hundred percent (100%) vested at all times in his or her voluntary
deferrals and the Earnings thereon.
In regards to the Company Contributions and Earnings thereon, a Participant
shall be one hundred percent (100%) vested in any given Deferred Compensation
Plan year Company Contribution when the Participant has completed three (3)
consecutive years of service with the Company as a Participant of the Deferred
Compensation Plan immediately after the year for which the contribution is
made, and he or she remains an employee on January 1 of the next year. If a
Participant's employment with the Company terminates before he or she has
completed at least three (3) consecutive years of service as a Participant
under the Deferred Compensation Plan immediately after the year for which the
contribution is made (or if he or she is not an employee on January 1 of the
next year), the Participant shall have no interest whatsoever in such
contribution and any Earnings thereon (in other words, any interest the
Participant may have had shall be forfeited).
The Deferred Compensation Plan may not be amended, altered or modified,
retroactively, except by written instrument signed by the Company and the
impacted Participants or their respective successors. We may amend, alter,
modify or terminate the Deferred Compensation Plan at any time, provided
further that no such modification or termination shall adversely affect a
Participant's entitlement to benefits attributable to vested amounts credited
to his or her Deferred Compensation account prior to the modification or
termination of the Deferred Compensation Plan.
Federal Income Tax Treatment
Any Participant in the Deferred Compensation Plan who is paid in cash will
not be subject to federal income tax or related withholding until the cash is
received. We will be entitled to take a corresponding tax deduction for the
tax year in which the Participant recognizes ordinary income. This summary is
not intended to be exhaustive and, among other things, does not describe
state, local or employment tax consequences.
Action by Stockholders
The affirmative vote of a majority of the votes cast by the holders of the
shares of common stock present, in person or represented by proxy, at the 2001
Annual Meeting is required for approval of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE RCM
TECHNOLOGIES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN.
19
PROPOSAL 4
---------------------
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
On the recommendation of our management, the Board of Directors has selected
Grant Thornton LLP to act in the capacity of independent accountants for the
current fiscal year. Ratification and approval by the stockholders will be
sought by the Board of Directors for the selection of Grant Thornton LLP as
independent accountants to audit our accounts and records for the fiscal year
ending December 31, 2001, and to perform other appropriate services. The
affirmative vote of a majority of the outstanding shares of our voting stock
is required to ratify the selection of Grant Thornton LLP. In the event that a
majority of the shares voted at the Annual Meeting do not vote for
ratification of the selection of Grant Thornton LLP, the Board of Directors
will reconsider such selection.
Audit Fees. Audit fees billed to the Company by Grant Thornton LLP during
2000 for audit and review of our annual financial statements and those
financial statements included in our quarterly reports on Form 10-Q totaled
$60,000.
Financial Information Systems Design and Implementation Fees. We did not
engage Grant Thornton LLP to provide advice to the Company regarding financial
information systems design and implementation during 2000.
All Other Fees. Fees billed to the Company by Grant Thornton LLP during 2000
for all other non-audit services rendered to the Company, including tax
related services, totaled $12,605.
The Audit Committee has considered whether Grant Thornton LLP's provision of
services other than professional services rendered for the audit and review of
our annual financial statements is compatible with maintaining Grant Thornton
LLP's independence, and has determined that it is so compatible.
The Audit Committee has been informed by Grant Thornton LLP that less than
50 percent of the hours expended on Grant Thornton LLP's engagement to audit
our financial statement for the fiscal year ended December 31, 2001 were
attributed to work performed by persons other than Grant Thornton LLP's full-
time, permanent employees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND APPROVAL
OF THE SELECTION OF GRANT THORNTON LLP AS OUR INDEPENDENT ACCOUNTANTS FOR
FISCAL 2001.
The following report of the audit committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other of our filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent we specifically incorporate this
report by reference therein.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees our financial reporting process on behalf of
the Board of Directors. In fulfilling its responsibilities, the Committee
recommended to the Board of Directors of the selection of our independent
auditors. The Audit Committee discussed with the independent auditors the
overall scope and specific plans for their audit. The Committee also discussed
our consolidated financial statements and the adequacy of our internal
controls. The Committee met regularly with our independent auditors, without
management present, to discuss the results of their examinations, their
evaluations of our internal controls, and the overall quality of our financial
reporting. The meetings also were designed to facilitate any private
communication with the Committee desired by the independent auditors. During
the course of the year, the Committee recommended to and received approval of
the Board of Directors for the creation of an internal auditor position. A
copy of the Audit Committee Charter is set forth below.
All members of the Audit Committee are independent, as independence is
defined in Rule 4200(a)(15) of the listing standards of the National
Association of Securities Dealers.
Audit Committee
Robert B. Kerr (Chair)
Norman S. Berson
Woodrow B. Moats, Jr.
20
AUDIT COMMITTEE CHARTER
Organization
The Audit Committee of the Board of Directors shall be comprised of at
least three directors who are independent of management and the Company.
Members of the Audit Committee shall be considered independent if they have
no relationship to the Company that may interfere with the exercise of their
independence from management and the Company. All Audit Committee members
will be financially literate, and at least one member will have accounting
or related financial management expertise.
Statement of Policy
The Audit Committee shall provide assistance to the directors in
fulfilling their responsibility to the stockholders, potential stockholders
and investment community relating to corporate accounting, reporting
practices of the Company and the quality and integrity of financial reports
of the Company. In so doing, it is the responsibility of the Audit Committee
to maintain free and open communication between the directors, the
independent auditors and the financial management of the Company. It is the
expectation of the Audit Committee that the financial management will
fulfill its responsibility of bringing any significant items to the
attention of the Audit Committee.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and stockholders that the
corporate accounting and reporting practices of the Company are in
accordance with pertinent requirements.
In carrying out these responsibilities, the Audit Committee will:
o Obtain annually the full Board of Directors' approval of this
Charter and review and reassess this Charter as conditions dictate.
o Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the Company and its
divisions and subsidiaries.
o Have a clear understanding with the independent auditors that they
are ultimately accountable to the Board of Directors and the Audit
Committee, as the stockholders' representatives, who have the
ultimate authority in deciding to engage, evaluate and, if
appropriate, terminate their services.
o Meet with the independent auditors and financial management of the
Company to review the scope of the proposed audit and quarterly
reviews for the current year and the procedures to be utilized, the
adequacy of the independent auditors' compensation and at the
conclusion thereof review such audit or reviews, including any
comments or recommendations of the independent auditors.
o Review with the independent auditors, the Company's internal auditor
and financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the
Company, and elicit any recommendations for the improvement of such
internal controls or particular areas where new or more detailed
controls or procedures are desirable.
o Review the financial statements contained in the annual report to
stockholders with management and the independent auditors to
determine that the independent auditors are satisfied with the
disclosure and contents of the financial statements to be presented
to the stockholders. Review with financial management and the
independent auditors the results of their timely analysis of
significant financial reporting issues and practices, including
changes in, or adoptions of, accounting principles and disclosure
practices, and discuss any other matters required to be communicated
to the Committee by the auditors.
21
o Provide sufficient opportunity for the internal and independent
auditors to meet with the members of the Audit Committee without
members of management present.
o Report the results of the annual audit to the Board of Directors.
o On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professional
services as required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees.
o Include a report of the Audit Committee in the proxy statements.
o Submit the minutes of all meetings of the Audit Committee to, or
discuss the matters discussed at each Committee meeting with, the
Board of Directors.
o Investigate any matter brought to its attention within the scope of
its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals to be considered for inclusion in the
proxy materials for our annual meetings. For your proposal to be included in
the proxy materials for our 2002 annual meeting:
o you must submit your proposal in writing to Stanton Remer, Secretary,
RCM Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken,
New Jersey 08109;
o Mr. Remer must receive your proposal no later than February 21, 2002;
and
o your proposal must comply with the rules and regulations of the SEC.
