UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 -12
ASI TECHNOLOGY CORORATION
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(NAME OF REGISTRANT AS SPECIFIED IN ITS 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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each Class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.
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3) Filing Party:
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4) Date Filed:
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ASI TECHNOLOGY CORPORATION
980 AMERICAN PACIFIC DRIVE, SUITE 111
HENDERSON, NEVADA 89014
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 2006
Dear Stockholder:
The Annual Meeting of Stockholders (the "Annual Meeting") of ASI Technology
Corporation (the "Company") will be held at 982 American Pacific Drive, Suite
204, Henderson, Nevada, on May 1, 2006 at 10:00 a.m. (Pacific Time).
At the Annual Meeting, stockholders will be asked:
1. To elect Jerry E. Polis, Eric M. Polis, Dawayne R. Jacobs, Gerald L. Ehrens
and Richard A. Fait to our Board of Directors;
2. To approve an amendment to the Company's Restated Articles of Incorporation
to increase the number of authorized shares of common stock from 10,000,000
to 30,000,000;
3. To approve an amendment to the Company's 2000 Equity Incentive Plan from
250,000 shares to 950,000 shares;
4. To ratify the selection of Piercy Bowler, Taylor and Kern as the Company's
independent registered public accounting firm for the fiscal year ending
September 30, 2006; and
5. To transact any other business properly brought before the Annual Meeting
and any adjournment thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this Notice. ONLY STOCKHOLDERS OF RECORD OF THE COMPANY'S
COMMON STOCK AT THE CLOSE OF BUSINESS ON MARCH 31, 2006 ARE ENTITLED TO NOTICE
OF, AND TO VOTE AT, THE ANNUAL MEETING AND ANY ADJOURNMENT THEREOF.
It is important that your shares be represented and voted at the Annual
Meeting. If you are the registered holder of the Company's common stock, you can
vote your shares by completing and returning the enclosed proxy card, even if
you plan to attend the Annual Meeting. Please review the instructions on the
proxy card or the information forwarded by your broker, bank or other nominee
regarding the voting instructions. You may vote your shares of common stock in
person even if you previously returned a proxy card. Please note, however, that
if your shares of common stock are held of record by a broker, bank or other
nominee and you wish to vote in person at the Annual Meeting, you must obtain a
proxy issued in your name from such broker, bank or other nominee.
If you are planning to attend the Annual Meeting in person, you will be
asked to register before entering the Annual Meeting. ALL ATTENDEES WILL BE
REQUIRED TO PRESENT GOVERNMENT-ISSUED PHOTO IDENTIFICATION (e.g., driver's
license or passport) to enter the Annual Meeting. IF YOU ARE A STOCKHOLDER OF
RECORD, your ownership of the Company's common stock will be verified against
the list of stockholders of record as of March 31, 2006 prior to being admitted
to the Annual Meeting. IF YOU ARE NOT A STOCKHOLDER OF RECORD AND HOLD YOUR
SHARES OF COMMON STOCK IN "STREET NAME" (THAT IS, YOUR SHARES OF COMMON STOCK
ARE HELD IN A BROKERAGE ACCOUNT OR BY A BANK OR OTHER NOMINEE) YOU MUST ALSO
PROVIDE PROOF OF BENEFICIAL OWNERSHIP AS OF MARCH 31, 2006, SUCH AS YOUR MOST
RECENT ACCOUNT STATEMENT PRIOR TO _______________, 2006 AND A COPY OF THE VOTING
INSTRUCTION CARD PROVIDED BY YOUR BROKER, BANK OR NOMINEE, OR SIMILAR EVIDENCE
OF OWNERSHIP.
In addition to the proxy statement, proxy card and voting instructions, a
copy of our 2005 annual report on Form 10-KSB, which is not part of the proxy
soliciting material, is enclosed for your review.
By Order of the Board of Directors
JERRY E. POLIS
President
o, 2006
TABLE OF CONTENTS
PAGE
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THE ANNUAL MEETING 1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 3
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON 5
PROPOSAL NUMBER ONE: ELECTION OF DIRECTORS TO OUR BOARD OF DIRECTORS 5
EXECUTIVE COMPENSATION 10
PROPOSAL NUMBER TWO: APPROVAL OF AMENDMENT TO RESTATED ARTICLES OF
INCORRPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK 12
PROPOSAL NUMBER THREE: APPROVAL OF AMENDMENT TO THE 2000 EQUITY
INCENTIVE PLAN 13
PROPOSAL NUMBER FOUR: RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS 16
FORWARD-LOOKING STATEMENTS 18
FUTURE STOCKHOLDERS PROPOSALS 18
WHERE YOU CAN FIND MORE INFORMATION 19
EXHIBIT A - CERTIFICATE OF AMENDMENT Exhibit A
EXHIBIT B - 2000 EQUITY INCENTIVE PLAN Exhibit B
ASI TECHNOLOGY CORPORATION
980 AMERICAN PACIFIC DRIVE, SUITE 111
HENDERSON, NEVADA 89014
PROXY STATEMENT
FOR THE 2006 ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD ON o, 2006
THE ANNUAL MEETING
GENERAL
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ASI Technology Corporation ("we", the
"Company" or "ASI") for use at the 2006 annual meeting of the stockholders to be
held on May 1, 2006 at 10:00 a.m. (Pacific Time) at 982 American Pacific Drive,
Suite 204, Henderson, Nevada, and at any adjournment thereof, for the purposes
set forth in the accompanying notice of annual meeting.
