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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12
The Murdock Group Career Satisfaction Corporation
................................................................................
(Name of Registrant as Specified in Charter)
................................................................................
(Name of Person(s) Filing Proxy Statement If Other Than The Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
...........................................................................
2) Aggregate number of securities to which transaction applies:
...........................................................................
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
...........................................................................
4) Proposed maximum aggregate value of transaction:
...........................................................................
5) Total fee paid:
...........................................................................
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the For of Schedule and the date of its filing.
1) Amount Previously Paid:..............................................
2) Form, Schedule or Registration Statement No..........................
3) Filing Party:........................................................
4) Date Filed:..........................................................
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5295 South Commerce Drive, Suite 400
Salt Lake City, Utah 84107
(801) 268-3232
NOTICE OF WRITTEN CONSENT
DUE BY NOVEMBER 30, 2000
To the Shareholders:
Attached hereto is a Proxy Statement which solicits the written
consent of the shareholders of The Murdock Group Career Satisfaction
Corporation, a Utah corporation (the "Company"), to authorize and approve (1)
the change of the name of the Company to "The Murdock Group Holding
Corporation," (2) adoption of the "2000 Murdock Group Stock Option Plan," and
(3) increase in the number of shares of common and preferred stock the Company
is authorized to issue. Proposals (1) and (3) would be accomplished by amendment
to the Company's Articles of Incorporation in the form of Amended and Restated
Articles of Incorporation attached. Additional information about these proposals
is contained in the attached Proxy Statement.
Attached to the Proxy Statement as Appendix A is the Shareholder
Consent Resolution (the "Consent Resolution"), which provides for authorization
and approval of these actions. The procedure for indicating authorization and
approval is described in detail in the attached Proxy Statement.
Pursuant to Section 16-10a-704 of the Utah Revised Business
Corporations Act, once the Company receives the written consents from holders of
a majority of the Company's issued and outstanding stock as of October 1, 2000
(the "Record Date"), the Company will deliver such written consents to its
registered office in Utah, and the actions shall be deemed to have been approved
by the Company's shareholders. No meeting will be held to vote on these
corporate actions.
You are requested to fill out, date, sign and return the enclosed
Shareholder Consent Resolution Signature Card ("Signature Card"), which is
solicited by the Board of Directors of the Company as described in the
accompanying Proxy Statement.
Your consent is important. Please sign and date the enclosed
Signature Card and return it promptly in the enclosed return envelope. The
return envelope requires no postage if mailed in the United States. If mailed
elsewhere, foreign postage must be affixed. Your consent as evidenced by your
signing and returning the Signature Card is irrevocable once the Company
receives it.
By Order of the Board of Directors,
/s/ KC Holmes
KC Holmes, Chairman
Salt Lake City, Utah
November 10, 2000
-1-
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5295 South Commerce Drive, Suite 400
Salt Lake City, Utah 84107
(801) 268-3232
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PROXY STATEMENT
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SHAREHOLDER ACTION BY WRITTEN CONSENT
This Proxy Statement has been prepared by the Board of Directors of
The Murdock Group Career Satisfaction Corporation, a Utah corporation (the
"Company") and is furnished in connection with the solicitation by the Board of
Directors of the written consent of the shareholders of the Company to authorize
and approve the amendment of the Articles of Incorporation of the Company to (1)
change the name of the Company to "The Murdock Group Holding Corporation" and
(2) increase the number of authorized shares of common stock to 300,000,000 and
authorize the issuance up to 25,000,000 shares of preferred stock, and to
approve the adoption of the "2000 Murdock Group Stock Option Plan."
The Company intends to distribute this Proxy Statement and the
accompanying materials to its shareholders on or about November 10, 2000. The
reasons for these corporate actions are described in the Proxy Statement.
Attached to this Proxy Statement as Appendix A is the Shareholder Consent
Resolution ("Consent Resolution"), which provides for the authorization and
approval of the corporate actions and the requisite amendment to the Company's
Articles of Incorporation to effect the name change and the increase in the
authorized shares. A copy of the Amended and Restated Articles of Incorporation
is attached to the Proxy Statement as Appendix B. The procedure for indicating
your approval of these corporate actions is described in this Proxy Statement.
General Information
Voting Rights
The matter being submitted for shareholder approval is to be acted
upon by written consent, without a meeting, rather than by a vote held at a
meeting. The holders of the Company's issued and outstanding common stock are
entitled to consent in writing to the name change. The execution of the
Signature Card by the holders of a majority of the issued and outstanding shares
of the Company's common stock is required to authorize the amendment to the
Articles of Incorporation and the adoption of the stock option plan. No
dissenters' rights or rights of appraisal are applicable or available in
connection with this action.
Only record holders of shares of the Company's common stock at the
close of business October 1, 2000 (the "Record Date") are entitled to execute
the Consent Resolution. At the close of business on the Record Date there were
31,796,171 shares of common stock issued and outstanding held by approximately
500 shareholders of record. As described in this Proxy Statement, a holder of
common stock on the Record Date will be entitled to provide one consent for each
share of common stock then registered in such holder's name. The holders of the
common stock as of the Record Date are referred to in this Proxy Statement as
the "Shareholders."
1
Solicitation of Written Consents
Under Utah law and under the Company's bylaws, any action that may be
taken at any meeting of the Shareholders may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or to take
such action at a meeting at which all shares entitled to vote thereon were
present and voted. The matter being considered by the Shareholders is being
submitted for action by written consent rather than by votes cast at a meeting.
The attached Consent Resolution will be effective on the date that the Company
receives signed Signature Cards representing the consent of the holders of a
majority of the Company's issued and outstanding common stock as of the Record
Date.
Shareholders are requested to indicate approval of and consent to the
adoption of the 2000 Murdock Group Stock Option Plan and the Amendment to the
Articles of Incorporation changing the name of the Company to "The Murdock Group
Holding Corporation" and increasing the number of authorized shares by filling
out, signing and dating the enclosed Signature Card. Execution of the Signature
Card will constitute your approval, as a Shareholder, of these corporate
actions. Shareholders who do not approve and consent to the change of name by
execution of the Signature Card will be bound by the Consent Resolution if
sufficient written consents are received by the Company on or before November
30, 2000, the latest date selected by the Company to effect the change (the
"Effective Date").
The Board of Directors requests that each Shareholder complete,
execute, date and return the Signature Card to the Company at the address
indicated therein. An addressed envelope is enclosed for your convenience. The
Consent Resolution Card should be returned as soon as possible for receipt by
the Company no later than November 30, 2000.
The Company will pay the entire cost of the preparation and mailing
of this Proxy Statement and all other costs of this solicitation. Certain of the
Company's directors, officers, or employees may also solicit written consents by
mail, telephone, telegraph, or personal interview but no additional compensation
will be paid to them by the Company for doing so.
Written Consents Irrevocable
Any Signature Card executed and delivered by a Shareholder shall be
deemed by the Company to constitute that Shareholder's approval of and written
consent to the adoption of the Consent Resolution. Once the Company (or its
agent) receives the executed Signature Card, that consent may not be revoked
unless written notice of revocation is received by the Company before the close
of business on the earlier of the date the Company receives the majority or
November 30, 2000.
This Proxy Statement and the enclosed Consent Resolution are being furnished to
shareholders on or about November 10, 2000.
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Adoption of the Amendment to the Certificate of Incorporation
The Board of Directors of the Company has unanimously adopted,
subject to shareholder approval, an amendment to the Company's Articles of
Incorporation, which will change the name of the Company to The Murdock Group
Holding Corporation and increase the number of shares the Company is authorized
to issue to 300,000,000 common shares and 25,000,000 preferred shares. The form
of the amendment to be included in the Amended and Restated Articles of
Incorporation of the Company is included in the Consent Resolution attached as
Appendix "B" to this Proxy Statement. The Shareholders are asked to approve this
amendment to the Articles of Incorporation.
Change of Corporate Name
The Board of Directors believes that it is in the Company's best
interest to change its corporate name to one that more appropriately reflects
the current and intended nature, expansion and operations of the Company. The
Company has restructured its operations to include three distinct operating
groups: Career Counseling Operations, Online Career Content Provider, and Real
Estate Acquisition and Development. The new name more accurately reflects the
diverse business interests of the Company and its activities.