You may wish to present a proposal at our 2002 annual meeting but not have
the proposal included in our proxy materials relating to that meeting. You
must notify our Secretary of such proposal. If we do not receive notice of
your proposal by May 7, 2002 the proposal will be deemed "untimely" for the
purposes of Rule 14a-4(c) of the Securities Exchange Act of 1934. If the
proposal is deemed "untimely," the persons named as proxies in next year's
proxy materials will be entitled to vote in their discretion with respect to
the proposal.
By Order of the Board of Directors,
/s/ Stanton Remer
---------------------------------------------
Stanton Remer
Secretary
April 25, 2001
22
APPENDIX A
RCM TECHNOLOGIES, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
The purpose of the RCM Technologies, Inc. 2001 Employee Stock Purchase
Plan is to provide eligible employees of the Company and its subsidiaries an
opportunity to purchase common stock of RCM Technologies, Inc. ("the Company").
The Board of Directors of the Company believes that employee participation in
stock ownership will be to the mutual benefit of the employees and the Company.
The Plan must be approved by the stockholders of the Company within 12 months
after the date on which the Plan is adopted.
ARTICLE I
Definitions
Sec. 1.01 "Board of Directors" means the Board of Directors of the
Company.
Sec. 1.02 "Code" means the Internal Revenue Code of 1986, as amended.
References to specific sections of the Code shall be taken to be references to
corresponding sections of any successor statute.
Sec. 1.03 "Committee" means the committee appointed by the Board of
Directors to administer the Plan, as provided in Section 5.04.
Sec. 1.04 "Company" means RCM Technologies, Inc., a Nevada corporation,
or any successor by merger or otherwise.
Sec. 1.05 "Compensation" means a Participant's base wages, overtime
pay, commissions, cash bonuses, premium pay and shift differential, before
giving effect to any compensation reductions made in connection with plans
described in section 401(k) or 125 of the Code.
Sec. 1.06 "Effective Date" shall mean January 1, 2001.
Sec. 1.07 "Election Date" means 30 days before each July 1 and January
1 or such other dates as the Committee shall specify; provided that the first
Election Date for the Plan shall be the Effective Date.
Sec. 1.08 "Eligible Employee" means each employee of the Employer:
(i) Who is employed by the Employer as an employee (and not as
an independent contractor),
(ii) Whose customary employment is for more than 20 hours per
week and for more than five months per year,
(iii) Who is not deemed for purposes of section 423(b)(3) of
the Code to own stock possessing five percent or more of the total
combined voting power or value of all classes of stock of the Company
or any subsidiary, and
(iv) Who has completed at least one year of service with the
Employer, including any period of service with any predecessor business
unit acquired by the Employer (whether by asset purchase, stock
purchase, merger or otherwise).
Sec. 1.09 "Employer" means the Company and each Subsidiary.
Sec. 1.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and as the same may hereafter be amended.
Sec. 1.11 "Market Value" means the last price for the Stock as reported
on the principal market on which the Stock is traded for the date of reference.
If there was no such price reported for the date of reference, "Market Value"
means the last reported price for the Stock on the day next preceding the date
of reference for which such price was reported or, if there was no such reported
price, the fair market value as determined by the Committee.
Sec. 1.12 "Participant" means each Eligible Employee who elects to
participate in the Plan.
Sec. 1.13 "Plan" means the RCM Technologies, Inc. 2001 Employee Stock
Purchase Plan, as set forth herein and as hereafter amended.
Sec. 1.14 "Plan Year" means each calendar year during which the Plan is
in effect.
Sec. 1.15 "Purchase Agreement" means the instrument prescribed by the
Committee pursuant to which an Eligible Employee may enroll as a Participant and
subscribe for the purchase of shares of Stock on the terms and conditions
offered by the Company. The Purchase Agreement is intended to evidence the
Company's offer of an option to the Eligible Employee to purchase Stock on the
terms and conditions set forth therein and herein.
Sec. 1.16 "Purchase Date" means the last day of each Purchase Period.
Sec. 1.17 "Purchase Period" means each six-month period or other period
specified by the Committee, beginning on or after the Effective Date, during
which the Participant's Stock purchase is funded through payroll deduction
accumulations.
Sec. 1.18 "Purchase Price" means the purchase price for shares of Stock
purchased under the Plan, determined as set forth in Section 3.03.
Sec. 1.19 "Stock" means the common stock of the Company.
Sec. 1.20 "Subsidiary" means any present or future corporation which
(i) constitutes a "subsidiary corporation" of the Company as that term is
defined in section 424 of the Code and (ii) is designated as a participating
entity in the Plan by the Committee.
ARTICLE II
Admission to Participation
Sec. 2.01 Initial Participation. An Eligible Employee may elect to
participate in the Plan and may become a Participant effective as of any
Election Date, by executing and filing with the Committee a Purchase Agreement
at such time in advance of the Election Date as the Committee shall prescribe.
The Purchase Agreement shall remain in effect until it is modified through
discontinuance of participation under Section 2.02 or a change under Section
3.05.
Sec. 2.02 Discontinuance of Participation.
(a) A Participant may voluntarily cease his or her
participation in the Plan and stop payroll deductions at any time by
filing a notice of cessation of participation on such form and at such
time in advance of the Purchase Date as the Committee shall prescribe.
A Participant who ceases contributions during a Purchase Period may not
make additional contributions to the Plan during the Purchase Period.
The Company shall pay a Participant who ceases contributions during a
Purchase Period any funds held in his or her account under the Plan.
The Participant may again elect to participate in the Plan on the next
Election Date, if the Participant is then an Eligible Employee.
(b) If a Participant terminates his or her employment with the
Employer for any reason or otherwise ceases to be an Eligible Employee,
his or her participation in the Plan automatically shall cease, no
further purchase of Stock shall be made for the Participant, and the
Company shall pay to the Participant (or, if the Participant terminates
employment with the Employer on account of death, to the Participant's
executor, administrator or other personal representative) any funds
held in his or her account under the Plan.
Sec. 2.03 Readmission to Participation. Any Eligible Employee who has
previously been a Participant, who has discontinued participation (whether by
cessation of eligibility or otherwise), and who wishes to be reinstated as a
Participant may again become a Participant by executing and filing with the
Committee a new Purchase Agreement. Reinstatement to Participant status shall be
effective as of any Election Date, provided the Participant files a new Purchase
Agreement with the Committee at such time in advance of the Election Date as the
Committee shall prescribe.
ARTICLE III
Stock Purchase and Resale
Sec. 3.01 Reservation of Shares. There shall be 500,000 shares of Stock
reserved for issuance or transfer under the Plan, subject to adjustment in
accordance with Section 4.02. Except as provided in Section 4.02, the aggregate
number of shares of Stock that may be purchased under the Plan shall not exceed
the number of shares of Stock reserved under the Plan.
Sec. 3.02 Limitation on Shares Available.
(a) The maximum number of shares of Stock that may be
purchased for each Participant on a Purchase Date is the lesser of (a)
the number of whole shares of Stock that can be purchased by applying
the full balance of the Participant's withheld funds to the purchase of
shares of Stock at the Purchase Price, or (b) the Participant's
proportionate part of the maximum number of shares of Stock available
under the Plan, as stated in Section 3.01.
(b) Moreover, the maximum number of shares that a Participant
may purchase during a Purchase Period is 1,000 shares (subject to the
limits of Section 3.02(d) and subject to adjustment as described in
Section 4.02). Further, the maximum number of shares that all
Participants may purchase, in the aggregate, during a Purchase Period
is 250,000 shares (subject to adjustment as described in Section 4.02).
If necessary, the maximum number of shares that a Participant may
purchase during a Purchase Period shall be adjusted as determined by
the Committee, to reflect the maximum number of shares that all
Participants may purchase, in the aggregate, during a Purchase Period.
Before the beginning of a Purchase Period, the Committee may increase
or decrease these maximum share limits for the Purchase Period and
subsequent Purchase Periods. The adjusted maximum share limits shall
continue in effect until again adjusted by the Committee.