This proxy statement, the notice of meeting and the enclosed form of proxy
are expected to be mailed to our stockholders on or about o, 2006.
ENTITLEMENT TO VOTE
If you are a registered holder of shares of our common stock on the record
date, you may vote those shares of our common stock in person at the annual
meeting or by proxy in the manner described below under "Voting of Proxies." If
you hold shares of our common stock in "street name" through a broker or other
financial institution, you must follow the instructions provided by your broker
or other financial institution regarding how to instruct your broker or
financial institution to vote your shares.
VOTING OF PROXIES
You can vote the shares that you own of record on the record date by either
attending the annual meeting in person or by filling out and sending in a proxy
in respect of the shares that you own. Your execution of a proxy will not affect
your right to attend the annual meeting and to vote in person.
You may revoke your proxy at any time before it is voted by:
(a) filing a written notice of revocation of proxy with our corporate
secretary at any time before the taking of the vote at the annual meeting;
(b) executing a later-dated proxy relating to the same shares and
delivering it to our corporate secretary at any time before the taking of
the vote at the annual meeting; or
(c) attending at the annual meeting, giving affirmative notice at the
annual meeting that you intend to revoke your proxy and voting in person.
Please note that your attendance at the annual meeting will not, in and of
itself, revoke your proxy.
All shares of common stock represented by properly executed proxies received at
or prior to the annual meeting that have not been revoked will be voted in
accordance with the instructions of the stockholder who has executed the proxy.
If no choice is specified in a proxy, the shares represented by the proxy will
be voted FOR the election of all the nominees to serve as our directors and FOR
the approval of all of the other proposals set forth in the accompanying notice
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of meeting. The shares represented by each proxy will also be voted for or
against such other matters as may properly come before the annual meeting in the
discretion of the persons named in the proxy as proxy holders. We are not aware
of any other matters to be presented for action at the annual meeting other than
those described herein.
Any written revocation of proxy or subsequent later-dated proxy should be
delivered to ASI Technology Corporation, 980 American Pacific Drive, Suite 111,
Henderson, Nevada 89014, Attention: Jerry E. Polis, President.
RECORD DATE AND SHARES ENTITLED TO VOTE
Our Board of Directors has fixed the close of business on March 31, 2006 as
the record date for the determination of stockholders entitled to notice of and
to vote at the annual meeting. At the record date, there were 7,019,664 shares
of our common stock issued, outstanding, and entitled to vote at the annual
meeting. Holders of common stock are entitled to one vote at the annual meeting
for each share of common stock held of record at the record date. There are no
separate voting groups or separate series of stock and no shares of preferred
stock outstanding. There is no cumulative voting in the election of directors.
QUORUM
A quorum is necessary to hold a valid meeting of our stockholders. The
required quorum for the transaction of business at the annual meeting is a
majority of our issued and outstanding shares as of the record date.
In order to be counted for purposes of determining whether a quorum exists
at the annual meeting, shares must be present at the annual meeting either in
person or represented by proxy. Shares that will be counted for purposes of
determining whether a quorum exists will include:
1. shares represented by properly executed proxies for which voting
instructions have been given, including proxies which are marked
"Abstain" or "Withhold" for any matter;
2. shares represented by properly executed proxies for which no
instruction has been given; and
3. broker non-votes.
Broker non-votes occur when shares held by a broker for a beneficial owner
are not voted with respect to a particular proposal because the broker has not
received voting instructions from the beneficial owner and the broker does not
have discretionary authority to vote such shares.
VOTES REQUIRED
Proposal One - Election of Directors: The affirmative vote of the holders
of a plurality of the shares of common stock voting is required for the election
of our directors. This means that the nominees who receive the greatest number
of votes for each open seat will be elected. Votes may be cast in favor of the
election of directors or withheld. A vote is withheld when a properly executed
proxy is marked WITHHOLD for the election of one or more directors. Votes that
are withheld and broker non-votes will be counted for the purposes of
determining the presence or absence of a quorum but will have no other effect on
the election of directors.
Proposal Two - Change to Restated Articles of Incorporation: The
affirmative vote of the holders of a majority of the shares of our common stock
outstanding on the record date is required for the approval of the amendment to
our Restated Articles of Incorporation to effect an increase in the authorized
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number of shares of our common stock. Stockholders may vote in favor of or
against any of these proposals, or they may abstain. Abstentions and broker
non-votes will be counted for purposes of determining the presence or absence of
a quorum, and will have the same effect as a vote against these proposals.
Proposal Three- Amendment to 2000 Equity Incentive Plan: The affirmative
vote of the holders of a majority of our common stock represented at the annual
meeting in person or by proxy is required for the approval of an amendment to
the 2000 Equity Stock Incentive Plan. Stockholders may vote in favor or against
any proposal, or they may abstain. Abstentions and broker non-votes will be
counted for purposes of determining the presence or absence of a quorum.
Abstentions are deemed to be "votes cast", and have the same effect as a vote
against this proposal. Broker non-votes are not deemed to be votes cast and,
therefore, have no effect on the vote with respect to this proposal.
Proposal Four- Appointment of Accountants: The affirmative vote of the
holders of a majority of our common stock represented at the annual meeting in
person or by proxy is required for the ratification of the appointment of our
independent registered public accountants. Stockholders may vote in favor or
against any proposal, or they may abstain. Abstentions and broker non-votes will
be counted for purposes of determining the presence or absence of a quorum.