Increase of Authorized Capital
Article 4 of the Company's Articles of Incorporation as originally
adopted and currently in effect reads:
Article 4. Stock
A. The aggregate number of shares which the corporation shall
be authorized to issue is 100,000,000 shares of "Class A
Common Voting Shares" with no par value, and 100,000,000
shares of "Class B Common Non-Voting Shares" with no par
value. Classes A and B shall have the same rights and
preferences, except that Class B shares shall have no
voting rights.
B. Fully paid stock of this corporation shall not be liable to
any call and shall be nonassessable, and shall not be
subject to any preemptive rights.
The Company's Board of Directors has approved and recommends to the
shareholders the adoption of an amendment that reflects the modernization of the
Utah Business Corporations Act. Therefore, management proposes to adopt Amended
and Restated Articles of Incorporation in which Article 4 is amended and
restated in its entirety to eliminate the Class B Non-Voting Shares, none of
which have been issued to date, and to increase the number of shares of voting
common stock that the Company is authorized to issue from 100,000,000 shares to
300,000,000 shares. In addition, the Amended and Restated Articles of
Incorporation would authorize the Company to issue 25,000,000 shares of
preferred stock in such series and having such rights and preferences as the
Board of Directors, in its discretion and without further action by the
shareholders may determine. Article 4 of the Articles of Incorporation, as
amended, would read as follows:
Article 4. Stock
The total number of shares which the Corporation shall have
the authority to issue is three hundred twenty-five million
(325,000,000) shares of capital stock, such total number of
shares consisting of 300,000,000 shares of Common Stock, $.001
par value per share, and 25,000,000 shares of Preferred Stock,
$.001 par value per share. All of the shares of the Corporation's
capital stock shall be non-assessable.
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Preferred Stock. The Preferred Stock may be issued by the
Corporation from time to time in one or more series and in such
amounts as may be determined by the Board of Directors. The
designations, voting rights, amounts of preference upon distribution
of assets, rates of dividends, premiums of redemption, conversion
rights and other variations, if any, the qualifications, limitations
or restrictions thereof, if any, of the Preferred Stock, and of each
series thereof, shall be such as are fixed by the Board of Directors,
the authority so to do being hereby expressly granted, as stated and
expressed in a resolution or resolutions adopted by the Board of
Directors providing for the issue of such series of Preferred Stock
(a "Director's Resolution"). The authority of the Board of Directors
with respect to each such series of Preferred Stock shall include,
but shall not be limited to, determination of the following:
1. The distinctive serial designation and number of shares
comprising each such series;
2. The rate of dividends, if any, on the shares of that series,
whether dividends shall be non-cumulative, cumulative to the
extent earned or cumulative (and, if cumulative, from which date
or dates), whether dividends shall be payable in cash, property
or rights, or in shares of the Corporation's capital stock, and
the relative priority, if any, of payment of dividends on shares
of that series over shares of any other series;
3. Whether the shares of that series shall be redeemable and, if so,
the terms and conditions of such redemption, including the date
or dates upon or after which they shall be redeemable, the event
or events upon or after which they shall be redeemable or at
whose option they shall be redeemable, and the amount per share
payable in case of redemption (which amount may vary under
different conditions and at different redemption dates) or the
property or rights, including securities of any other
corporation, payable in case of redemption;
4. Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series and, if so, the terms and
amounts payable into such sinking fund;
5. The rights, if any, to which the holders of the shares of that
series shall be entitled in the event of voluntary involuntary
liquidation, dissolution or winding-up of the Corporation, and
the relative rights of priority, if any, of payment of shares of
that series in any such event;
6. Whether the shares of that series shall be convertible into or
exchangeable for shares of stock of any other class of the
capital stock of the Corporation or any other series of Preferred
Stock of the Corporation or the securities of any other entity
and, if so, the terms and conditions of such conversion or
exchange, including the rate or rates of conversion or exchange,
the date or dates upon or after which or the events upon which
they shall be convertible or exchangeable or at whose option they
shall be convertible or exchangeable, and the method, if any, of
adjusting the rates of conversion or exchange in the event of a
stock split, stock dividend, combination of shares or similar
event;
7. Whether the issuance of any additional shares of such series
shall be subject to restrictions, or whether any shares of any
other series shall be subject to restrictions as to issuance, or
as to the powers, preferences or rights of any such other series;
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8. Voting rights, if any, including, without limitation, the
authority to confer multiple votes per share, voting rights as to
specified matters or issues or, subject to the provisions of
these Articles of Incorporation, voting rights to be exercised
either together with holders of Common Stock as a single class,
or independently as a separate class; and
9. Any other preferences, privileges and powers, and relative,
participating, optional or other special rights and
qualifications, limitations or restrictions of such series, as
the Board of Directors may deem advisable and as shall not be
inconsistent with the provisions of these Articles of
Incorporation and as shall now or hereafter be permitted by the
Utah Revised Business Corporation Act, as amended.
Common Stock. Except as otherwise required by law or these
Articles of Incorporation or as otherwise provided with respect to
the relative rights of shares of Preferred Stock in any Director's
Resolution, all shares of Common Stock shall be identical and the
holders of shares of Common Stock shall possess voting power and each
share of Common Stock shall have one (1) vote.
Relative Ranking of Common Stock. The Common Stock is
junior to the Preferred Stock and is subject to all of the powers,
rights, privileges, preferences and priorities of the Preferred Stock
as herein set forth and as may be stated in any Director's
Resolution.
Background of the Proposed Amendment to Increase the Authorized
Capital. As of the Record Date, there are 31,796,171 shares of the Company's
common stock issued and outstanding. A total of 5,000,000 shares of common stock
are reserved for issuance under the Company's existing incentive stock option
plan. Depending on the market price for the common stock as related to the
conversion of certain debt under a corporate restructuring plan announced
earlier this year, the Company may have to increase the number of shares of
authorized common stock in order to accomplish its restructuring of debt and to
continue its business plan, including the acquisition of real property using the
Company's common stock as consideration for the purchase price of that property,
which is based on the market price of the stock on the date an acquisition
transaction is entered into.
Management believes that this proposed Amendment would benefit the
Company by providing greater flexibility to the Board of Directors to issue
additional equity securities to raise additional capital, to facilitate possible
future acquisitions and to provide stock-related employee benefits. To date, the
Company's primary source of financing has been private sales of common stock or
other equity or debt securities convertible into common stock. The Company
presently is in immediate need of additional capital. To facilitate such
financing transactions, the authorized capital of the Company will need to be
increased pursuant to a shareholder-approved amendment to the Articles of
Incorporation.
If this Amendment is approved, generally, no shareholder approval
would be necessary for the issuance of all or any portion of the additional
shares of common stock unless required by law or any rules or regulations to
which the Company is subject. Depending upon the consideration per share
received by the Company for any subsequent issuance of common stock, such
issuance could have a dilutive effect on those shareholders who paid a higher
consideration per share for their stock. Also, future issuances of common stock
will increase the number of outstanding shares, thereby decreasing the
percentage ownership in the Company (for voting, distributions and all other
purposes) represented by existing shares of common stock. The availability for
issuance of the additional shares of common stock may be viewed as having the
effect of discouraging an unsolicited attempt by another person or entity to
acquire control of the Company. Although the Board of Directors has no present
intention of doing so, the Company's authorized but unissued common stock or
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preferred stock could be issued in one or more transactions that would make a
takeover of the Company more difficult or costly, and therefore less likely. The
Company is not aware of any person or entity that is seeking to acquire control
of the Company. Holders of common stock do not have any preemptive rights to
acquire any additional securities issued by the Company.
If the Company's shareholders do not approve the Amendment, due to
declines in the market price of the common stock affecting conversion ratios of
debt, the Company may be precluded from successfully restructuring its debt by
issuing shares of common stock in lieu of cash payment. In such event, the
Company could be subject to material liabilities for money damages that could
adversely affect the Company's operations and financial condition. Moreover,
even if the Company were to negotiate additional real estate acquisition
transactions on terms acceptable to the Company, it would not be able to
complete such transactions without an increase in authorized capital.
Under Utah law, the change of a corporate name and the increase of
authorized capital both require an amendment to the Articles of Incorporation.
Except for certain special circumstances that are not applicable to the action
proposed by the Board of Directors of the Company, an amendment to a
corporation's Articles of Incorporation under Utah law requires the approval of
a majority of the issued and outstanding voting shares of the corporation.