(c) Notwithstanding the foregoing, if any person entitled to
purchase shares pursuant to any offering under the Plan would be deemed
for purposes of section 423(b)(3) of the Code to own stock (including
any number of shares of Stock that such person would be entitled to
purchase under the Plan) possessing five percent or more of the total
combined voting power or value of all classes of stock of the Company
or any subsidiary, the maximum number of shares of Stock that such
person shall be entitled to purchase pursuant to the Plan shall be
reduced to that number which, when added to the number of shares of
stock that such person is deemed to own (excluding any number of shares
of Stock that such person would be entitled to purchase under the
Plan), is one less than such five percent. Any amounts withheld from a
Participant's compensation that cannot be applied to the purchase of
Stock by reason of the foregoing limitation shall be returned to the
Participant as soon as practicable.
(d) A Participant may not purchase shares of Stock having an
aggregate Market Value of more than $25,000, determined at the
beginning of each Purchase Period, for any calendar year in which one
or more offerings under this Plan are outstanding at any time, and a
Participant may not purchase a share of Stock under any offering after
the expiration of the Purchase Period for the offering.
Sec. 3.03 Purchase Price of Shares.
(a) Unless the Committee determines otherwise, the Purchase
Price per share of the Stock to be sold to Participants under the Plan
shall be the lower of:
(i) 85% of the Market Value of such share on the first day
of the Purchase Period, or
(ii) 85% of the Market Value of such share on the Purchase
Date.
(b) The Committee may determine that the Purchase Price shall
be the Market Value, or a percentage of the Market Value, on either of
the first day of the Purchase Period or the Purchase Date, or the lower
of such values, so long as the percentage shall not be lower than 85%
of such Market Value.
Sec. 3.04 Exercise of Purchase Privilege.
(a) As of the first day of each Purchase Period, each
Participant shall be granted an option to purchase shares of Stock at
the Purchase Price specified in Section 3.03. The option shall continue
in effect through the Purchase Date for the Purchase Period. Subject to
the provisions of Section 3.02 above, on each Purchase Date, the
Participant shall automatically be deemed to have exercised his or her
option to purchase shares of Stock, unless he or she notifies the
Committee, in such manner and at such time in advance of the Purchase
Date as the Committee shall prescribe, of his or her desire not to make
such purchase.
(b) Subject to the provisions of Section 3.02, there shall be
purchased for the Participant on each Purchase Date, at the Purchase
Price for the Purchase Period, the largest number of whole shares of
Stock as can be purchased with the amounts withheld from the
Participant's Compensation during the Purchase Period. Each such
purchase shall be deemed to have occurred on the Purchase Date
occurring at the close of the Purchase Period for which the purchase
was made. Any amounts that are withheld from a Participant's
Compensation in a Purchase Period and that remain after the purchase of
whole shares of Stock on a Purchase Date will be held in the
Participant's account, without interest, and applied on the
Participant's behalf to purchase Stock on the next Purchase Date.
Sec. 3.05 Payroll Deductions. Each Participant shall authorize payroll
deductions from his or her Compensation for the purpose of funding the purchase
of Stock pursuant to his or her Purchase Agreement. In the Purchase Agreement,
each Participant shall authorize an after-tax payroll deduction from each
payment of Compensation during the Purchase Period in integral percentage
amounts ranging from 1% to 10% of such Participant's Compensation, but in no
event shall Participant be able to authorize more than $10,000 per year toward
the purchase of Stock pursuant to his or her Purchase Agreement. A Participant
may change the deduction to any permissible level effective as of any Election
Date. A change shall be made by filing with the Committee a notice in such form
and at such time in advance of the Election Date on which the change is to be
effective as the Committee shall prescribe. Except as provided in Section 2.02,
a Participant may not change his or her percentage amounts during the Purchase
Period.
Sec. 3.06 Payment for Stock. The Purchase Price for all shares of Stock
purchased by a Participant under the Plan shall be paid out of the Participant's
authorized payroll deductions. All funds received or held by the Company under
the Plan are general assets of the Company, shall be held free of any trust or
other restriction, and may be used for any corporate purpose.
Sec. 3.07 Share Ownership; Issuance of Certificates.
(a) The shares of Stock purchased by a Participant on a
Purchase Date shall, for all purposes, be deemed to have been issued or
sold at the close of business on the Purchase Date. Prior to that time,
none of the rights or privileges of a stockholder of the Company shall
inure to the Participant with respect to such shares of Stock. All the
shares of Stock purchased under the Plan shall be delivered by the
Company in a manner as determined by the Committee.
(b) The Committee, in its sole discretion, may determine that
shares of Stock shall be delivered by (i) issuing and delivering to the
Participant a certificate for the number of shares of Stock purchased
by the Participant, (ii) issuing and delivering certificates for the
number of shares of Stock purchased to a firm which is a member of the
National Association of Securities Dealers, as selected by the
Committee from time to time, which shares shall be maintained by such
firm in a separate brokerage account for each Participant, or (iii)
issuing and delivering certificates for the number of shares of Stock
purchased by Participants to a bank or trust company or affiliate
thereof, as selected by the Committee from time to time, which shares
may be held by such bank or trust company or affiliate in street name,
but with a separate account maintained by such entity for each
Participant reflecting such Participant's share interests in the Stock.
Each certificate or account, as the case may be, may be in the name of
the Participant or, if he or she so designates on the Participant's
Purchase Agreement, in the Participant's name jointly with the
Participant's spouse, with right of survivorship, or in such other form
as the Committee may permit.
(c) The Committee, in its sole discretion, may impose such
restrictions or limitations as it shall determine on the resale of
Stock, the issuance of individual stock certificates or the withdrawal
from any stockholder accounts established for a Participant.
(d) If, under Section 3.07(b), certificates for Stock are held
for the benefit of the Participant, any dividends payable with respect
to shares of Stock credited to a stockholder account of a Participant
will, at the Participant's election, either be (i) reinvested in shares
of Stock and credited to the Participant's account or (ii) paid
directly to the Participant. If dividends are reinvested in shares of
Stock, such reinvestment shall be made based on the Market Value of the
Stock at the date of the reinvestment, with no discount from Market
Value.
Sec. 3.08 Distribution of Shares or Sale of Stock.
(a) In accordance with the procedures established by the
Committee, a Participant may request a distribution of shares of Stock
purchased for the Participant under the Plan or order the sale of such
shares. However, a Participant may not receive a distribution of any
shares of Stock acquired under the Plan within two years after the
beginning of the Purchase Period in which the Stock is purchased.
(b) In accordance with the procedures established by the
Committee, the Participant may elect to sell the shares of Stock from
the stockholder account established pursuant to Section 3.07(b) under
the Plan.
(c) In accordance with the procedures established by the
Committee, if a Participant terminates his or her employment with the
Employer for any reason or ceases to be an Eligible Employee, the
Committee may (i) require the Participant to sell the shares of Stock
from the account established pursuant to Section 3.07(b) under the
Plan, or (ii) receive a distribution of his or her shares of Stock held
in any stockholder account established pursuant to Section 3.07(b),
unless the Participant elects (or, if the Participant terminates
employment with the Employer on account of death, the Participant's
executor, administrator or other personal representative elects) to
have the shares of Stock sold in accordance with such procedures as the
Committee shall prescribe.
(d) If a Participant is to receive a distribution of shares of
Stock, or if shares are to be sold, the distribution or sale shall be
made in whole shares of Stock. Any brokerage commissions resulting from
a sale of Stock shall be deducted from amounts payable to the
Participant.
ARTICLE IV
Special Adjustments
Sec. 4.01 Shares Unavailable. If, on any Purchase Date, the aggregate
funds available for the purchase of Stock would purchase a number of shares in
excess of the number of shares of Stock then available for purchase under the
Plan, the following events shall occur:
(a) The number of shares of Stock that would otherwise be
purchased by each Participant shall be proportionately reduced on the
Purchase Date in order to eliminate such excess; and
(b) The Plan shall automatically terminate immediately after
the Purchase Date as of which the supply of available shares is
exhausted.