Abstentions are deemed to be "votes cast", and have the same effect as a vote
against this proposal. Broker non-votes are not deemed to be votes cast and,
therefore, have no effect on the vote with respect to this proposal.
STOCKHOLDER PROPOSALS
No proposals have been received from any stockholder to be considered at
the annual meeting.
OTHER MATTERS
It is not expected that any matters other than those referred to in this
proxy statement will be brought before the annual meeting. If other matters are
properly presented, however, the persons named as proxy appointees will vote in
accordance with their best judgment on such matters. The grant of a proxy also
will confer discretionary authority on the persons named as proxy appointees to
vote in accordance with their best judgment on matters incident to the conduct
of the annual meeting.
SOLICITATION OF PROXIES
This proxy solicitation is being made on behalf of our Board of Directors.
We will solicit proxies initially by mail. Further solicitation may be made by
our directors, officers and employees personally, by telephone, facsimile,
e-mail, Internet or otherwise, but they will not be specifically compensated for
these services. At this time, the Company has not engaged a proxy solicitation
firm. We may, in the discretion of the Board of Directors, choose to engage a
proxy solicitation firm to assist us with this proxy solicitation. In such
event, the proxy solicitation firm will be engaged and compensated for their
services on customary terms. Upon request, we will reimburse brokers, dealers,
banks or similar entities acting as nominees for their reasonable expenses
incurred in forwarding copies of the proxy materials to the beneficial owners of
the shares of our common stock they hold as of the record date. We will bear the
expenses incurred in connection with printing, filing and mailing of this proxy
statement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of February 28, 2006
regarding the beneficial ownership of our common stock by:
o each person who is known by us to beneficially own more than 5% of our
shares of common stock; and
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o each named executive officer, each director and all of our directors
and executive officers as a group.
The number of shares beneficially owned and the percentage of shares
beneficially owned are based on 7,019,664 shares of common stock outstanding as
of February 28, 2006.
For the purposes of the information provided below, shares that may be
issued upon the exercise or conversion of options, warrants and other rights to
acquire shares of our common stock that are exercisable or convertible within 60
days following February 28, 2006, are deemed to be outstanding and beneficially
owned by the holder for the purpose of computing the number of shares and
percentage ownership of that holder, but are not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.
AS OF FEBRUARY 28, 2006
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NAME AND ADDRESS OF BENEFICIAL OWNER SHARES(1) PERCENT
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NAMED EXECUTIVE OFFICERS AND DIRECTORS(2)
Jerry E. Polis (3) 2,886,024 37.8%
President and Director
Eric M. Polis (4) 156,000 2.2%
Secretary, Treasurer and Director
Dawayne R. Jacobs(5) 130,000 1.8%
Director
Gerald L. Ehrens (6) 245,000 3.4%
Director
James A. Barnes (7) 645,281 9.2%
Elwood G. Norris (8) 447,905 6.5%
Richard A. Fait (9) 160,000 2.3%
Director
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP 3,577,024 (10) 45.5%
(FIVE PERSONS)
(1) Based on 7,019,664 shares of common stock issued and outstanding as of
February 28, 2006. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Except as otherwise
indicated, we believe that the beneficial owners of the common stock listed
above, based on information furnished by such owners, have sole investment
and voting power with respect to such shares, subject to community property
laws where applicable, and except as noted below.
(2) The address of the executive officers and directors is c/o ASI Technology
Corporation, 980 American Pacific Drive, Suite 111, Henderson, Nevada
89104.
(3) Includes 1,784,156 shares held by the Polis Family Trust and 363,000 shares
held by Davric Corporation, a company controlled by Mr. Polis. Also
includes currently exercisable options on 30,000 shares of common stock and
warrants on 578,571 shares of common stock
(4) Shares held by family trust. Also includes currently exercisable options on
30,000 shares of common stock and warrants on 25,000 shares of common
stock.
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(5) Includes currently exercisable options on 30,000 shares of common stock.
(6) Consists of 150,000 shares held by a family limited partnership. Also
includes currently exercisable options on 20,000 shares of common stock and
warrants on 75,000 shares of common stock.
(7) Includes 440,281 shares held by Sunrise Capital, Inc., a company controlled
by Mr. Barnes, and 100,000 shares held by a family trust. Also includes
currently exercisable options on 30,000 shares of common stock and warrants
on 25,000 shares of common stock.
(8) Shares held by family trust. Also includes currently exercisable options on
30,000 shares of common stock and warrants on 25,000 shares of common
stock.
(9) Consists of 100,000 shares held by family trust. Also includes currently
exercised options on 10,000 shares of common stock and warrants on 50,000
shares of common stock.
(10) Includes currently exercisable options on 120,000 shares of common stock
and warrants on 728,571 shares of common stock.
We have no knowledge of any arrangements, including any pledge by any
person of our securities, the operation of which may at a subsequent date result
in a change in our control.
We are not, to the best of our knowledge, directly or indirectly owned or
controlled by another corporation or foreign government.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of the following persons has any substantial or material interest,
directly or indirectly, by way of beneficial ownership of securities or
otherwise, in any matter to be acted on at the annual meeting except for our
current and future directors and executive officers inasmuch as they may be
granted stock options or stock awards:
1. each person who has been one of our directors or executive officers at
any time since the beginning of our last fiscal year;
2. each nominee for election as one of our directors; or
3. any associate of any of the foregoing persons.
