SCHEDULE 14A INFORMATION/A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Amendment No. 1
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|_| Preliminary Proxy Statement
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Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Pico Products, Inc.
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(Name of Registrant as Specified In Its Charter)
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Pursuant to Instruction 3 of Item 10 of Schedule 14-A, the full text of
the Company's 1996 Incentive Stock Plan is set forth below as an appendix to the
proxy statement.
APPENDIX TO PROXY STATEMENT
AMENDED AND RESTATED
1996 INCENTIVE STOCK PLAN
1. Purpose
The purpose of the Pico Products, Inc. 1996 Incentive Stock Plan (the
"Plan") is to promote the interests of Pico Products, Inc. (the "Company") by
attracting and retaining outstanding individuals as directors, officers and
other key employees and consultants, by encouraging and enabling such persons to
acquire financial interests in the Company through the acquisition of shares of
the Company's Common Stock, and by providing performance incentives to such
persons.
Under the Plan, the Company may grant (i) stock options that qualify as
"incentive stock options" ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) nonqualified stock
options that do not constitute ISOs ("NSOs") (ISOs and NSOs are together the
"Options"), (iii) stock appreciation rights ("Rights") and (iv) stock awards
("Stock Awards").
2. Term
The Plan shall be effective as of June 14, 1996, and it shall remain in
effect until, and shall terminate on, June 13, 2006. After termination of the
Plan, no grants may be effected hereunder, but previously made grants shall
remain outstanding in accordance with their terms and conditions and the terms
and conditions of the Plan.
3. Administration
The Plan shall be administered by a committee (the "Committee") of the
Board of Directors of the Company, composed of two or more members of the Board.
No person, other than members of the Committee, shall have any discretion as to
decisions regarding the Plan. The Committee shall determine the directors,
officers and key employees and consultants of the Company and its "Affiliates"
(as defined in Section 5 hereof) to whom, and the time or times at which,
Options, Rights and Stock Awards will be granted, the number of shares to be
subject to each Option or Stock Award, the duration of each Option or Right, the
time or times during which an Option or Right may be exercised, and other terms
and conditions of the grant of Options, Rights and Stock Awards under the Plan.
The terms and conditions of Options, Rights and Stock Awards need not be the
same for all recipients thereof under the Plan ("Recipients") nor for all
Options, Rights and Stock Awards granted under the Plan.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the proper
administration of the Plan, and may make determinations and take such other
action in connection with or in relation to the Plan as it deems necessary or
advisable. Each determination or other action made or taken by the Committee in
regard to the Plan, including, but not limited to, interpretation of the Plan
and the specific conditions and provisions of the Options, Rights and Stock
Awards granted hereunder, shall be final and conclusive for all purposes and
upon all persons including, but not limited to, the Company, its Affiliates, the
Committee, the Board and the affected Recipients, and their respective
successors in interest.
4. Stock Subject to the Plan
A maximum of 195,000 shares of the Company's $.01 par value Common
Stock (the "Shares") shall be issuable or transferable by the Company under the
Plan. The Shares issued or transferred pursuant to the Plan shall be made
available from authorized and unissued Common Stock of the Company or from the
Company's treasury Shares. Such maximum number of Shares shall be subject to
adjustment in accordance with Section 10 hereof.
Shares subject to an unexercised portion of any Option or Right that
expires or is cancelled, terminated, or, except as provided in the following
sentence, surrendered for any reason may again become subject to Options, Rights
or Stock Awards granted under the Plan. Upon surrender, in connection with the
exercise of a Right, of an Option (or a stock option granted under any other
plan hereafter adopted by the Company), the number of Shares subject to the
surrendered Option (or other stock option) shall be charged against the maximum
number of Shares issuable or transferable under the Plan (or such other stock
option plan),
and such number of Shares shall not be issuable or transferable under the Plan
(or such other plan) thereafter. The surrender, in connection with the exercise
of a Right, of any stock option issued other than pursuant to a stock option
plan shall not result in a charge against the maximum number of Shares issuable
or transferable under the Plan or any other stock option plan. Shares issued
pursuant to a Stock Award that are subsequently reacquired by the Company
pursuant to rights reserved upon the grant of such Stock Award may again become
subject to new Options, Rights or Stock Awards.