Generally such action is taken by a vote conducted at an annual or special
meeting of the shareholders of the corporation. Section 16-10a-706 of the Utah
Revised Business Corporations Act (the "Utah Law") provides that "any action
which may be taken at any annual or special meeting of shareholders may be taken
without a meeting and without prior notice, if one or more consents in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to authorize or take the action at a meeting at which all shares entitled to
vote thereon were present and voted." In addition, the Utah Law provides that
any action taken in this manner has the same effect as action taken at a meeting
of shareholders.
THE BOARD OF DIRECTORS HAS APPROVED THE PROPOSAL TO AMEND THE COMPANY'S
ARTICLES OF INCORPORATION AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
THE PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION AND THE
CHANGE OF NAME OF THE COMPANY AND TO INCREASE THE NUMBER OF
SHARES OF STOCK THE COMPANY IS AUTHORIZED TO ISSUE.
Adoption of the 2000 Stock Option Plan
The 2000 Murdock Group Stock Option Plan (the "Plan") must be
approved by the shareholders of the Company within 12 months of its adoption by
the Board of Directors. The Board adopted the Plan effective October 1, 2000.
The following is a brief description of the principal features of the Plan. A
copy of the Plan is filed as Appendix C to this Proxy Statement and
shareholders should refer to the Plan for details regarding the awards that may
be made under the Plan. No awards have been made to date.
This Plan provides for the grant of awards to employees, directors,
officers and certain consultants of the Company and other key individuals who
make a contribution to the success of the Company. Under this Plan, eligible
persons may receive incentive awards comprised of any of the following:
"Stock Options" which are nonqualified stock options, the tax
consequences of which are governed by the provisions of Section 83 of
the Internal Revenue Code (the "Code");
"Incentive Stock Options" ("ISO") which are statutory stock
options, the tax consequences of which are governed by Section 422 of
the Code;
"Reload Options" which are also nonqualified stock options, the
tax consequences of which are governed by Section 83 of the Code; or
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"Stock Bonuses" which are compensation, the tax consequences of
which are governed by Section 83 of the Code.
Awards under the Plan may be granted as determined by the Committee
appointed by the Board that administers the Plan (the "Committee"). A majority
of the members of the Committee will be non-employee directors of the Company
who may, under certain circumstances, also participate in the Plan. The total
number of shares of the Company's common stock that may be the subject of awards
made under the Plan is 25,000,000 shares.
No award under the Plan may be granted or exercised after September
30, 2010. The grant of awards under the Plan must be evidenced by a written
agreement with the recipient, which contains the terms and conditions (subject
always to the terms and provisions of the Plan) under which the award may be
exercised or received. The exercise price of stock options under the Plan is to
be 100% of the fair market value of the Company's common stock on the date the
option is granted, unless the Committee establishes a lower exercise price. The
exercise price of an ISO must be 100% of the fair market value of the common
stock on the date of grant, except that any ISO awarded to an employee who is
also the owner of 10% or more of the Company's common stock will be 110% of fair
market value of the common stock on the date of grant. The aggregate fair market
value of stock subject to any ISO granted to a given recipient during any
calendar year may not exceed $100,000.
Option exercise prices are to be paid at the time of exercise in cash
or in shares of common stock of the Company having a fair market value equal to
the exercise price, or a combination of the two. Cash for exercise of options
may be monies received as compensation from the Company or borrowed from the
Company on terms established by the Committee.
The members of the Committee who are non-employee directors and
therefore "independent" for purposes of plan administration, may accept awards
of non-statutory stock options under the plan if the grant of these options is
approved by the full Board of Directors.
Under the Plan, the "fair market value" of the common stock of the
Company is determined as of any particular date to be (i) the closing sales
price per share of common stock reflected on a national securities exchange for
the last preceding date on which there was a sale of such common stock on such
exchange; or (ii) if the shares of common stock are then traded on an
over-the-counter market, the average of the closing bid and asked prices for the
shares of common stock in such over-the-counter market for the last preceding
date on which there was a sale of such common stock in such market; or (iii) in
case no reported sale takes place, the average of the closing bid and asked
prices on the National Association of Securities Dealers' Automated Quotations
System ("NASDAQ") or any comparable system, or if the shares of common stock are
not listed on NASDAQ or comparable system, the closing sale price or, in case no
reported sale takes place, the average of the closing bid and asked prices, as
furnished by any member of the National Association of Securities Dealers, Inc.
selected from time to time by the Company for that purpose; or (iv) if the
shares of common stock are not then listed on a national securities exchange or
traded in an over-the-counter market, such value as the Committee in its
discretion may determine in any such other manner as the Committee may deem
appropriate. In no event shall the fair market value of any share of common
stock be less than its par value. In the case of ISO, the fair market value
shall not be discounted for restrictions, lack of marketability and other such
limitations on the enjoyment of the common stock. In the case of other type of
options, the fair market value of the common stock shall be so discounted.
THE BOARD OF DIRECTORS HAS APPROVED THE ADOPTION OF THE PLAN AND RECOMMENDS
THAT SHAREHOLDERS VOTE IN FAVOR OF RATIFICATION OF THE PLAN.
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The enclosed Shareholder Consent Resolution is furnished for you to
indicate your consent with respect to the change of name described in this Proxy
Statement. If you wish to consent in accordance with the Board's recommendation,
please fill out, sign, date and return the Signature Card in the enclosed
envelope, which requires no postage if mailed in the United States. A prompt
return of the Signature Card will be appreciated.
By Order of the Board of Directors
KC Holmes
Chairman and Chief Executive Officer
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APPENDIX B
[OBJECT OMITTED]
CONSENT RESOLUTION
OF THE SHAREHOLDERS
OF
THE MURDOCK GROUP CAREER SATISFACTION CORPORATION
A Utah Corporation
(Change of Name)
Pursuant to Section 16-10a-704 of the Utah Revised Business
Corporations Act, the undersigned, being the holders of __________ shares of the
issued and outstanding common stock of The Murdock Group Career Satisfaction
Corporation (the "Company"), a Utah corporation, hereby consent to and approve
the following corporate action as if it had been taken at a meeting of the
shareholders of the Company:
RESOLVED, that the Articles of Incorporation of the Company be
amended and the name of the Corporation changed as follows:
Article 1 of the Company's Articles of Incorporation is hereby
amended in its entirety to read as follows:
"The name of this Corporation is "The Murdock Group Holding Corporation."
RESOLVED, that the Articles of Incorporation of the Company be
amended and the authorized capital of the Corporation increased as follows:
Article 4 of the Company's Articles of Incorporation is hereby
amended in its entirety to read as follows:
Article 4. Stock
The total number of shares which the Corporation shall have
the authority to issue is three hundred twenty-five million
(325,000,000) shares of capital stock, such total number of
shares consisting of 300,000,000 shares of Common Stock, $.001
par value per share, and 50,000,000 shares of Preferred Stock,
$.001 par value per share. All of the shares of the Corporation's
capital stock shall be non-assessable.
Preferred Stock. The Preferred Stock may be issued by the
Corporation from time to time in one or more series and in such
amounts as may be determined by the Board of Directors. The
designations, voting rights, amounts of preference upon
distribution of assets, rates of dividends, premiums of
redemption, conversion rights and other variations, if any, the
qualifications, limitations or restrictions thereof, if any, of
the Preferred Stock, and of each series thereof, shall be such as
are fixed by the Board of Directors,
9
the authority so to do being hereby expressly granted, as stated
and expressed in a resolution or resolutions adopted by the Board
of Directors providing for the issue of such series of Preferred
Stock (a "Director's Resolution"). The authority of the Board of
Directors with respect to each such series of Preferred Stock
shall include, but shall not be limited to, determination of the
following:
1. The distinctive serial designation and number of shares
comprising each such series;
2. The rate of dividends, if any, on the shares of that series,
whether dividends shall be non-cumulative, cumulative to the
extent earned or cumulative (and, if cumulative, from which date
or dates), whether dividends shall be payable in cash, property
or rights, or in shares of the Corporation's capital stock, and
the relative priority, if any, of payment of dividends on shares
of that series over shares of any other series;
3. Whether the shares of that series shall be redeemable and, if so,
the terms and conditions of such redemption, including the date
or dates upon or after which they shall be redeemable, the event
or events upon or after which they shall be redeemable or at
whose option they shall be redeemable, and the amount per share
payable in case of redemption (which amount may vary under
different conditions and at different redemption dates) or the
property or rights, including securities of any other
corporation, payable in case of redemption;
4. Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series and, if so, the terms and
amounts payable into such sinking fund;
5. The rights, if any, to which the holders of the shares of that
series shall be entitled in the event of voluntary involuntary
liquidation, dissolution or winding-up of the Corporation, and
the relative rights of priority, if any, of payment of shares of
that series in any such event;
6. Whether the shares of that series shall be convertible into or
exchangeable for shares of stock of any other class of the
capital stock of the Corporation or any other series of Preferred
Stock of the Corporation or the securities of any other entity
and, if so, the terms and conditions of such conversion or
exchange, including the rate or rates of conversion or exchange,
the date or dates upon or after which or the events upon which
they shall be convertible or exchangeable or at whose option they
shall be convertible or exchangeable, and the method, if any, of
adjusting the rates of conversion or exchange in the event of a
stock split, stock dividend, combination of shares or similar
event;
7. Whether the issuance of any additional shares of such series
shall be subject to restrictions, or whether any shares of any
other series shall be subject to restrictions as to issuance, or
as to the powers, preferences or rights of any such other series;
8. Voting rights, if any, including, without limitation, the
authority to confer multiple votes per share, voting rights as to
specified matters or issues or, subject to the provisions of
these Articles of Incorporation, voting rights to be exercised
either together with holders of Common Stock as a single class,
or independently as a separate class; and
9. Any other preferences, privileges and powers, and relative,
participating, optional or other special rights and
qualifications, limitations or restrictions of such series, as
the Board of Directors may deem advisable and as shall not be
inconsistent with the provisions of these Articles of
Incorporation and as shall now or hereafter be permitted by the
Utah Revised Business Corporation Act, as amended.