PROPOSAL NUMBER ONE:
ELECTION OF DIRECTORS TO OUR BOARD OF DIRECTORS
ELECTION OF DIRECTORS
We propose to elect five directors, each to hold office until each
director's successor is elected and qualified at our next annual meeting.
The persons named in the enclosed proxy will vote it for the election of
the nominees listed under "Nominees for Election of Directors" below unless you
instruct them otherwise, or unless a nominee is unwilling to serve as a director
of our Company. Our Board of Directors has no reason to believe that any nominee
will be unwilling to serve, but if a nominee should determine not to serve, the
persons named in the proxy may vote for another candidate nominated by our Board
of Directors.
The affirmative vote of a plurality of the votes present in person or by
proxy at the annual meeting and entitled to vote on the election of directors is
required for election of each nominee as a director. Our Restated Articles of
Incorporation does not provide for cumulative voting in the election of
directors.
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NOMINEES FOR ELECTION AS DIRECTORS
Each of our current directors, Jerry E. Polis, Eric M. Polis, Dawayne R.
Jacobs, Gerald L. Ehrens and Richard A. Fait have been nominated by our Board of
Directors for election. It is the intention of the persons named in the
accompanying form of proxy to vote proxies for the election of these individuals
and they have consented to being named in this proxy statement and to serve, if
elected. In the event that any or all of these individuals should for some
reason, presently unknown, become unavailable for election, the persons named in
the form of proxy intend to vote for substitute nominees.
DIRECTORS AND EXECUTIVE OFFICERS
The following table and information that follows sets forth the names and
positions of our directors and executive officers:
NAME AND MUNICIPALITY CURRENT OFFICE WITH ASI
OF RESIDENCE AGE TECHNOLOGIES CORPORATION DIRECTOR SINCE
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JERRY E. POLIS 73 President and Director 1973
Las Vegas, Nevada
ERIC M. POLIS 35 Secretary, Treasurer and Director August 2000
Las Vegas, Nevada
DAWAYNE R. JACOBS 63 Director August 2000
Henderson, Nevada
GERALD L. EHRENS 66 Director September 2005
Las Vegas, Nevada
RICHARD A. FAIT 68 Director January 2006
Henderson, Nevada
The following is a description of the business background of the directors,
director nominees and executive officers of our company.
Jerry E. Polis - Mr. Polis has been our President and a member of our Board
of Directors since 1973. Since 1963 he has been self-employed primarily in real
estate investment, and from 1964 to 2002 he owned and operated Polis Realty.
>From 1968 to the sale of his ownership in January 1997, he was active as a
co-owner of the Taco Bell franchises for the State of Nevada (operated under
privately owned Las Cal Corporation). In 1994, he co-founded Commercial Bank of
Nevada, an unlisted publicly owned bank located in Las Vegas, Nevada, which was
sold through a merger to a NYSE bank group in June 1998. He was a director of
Commercial Bank from 1994 and Chairman from May 1996 until its sale. Mr. Polis
graduated from Penn State University with a B.A. Degree in Commerce in 1953. Mr.
Polis is the father of Eric M. Polis.
Eric M. Polis- Mr. Polis has served as our Secretary and our Treasurer
since August 2000. He served as property manager and leasing agent for Polis
Realty from 1993 to 2002. Mr. Polis is a private investor and serves on the
board of several Las Vegas non-profit organizations. He obtained a B.S. in
Business Administration from the University of Arizona in 1993. Mr. Polis is the
son of Jerry E. Polis.
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Dawayne R. Jacobs - Mr. Jacobs has served on our Board of Directors since
August 2000. Mr. Jacobs founded Jacobs Marketing Inc., a general merchandise
manufacturing representative firm located in Plymouth, Minnesota in 1982. He has
served as its President and CEO since 1982. He also founded The Accessory Group,
Henderson, Nevada in 1995, a manufacturer and national distributor of
proprietary products, and serves as its Chief Executive Officer. In 1993 he
founded International Rainwear Inc., Henderson, Nevada, a national distributor
of rainwear that was sold in 1997.
Gerald L. Ehrens - Mr. Ehrens has been a member of our board of directors
since September 2005. Mr.. Ehrens has been a self-employed private investor
since 1994. From 1992 to 1994 he was Chief Operating Officer of Inamed Corp., a
Nasdaq medical device company. Previously he held senior executive positions at
E.I. Dupont and Union Carbide with his last position at Union Carbide in 1992
being Vice President of New Business Development. In 1996, he was appointed as a
director of unlisted publicly owned Commercial Bank of Nevada and served until
its sale through merger to a NYSE bank group in June 1998. He currently serves
as a director of SouthwestUSA Bank in Las Vegas, Nevada. Mr. Ehrens received a
BS in Chemical Engineering from Princeton University in 1961 and a MS in
Industrial Administration from George Washington University in 1965.
Richard A. Fait - Mr. Fait has been a member of our board of directors
since January 9, 2006. Mr. Fait, has been a self-employed investor since 2001.
>From 1966 to January 2001 he served as President of the Peoples Bank of
Aberdeen, South Dakota and Chairman and President of its holding company,
Investment Corporation of America. From the mid-1960's to 2001 he was an owner,
officer and director of ten community banks in the Midwest. From 1972 to 2000 he
was a practicing certified public accountant in South Dakota and Minnesota. Mr.