5. Eligibility
NSOs, Rights and Stock Awards may be granted to the directors,
officers, employees and consultants of the Company and its Affiliates. The term
"Affiliates" shall mean any corporation or other business organization in which
the Company owns, directly or indirectly, 25 percent or more of the voting stock
or capital at the time of the granting of the Option, Right or Stock Award. ISOs
may be granted to the employees of the Company and the employees of its
Affiliates that are corporations and are at least 50 percent owned, directly or
indirectly, by the Company. Any ISO held by a Recipient who is an employee of an
Affiliate that ceases to be 50 percent owed by the Company will become an NSO
three months after the date that the Company's ownership of the Affiliate falls
below 50 percent. If the Company's ownership of an Affiliate falls below 25
percent, any Recipient who is an employee or consultant of such Affiliate
(except one who also is employed or retained by the Company or another
Affiliate) will be considered terminated for purposes of Section 6d hereof on
the date that the Company's ownership of the Affiliate falls below 25 percent.
6. Grants of Options
Except as otherwise expressly provided herein, Options granted pursuant
to the Plan shall be subject to the following terms and conditions:
a. Option Price. The price of a Share purchased upon the
exercise of a particular ISO (the "Option Price") shall be 100 percent of the
Fair Market Value (as defined in Section 9 hereof) of a Share on the date of
grant of such ISO. The Committee, in its discretion, shall determine the Option
Prices of NSOs.
b. Payment. Unless otherwise determined by the Committee in
its sole discretion, the Option Price shall be paid in full at the time of
exercise. Payment may be in cash or, with the prior approval of and upon
conditions established by the Committee, by delivery of Shares owned by the
Recipient. If payment is made by the delivery of Shares, the value of the Shares
delivered shall be the Fair Market Value of such Shares on the date of exercise
of the respective Option.
c. Exercise Period. The Committee shall determine the period
during which an Option may be exercised; provided, however, that for any Option,
such period shall not exceed ten years from the date of grant of such Option. An
Option granted to a Recipient who is subject to Section 16 of the Exchange Act,
may be exercised only after six months from the date of its grant.
d. Effects of Termination of Employment, Retirement,
Disability and Death. The effects of the termination of employment or the
retirement, "Disability" (as defined below) or death of a Recipient on the
exercisability of ISOs held by such Recipient shall be determined by the
Committee in accordance with Section 6f(iii) hereof. Except as otherwise
determined by the Committee in its discretion:
(i) If a Recipient's employment (or service as an officer,
director, or consultant) is terminated due to retirement or Disability, or if
the Recipient should die while employed (or while serving as an officer,
director, or consultant), the right of the Recipient or his or her successor in
interest to exercise any NSO then held by such Recipient (to the extent
exercisable at such time) shall terminate upon the earlier of the end of the
original term of the NSO or one year after the date of such retirement,
Disability or death.
(ii) If the Recipient should die within one year after
termination of employment (or service as an officer, director, or consultant)
due to retirement or Disability, the right of his or her successor in interest
to exercise any NSO held by the Recipient at the time of his or her death (to
the extent exercisable at such time) shall terminate upon the later of one year
after the date of such retirement or Disability or six months after the date of
such Recipient's death, but not later than the end of the original term of the
NSO.
(iii) If any Recipient's employment (or service as an officer,
director, or consultant) is terminated for any reason other than retirement,
Disability or death, the right of such Recipient to exercise any NSO then held
by such Recipient (to the extent exercisable at the time of termination of
employment) shall terminate upon the earlier of the end of the original term of
such NSO or three months after the Recipient's last day of employment (or
service as an officer, director, or consultant) for the Company and its
Affiliates.
(iv) If such Recipient should die within three months after
termination of employment for any reason other than retirement or Disability,
the right of his or her successor in interest to exercise any NSO held by the
Recipient at the time of his or her death (to the extent exercisable at such
time) shall terminate upon the earlier of the end of the original term of such
NSO or three months after the date of such Recipient's death.
Notwithstanding the foregoing, no Option held by any employee, officer,
director, or consultant shall be exercisable after termination of such employee,
officer, director, or consultant for "cause," as such term is defined by the
Committee in its discretion. The term "Disability" shall mean "permanent and
total disability," as such is defined in Section 22(e)(3) of the Code.