10
Common Stock. Except as otherwise required by law or these
Articles of Incorporation or as otherwise provided with respect to
the relative rights of shares of Preferred Stock in any Director's
Resolution, all shares of Common Stock shall be identical and the
holders of shares of Common Stock shall possess voting power and each
share of Common Stock shall have one (1) vote.
Relative Ranking of Common Stock. The Common Stock is
junior to the Preferred Stock and is subject to all of the powers,
rights, privileges, preferences and priorities of the Preferred Stock
as herein set forth and as may be stated in any Director's
Resolution.
FURTHER RESOLVED, that the officers of the Corporation are authorized
to take all additional actions, and to execute, deliver and cause to be filed,
such instruments and documents as may be required by the Utah Revised Business
Corporations Act to effect this change of name and that such filing may be in
the form of Amended and Restated Articles of Incorporation incorporating all
changes to the Articles of Incorporation since the Company's inception,
including the change of name amendment described herein.
Once signed by the holders of at least a majority of the outstanding
shares of common stock of the Company, these resolutions shall be delivered to
the Company at its principal office in Salt Lake City, Utah. These resolutions
are to be included in the Company's corporate records and, as of the Effective
Date as indicated in the Proxy Statement filed by the Company in connection with
these corporate actions, shall have the same force and effect as an action taken
at a meeting of the shareholders of the Company.
11
APPENDIX A
CONSENT RESOLUTION OF THE SHAREHOLDERS
OF
THE MURDOCK GROUP CAREER SATISFACTION CORPORATION
SIGNATURE CARD
You are requested to fill out, date, sign and return this Shareholder Consent
Resolution Signature Card, which is solicited by the Board of Directors of the
Company as described in the accompanying Proxy Statement. Your consent is
important. Please sign and date this Signature Card and return it promptly in
the enclosed return envelope. The return envelope requires no postage if mailed
in the United States. If mailed elsewhere, foreign postage must be affixed. Your
consent as evidenced by your signature and return of this card is revocable only
if written notice of revocation is received by the Company prior to close of
business on November 30, 2000, as explained in the Proxy Statement.
1. To approve an amendment to the Company's Articles of Incorporation to
change the name to The Murdock Group Holding Corporation and to
increase the authorized capital of the Company:
FOR AGAINST ABSTAIN
/ / / / / /
2. To approve the adoption of the 2000 Murdock Group Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
THIS WRITTEN CONSENT WHEN PROPERLY EXECUTED WILL BE DEEMED REVOCABLE ONLY IF
WRITTEN NOTICE IS RECEIVED BY THE COMPANY BY THE EARLIER OF THE DATE ON WHICH
THE COMPANY HAS RECEIVED THE REQUIRED MAJORITY TO APPROVE THE AMENDMENT AND THE
PLAN OR NOVEMBER 30, 2000. IF THIS CONSENT IS RETURNED BUT NO DIRECTION IS MADE,
THIS WRITTEN CONSENT WILL BE CONSIDERED GRANTED IN FAVOR OF THE CHANGE OF
CORPORATE NAME, THE INCREASE IN AUTHORIZED CAPITAL AND THE ADOPTION OF THE STOCK
OPTION PLAN.
DATE: ____________ ______________________________________________
Signature
----------------------------------------------
Signature of co-tenant holder, if any
PLEASE SIGN EXACTLY AS THE SHARES ARE ISSUED. WHEN CO-TENANTS HOLD SHARES, BOTH
SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON. PLEASE DATE, SIGN AND
RETURN THIS WRITTEN CONSENT CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
APPENDIX B
FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
Amended and Restated
Articles of Incorporation
of
The Murdock Group Holding Corporation
(fka Murdock Group Career Satisfaction Corporation)
The undersigned, being the President and Secretary of a corporation formed under
the Utah Revised Business Corporation Act, Chapter 10 of Title 16 of the Utah
Code of 1953, as amended, adopt the following Amended and Restated Articles of
Incorporation for such corporation, which Amended and Restated Articles of
Incorporation were approved by vote of the majority of the issued and
outstanding common shares of the Corporation on October __, 2000:
Article 1. Name
The name of this corporation is The Murdock Group Holding Corporation.
Article 2. Duration
The period of its duration is perpetual.
Article 3. Purposes
A. This Corporation is organized for any and all lawful purposes for which
corporations may be organized under this Act, but is primarily organized to
engage in career-related businesses.
B. The Corporation shall have and exercise all powers necessary or convenient
for the carrying out of any or all of the purposes for which it is organized.
Article 4. Stock
The total number of shares which the Corporation shall have the authority to
issue is three hundred twenty-five million (325,000,000) shares of capital
stock, such total number of shares consisting of 300,000,000 shares of Common
Stock, $.001 par value per share, and 50,000,000 shares of Preferred Stock,
$.001 par value per share. All of the shares of the Corporation's capital stock
shall be non-assessable.
Preferred Stock. The Preferred Stock may be issued by the Corporation
from time to time in one or more series and in such amounts as may be
determined by the Board of Directors. The designations, voting rights,
amounts of preference upon distribution of assets, rates of dividends,
premiums of redemption, conversion rights and other variations, if any,
the qualifications, limitations or restrictions thereof, if any, of the
Preferred Stock, and of each series thereof, shall be such as are fixed
by the Board of Directors, the authority so to do being hereby
expressly granted, as stated and expressed in a resolution or
resolutions adopted by the Board of Directors providing for the issue
of such series of Preferred Stock (a "Director's Resolution"). The
authority of the Board of Directors with respect to each such series of
Preferred Stock shall include, but shall not be limited to,
determination of the following:
1. The distinctive serial designation and number of shares
comprising each such series;
1
2. The rate of dividends, if any, on the shares of that series,
whether dividends shall be non-cumulative, cumulative to the
extent earned or cumulative (and, if cumulative, from which date
or dates), whether dividends shall be payable in cash, property
or rights, or in shares of the Corporation's capital stock, and
the relative priority, if any, of payment of dividends on shares
of that series over shares of any other series;
3. Whether the shares of that series shall be redeemable and, if so,
the terms and conditions of such redemption, including the date
or dates upon or after which they shall be redeemable, the event
or events upon or after which they shall be redeemable or at
whose option they shall be redeemable, and the amount per share
payable in case of redemption (which amount may vary under
different conditions and at different redemption dates) or the
property or rights, including securities of any other
corporation, payable in case of redemption;
4. Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series and, if so, the terms and
amounts payable into such sinking fund;
5. The rights, if any, to which the holders of the shares of that
series shall be entitled in the event of voluntary involuntary
liquidation, dissolution or winding-up of the Corporation, and
the relative rights of priority, if any, of payment of shares of
that series in any such event;
6. Whether the shares of that series shall be convertible into or
exchangeable for shares of stock of any other class of the
capital stock of the Corporation or any other series of Preferred
Stock of the Corporation or the securities of any other entity
and, if so, the terms and conditions of such conversion or
exchange, including the rate or rates of conversion or exchange,
the date or dates upon or after which or the events upon which
they shall be convertible or exchangeable or at whose option they
shall be convertible or exchangeable, and the method, if any, of
adjusting the rates of conversion or exchange in the event of a
stock split, stock dividend, combination of shares or similar
event;
7. Whether the issuance of any additional shares of such series
shall be subject to restrictions, or whether any shares of any
other series shall be subject to restrictions as to issuance, or
as to the powers, preferences or rights of any such other series;
8. Voting rights, if any, including, without limitation, the
authority to confer multiple votes per share, voting rights as to
specified matters or issues or, subject to the provisions of
these Articles of Incorporation, voting rights to be exercised
either together with holders of Common Stock as a single class,
or independently as a separate class; and
9. Any other preferences, privileges and powers, and relative,
participating, optional or other special rights and
qualifications, limitations or restrictions of such series, as
the Board of Directors may deem advisable and as shall not be
inconsistent with the provisions of these Articles of
Incorporation and as shall now or hereafter be permitted by the
Utah Revised Business Corporation Act, as amended.