Fait received a degree in Accounting from Nettleton College in 1958.
Our directors hold office until the next annual meeting of the stockholders
and the election and qualification of their successors. Officers are elected
annually by the Board of Directors and serve at the direction of the Board of
Directors.
MEETINGS OF DIRECTORS DURING THE LAST FISCAL YEAR
The Company's Board of Directors did not hold any meetings during the year
ended September 30, 2005 (nine months). From January 1 - September 30, 2005, the
Board of Directors transacted its business by five unanimous consent resolutions
after informal discussions amongst the directors.
The Company does not have a formal policy with respect to director
attendance at annual stockholders meetings, however, all directors are
encouraged to attend. The Company did not hold an annual stockholders meeting
last year.
Stockholders may contact an individual director, the Board of Directors as
a group, or a specified board committee or group, including the non-employee
directors as a group, by writing to: ASI Technology Corporation, 980 American
Pacific Drive, Suite 111, Henderson, Nevada 89014, Attention: Board of
Directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Securities and Exchange Commission has adopted rules implementing
Section 407 of the Sarbanes-Oxley Act of 2002 requiring public companies to
disclose information about "audit committee financial experts." We do not have a
standing Audit Committee. The functions of the Audit Committee have been assumed
by our full Board of Directors. However, we believe Richard A. Fait and Gerald
L. Ehrens, independent members of our board of directors, each qualify as an
"audit committee financial expert." The Securities and Exchange Commission's
rules do not require us to have an audit committee financial expert.
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CODE OF ETHICS
We have adopted a code of ethics that applies to our members of the board
of directors, principal executive officer, principal financial officer and
principal accounting officer or persons performing similar functions (as well as
its other employees and directors). This code summarizes the legal, ethical and
regulatory standards that must be followed and is a reminder to each direction
and applicable personnel of the seriousness of that commitment. Compliance with
this Code of Ethics and high standards of business conduct is mandatory for each
officer. As adopted, the Code of Ethics sets forth written standards that are
designed to deter wrongdoing and to promote:
1. honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
2. compliance with applicable governmental laws, rules and regulations;
3. the prompt internal reporting of violations of the Code of Ethics to
the appropriate person or persons identified in the Code of Ethics;
and
4. accountability for adherence to the Code of Ethics.
A copy of the code of ethics is posted on our Internet site at
www.asiplasma.com. In the event we make any amendments to, or grant any waivers
of, a provision of the Code Ethics for Senior Officers that applies to the
principal executive officer, principal financial officer, or principal
accounting officer that requires disclosure under applicable SEC rules, we
intend to disclose such amendment or waiver and the reasons therefor on a Form
8-K or on our next periodic report.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Except as disclosed in this proxy, during the past five years none of our
directors or executive officers is, or has been, a general partner or executive
officer of any business that filed a bankruptcy petition (or had a bankruptcy
petition filed against it), either at the time of filing or within two years
prior to such time.
None of our directors or executive officers has, within the past five
years, been convicted in a criminal proceeding or been the subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses).
None of our directors or executive officers has, within the past five
years, been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities.
None of our directors or executive officers has, within the past five
years, been found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.
There are currently no legal proceedings to which any of our directors or
officers is a party adverse to us or in which any of our directors or officers
has a material interest adverse to us.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except for the transactions described below, during the last two years none
of our directors, officers or principal stockholders, nor any associate or
affiliate of the foregoing have any interest, direct or indirect, in any
transaction, or in any proposed transactions, which has materially affected or
will materially affect us.
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Other than compensatory arrangements described under "Executive
Compensation," we have no other transactions, directly or indirectly, with our
promoters, directors, senior officers or principal stockholders, which have
materially affected or will materially affect us.
In August and September 2005, Jerry E. Polis, an officer and director,
purchased through his family trust and a controlled corporation 1,157,142 shares
of stock at $0.35 per share, $405,000 of 7% subordinated notes due July 31, 2008
and as part of the units received 578,571 warrants exercisable at $0.50 per
share until July 31, 2008. In August 2005, Eric M. Polis, an officer and
director, purchased through his family trust 50,000 shares of stock at $0.35 per
share, $17,500 of 7% subordinated notes due July 31, 2008 and as part of the
units received 25,000 warrants exercisable at $0.50 per share until July 31,
2008. In August 2005, prior to being appointed a director, Gerald L. Ehrens,
through a family partnership he controls, purchased 150,000 shares of stock at
$0.35 per share, $52,500 of 7% subordinated notes due July 31, 2008 and as part
of the units received 75,000 warrants exercisable at $0.50 per share until July
31, 2008. In September 2005, prior to being appointed a director, Richard A.
Fait purchased 100,000 shares of stock at $0.35 per share, $35,000 of 7%
subordinated notes due July 31, 2008 and as part of the units received 50,000
warrants exercisable at $0.50 per share until July 31, 2008. David A. Polis, the
son of Jerry E. Polis and brother of Eric M. Polis, in September 2005 purchased
through his family trust 50,000 shares of stock at $0.35 per share, $17,500 of
7% subordinated notes due July 31, 2008 and as part of the units received 25,000
warrants exercisable at $0.50 per share until July 31, 2008.
In June 2005 Jerry E. Polis exchanged $75,000 principal amount of 10%
demand notes for 250,000 shares of common stock. This demand note represented
cash advanced in 2002. We recorded $24,000 in 2004 and $18,000 in 2005 (nine
months) as contributed services for Jerry E. Polis. No common stock or other
value is due for these contributed services.