Whether military, governmental or eleemosynary service or other leave
of absence will constitute termination of employment (or services as an officer,
director, or consultant) for the purposes of this Section 6d shall be determined
in each case by the Committee in its sole discretion.
e. Other Terms and Conditions. Options may contain such other
provisions, not inconsistent with the provisions of the Plan, as the Committee
shall determine appropriate from time to time.
f. Grant of ISOs.
(i) The Committee, with respect to each grant of an
Option, shall determine whether such Option shall be an ISO, and, upon
determining that an Option shall be an ISO, shall designate it as such in the
written instrument evidencing such Option. If the written instrument evidencing
an Option does not contain a designation that it is an ISO, it shall not be an
ISO.
(ii) The aggregate Fair Market Value (determined in
each instance on the date on which an ISO is granted) of the Shares with respect
to which ISOs are first exercisable by any Recipient in any calendar year shall
not exceed $100,000. Should any Affiliate of the Company adopt a stock option
plan under which options constituting incentive stock options (as defined in
Section 422 of the Code) are granted to any Recipient, then the Fair Market
Value of the Shares for which, and the times at which, such incentive stock
options will be exercisable shall be taken into account in determining the value
of the Shares for which such Recipient's ISOs granted under the Plan are first
exercisable in any year.
(iii) The Committee will determine, at the time of
granting an ISO, the terms and conditions to which such ISO shall be subject for
the purpose of compliance with the requirements of the Code, and such terms and
conditions shall be set forth in the agreement provided for in Section 13 hereof
evidencing the grant of such ISO.
7. Grants of Rights
The Committee may, at any time and in its discretion, grant to any
holder of an Option outstanding under the Plan or any other outstanding stock
option granted by the Company the right to surrender such Option or other stock
option (to the extent such Option or other stock option is otherwise
exercisable) and to receive from the Company an amount equal to the excess, if
any, of the Fair Market Value of the Shares with respect to which such Option or
other stock option is surrendered on the date of such surrender over the Option
Price of the Option or other stock option surrendered. No ISO may be surrendered
in connection with the exercise of a Right unless the Fair Market Value of a
Share at the time of such surrender is greater than the Option Price for such
ISO.
Payment by the Company of the amount payable upon the exercise of a
Right may be made by the delivery of Shares or cash or any combination of Shares
and cash, as determined in the sole discretion of the Committee from time to
time. No fractional Shares shall be issued as payment in respect of a Right. The
Committee may provide for the elimination of fractional Shares without
adjustment, or for the payment of the value of such fractional Shares in cash.
Shares delivered to a Recipient upon the exercise of a Right shall be valued at
their Fair Market Value on the date the Right is exercised.
The Committee may limit the period or periods during which Rights may
be exercised and may provide such other terms and conditions (which need not be
the same with respect to all Recipients or Rights) under which Rights may he
granted or exercised. A Right may be exercised only as long as the Option or
other stock option to which it relates is exercisable. A Right granted to a
Recipient who is subject to Section 16 of the Exchange Act may be exercised only
after six months from the date of grant.
8. Grants of Stock Awards
Stock Awards will consist of Shares transferred to Recipients, without
payment therefor, as additional compensation for their services to the Company
or its Affiliates. Stock Awards shall be subject to such terms and conditions as
the Committee
determines appropriate including, without limitation, restrictions on the sale
or other disposition of such Shares, and rights of the Company to reacquire such
Shares upon termination of the Recipient's employment within specified periods.
Subject to such other restrictions as are imposed by the Committee, the Shares
covered by a Stock Award granted to a Recipient who is subject to Section 16 of
the Exchange Act may be sold or otherwise disposed of only after six months from
the date of grant of the Stock Award.
9. Fair Market Value
"Fair Market Value" for all purposes under the Plan shall mean the
average of the high and low prices of Shares, as reported in The Wall Street
Journal, on the American Stock Exchange (or a similar consolidated transactions
report for the exchange or other market on which the Shares are then trading, if
not the American Stock Exchange) for the relevant date, or if no sales of Shares
were made on such exchange on such date, the average of the high and low prices
of Shares as reported in such composite transaction report for the preceding day
on which sales of Shares were made on such exchange. If the Shares are not
listed on a national securities exchange at the time Fair Market Value is to be
determined, then Fair Market Value shall be determined by the Committee in good
faith pursuant to such method as to the Committee deems appropriate and
equitable. Under no circumstances shall the Fair Market Value of a Share be less
than its par value.