Common Stock. Except as otherwise required by law or these Articles of
Incorporation or as otherwise provided with respect to the relative
rights of shares of Preferred Stock in any Director's Resolution, all
shares of Common Stock shall be identical and the holders of shares of
Common Stock shall possess voting power and each share of Common Stock
shall have one (1) vote.
Relative Ranking of Common Stock. The Common Stock is junior to the
Preferred Stock and is subject to all of the powers, rights,
2
privileges, preferences and priorities of the Preferred Stock as herein
set forth and as may be stated in any Director's Resolution.
Article 5. Registered Agent
The name of the registered agent and the address of the registered office of the
corporation are as follows: K C Holmes, 5295 South 300 West, 3rd Floor, Salt
Lake City, Utah 84107.
The undersigned hereby accepts such appointment:
K C Holmes
The foregoing Amended and Restated Articles of Incorporation were adopted upon
the written consent of shareholders of the Corporation holding a total of
__________ shares (___%) of the issued and outstanding voting shares of the
Corporation. No shares voted against such amendment. A copy of the consent
resolution is attached to these Amended and Restated Articles of Incorporation.
Dated this __ day of October 2000.
K C Holmes, President
Secretary
APPENDIX C
[GRAPHIC OMITTED][GRAPHIC OMITTED]
A Utah corporation
2000 Stock Option Plan
SECTION 1 GENERAL.............................................................1
1.1 Purpose.........................................................1
1.2 Eligibility for Participation...................................1
1.3 Selection of Award Recipients...................................1
1.4 Defined Terms...................................................1
SECTION 2 STOCK OPTION AWARDS.................................................2
2.1 Grant of Option.................................................2
2.2 Exercise Price..................................................2
2.3 Term and Exercise...............................................2
2.4Settlement of Award..............................................4
SECTION 3 INCENTIVE STOCK OPTION LIMITATIONS..................................4
3.1 Dollar Limitation...............................................4
3.2 More Than 10% Shareholders......................................5
3.3 Eligible Employees..............................................5
3.4 Exercisability..................................................5
3.5 Taxation of ISOs................................................5
3.6 Promissory Notes................................................5
SECTION 4 OPERATION AND ADMINISTRATION........................................5
4.1 Effective Date..................................................5
4.2 Shares Subject to Plan..........................................6
4.3 General Restrictions............................................6
4.4 Tax Withholding.................................................6
4.5 Use of Shares...................................................6
4.6 Payments........................................................7
4.7 Transferability.................................................7
4.8 Form and Time of Elections......................................7
4.9 Agreement With Company..........................................7
4.10 Action by Company..............................................7
4.11 Gender and Number..............................................7
4.12 Limitation of Implied Rights...................................7
4.13 Evidence.......................................................8
SECTION 5 CHANGE IN CONTROL...................................................8
5.1 Effect of Change in Control.....................................8
5.2 Definition......................................................8
SECTION 6 COMMITTEE...........................................................8
6.1 Administration..................................................8
6.2 Powers of Committee.............................................9
6.3 Delegation by Committee.........................................9
6.4 Information to be Furnished to Committee........................9
SECTION 7 AMENDMENT AND TERMINATION...........................................9
SECTION 8 DEFINED TERMS......................................................10
8.1 "Award"........................................................10
8.2 "Board"........................................................10
8.3 "Code".........................................................10
8.4 "Disability"...................................................10
8.5 "Eligible Employee"............................................10
8.6 "Fair Market Value"............................................10
8.7 "Grant Date"...................................................10
8.8 "ISO"..........................................................10
8.9 "NSO"..........................................................10
8.10 "Options".....................................................10
8.11 "Parent Corporation"..........................................11
8.12 "Retirement"..................................................11
8.13 "Common Stock"................................................11
SECTION 9 MISCELLANEOUS......................................................11
9.1 General Restriction............................................11
9.2 Non-Uniform Determinations.....................................11
9.3 Fractional Shares..............................................11
9.4 Effects of Headings............................................11
[GRAPHIC OMITTED][GRAPHIC OMITTED]
A Utah corporation
2000 Stock Option Plan
SECTION 1
GENERAL
1.1. Purpose. This 2000 Stock Option Plan (the "Plan") is adopted by the
Board of Directors of The Murdock Group Holding Corporation, a Utah corporation
(the "Company") effective as of October 1, 2000. The Plan has been established
to:
- attract and retain persons eligible to participate in the
Plan;
- motivate participants in the Plan by means of appropriate
incentives to achieve long-range goals;
- provide incentive compensation opportunities that are
competitive with those of other similar companies;
- closely associate the interests of the participants of the
Plan with those of the Company and its other shareholders by
reinforcing the relationship between participants' rewards
and shareholder gains through equity ownership in the
Company and increased shareholder value.
1.2. Eligibility for Participation. Participants in the Plan shall be
selected by the Committee (as defined in Section 5 below), and awards under the
Plan may be granted by the Committee to directors, officers and employees of the
Company or of the Company's Parent Corporations or Subsidiary Corporations, and
to other individuals such as consultants and non-employee agents of the Company
or a Subsidiary Corporation, whom the Committee believes have made or will make
an essential contribution to the Company or a Subsidiary. Notwithstanding any of
the other provisions of this Plan, "ISO's" shall be granted hereunder and shall
be subject to the additional terms and conditions of Section 3 of this Plan.
When a Participant changes status from an employee to a nonemployee (or vice
versa) and continues to perform services for the Company, the Participant is
entitled to retain any Awards previously granted under the Plan.
1.3. Selection of Award Recipients. The Committee has the authority to
select particular employees within the eligible group to receive Awards under
the Plan. In making this selection and in determining the persons to whom Awards
under the Plan shall be granted and the form and amount of awards under the
Plan, the Committee shall consider any factors deemed relevant in connection
with accomplishing the purposes of the Plan, including the duties of the
respective persons and the value of their present and potential services and
contributions to the success, profitability and sound growth of the Company. A
person to whom an Award has been granted is sometimes referred to herein as a
"Participant." In the discretion of the Committee, a Participant may be granted
any Award permitted by the Plan and more than one Award may be granted to a
Participant.
1.4. Defined Terms. Capitalized terms in the Plan are defined as set forth
in the Plan, including the definition provisions of Section 8 of the Plan.
SECTION 2
STOCK OPTION AWARDS
2.1. Grant of Option. The grant of an option or an AISO@ (collectively,
"Options") entitles the Participant to purchase shares of the Company's common
stock ("Common Stock") at the "Exercise Price" (defined below) established by
the Committee. Options granted under this Section may be either "ISO's", the tax
consequences of which are intended to be governed by Section 422 of the Code, or
Non-Qualified Stock Options ("NSO's"), as determined in the discretion of the
Committee.
2.2. Exercise Price. The "Exercise Price" of each Option granted under this
Plan is the price established by the Committee or determined by a method
established by the Committee at the time the Option is granted, that must be
paid by a Participant to purchase the shares of Common Stock, except that the
Exercise Price shall not be less than 100% of the Fair Market Value of a share
of Common Stock on the Grant Date, unless the Committee shall determine, in its
sole discretion, that there are circumstances which reasonably justify the
establishment of a lower Exercise Price.