Sec. 4.02 Anti-Dilution Provisions. The aggregate number of shares of
Stock reserved for purchase under the Plan, as provided in Section 3.01, the
maximum number of shares that may be purchased by a Participant as provided in
Section 3.02(b), the total number of shares that may be purchased by all
Participants in a Purchase Period as provided in Section 3.02(b), and the
calculation of the Purchase Price per share may be appropriately adjusted by the
Committee to reflect any increase or decrease in the number of issued shares of
Stock resulting from a subdivision or consolidation of shares or other capital
adjustment, or the payment of a stock dividend, or other increase or decrease in
such shares, if effected without receipt of consideration by the Company.
Sec. 4.03 Effect of Certain Transactions. Subject to any required
action by the stockholders, if the Company shall be the surviving corporation in
any merger or consolidation, any offering hereunder shall pertain to and apply
to the shares of stock of the Company. However, in the event of a dissolution or
liquidation of the Company, or of a merger or consolidation in which the Company
is not the surviving corporation, the Plan and any offering hereunder shall
terminate upon the effective date of such dissolution, liquidation, merger or
consolidation, unless the Board determines otherwise, and the balance of any
amounts withheld from a Participant's Compensation which have not by such time
been applied to the purchase of Stock shall be returned to the Participant.
ARTICLE V
Miscellaneous
Sec. 5.01 Non-Alienation. The right to purchase shares of Stock under
the Plan is personal to the Participant, is exercisable only by the Participant
during the Participant's lifetime and may not be assigned or otherwise
transferred by the Participant.
Sec. 5.02 Administrative Costs. The Company shall pay the
administrative expenses associated with the operation of the Plan (other than
brokerage commissions resulting from sales of Stock directed by Participants).
Sec. 5.03 No Interest. No interest shall be payable with respect to
amounts withheld under the Plan.
Sec. 5.04 Committee. The Board of Directors shall appoint the
Committee, which shall have the authority and power to administer the Plan and
to make, adopt, construe, and enforce rules and regulations not inconsistent
with the provisions of the Plan. The Committee shall adopt and prescribe the
contents of all forms required in connection with the administration of the
Plan, including, but not limited to, the Purchase Agreement, payroll withholding
authorizations, requests for distribution of shares, and all other notices
required hereunder. The Committee shall have the fullest discretion permissible
under law in the discharge of its duties. The Committee's interpretations and
decisions with respect to the Plan shall be final and conclusive.
Sec. 5.05 Withholding of Taxes; Notification of Transfer.
(a) All acquisitions and sales of Stock under the Plan shall
be subject to applicable federal (including FICA), state and local tax
withholding requirements if the Internal Revenue Service or other
taxing authority requires such withholding. The Company may require
that Participants pay to the Company (or make other arrangements
satisfactory to the Company for the payment of) the amount of any
federal, state or local taxes that the Company is required to withhold
with respect to the purchase of Stock or the sale of Stock acquired
under the Plan, or the Company may deduct from the Participant's wages
or other compensation the amount of any withholding taxes dues with
respect to the purchase of Stock or the sale of Stock acquired under
the Plan.
(b) A Participant shall be required to advise the Committee
immediately if the Participant transfers (by sale, gift or other
manner) any shares of Stock acquired under the Plan within two years
after the beginning of the Purchase Period in which the Stock is
purchased.
Sec. 5.06 Amendment of the Plan. The Board of Directors may, at any
time and from time to time, amend the Plan in any respect, except that any
amendment that is required to be approved by the stockholders under section 423
of the Code shall be submitted to the stockholders of the Company for approval.
Sec. 5.07 Expiration and Termination of the Plan. The Plan shall
continue in effect for ten years from the Effective Date, unless terminated
prior to that date pursuant to the provisions of the Plan or pursuant to action
by the Board of Directors. The Board of Directors shall have the right to
terminate the Plan at any time without prior notice to any Participant and
without liability to any Participant. Upon the expiration or termination of the
Plan, the balance, if any, then standing to the credit of each Participant from
amounts withheld from the Participant's Compensation which has not, by such
time, been applied to the purchase of Stock shall be refunded to the
Participant.
Sec. 5.08 No Employment Rights. Participation in the Plan shall not
give an employee any right to continue in the employment of an Employer, and
shall not affect the right of the Employer to terminate the employee's
employment at any time, with or without cause.
Sec. 5.09 Repurchase of Stock. The Company shall not be required to
purchase or repurchase from any Participant any of the shares of Stock that the
Participant acquires under the Plan.
Sec. 5.10 Notice. A Purchase Agreement and any notice that a
Participant files pursuant to the Plan shall be on the form prescribed by the
Committee and shall be effective only when received by the Committee. Delivery
of such forms may be made by hand or by certified mail, sent postage prepaid, to
the Company's corporate headquarters, or such other address as the Committee may
designate. Delivery by any other mechanism shall be deemed effective at the
option and discretion of the Committee.
Sec. 5.11 Government Regulation. The Company's obligation to sell and
to deliver the Stock under the Plan is at all times subject to all approvals of
any governmental authority required in connection with the authorization,
issuance, sale or delivery of such Stock.
Sec. 5.12 Internal Revenue Code and ERISA Considerations. The Plan is
intended to constitute an "employee stock purchase plan" within the meaning of
section 423 of the Internal Revenue Code of 1986, as amended. The Plan is not
intended and shall not be construed as constituting an "employee benefit plan,"
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended.
Sec. 5.13 Headings, Captions, Gender. The headings and captions herein
are for convenience of reference only and shall not be considered as part of the
text. The masculine shall include the feminine, and vice versa.
Sec. 5.14 Severability of Provisions, Prevailing Law. The provisions of
the Plan shall be deemed severable. In the event any such provision is
determined to be unlawful or unenforceable by a court of competent jurisdiction
or by reason of a change in an applicable statute, the Plan shall continue to
exist as though such provision had never been included therein (or, in the case
of a change in an applicable statute, had been deleted as of the date of such
change). The Plan shall be governed by the laws of the Nevada to the extent such
laws are not in conflict with, or superseded by, federal law.
APPENDIX B
RCM TECHNOLOGIES, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
THIS PLAN, effective as of January 1, 2001 (the "Effective Date"), is
established by RCM Technologies, Inc., a Nevada corporation (hereinafter the
"Company"), 2500 McClellan Ave., Suite 350, Pennsauken, NJ 08109.
RECITALS
The Company recognizes the valuable services performed for it by the
employees participating in this Plan (herein the "Employees," the "Participants"
or the "Employees").
The Company desires to establish this Plan to permit certain Employees
of the Company to defer payment of a portion of their compensation until the
times specified in this Plan.
The Employees participating in this Plan constitute a select group of
management or highly compensated employees.
It is the intention of the parties that this arrangement is unfunded
for tax purposes and for purposes of Title I of ERISA.
The Company desires to provide the terms and conditions under which
such amounts shall be deferred and paid.
AGREEMENTS
In consideration of these premises, the Company hereby declares:
1. Establishment and Purposes.
a. Establishment. Company hereby establishes this Plan as of
the Effective Date.
b. Name. The Plan shall be known as the "RCM Technologies,
Inc. Nonqualified Deferred Compensation Plan."
c. Purpose. The purpose of this Plan is to allow Employees to
defer a portion of their compensation so that such amounts may be paid
to the Employees (or their beneficiaries) as specified in this Plan,
and to allow the Company to make certain discretionary contributions as
provided in this Plan.