We currently share office space with Davric Corporation, an entity
controlled by Mr. Jerry E. Polis. We are paying Davric Corporation $1,000 per
month for use of this space and associated administrative costs. We paid $12,000
in 2004 and $9,000 in 2005 (nine months) in such costs.
CONFLICTS OF INTEREST
Certain conflicts of interest now exist and will continue to exist between
us and certain of our officers, directors and consultants due to the fact that
they have other employment or business interests to which they devote some
attention and they are expected to continue to do so. We have not established
policies or procedures for the resolution of current or potential conflicts of
interest between us and management, consultants or affiliated entities. There
can be no assurance that members of management will resolve all conflicts of
interest in our favor. Our officers and directors are accountable to us as
fiduciaries and are required to adhere to our Code of Ethics, which means that
they are legally obligated to exercise good faith and integrity in handling our
affairs. Failure by them to conduct our business in our best interests may
result in liability to them.
It is conceivable that our areas of interest could overlap or conflict with
other business interests of our management or our consultants. We believe that
our areas of focus, products and technology directions are unique and distinct
from other businesses in which our management and consultants may be involved
such that no conflict in business lines or loyalties will result. Because of
this unlikelihood, no steps have been taken to resolve possible conflicts, and
any such conflicts, should they arise, will be addressed at the appropriate
time.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the SECURITIES EXCHANGE ACT OF 1934 requires our executive
officers and directors, and persons who beneficially own more than ten percent
of our equity securities, to file reports of ownership and changes in ownership
with the SEC. Officers, directors and greater than ten percent stockholders are
required by SEC regulation to furnish us with copies of all Section 16(a) forms
they file. Based solely on a review of copies of such reports furnished to the
Company and written representations that no other reports were required during
the transition period ended September 30, 2005, the Company believes that all
persons subject to the reporting requirements pursuant to Section 16(a) filed
the required reports on a timely basis with the SEC.
-9-
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation awarded to, earned by or paid
to each of the individuals who served as our Chief Executive Officer and our
four other most highly compensated executive officers (the "named executive
officers") for the nine months ended September 30, 2005 and fiscal years ended
December 31, 2004 and 2003.
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
---------------------------------------------
OTHER COMMON RESTRICTED
ANNUAL SHARES UNDER SHARES OR LONG TERM ALL OTHER
COMPEN- OPTIONS/ SARS RESTRICTED INCENTIVE COMPEN-
NAME AND FISCAL SALARY BONUS SATION GRANTED SHARE UNITS PLAN PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($) ($) ($)
- ----------------------------------------------------------------------------------------------------------------------------
JERRY E. POLIS(1) 2005(2) $0 - - - - - -
President 2004 $0 - $200 10,000 - - -
2003 $0 - - - - - -
ERIC M. POLIS 2005 $0 - - - - - -
Secretary 2004 $0 - $100 10,000 - - -
and Treasurer 2003 $0 - - - - - -
(1) Director fees. Mr. Polis received no compensation as an officer of the
Company for any period. The Company recorded $24,000 in 2003 and 2004 and
$18,000 in 2005 (nine months) as contributed services for Mr. Jerry Polis.
(2) On November 7, 2005, the Board of Directors approved the change of our
fiscal year to September 30. Our previous fiscal year ended on
December 31. A Form 10-KSB for the nine-month period ended September 30,
2005 was filed with the Securities and Exchange Commission on December 27,
2005.
OPTION GRANTS IN FISCAL 2005
There were no grants of stock options during the nine month period ended
September 30, 2005 to our named executive officers.
OPTION EXERCISES IN FISCAL 2005 AND FISCAL PERIOD-END OPTION VALUES
During the nine month period ended September 30, 2005, there were no stock
options exercised by directors or named executive officers.
AGGREGATED OPTION EXERCISES AND FISCAL PERIOD-END VALUES
Number of Unexercised Value of Unexercised
Options Held At In-The-Money Options At
Shares September 30, 2005 September 30, 2005(1)
Acquired Value ----------------------------- -----------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
Jerry E. Polis -0- -0- 20,000 -0- $ 500 -0-
Eric M. Polis -0- -0- 20,000 -0- $ 500 -0-
(1) Based on the closing bid price on September 30, 2005 of $0.40 per share.
-10-
INCENTIVE PLANS
On August 16, 2000, the stockholders approved the 2000 Equity Incentive
Plan reserving an aggregate of 250,000 shares of common stock for issuance under
the plan. At February 29, 2006, there were 250,000 options outstanding. Other
than the 2000 Equity Incentive Plan, we do not have any stock appreciation
rights plans in effect, or rights and have no long-term incentive plans, as
those terms are defined in Securities and Exchange Commission regulations. At
February 28, 2006 we had warrants outstanding exercisable until July 31, 2008
into an aggregate of 1,428,571 shares of common stock at $0.50 per share.
COMPENSATION OF DIRECTORS
Effective December 6, 2005 the directors approved compensation of $200 per
meeting for their services as directors and Mr. Jerry E. Polis, Chairman of the
Board, receives $400 for each meeting. None of the officers currently receive
any compensation for their services as officers of the Company. We may begin
compensating management at a future date.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no employment contracts with any of our officers or directors.
REPORT ON REPRICING OF OPTIONS/SARS
None.