2.3. Term and Exercise. An Option shall be exercisable in accordance with
such terms and conditions and during such periods as may be established by the
Committee, which terms shall include but are not limited to the following:
2.3.1 Term and Exercise of Options. Each instrument that evidences an
Option shall state the period of time during which the Option may be
exercised; provided, however, that, anything contained herein to the
contrary, any ISO's granted hereunder shall not be exercisable after the
expiration of five (5) years after the Grant Date and any NSO's granted
hereunder shall not be exercisable after the expiration of ten (10) years
after the Grant Date.
2.3.2 Vesting and Method of Exercising Options. Subject to the minimum
exercise requirements described in Section 2.3.1 above, the Committee shall
establish and set forth in each instrument that evidences an Option the
time at which, or the installments in which, the Option shall vest and
become exercisable. To the extent that an Option has vested and become
exercisable, the Option may be exercised from time to time by delivery to
the Company of a written stock option exercise agreement or notice, in a
form and in accordance with procedures established by the Committee, the
restrictions imposed on the shares purchased under such exercise agreement,
if any, and such representations and agreements as may be required by the
Committee, accompanied by payment in full of the Exercise Price as
described herein. An Option may not be exercised for less than a reasonable
number of shares at any one time, as determined by the Committee.
2.3.3 Payment of Exercise Price. The payment of the Exercise Price of
an Option will be subject to the following:
a. Time of Payment. Subject to the following provisions of this
Section 2.3.3, the full Exercise Price for shares of Common Stock
purchased upon the exercise of any Option shall be paid at the time of
such exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in Section 2.3.3(c), payment
may be made as soon as practicable after the exercise).
b. Form of Payment. The Exercise Price shall be payable (i) in
cash, (ii) by certified or cashier's check (but no personal checks
unless otherwise approved by the Committee), (iii) by tendering
(either actually or, if and so long as the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of the Common Stock already owned by the Participant for at
least six (6) months (or any shorter period necessary to avoid a
charge to the Company's earnings for financial reporting purposes)
2
having a Fair Market Value on the day prior to the exercise date equal
to the Exercise Price, (iv) by a full-recourse promissory note at an
interest rate to be determined by the Committee, provided that in no
event shall a Participant who has had an Involuntary Termination of
Employment be permitted to pay the Exercise Price by such promissory
notes, (v) if and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, delivery of a properly
executed exercise notice, together with irrevocable instructions, to
(a) a brokerage firm designated by the Company to deliver promptly to
the Company the aggregate amount of sale or loan proceeds to pay the
Option exercise price and any withholding tax obligations that may
arise in connection with the exercise and (b) the Company to deliver
the certificates for such purchased shares directly to such brokerage
firm, all in accordance with the regulations of the Federal Reserve
Board; or (vi) such other consideration as the Committee may permit.
2.3.4 Transfer of Options. Neither the whole nor any part of any
Option shall be transferable by a Participant or by operation of law during
said Participant's lifetime and at said Participant's death an Option or
any part thereof shall only be transferable by said Participant's will or
by the laws of descent and distribution. An Option may be exercised during
the lifetime of the Participant only by the Participant. Any Option, and
any and all rights granted to a Participant thereunder, to the extent not
theretofore effectively exercised, shall automatically terminate and expire
upon any sale, transfer or hypothecation or any attempted sale, transfer or
hypothecation of such Option or rights, or upon the bankruptcy or
insolvency of the Participant.
2.3.5 Termination of Employment. Unless otherwise provided by the
Committee or in the Incentive Stock Option Agreement pertaining to the
Options, no Options may be exercised after the termination of the
employment of the Participant with the Company (the "Termination Date")
except as hereinafter provided:
a. Retirement. Options granted under the Plan may be exercised
within three (3) months after the Retirement (as hereinafter defined)
of the Participant, and the Options shall be exercisable for all of
the shares covered thereby. For purposes of the Plan, "Retirement"
shall mean any termination of employment with the Company occurring
after the completion of ten (10) years of service with the Company.
b. Disability. Options granted under the Plan may be exercised
within three (3) months after the termination of the employment of the
Participant by reason of the Disability (as hereinafter defined) of
the Participant, and the Options shall be exercisable for all of the
shares covered thereby.
c. Death. If a Participant shall die while employed by the
Company or within three (3) months after termination of employment
with the Company by reason of Retirement or Disability, the Options
granted under this Plan to such deceased Participant shall be
exercisable within one (1) year after the date of the Participant's
death, and the Options shall be exercisable for all of the Shares
covered thereby. However, if a Participant shall die within three (3)
months after termination of employment with the Company for a reason
other than Retirement or Disability, the Options granted under this
Plan to such deceased Participant shall be exercisable within one (1)
year after the date of the Participant's death, but the Options may
not be exercised for more than the number of Shares, if any, as to
which the Options were exercisable by the Participant immediately
prior to his death. The legal representative, if any, of the deceased
Participant's estate, or otherwise the appropriate legatees or
distributees of the deceased Participant's estate, may exercise the
Options on behalf of such a deceased Participant.
d. Involuntary Termination of Employment. Options granted under
the Plan may be exercised within three (3) months after the
Involuntary Termination of Employment (as hereinafter defined) of the
Participant with the Company, but the Options may not be exercised for
3
more than the number of shares, if any, as to which the Options were
exercisable by the Participant immediately prior to such termination
of employment. For purposes of the Plan, "Involuntary Termination of
Employment" shall mean any termination of a Participant's employment
with the Company by reason of the discharge, firing or other
involuntary termination of a Participant's employment by action of the
Company, other than an involuntary termination For Cause (as defined
in Section 2.3.5(f) below).
e. Voluntary Termination of Employment. Options granted under the
Plan may be exercised, if otherwise timely, within three (3) months
after the Voluntary Termination of Employment (as hereinafter defined)
of the Participant with the Company, but the Options may not be
exercised for more than the number of shares, if any, as to which the
Options were exercisable by the Participant immediately prior to such
termination of employment. For purposes of the Plan "Voluntary
Termination of Employment" shall mean any voluntary termination of
employment with the Company by reason of the Participant's quitting or
otherwise voluntarily leaving the Company's employ other than a
voluntary termination of employment by reason of Retirement or a
voluntary termination of employment constituting a termination For
Cause.
f. Termination For Cause. Anything contained herein to the
contrary notwithstanding, if the termination of a Participant's
employment with the Company is as a result of or caused by the
Participant's theft or embezzlement from the Company, the violation of
a material term or condition of his or her employment, the disclosure
by the Participant of confidential information of the Company,
conviction of the Participant of a crime of moral turpitude, the
Participant's stealing trade secrets or intellectual property owned by
the Company, any act by the Participant in competition with the
Company or any other act, activity or conduct of the Participant which
in the opinion of the Committee is adverse to the best interests of
the Company, such termination shall constitute termination "For Cause"
and any Options and any and all rights granted to such Participant
thereunder whether vested or unvested, to the extent not yet
effectively exercised, shall become null and void effective as of the
date of the occurrence of the event which results in the Participant
ceasing to be an employee of the Company and any purported exercise of
an Option by or on behalf of said Participant following such date
shall be of no effect.
g. Acceleration of Option Expiration Date. The Committee may, in
the case of merger, consolidation, dissolution or liquidation of the
Company, accelerate the expiration date of any Option for any or all
of the shares covered thereby (but still giving Participants a
reasonable period of time to exercise any outstanding Options prior to
the accelerated expiration date).
h. Rights as a Stockholder. A Participant shall have no rights as
a stockholder with respect to any shares covered by any of said
Participant's Options until the date that the Company receives payment
in full for the purchase of said shares pursuant to the effective
exercise of said Options, unless otherwise provided by the Committee.
No adjustment shall be made for dividends or distributions or other
rights for which the record date is prior to the date such payment is
received by the Company.
2.4. Settlement of Award. Shares of Common Stock delivered pursuant to the
exercise of an Option by a Participant shall be subject to such conditions,
restrictions and contingencies as the Committee may establish in the applicable
agreement.
4
SECTION 3
INCENTIVE STOCK OPTION LIMITATIONS
3.1. Dollar Limitation. To the extent the aggregate Fair Market Value
(determined as of the Grant Date) of Common Stock with respect to which ISO's
are exercisable for the first time during any calendar year (under the Plan and
all other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as an NSO. In the event the Participant
holds two or more ISO's that become exercisable for the first in the same
calendar year, such limitation shall be applied on the basis of the order in
which such ISO's are granted.