2. Definitions.
Except as otherwise provided herein, the following terms shall have the
definitions hereinafter indicated wherever used in this Plan with initial
capital letters:
a. Beneficiary: Any person, entity, or any combination
thereof, designated by an Employee in a written document in
substantially the form of Exhibit 1 attached to this Plan and hereby
made a part of this Plan (or such other form as the Company may
designate from time to time), to receive benefits under this Plan in
the event of the Employee's death, or in the absence of any such
designation, his or her estate. The term "Beneficiary" shall include
one or more Beneficiaries, including all contingent Beneficiaries
designated.
b. Board of Directors: The Company's Board of Directors or
other governing body at any time.
c. Code: The Internal Revenue Code of 1986, as amended.
d. Deferred Compensation Account: shall have the meaning set
forth in Section 8 of this Plan.
e. Disability or Disabled: An Employee shall be considered
"Disabled" or to have a "Disability" for purposes of this Plan if he or
she is unable to perform his or her regular duties because of a
physical or mental illness or injury for a period in excess of four (4)
months, and his or her employment terminates as a result of such
illness or injury.
f. Employee or Executive: An Employee of the Company selected
by the Company to participate in this Plan and who has fulfilled the
requirements to participate in this Plan, provided that all Employees
herein shall be members of a select group of management or highly
compensated employees. The term "Executive" shall have the same meaning
as the term "Employee."
g. ERISA. The Employee Retirement Income Security Act of 1974,
as amended.
h. Participant: The term "Participant" shall have the same
meaning in this Plan as the terms "Employee" and "Executive".
i. Participation Agreement: A written document under which an
Employee elects to participate in this Plan, and elects to defer a
portion of his or her compensation, in substantially the form of
Exhibit 2 attached to this Plan and hereby made a part of this Plan (or
such other form as the Company may designate from time to time).
j. Plan: This RCM Technologies, Inc. Nonqualified Deferred
Compensation Plan.
3. Participation in the Plan.
a. Employees selected by the Company from time to time shall
be eligible to participate in this Plan. Notwithstanding any other
provision herein, only individuals who are members of a select group of
management or highly compensated employees may participate in this
Plan.
b. Employees may elect to commence their participation in this
Plan and defer payment of part of their compensation by executing a
Participation Agreement and delivering said Participation Agreement to
the Company.
c. Each Participation Agreement executed under this Plan shall
specify the total dollar amount (or a percentage) of base salary and
commissions, and the total dollar amount (or a percentage) of the
Employee's annual bonus which is to be deferred for each year. An
Employee cannot defer more than fifty percent (50%) of his or her base
salary and commissions, and may defer up to one hundred percent (100%)
of his or her bonus for any year. The minimum amount that may be
deferred in any year is Five Thousand Dollars ($5,000.00). If the
Employee is a participant of this Plan for only part of the year, the
minimum amount that may be deferred shall be $416.66 per month. The
amount to be deferred shall be deducted from the compensation otherwise
payable to the Employee.
d. At times designated by the Company, each Employee may
execute and deliver a written election with the Company in the form and
manner directed by the Company to increase or decrease the amount
deferred hereunder effective for compensation earned after the date
designated in the election form. Any change in the amount deferred
shall only be effective for amounts that have not yet been earned. If
an Employee does not change the amount deferred, his or her previous
election shall continue in effect. In its discretion, the Company may
permit an Employee to execute a new deferral election form any time
(including but not limited to situations in which an employee becomes a
Participant of the Plan after the beginning of the year), provided that
any change in the amount deferred shall only be effective for amounts
that have not yet been earned.
e. Employees who had participated in the Plan and who
subsequently terminate their participation may recommence active
participation with the consent of the Company by filing a new
Participation Agreement as allowed by the Company.
f. All elections provided for in paragraphs (a) through (e) in
this Section, including but not limited to all elections to participate
in this Plan or to increase or decrease amounts deferred, shall only be
effective if filed with or delivered to the Company in the manner
requested or directed by the Company.
4. Employee Elective Deferrals and Designation of Schedule for Payment
of Benefits.
a. During each payroll period in which an Employee has elected
to defer compensation under a Participation Agreement or deferral
election form, the Company shall defer payment of such part of the
Employee's compensation as is specified in the Participation Agreement
or deferral election form (herein the "Employee Elective Deferrals").
Compensation is to be deferred for any calendar month only if an
agreement providing for such deferral has been entered into before the
first day of the month. However, with respect to a new employee,
compensation may be deferred for the calendar month during which the
employee first becomes an employee, if an agreement providing for such
deferral is entered into before the first day on which the employee
becomes an employee.
b. In addition to designating the amount of his or her
compensation that shall be deferred in a Participation Agreement or a
deferral election form, an Employee may also designate when such
amounts shall be paid, as provided in Section 9 of this Plan.
5. Company Contributions. In addition to the amounts that are
voluntarily deferred by an Employee, the Company has discretion to defer
additional amounts under this Plan (herein the "Company Contributions"). The
additional amounts may be based on the Company profits for the previous year,
and may be allocated among the Employees based on their respective levels of
compensation. Any Company Contribution shall be credited to the Employee's
Deferred Compensation Account at the time designated by the Company.
6. Earnings Amounts. In addition to the other amounts credited to an
Employee's Deferred Compensation Account, the Company shall also credit (or
reduce) an Employee's Deferred Compensation Account by an amount equal to the
amount that would have been earned (or lost) if the amounts deferred under this
Plan had been invested in hypothetical investments designated by the Employee
from time to time, based on a list of hypothetical investments provided by the
Company from time to time. Such hypothetical earning shall be referred to in
this Plan as the "Earnings Amount"). The Employee shall designate the
investments used to measure the Earnings Amount from the list provided by the
Company, by completing a document in the form of Exhibit 3 attached hereto, or
in such other form as the Company may designate from time to time. The Employee
may change such designations at such times as are permitted by the Company,
provided that the Employee shall be entitled to change such designations at
least quarterly. Earnings Amounts shall be credited to (or deducted from) the
Employee's Deferred Compensation Account at least annually (or more frequently
at the discretion of the Company). Earnings shall be credited (or deducted from)
a Deferred Compensation Account until all payments with respect to such account
have been made under this Plan. The Company shall not be liable or otherwise
responsible for any decrease in an Employee's Deferred Compensation Account
because of the investment performance of the designated assets. The Company, in
its sole and absolute discretion may (or may not) acquire any particular
investment product or any other instrument or otherwise invest any amount to
provide the funds from which it can satisfy its obligations to make benefit
payments under this Plan. To the extent that an Employee or his or her
Beneficiary acquires a right to receive payments from the Company under the
provisions hereof, such right shall be no greater than the right of any
unsecured general creditor of the Company.
7. Vesting of Company Contributions and Earnings Thereon. An Employee
shall be one hundred percent (100%) vested at all times in his or her Employee
Elective Deferrals and the Earnings thereon.
In regards to the Company Contributions and Earnings thereon, an
Employee shall be one hundred percent (100%) vested in any given plan year
Company Contribution when the Employee has completed three (3) consecutive Years
of Service with the Company as a Participant of this Plan immediately after the
year for which the contribution is made, and he or she remains an employee on
January 1 of the next year. For the purpose of determining the vesting for
Company Contributions, each plan year Company Contribution shall be considered
separately and have its own vesting schedule. No Years of Service with the
Company prior to becoming a participant under this Plan shall be considered for
purposes of this Plan. A "Year of Service" shall mean a calendar year after
December 31, 2000 in which the Employee works at least one thousand (1,000)
hours for the Company. If an Employee's employment with the Company terminates
before he or she has completed at least three (3) consecutive Years of Service
as a Participant under this Plan immediately after the year for which the
contribution is made (or if he or she is not an employee on January 1 of the
next year), the Employee shall have no interest whatsoever in such contribution
and any Earnings thereon (in other words, any interest the Employee may have had
shall be forfeited).
As an example, assume that the Company reviews its results for the
calendar year ending December 31, 2001, and as a result, in March of 2002,
elects to make a Company Contribution. In order to vest in such contribution
(and the Earnings thereon) the Employee would need to complete three (3)
consecutive Years of Services in the next three years (in 2002, 2003, and 2004)
and be an employee on January 1 of the next year, in which case the Employee
would vest in the contribution with respect to 2001 on January 1, 2005; if the
Employee's employment terminated before he or she completed such three Years of
Service, or if he or she was not an employee on January 1, 2005, the Employee
would forfeit any interest in such contribution and the Earnings thereon.
Similarly, if a Company Contribution is made for the plan year ended December
31, 2002, the Employee must complete three (3) consecutive Years of Service (in
2003, 2004 and 2005) and continue to be an employee on January 1, 2006.