EQUITY COMPENSATION PLANS
We have granted incentive and non-qualified stock options to our employees
and directors under the terms of our 2000 Equity Incentive Plan. We have also
granted non-qualified stock options, which have been authorized by our Board of
Directors.
The following table provides a summary of the number of options granted
under our 2000 Equity Incentive Plan, and the number of options granted under
individual compensation agreements and the weighted average exercise price and
the number of options remaining available for issuance at September 30, 2005.
NUMBER OF NUMBER OF SECURITIES
SECURITIES TO BE WEIGHTED REMAINING AVAILABLE
ISSUED UPON AVERAGE FOR FUTURE ISSUANCE
EXERCISE OF EXERCISE PRICE UNDER EQUITY
OUTSTANDING OF OUTSTANDING COMPENSATION PLANS
OPTIONS, OPTIONS, (EXCLUDING SECURITIES
WARRANTS AND WARRANTS AND REFLECTED IN
RIGHTS RIGHTS COLUMN (A))
(A) (B) (C)
- -----------------------------------------------------------------------------------------------------------------------------
Equity compensation plans approved by security holders 160,000(1) $0.43 90,000
Equity compensation plans not approved by security holders - - -
TOTAL(1) 160,000 $0.43 90,000
(1) Includes certain options granted to directors and non-executive.
-11-
In January 2006 the Company granted options on 90,000 shares of common
stock exercisable at $0.40 per share including options on 50,000 shares to
directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" THE ELECTION OF THE DIRECTOR NOMINEES SET FORTH ABOVE.
DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST
PROPOSAL NUMBER TWO:
APPROVAL OF AMENDMENT TO RESTATED ARTICLE OF INCORPORATION TO
INCREASE AUTHORIZED SHARES OF COMMON STOCK
The stockholders are being asked to approve an amendment to the Company's
Restated Article of Incorporation (the "Restated Article") to increase the
number of authorized shares of common stock from 10,000,000 to 30,000,000. On
March __, 2006, the Company's Board of Directors adopted resolutions approving
and authorizing the amendment and directing that the amendment be submitted to a
vote of the stockholders at the Annual Meeting. A copy of the proposed amendment
to our Restated Article affecting the increase in our authorized shares is
attached hereto as Exhibit A. The Board determined that the amendment is in the
best interests of the Company and its stockholders and unanimously recommends
approval by the stockholders.
If this proposed the stockholders approve the proposed amendment, the Board
of Directors may proceed to file the amendment, thereby making the increase in
authorized capital effective upon the filing of such amendment. The Board of
Directors may, in its discretion, abandon the amendment to increase the
authorized capital. If the Board of Directors determines that it is in the best
interests of the Company and its stockholders to proceed with the increase in
authorized capital, the Board of Directors will, subject to stockholder
approval, file with the Secretary of State of the State of Nevada a Certificate
of Amendment to the Restated Article increasing the Company's authorized capital
as set forth in this proposal.
The Restated Article currently authorizes the issuance of up to 11,000,000
shares of stock, of which 10,000,000 shares are designated as common stock, $.02
par value per share. Of the 10,000,000 shares of common stock currently
authorized, as of the close of business on February 28, 2006, there were
7,019,664 shares of common stock issued and outstanding. In addition, as of
February 28, 2006, the Company has reserved up to approximately 250,000 shares
of common stock for issuance pursuant to the grants made under the 2000 Equity
Incentive Plan and 1,428,571 shares of common stock for issuance upon possible
exercise of outstanding warrants.
REASONS FOR INCREASE
The Board of Directors has proposed this amendment to ensure that the
Company has sufficient shares available for general corporate purposes
including, without limitation, equity financings, acquisitions, establishing
strategic relationships with corporate partners, providing equity incentives to
employees, and payments of stock dividends, stock splits or other
recapitalizations. The Company considers from time to time acquisitions, equity
financings, strategic relationships and other transactions as market conditions
or other opportunities arise. Without an increase in the shares of common stock
authorized for issuance, the Company might not be able to conclude any such
transaction in a timely fashion.
-12-
EFFECT OF INCREASE
If the stockholders approve the proposed amendment, the Board may cause the
issuance of additional shares of common stock without further vote of the
stockholders of the Company, except as may be required in particular cases by
the Company's charter documents, applicable law or the rules of any national
securities exchange on which shares of common stock of the Company may then be
listed. Under the Company's Restated Article, the Company's stockholders do not
have preemptive rights to subscribe to additional securities that may be issued
by the Company, which means that current stockholders do not have a prior right
to purchase any new issue of capital stock of the Company in order to maintain
their proportionate ownership of common stock. In addition, if the Board elects
to cause the Company to issue additional shares of common stock or securities
convertible into or exercisable for common stock, such issuance could have a
dilutive effect on the voting power and earnings per share of existing
stockholders.
The increase in the number of authorized shares of common stock could have
an anti-takeover effect, although this is not the intent of the Board in
proposing the amendment. For example, if the Board issues additional shares in
the future, such issuance could dilute the voting power of a person seeking
control of the Company, thereby deterring or rendering more difficult a merger,
tender offer, proxy contest or an extraordinary transaction opposed by the Board
of Directors. As of the date of this Proxy Statement, the Board is not aware of
any attempt or plan to obtain control of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE RESTATED ARTICLE OF INCORPORATION INCREASING
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
PROPOSAL NUMBER THREE:
APPROVAL OF AMENDMENT TO 2000 EQUITY INCENTIVE PLAN
The Board of Directors has amended the 2000 Equity Incentive Plan (the
"Plan"), subject to the approval by the stockholders. The amended plan will
become effective upon approval by stockholders.