3.2. More Than 10% Shareholders. If an individual owns more than ten
percent (10%) of the total voting power of all classes of the Company's stock,
then the exercise price per share of an ISO shall not be less than One Hundred
Ten Percent (110%) of the Fair Market Value of the Common Stock on the Grant
Date and the term of the ISO shall not exceed five (5) years, except in the
event that any portion of an ISO is treated as an NSO as provided in Section 3.1
above, in which case the term of the NSO will be ten (10) years.
3.3. Eligible Employees. Individuals who are not employees of the Company
or one of its Parent Corporations or Subsidiary Corporations may not be granted
ISO's and such employees must agree, in writing, to remain in the employ of, and
to render services to, the Company (or any of the Parent Corporations or
Subsidiary Corporations) for a period of at least one (1) year from the date of
the grant of the Award (unless this condition is otherwise waived by the
Committee).
3.4. Exercisability. An option designated as an ISO shall cease to qualify
for favorable tax treatment as an ISO to the extent it is exercised (if
permitted by the terms of the option) (i) more than three (3) months after the
Termination Date (as defined in Section 2.3.5) for reasons other than death or
Disability, (ii) more than one (1) year after the Termination Date by reason of
death or Disability, or (iii) after the Participant has been on leave of absence
for more than ninety (90) days, unless the Participant's reemployment rights are
guaranteed by statute or contract.
3.5. Taxation of ISO's. In order to obtain certain tax benefits afforded to
incentive stock options under Section 422 of the Code, the Participant must hold
the shares issued upon the exercise of an ISO for two (2) years after the Grant
Date and one (1) year from the date of exercise. A Participant may be subject to
the alternate minimum tax at the time of exercise of an ISO. The Participant
shall give the Company prompt notice of any disposition of shares acquired by
the exercise of an ISO prior to the expiration of such holding periods.
3.6. Promissory Notes. The amount of any promissory note delivered in
connection with the Participant's payment of the exercise price shall bear
interest at a rate specified by the Committee, but in no case less than the rate
required to avoid imputation of interest (taking into account any exceptions to
the imputed interest rules) for federal income tax purposes.
SECTION 4
OPERATION AND ADMINISTRATION
4.1. Effective Date. Subject to the approval of the shareholders of the
Company, the Plan shall be effective as of October 1, 2000 (the "Effective
Date"), the date the Plan was adopted by the directors of the Company; provided,
however, that to the extent that Awards are granted under the Plan prior to its
approval by the shareholders, the Awards shall be contingent on approval of the
Plan by the shareholders. The Plan shall be unlimited in duration and, in the
event of Plan termination, shall remain in effect as long as any Awards under it
are outstanding; provided, however, that, to the extent required by the Code, no
5
ISO's may be granted under the Plan on a date that is more than ten years from
the date the Plan is adopted or, if earlier, the date the Plan is approved by
shareholders.
4.2. Shares Subject to Plan. The shares of Common Stock for which Awards
may be granted under the Plan shall be subject to the following:
4.2.1 Maximum Number of Shares. Subject to the following provisions of
this Section 3.2, the maximum number of shares of Common Stock that may be
delivered to Participants and their beneficiaries under the Plan shall be
1,000,000 shares of Common Stock; however, the Board may increase such
number of shares, but not in any event without shareholder approval of an
increase that would result in the number of shares available in the
aggregate for Awards under the Plan exceeding 10% of the total authorized
common shares of the Company.
4.2.2 Effect of Forfeiture of Options. To the extent any shares of
Common Stock covered by an Award are not delivered to a Participant or
beneficiary because the Award is forfeited or canceled, or the shares of
Common Stock are not delivered because the Award is settled in cash or used
to satisfy the applicable tax withholding obligation, such shares will not
be deemed to have been delivered for purposes of determining the maximum
number of shares of Common Stock available for delivery under the Plan.
4.2.3 Adjustment of Award. In the event of a corporate transaction
involving the Company (including, without limitation, any Common Stock
dividend, Common Stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination or exchange of shares), the Committee may adjust
Awards to preserve the benefits or potential benefits of the Awards. Action
by the Committee may include (i) adjustment of the number and kind of
shares which may be delivered under the Plan; (ii) adjustment of the number
and kind of shares subject to outstanding Awards; (iii) adjustment of the
Exercise Price of outstanding Options; and (iv) any other adjustments that
the Committee determines to be equitable.
4.3. General Restrictions. Delivery of shares of Common Stock or other
amounts under the Plan shall be subject to the following:
4.3.1 Compliance with Law. Notwithstanding any other provision of the
Plan, the Company shall have no liability to deliver any shares of Common
Stock under the Plan or make any other distribution of benefits under the
Plan unless such delivery or distribution would comply with all applicable
laws (including, without limitation, the requirements of the Securities Act
of 1933), and the applicable requirements of any securities exchange or
similar entity.
4.3.2 Non-Certificated Shares. To the extent that the Plan
provides for issuance of Common Stock certificates to reflect the
issuance of shares of Common Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law
or the applicable rules of any stock exchange.
4.4. Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes and the Committee may condition the delivery
of any shares or other benefits under the Plan on satisfaction of the applicable
withholding obligations. The Committee, in its discretion, and subject to such
requirements as the Committee may impose prior to the occurrence of such
withholding, may permit such withholding obligations to be satisfied through
cash payment by the Participant, through the surrender of shares of Common Stock
which the Participant already owns, or through the surrender of shares of Common
Stock to which the Participant is otherwise entitled under the Plan.
4.5. Use of Shares. Subject to the overall limitation on the number of
shares of Common Stock that may be delivered under the Plan, the Committee may
use available shares of Common Stock as the form of payment for compensation,
6
grants or rights earned or due under any other compensation plans or
arrangements of the Company or any Parent Corporation or Subsidiary Corporation,
including the plans and arrangements of the Company or a Parent Corporation or
Subsidiary Corporation assumed in business combinations.
4.6. Payments. Awards may be settled by payment of consideration in the
forms authorized in Section 2.3.3(b), or combination thereof, as the Committee
shall determine. Any Award settlement, including payment deferrals, may be
subject to such conditions, restrictions and contingencies, as the Committee
shall determine. The Committee may permit or require the deferral of any Award
payment, subject to such rules and procedures as it may establish, which may
include provisions for the payment or crediting of interest, or dividend
equivalents, including converting such credits into deferred Common Stock
equivalents. Each Subsidiary Corporation shall be liable for payment of cash due
under the Plan with respect to any Participant to the extent that such benefits
are attributable to the services rendered for that Subsidiary Corporation by the
Participant. Any disputes relating to liability of a Subsidiary Corporation for
cash payments shall be resolved by the Committee.
4.7. Transferability. Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.
4.8. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
4.9. Agreement With Company. An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not require, that the Participant
shall sign a copy of such document. Such document is referred to in the Plan as
an "Award Agreement" regardless of whether any Participant signature is
required.
4.10. Action by Company. Any action required or permitted to be taken by
the Company or any Parent Corporation or Subsidiary Corporation shall be by
resolution of its Board, or by action of one or more members of the Board
(including a committee of the Board) who are duly authorized to act for the
Board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of such company.
4.11. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
4.12 Limitation of Implied Rights.
4.12.1 No Right to Company Assets. Neither a Participant nor any other
person shall, by reason of participation in the Plan, acquire any right or
title to any assets, funds or property of the Company or any Parent
Corporation or Subsidiary Corporation whatsoever, including, without
limitation, any specific funds, assets, or other property which the Company
or any Parent Corporation or Subsidiary Corporation, in their sole
discretion, may set aside in anticipation of a liability under the Plan. A
Participant shall have only a contractual right to the Common Stock or
amounts, if any, payable under the Plan, unsecured by any assets of the
Company or any Parent Corporation or Subsidiary Corporation, and nothing
contained in the Plan shall constitute a guarantee that the assets of the
Company or any Parent Corporation or Subsidiary Corporation shall be
sufficient to pay any benefits to any person.
7
4.12.2 No Contract of Employment. The Plan does not constitute a
contract of employment, and selection as a Participant will not give any
participating employee the right to be retained in the employ of the
Company or any Parent Corporation or Subsidiary Corporation, nor any right
or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan. Except as otherwise
provided in the Plan, no Award under the Plan shall confer upon the holder
thereof any rights as a shareholder of the Company prior to the date on
which the individual fulfills all conditions for receipt of such rights.
4.13. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information that the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
SECTION 5
CHANGE IN CONTROL
5.1. Effect of Change in Control. Subject to the provisions of paragraph
3.2.4 (relating to the adjustment of shares), and except as otherwise provided
in the Plan or the Award Agreement reflecting the applicable Award, upon the
occurrence of a Change in Control all outstanding Options shall become fully
exercisable.