The portion of an Employee's Deferred Compensation Account that is
vested under this Plan shall be referred to as the "Vested Deferred Compensation
Account." Notwithstanding any other provision herein, Company Contributions and
Earnings thereon previously credited to an Employee's Deferred Compensation
Account shall vest automatically if:
(i) the Employee dies while he or she is a full-time employee
of the Company;
(ii) the Employee becomes Disabled while he or she is a
full-time employee of the Company;
(iii) there is a "Change of Control" as defined in this
Section 7; or
(iv) the Company voluntarily terminates this Plan with respect
to all Employees, as provided in Section 12 hereof.
For purposes of this Section 7 (and Section 9 hereof), a "Change of
Control" is deemed to occur upon:
(a) the purchase or other acquisition by any person, entity or
group of persons, within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 (the "Act"), or any comparable
successor provisions, of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Act) of more than 50 percent of either
the outstanding shares of common stock or the combined voting power of
the Company's then outstanding voting securities entitled to vote
generally, or
(b) the approval by the stockholders of Company of a
reorganization, merger, or consolidation, in each case, with respect to
which persons who were stockholders of company immediately prior to
such reorganization, merger or consolidation do not, immediately
thereafter, own more than 50 percent of the combined voting power
entitled to vote generally in the election of directors of the
reorganized, merged or consolidated Company's then outstanding
securities, or
(c) a liquidation or dissolution of the Company or the sale of
all or substantially all of Company's assets.
8. Deferred Compensation Account.
The Company shall cause to be established for each Employee a
bookkeeping account (the "Deferred Compensation Account") to provide a
convenient method of measuring the Company's obligation to each Employee under
this Plan. The Company shall record in each account the amounts equal to the
Employee Elective Deferrals, the Company Contributions, and the related Earnings
Amounts. Deferred Compensation Accounts shall at all times remain a part of the
general assets of the Company and shall remain available for the payment of
Company obligations.
Neither the existence of this Plan nor any Deferred Compensation
Account shall be deemed to create a trust. Any trust referred to in this Plan or
created by the Company in connection with this Plan, and any assets held by the
trust to assist the Company in meeting its obligations under this Plan, will
constitute on unfunded arrangement for tax purposes and for purposes of Title I
of ERISA. Neither the existence of this Plan nor any Deferred Compensation
Account shall entitle any Employee, Beneficiary or other person to a claim or
lien against the assets of a Deferred Compensation Account or any other assets
of the Company. The Employee and his or her Beneficiary shall have only the
rights of an unsecured general creditor in regard to receiving the benefits
payable under this Plan.
9. Benefit Payments.
a. Payments Based on Designated Schedule(s). In addition to
designating the amount to be deferred, on each Participation Agreement
and deferral election form, the Employee may designate (among a list of
options provided by the Company) when the benefits (equal to the
Employee's Vested Deferred Compensation Account balance) will be paid
under this Plan. At a minimum, Employees will have the option to have
the vested amounts paid at normal retirement age (hereby designated as
age 55), at termination of employment before retirement, and/or at four
designated times prior to retirement (thus, up to four "in service"
distributions can be specified). To the extent provided in the
applicable Participation Agreement or deferral election form, the
vested amount may be paid out in a lump sum or over a specified period
of years. The method of distribution can be changed by the Employee (in
a manner permitted by the Company) at any time more than a year before
the original designated distribution date.
b. Payment on Early Termination. Notwithstanding any other
designation by an Employee, if the Employee terminates employment with
the Company at any time before attaining normal retirement age for any
reason (including Disability, voluntary resignation, termination
without cause, or termination with cause), an amount equal to the
amount of the Employee's Vested Deferred Compensation Account at the
time shall be paid to the Employee promptly in a lump sum, and the
Company shall have no further liability hereunder. In the event the
Employee dies, an amount equal to the Employee's Deferred Compensation
Account shall be paid to the Employee's designated Beneficiary.
c. Payment Upon a Change of Control. Notwithstanding any other
provision herein, if there is a "Change of Control" (as defined in
Section 7 hereof), an amount equal to the Employee's Vested Deferred
Compensation Account shall be paid to the Employee promptly in a lump
sum, and the Company shall have no further liability hereunder.
d. Unforeseeable Emergency. In addition, an Employee may
request in writing from the Company, a payment described in this
paragraph because of an unforeseeable emergency. For purposes of this
Plan, an unforeseeable emergency is defined as an unanticipated
emergency that is caused by an event beyond the control of the Employee
or Beneficiary and that would result in severe financial hardship to
the individual if early withdrawal were not permitted. Any early
withdrawal approved by the Company is limited to the amount necessary
to meet the emergency, and will reduce the Employee's Vested Deferred
Compensation Account on a dollar-for-dollar basis.
e. Withholding. Notwithstanding any other provision herein,
the Company shall be entitled to withhold from any amount payable
hereunder any amount required to be withheld for income, employment or
other taxes.
f. Payment Only from Company Assets. Any payment of benefits
to an Employee or his or her Beneficiary shall be made from assets
which shall continue, for all purposes, to be a part of the general
assets of the Company; no person shall have or acquire any interest in
such assets by virtue of the provisions of this Plan. To the extent
that an Employee or his or her Beneficiary acquires a right to receive
payments from the Company under the provisions hereof, such right shall
be no greater than the right of any unsecured general creditor of the
Company. This Plan constitutes a mere promise by the Company to make
benefit payments in the future.
g. Beneficiaries. An Employee may designate his or her
Beneficiary or Beneficiaries to receive the amounts as provided herein
after his or her death by delivering a writing to the Company in
substantially the form of Exhibit 1 attached hereto, designating a
beneficiary or beneficiaries. In the absence of such a designation, the
Company shall pay any such amount to the Employee's estate.
10. Administration of the Plan and Claims Procedure.
a. Determinations. The Company, or a committee designated by
the Company, shall make all determinations as to rights to benefits
under this Plan. The Company (or its designee) shall have full power
and authority to interpret, construe and administer this Plan. The
interpretation and construction of this Plan by the Company (or its
designee), and any action taken pursuant thereto, shall be binding and
conclusive upon all parties in interest.
b. Reports. The Company shall provide each Employee with a
statement reflecting the amount of the Employee's Deferred Compensation
Account on at least an annual basis.
c. No Liability. No employee, agent, officer or director of
the Company (or its designee) shall, in any event, be liable to any
person for any action taken or omitted to be taken in connection with
the interpretation, construction or administration of this Plan, so
long as such action or omission to act be made in good faith.
d. Designation of Committee. The Company hereby designates the
Company's Deferred Compensation Committee (the "Committee") to
administer this Plan. Said Committee shall have all the authority as is
granted to the Company under the terms of this Plan for the
administration of this Plan in accordance with its terms and in ruling
on such questions arising out of the administration, interpretation and
application of the Plan. This Committee may approve or disapprove all
Participation Agreements and elections in connection therewith, and
make all other determinations hereunder. Members of the Committee may
participate in the Plan, but no member of the Committee shall be
entitled to make decisions which relate solely to his or her own
participation. The Company reserves the right to designate a different
committee to administer this Plan from time to time, or to make any
determinations directly at any time. If no such committee is designated
at any time, such functions, as appropriate, may be conducted by the
Company's Board of Directors. The Company's Board of Directors hereby
reserves the right to revoke such designation at any time and to make
other designations (and to revoke such designations) at any time.
e. Claims Procedure. The following provisions are hereby made
a part of this Plan and are intended to meet the requirements of ERISA:
(1) The named fiduciary under this Plan is the
Company.
(2) This Plan is unfunded. The Employees shall defer
certain amounts under this Plan, but all benefits shall be
paid from the Company's general assets which at all times
shall remain subject to the claims of the Company's general
creditors.
(3) Direct payment by the Company is the basis of
payment of benefits under this Plan.
(4) The following claims procedures shall apply for
purposes of this Plan. Any and all persons presenting claims
hereunder (individually or collectively, "Claimant") must
follow these procedures:
(a) For claims procedure purposes, the
"Claims Manager" shall be the chairperson of the
Committee (or the chairperson of any other committee
designated by the Company to administer this Plan, or
a designated member of the Board of Directors of the
Company).