10. Adjustments and Reorganization
The Committee may make such adjustments as it deems appropriate in the
event of changes that impact upon the price or status of the Shares, provided
that any such actions are consistently and equitably applicable to all affected
Recipients, and further provided, however, that the Committee shall not change
the aggregate number of Shares subject to the Plan, except in accordance with
the following paragraph.
In the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation, spin-off or other similar transaction
or any other change affecting the capital structure of the Company, such
adjustments, if any, as the Committee in its discretion may deem appropriate to
reflect such change shall be made with respect to (i) the aggregate number of
Shares that may be issued under the Plan; (ii) the number of Shares subject to
Options, Rights and Stock Awards under the Plan; and (iii) the Option Prices for
Options outstanding under the Plan.
11. Amendments, Modifications and Termination of the Plan
The Board or the Committee may terminate, suspend or amend the Plan as
the Board or the Committee deems appropriate, in whole or in part, without the
approval of the stockholders of the Company; provided, however, that no action
shall be taken without the approval of the stockholders of the Company to
increase the aggregate number of Shares subject to the Plan, materially increase
the benefits accruing to the Recipients under the Plan, or materially modify the
requirements as to eligibility for participation in the Plan. Notwithstanding
the foregoing, the Committee may make amendments applicable or inapplicable only
to persons who are subject to Section 16 of the Exchange Act, and the Committee
may, at any time and in its sole discretion, declare any or all Options and
Rights then outstanding under the Plan to be exercisable and any or all Stock
Awards outstanding under the Plan to be vested, whether or not such Options,
Rights or Stock Awards are then otherwise exercisable or vested.
No amendment or termination of the Plan shall in any manner adversely
affect any Option, Right or Stock Award theretofore granted without the consent
of the Recipient thereof.
12. Tax Withholding
The Company shall have the right to deduct from any amount payable or
Shares deliverable or vested under the Plan an amount sufficient to cover
withholding required by law for any federal, state or local taxes or to take
such other action as may be necessary to satisfy any such withholding
obligations. The Committee may permit Shares to be used to satisfy required tax
withholding and such Shares shall be valued at their Fair Market Value as of the
date of the applicable payment, delivery or vesting.
13. Unfunded Plan
Unless otherwise determined by the Committee, the Plan shall be
unfunded and shall not create (or be construed to create) a trust or a separate
fund or funds. The Plan shall not establish any fiduciary relationship between
the Company and any Recipient or other person. To the extent any person holds
any right by virtue of a grant under the Plan, such right (unless otherwise
determined by the Committee) shall be no greater than the right of an unsecured
general creditor of the Company.
14. Grant Agreements
Grants under the Plan shall be evidenced by agreements approved by the
Committee that set forth the terms, conditions and limitations applicable to
such grants. The Committee need not require the execution of any such agreement,
and acceptance of any grant by the Recipient thereof will constitute agreement
to the terms of such grant.
15. Replacement of Options and Rights
The Committee, from time to time, may determine that one or more
Recipients or the holders of stock options under any other stock option plan
hereafter adopted by the Company may or must surrender for cancellation any
unexercised outstanding Option or other stock option and related Right in order
to receive from the Company in exchange therefor Options for such number of
Shares as may be designated by the Committee.
16. Nontransferability of Options and Rights
No Option or Right shall be transferable otherwise than by will or by
the laws of descent and distribution. During the lifetime of a Recipient,
Options and Rights granted to such Recipient shall be exercisable only by such
Recipient personally or by his or her legal representative.
17. Rights as a Stockholder
No Recipient nor any transferee of a Recipient pursuant to Section 13
hereof shall have any right as a stockholder with respect to any Shares covered
by any Option, Right or Stock Award until such Recipient or transferee shall
have become the holder of record of such Shares.
18. Future Rights
No person shall have any claim or right to be granted any Option, Right
or Stock Award under the Plan, and no Recipient of such a grant shall have any
right by reason of such grant to continued employment by the Company or any
Affiliate.
19. Governing Law
The Plan and all determinations made and actions taken pursuant thereto
shall be governed by the laws of the State of New York and construed in
accordance therewith.