5.2. Definition. For purposes of the Plan, the term "Change in Control"
shall mean a change in the beneficial ownership of the Company's voting Common
Stock or a change in the composition of the Board of the Company that occurs as
follows:
5.2.1 Acquisition of 40%. Any "Person" (as such term is used in
Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended ("Exchange Act")) other than any Person who is a shareholder of the
Company at the Effective Date of this Plan, or becomes a beneficial owner,
directly or indirectly, of Common Stock of the Company representing 40% or
more of the total voting power of the Company's then outstanding Common
Stock.
5.2.2 Tender Offer. A tender offer (for which a filing has been made
with the SEC that purports to comply with the requirements of Section 14(d)
of the Exchange Act and the corresponding SEC rules) is made for the Common
Stock of the Company. In case of such a tender offer, the Change in Control
will be deemed to have occurred upon the first to occur of (i) any time
during the tender offer when the Person making the offer owns or has
accepted for payment Common Stock of the Company with 25% or more of the
total voting power of the Company's outstanding Common Stock or (ii) three
business days before the offer is to terminate unless the offer is
withdrawn first, if the Person making the offer could own, by the terms of
the offer plus any shares owned by this Person, Common Stock with 50% or
more of the total voting power of the Company's outstanding Common Stock
when the offer terminates.
5.2.3 Change in Majority of Board Nominees. Individuals who were the
Board's nominees for election as directors of the Company immediately prior
to a meeting of the shareholders of the Company involving a contest for the
election of directors shall not constitute a majority of the Board
following the election.
8
SECTION 6
COMMITTEE
6.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee") in
accordance with this Section 6. The Committee shall be selected by the Board of
the Company and shall (i) consist of all of the members of the Board if a class
of shares of the Company's equity securities is not registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, or (ii) consist solely of two or
more members of the Board who are "Non-Employee Directors" (as defined in Rule
16b-3 of the Exchange Act), if a class of shares of the Company's equity
securities is registered pursuant to Section 12(b) or 12(g) of the Exchange Act.
If the Committee does not exist, or for any other reason determined by the
Board, the Board may take any action under the Plan that would otherwise be the
responsibility of the Committee.
6.2. Powers of Committee. The Committee's administration of the Plan shall
be subject to the following:
6.2.1 Granting of Awards. Subject to the Plan, the Committee will have
the authority and discretion to select from among the Eligible Employees
those persons who shall receive Awards, to determine the time or times of
receipt, to determine the types of Awards and the number of shares covered
by the Awards, to establish the terms, conditions, performance criteria,
restrictions, and other provisions of such Awards, and (subject to the
restrictions imposed by Section 6) to cancel or suspend Awards.
6.2.2 Foreign Modifications. To the extent that the Committee
determines that the restrictions imposed by the Plan preclude the
achievement of the material purposes of the Awards in jurisdictions outside
the United States, the Committee will have the authority and discretion to
modify those restrictions as the Committee determines to be necessary or
appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.
6.2.3 Interpretations, Amendments and Rescissions. The Committee will
have the authority and discretion to interpret the Plan, to establish,
amend, and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any Award Agreement made pursuant to
the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.
6.2.4 Binding Decisions. Any interpretation of the Plan by the
Committee and any decision made by it under the Plan are final and binding
on all persons.
6.2.5 Conformity to Law. In controlling and managing the operation and
administration of the Plan, the Committee shall take action in a manner
that conforms to the articles and bylaws of the Company, and applicable
state corporate law.
6.3. Delegation by Committee. Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any part of its responsibilities and powers to
any person or persons selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.
6.4. Information to be Furnished to Committee. The Company and any Parent
Corporations and Subsidiary Corporations shall furnish the Committee with such
data and information as it determines may be required for it to discharge its
duties. The records of the Company and any Parent Corporations and Subsidiary
Corporations as to an employee's or Participant's employment, termination of
employment, leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
9
data or information as the Committee considers desirable to carry out the terms
of the Plan.
SECTION 7
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided
that no amendment or termination may, in the absence of written consent to the
change by the affected Participant (or, if the Participant is not then living,
the affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; provided that adjustments pursuant or subject
to subsection 3.2.4 shall not be subject to the foregoing limitations of this
Section.
SECTION 8
DEFINED TERMS
In addition to the other definitions contained herein, the following
definitions shall apply:
8.1. "Award" means any award or benefit granted under the Plan, including,
without limitation, the grant of ISO's, NSO's, or shares of Common Stock, the
rights of ownership of which may be subject to restrictions contained in the
Plan or prescribed by the Committee.
8.2. "Board" means the Board of Directors of the Company.
8.3. "Code" means the Internal Revenue Code of 1986, as amended. A
reference to any provision of the Code shall include reference to any successor
provision of the Code.
8.4. "Disability" unless otherwise defined by the Committee, means a mental
or physical impairment of the Participant that is expected to result in death or
that has lasted or is expected to last for a continuous period of twelve (12)
months or more and that causes the Participant to be unable, in the opinion of
the Company, to perform his or her duties for the Company (or any Parent
Corporations or Subsidiary Corporations) and to be engaged in any substantial
gainful activity.
8.5. "Eligible Employee" means any employee of the Company or any Parent
Corporation or Subsidiary Corporation. An Award may be granted to an employee,
in connection with hiring, retention or otherwise, prior to the date the
employee first performs services for the Company or the Subsidiaries, provided
that such Award shall not become vested prior to the date the employee first
performs such services.
8.6. "Fair Market Value" of a share of Common Stock under the Plan, as of
any date, shall be established in good faith by the Committee, or (i) if the
Common Stock is listed on the Nasdaq National markets, the average of the high
and low per share sales prices for the Common Stock as reported by Nasdaq for a
single trading day or (ii) if the Common Stock is listed on the New York Stock
Exchange or the American Stock Exchange, the average of the high and low per
share sales prices for the Common Stock as such price is officially quoted in
the composite tape of transactions on such exchange for a single trading day. If
there is no such reported price for the Common Stock for the date in question,
then such price on the last preceding date for which such price exists shall be
determinative of Fair Market Value.
8.7. "Grant Date" means the date on which the Board (or the Committee if
the Board assigns and delegates its powers to the Committee) completes the
corporate action relating to the grant of an Award and all conditions precedent
10
to the grant have been satisfied, provided that conditions to the exercisability
or vesting of Awards shall not defer the Grant Date.
8.8. "ISO" means an option to purchase Common Stock with the intention that
it qualify as an incentive stock option as that term is defined in Section 422
of the Code.
8.9. "NSO" means an option to purchase Common Stock granted herein other
than an ISO and called Nonqualified Stock Option.
8.10. "Options" means, collectively, the ISO's and NSO's.
8.11. "Parent Corporation" has the meaning attributed to such terms for
purposes of Section 422 of the Code.
8.12. "Retirement" of a Participant shall have the meaning ascribed in
Section 2.3.5(a).
8.13 "Common Stock" means shares of the Company's common stock.
8.14. "Subsidiary Corporation" has the meaning attributed to such terms for
purposes of Section 422 of the Code.
SECTION 9
MISCELLANEOUS
9.1. General Restriction. Each Award under the Plan shall be subject to the
requirement that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Common Stock subject or
related thereto upon any securities exchange or under any state or federal law,
or (ii) the consent or approval of any government regulatory body, or (iii) an
agreement by the Participant with respect to the disposition of Common Stock, is
necessary or desirable as a condition of, or in connection with, the granting of
such Award or the issue or purchase of Common Stock thereunder, such Award may
not be exercised or consummated in whole or in part unless and until such
listing, registration, qualification, consent, approval or agreement shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
9.2. Non-Uniform Determinations. The Committee's determinations under the
Plan (including without limitation determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the agreements evidencing same) need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
Awards under the Plan, whether or not such persons are similarly situated.
9.3. Fractional Shares. Fractional shares shall not be granted under any
Award under this Plan, unless the provision of the Plan which authorizes such
Award also specifies the terms under which fractional shares or interests may be
granted.
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9.4. Effects of Headings. The Section and subsection headings contained
herein are for convenience only and shall not affect the construction hereof.
ADOPTED BY RESOLUTION OF THE BOARD OF DIRECTORS, EFFECTIVE THE 1ST DAY OF
OCTOBER 2000.
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, Secretary
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