(b) A Claimant shall make a claim for
benefits hereunder by submitting a written claim to
the Company (or its designee) in accordance with any
procedures and guidelines established from time to
time by the Company, and in the absence of any
specific procedures or guidelines shall be delivered
in the manner set forth herein for providing notice
to the Company under this Plan. The Claims Manager
shall decide whether the claim shall be allowed, and
the following claims procedure shall apply:
(i) If for any reason a claim for
benefits under this Plan is denied by the
Claims Manager, the Claims Manager shall
deliver to the Claimant a written
explanation setting forth: the specific
reason or reasons for the denial; specific
references to pertinent Plan provisions; a
description of any additional material or
information necessary for the Claimant to
perfect the claim and an explanation of why
such material or information is necessary;
and appropriate information as to the steps
to be taken if the Claimant wishes to submit
his or her claim for review, all written in
a manner calculated to be understood by the
Claimant. For this purpose:
(A) The Claimant's claim
shall be deemed filed when delivered
in writing as provided herein.
(B) The Claims Manager's
explanation shall be in writing
delivered to the Claimant within 90
days of the date the claim is filed,
unless special circumstances require
an extension of time for processing
the claim. If such an extension of
time for processing is required,
written notice of the extension
shall be furnished to the Claimant
prior to the termination of the
initial 90 days from the end of such
initial period. The extension notice
shall indicate the special
circumstances requiring an extension
of time and the date by which the
Claims Manager expects to render the
final decision.
(ii) The Claimant shall have 60 days
following his or her receipt of the denial
of the claim to file with the Claims Manager
a written request for review of the denial.
For such review, the Claimant or his or her
representative may review pertinent
documents and submit issues and comments in
writing.
(iii) On review, a decision shall be
made within 60 days after the Claims
Manager's receipt of the request for review,
unless special circumstances require an
extension of time for processing, in which
case a decision shall be rendered as soon as
possible, but not later than 120 days after
receipt of the request for review. If such
an extension of time for review is required
because of special circumstances, written
notice of the extension shall be furnished
to the Claimant prior to the commencement of
the extension. The decision on review shall
be in writing and shall include specific
reasons for the decision, written in a
manner calculated to be understood by the
Claimant, as well as specific references to
the pertinent Plan provisions on which the
decision is based. If the decision on review
is not furnished within such time, the claim
shall be deemed denied on review. The Claims
Manager may designate an appropriate person
to review the claim, who may be a member of
the Committee or the Company's Board of
Directors.
11. Non-Assignability of Benefits. Neither any Employee nor any
Beneficiary under this Plan shall have any power or right to transfer, assign,
anticipate, hypothecate or otherwise encumber any part or all of the amounts
payable hereunder. Such amounts shall not be subject to seizure by any creditor
of an Employee or any Beneficiary hereunder, by a proceeding at law or in
equity, nor transferable by operation of law in the event of the bankruptcy or
insolvency of any Employee or any Beneficiary hereunder. Any such attempted
assignment or transfer shall be void and shall terminate the Employee's
participation in this Plan; the Company shall thereupon have no further
liability hereunder with respect to such Employee and his or her Beneficiary.
12. Amendment and Termination. This Plan may not be amended, altered or
modified, retroactively, except by a written instrument signed by the Company
and the impacted Employees or their respective successors. The Company may
amend, alter, modify or terminate this Plan on a prospective basis at any time,
provided further that no such modification or termination shall adversely affect
an Employee's entitlement to benefits attributable to vested amounts credited to
his or her Deferred Compensation Account prior to the modification or
termination of this Plan.
13. Impact on Other Benefits. Except as otherwise required by the Code
or any other applicable law, this Plan and the benefits provided herein are in
addition to all other benefits which may be provided by the Company to the
Employees from time to time, and shall not reduce, replace or otherwise cause
any reduction, in any manner, with regard to any of such other benefits. In no
event shall any provision herein be deemed to amend or modify any employment
agreement between the Company and any Employee, and no provision herein shall be
deemed to entitle any Employee to continued employment with the Company.
14. Notices. Any notice or other communication required or permitted
under this Plan shall be in writing and, if directed to the Company, shall be
sent by United States certified mail, return receipt requested, postage prepaid,
addressed to: RCM Technologies, Inc., 277 Fairfield Road, Fairfield, NJ 07004,
Attn: Mr. Kevin Miller, Sr. V.P. Corporate Development, and, if directed to an
Employee or to a Beneficiary, may be hand-delivered or mailed to such Employee
or Beneficiary at the last known address for such person as it appears in the
Company's records. A notice or other communication sent by United States
certified mail, return receipt requested, postage prepaid, addressed as provided
above, shall be deemed to have been given on the next business day after
mailing.
15. Tax Withholding. The Company shall have the right to deduct from
all payments made under this Plan any federal, state or local taxes required by
law to be withheld with respect to such payments.
16. Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to its conflict
of law rules.
IN WITNESS WHEREOF, the Company has executed and adopted this Plan as
of the Effective Date.
RCM TECHNOLOGIES, INC.
By:_________________________________
Print Name:____________________
Print Title:___________________
RCM TECHNOLOGIES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
EXHIBIT 1
BENEFICIARY DESIGNATION
Employee:___________________________ Social Security No.:___________________
Address:____________________________ Date of Birth:_________________________
____________________________________
CAREFULLY READ THE INSTRUCTIONS FOUND ON THE BACK
OF THIS FORM BEFORE PROCEEDING.
I, _______________________________, hereby designate the following individual(s)
or entity(ies) as my beneficiary(ies) pursuant to the RCM Technologies, Inc.
Plan (Insert Name, Social Security Number, Relationship, Date of Birth and
Address of Individuals and fully identify any Trusts by the Name of the Trust,
Date of Execution, the Trustee's Name and Address, and the Company
Identification Number of the Trust):
Primary Beneficiary(ies)
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Contingent Beneficiary(ies)
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- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
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THE RIGHT TO REVOKE OR CHANGE THIS BENEFICIARY
DESIGNATION IS HEREBY RESERVED.
Date: ______________________________ ____________________________________
Signature of Employee
Received and acknowledged this _____ day of _____________, ______:
RCM TECHNOLOGIES, INC.
By:_________________________________
Print Name:_________________________
Print Title:________________________
"Company"
INSTRUCTIONS FOR COMPLETION OF BENEFICIARY DESIGNATION FORM
As an Employee in the RCM Technologies, Inc. Nonqualified Deferred Compensation
Plan, you are entitled to designate a beneficiary who will receive your benefits
under the Plan in the event of your death. We recommend that you consult your
attorney concerning the completion of this form to assure that the desired
federal tax consequences are achieved.
This form should be executed in triplicate. All three copies must be mailed or
delivered to the following address:
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One copy will be returned to you, and it should be kept with your other
important documents.
If no Primary Beneficiary is alive when the payment becomes due, the benefits
will be paid in equal shares to those of the Contingent Beneficiaries who are
alive when the payment becomes due.
If you fail to designate a beneficiary, or if no designated beneficiaries are
alive when the payment becomes due, or if insufficient information is available
to reasonably determine your intent, the death benefits under the Plan will be
paid to your estate.
THIS BENEFICIARY DESIGNATION DOES NOT ALTER OR MODIFY THE PROVISIONS OF
THE PLAN. IN THE EVENT THAT THIS FORM INADVERTENTLY CONFLICTS WITH THE
PROVISIONS OF THE PLAN, THE PROVISIONS OF THE PLAN SHALL CONTROL.
RCM TECHNOLOGIES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
EXHIBIT 2
PARTICIPATION AGREEMENT
Name of Employee: _____________________________
Employee's Address: ___________________________
___________________________
Employee's Social Security Number: ____________
I. EMPLOYEE ELECTIVE DEFERRALS
RCM TECHNOLOGIES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
EXHIBIT 3
INVESTMENT DESIGNATION FORM
RCM Deferred Compensation Plan
Enrollment Election Form
Please complete all sections of this form if you are deferring pay,
bonus, or both.
Personal Information
Name: Address:
-------------------------------- ------------------------------
S.S. #
-------------------------------- ------------------------------
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Deferral Election
I hereby elect to defer: ____________% and/or ____________%
of 2001 Base Salary/Commissions Bonus(es) Payable in 2001
----------------------------- -------------------------
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Designation of Deferral Accounts
I understand that I may designate to have my deferrals allocated to a Retirement
Account and up to four In-service Accounts to be distributed to me upon
attaining a pre-selected year (life event) such as college tuition payments,
balloon mortgage payment, etc. I am not required to designate all four
In-service Accounts in the initial Plan year. In succeeding Plan years I may
designate additional In-service Accounts as long as I do not exceed a total of
four of these Deferral Accounts at any time.
Please indicate below your choices below. Your deferral allocation percentages
must add to 100%.
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% of Deferral
Account Allocated Distribution Year Payout Mode
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___ Lump Sum
Retirement ___% At Retirement ___ 10 Annual Installments
___ 15 Annual Installments
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In-service Account 1 ___% January, 20__ ___ Lump Sum
___ 4 Annual Installments
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In-service Account 2 ___% January, 20__ ___ Lump Sum
___ 4 Annual Installments
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In-service Account 3 ___% January, 20__ ___ Lump Sum
___ 4 Annual Installments
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In-service Account 4 ___% January, 20__ ___ Lump Sum
___ 4 Annual Installments
- ---------------------------------------------------------------------------------------------------------------------
Total _______% (Must total 100%)
- ---------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Retirement
I request that my deferrals be credited as follows (in 1% increments)
- --------------------------------------------------------------------------------
Investment Election Fund Classification 1% Increments
------------------- ------------------- -------------
Federated Money Market Trust Money Market __________
Vanguard GNMA Government Bond __________
Van Kampen Equity Income Domestic Hybrid __________
MFS Capital Opportunities Large Blend __________
Smith Barney Aggressive Income Large Growth __________
Legg Mason Value Large Value __________
INVESCO Dynamics Mid Cap Stock __________
Delaware Trend Small Cap Stock __________
Putnam International Voyager Foreign Stock __________
MFS Global Growth Global Growth __________
100%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In-service Account 1
I request that my deferrals be credited as follows (in 1% increments)
- --------------------------------------------------------------------------------
Investment Election Fund Classification 1% Increments
------------------- ------------------- -------------
Federated Money Market Trust Money Market __________
Vanguard GNMA Government Bond __________
Van Kampen Equity Income Domestic Hybrid __________
MFS Capital Opportunities Large Blend __________
Smith Barney Aggressive Income Large Growth __________
Legg Mason Value Large Value __________
INVESCO Dynamics Mid Cap Stock __________
Delaware Trend Small Cap Stock __________
Putnam International Voyager Foreign Stock __________
MFS Global Growth Global Growth __________
100%
- --------------------------------------------------------------------------------
In-service Account 2
I request that my deferrals be credited as follows (in 1% increments)
- --------------------------------------------------------------------------------
Investment Election Fund Classification 1% Increments
------------------- ------------------- -------------
Federated Money Market Trust Money Market __________
Vanguard GNMA Government Bond __________
Van Kampen Equity Income Domestic Hybrid __________
MFS Capital Opportunities Large Blend __________
Smith Barney Aggressive Income Large Growth __________
Legg Mason Value Large Value __________
INVESCO Dynamics Mid Cap Stock __________
Delaware Trend Small Cap Stock __________
Putnam International Voyager Foreign Stock __________
MFS Global Growth Global Growth __________
100%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In-service Account 3
I request that my deferrals be credited as follows (in 1% increments)
- --------------------------------------------------------------------------------
Investment Election Fund Classification 1% Increments
------------------- ------------------- -------------
Federated Money Market Trust Money Market __________
Vanguard GNMA Government Bond __________
Van Kampen Equity Income Domestic Hybrid __________
MFS Capital Opportunities Large Blend __________
Smith Barney Aggressive Income Large Growth __________
Legg Mason Value Large Value __________
INVESCO Dynamics Mid Cap Stock __________
Delaware Trend Small Cap Stock __________
Putnam International Voyager Foreign Stock __________
MFS Global Growth Global Growth __________
100%
- --------------------------------------------------------------------------------
In-service Account 4
I request that my deferrals be credited as follows (in 1% increments)
- --------------------------------------------------------------------------------
Investment Election Fund Classification 1% Increments
------------------- ------------------- -------------
Federated Money Market Trust Money Market __________
Vanguard GNMA Government Bond __________
Van Kampen Equity Income Domestic Hybrid __________
MFS Capital Opportunities Large Blend __________
Smith Barney Aggressive Income Large Growth __________
Legg Mason Value Large Value __________
INVESCO Dynamics Mid Cap Stock __________
Delaware Trend Small Cap Stock __________
Putnam International Voyager Foreign Stock __________
MFS Global Growth Global Growth __________
100%
ACKNOWLEDGMENT:
I understand that my right to receive payments from my Account is a claim
against the general assets of the Company as an unsecured general creditor. I
hereby acknowledge that my election to defer Compensation under the Plan is
irrevocable with respect to amounts that are deferred under the Plan.
Signature: __________________________________ Date: ________________________
Print Name: ______________________________________
RCM TECHNOLOGIES, INC.
2500 McCLELLAN AVENUE
SUITE 350
PENNSAUKEN, NEW JERSEY 08109
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY
The undersigned, a stockholder of RCM Technologies, Inc., a Nevada corporation
(the "Company"), hereby appoints Leon Kopyt and Stanton Remer, and each of them,
as the true and lawful attorneys and proxies of the undersigned, with full power
of substitution, for and in the name of the undersigned, to vote and otherwise
act on behalf of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Hilton Cherry Hill, 2349 W. Marlton Pike (Route 70),
Cherry Hill, New Jersey 08002 on Thursday, June 21, 2001, at 6:00 p.m. local
time, and at any adjournment or adjournments thereof, with respect to all shares
of the Company's Common Stock which the undersigned would be entitled to vote,
with all powers the undersigned would possess if personally present, on the
following matters:
Please mark your /X/ votes as
in this example.
FOR both nominees listed at
right (except as marked to the
contrary below) WITHHELD
1 . The election of two Class B
directors, each to serve / / / /
until the expiration of his Nominees:
term and until his successor is Robert B. Kerr
elected and qualified or
until his earlier resignation Woodrow B. Moats, Jr.
or removal.
INSTRUCTION. To withhold authority to vote for any
individual nominee, write that nominee's name on the
line below.
------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of adoption of the Company's / / / / / /
2001 Employee Stock Purchase Plan.
3. Approval of adoption of the Company's / / / / / /
Nonqualified Deferred Compensation Plan
31
4. Ratification of the appointment by the
Board of Directors of Grant Thornton LLP
as independent auditors for the Company
for the fiscal year ending December 31, 2001 / / / / / /
5. In their discretion, the named proxies are
authorized to vote upon such other matters
as may properly come before the meeting or any
adjournment(s) thereof. / / / / / /
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED
STOCKHOLDER. IF THE STOCKHOLDER GIVES NO DIRECTION, THE PROXY WILL BE VOTED
"FOR7'ALL NOMINEES FOR DIRECTOR, "FOR"PROPOSAL #2, "FOR" PROPOSAL #3, "FOR"
PROPOSAL #4, AND IN THE PROXIES' DISCRETION ON ANY OTHER MATTERS TO COME BEFORE
THE MEETING.
Signature(s) Dated: ,2001
------------------------------------------------ --------
PLEASE DATE THIS PROXY AND SIGN ABOVE exactly as your name appears on this
Proxy. If more than one person owns the shares, each owner should sign. If you
are signing this proxy as an attorney, administrator, executor, guardian or
trustee, please include your title. If you are signing this proxy on behalf of a
corporation, please include your title.
32