Summary of Changes
We are asking stockholders to approve an amendment to the Plan to increase
the total number of shares of the common stock available for awards granted
under the Plan by 700,000 shares. As of February 28, 2006, none of the 250,000
shares authorized remain available for awards under the Plan.
The following is a summary of the Plan. This summary is qualified in its
entirety by reference to the complete text of the Plan. Stockholders are urged
to read the actual text of the Plan in its entirety which is set forth as
Exhibit B to this Proxy Statement.
PURPOSE. The purpose of the Plan is to provide the Company a means to retain the
services of officers, directors, employees, advisors and consultants and other
persons eligible to receive stock awards and to provide incentives for such
persons to contribute to the success of the Company and its affiliates, as well
as to provide a means by which eligible recipients of stock awards may be given
an opportunity to benefit from increases in value of the Common Stock through
the granting of the awards, including stock-based incentive awards, including
stock options, stock appreciation rights, limited stock appreciation rights,
restricted stock, deferred stock and performance shares.
ELIGIBLE PARTICIPANTS. Employees, directors, officers, advisors and consultants
of the Company and any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing (each an "Affiliate", as such terms
are defined in Section 424(e) and (f) of the Internal Revenue Code of 1986, as
amended (the "CODE")) are eligible to receive stock awards under the Plan.
-13-
NUMBER OF SHARES OF COMMON STOCK AVAILABLE UNDER THE PLAN. A total of 250,000
(950,000 if the amendment to the Plan is approved by the stockholders) of Common
Stock may be issued pursuant to stock awards under the Plan. If any stock award
shall for any reason expire or otherwise terminates, in whole or in part,
without having been exercised in full (or vested in the case of restricted
stock), the stock not acquired under such stock award shall revert to and again
become available for issuance under the Plan. If any Common Stock acquired
pursuant to the exercise of an option shall for any reason be repurchased by the
Company under an unvested share repurchase option provided under the Plan, the
stock repurchased by the Company under such repurchase option shall not revert
to and again become available for issuance under the Plan.
ADMINISTRATION OF THE PLAN. The Board of Directors has the authority to
administer the Plan or may delegate administration of the Plan to a Committee or
Committees of one or more members of the Board of Directors. If administration
is delegated to a Committee, the Committee shall have all administrative powers
conferred upon the Board of Directors, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board of
Directors. The Board of Directors may abolish the Committee at any time and
revest the administration of the Plan in the Board of Directors.
In the discretion of the Board of Directors, a Committee may consist solely of
two or more "outside directors", in accordance with Section 162(m) of the Code,
and/or solely of two or more "non-employee directors", in accordance with Rule
16b-3. Within the scope of such authority, the Board of Directors or the
Committee may (i) delegate to a committee of one or more members of the Board of
Directors who are not outside directors under the Securities Exchange Act of
1934, the authority to grant stock awards to eligible persons who are either (1)
not then covered employees and are not expected to be covered employees at the
time of recognition of income resulting from such stock award or (2) not persons
with respect to whom the Company wishes to comply with Section 162(m) of the
Code and/or (ii) delegate to a committee of one or more members of the Board of
Directors who are not non-employee directors the authority to grant stock awards
to eligible persons who are not then subject to Section 16 of the Exchange Act.
CHANGE IN CONTROL. The Plan provides that in the event of a merger with or into
another corporation or other entity, then the surviving corporation or acquiring
corporation shall assume any stock awards outstanding under the Plan or shall
substitute similar stock awards for those outstanding under the Plan. If the
surviving corporation or acquiring corporation in an change of control refuses
to assume such stock awards or to substitute similar stock awards for those
outstanding under the Plan, then with respect to stock awards which are (i) held
by participants whose continuous service has not terminated prior to such event,
and (ii) would otherwise vest and become exercisable within one (1) year of the
closing of such acquisition, the vesting of such stock award shall be
accelerated and made fully exercisable at least thirty (30) days prior to the
closing of such acquisition. Any stock award not exercised prior to the closing
of an acquisition involving a change in control of the Company shall be
terminated.
AMENDMENT TO THE PLAN AND AWARDS. The Board of Directors at any time, and from
time to time, may amend the Plan. However, except as provided in Section 11 of
the Plan relating to adjustments upon changes in stock, no amendment shall be
effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of Section 422 of
the Code, Rule 16b-3 or any securities exchange listing requirements.
TERMINATION AND SUSPENSION OF THE PLAN. The Board of Directors may suspend or
terminate the Plan at any time. Unless sooner terminated, the Plan shall
terminate on the day before the tenth (10th) anniversary of the date the Plan is
adopted by the Board of Directors or approved by the stockholders of the
Company, whichever is earlier. No stock awards may be granted under the Plan
while the Plan is suspended or after it is terminated.
-14-
TYPES OF AWARDS
STOCK OPTIONS. A stock option is the right to purchase shares of our common
stock at a fixed exercise price for a fixed period of time. The Committee will
determine the exercise price of options granted under the Plan, but with respect
to non-statutory stock options intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code and incentive
stock options, the exercise price must be at least equal to the fair market
value of our common stock on the date of grant. Notwithstanding the foregoing,
an incentive stock option may be granted with an exercise price lower than that
set forth in the preceding sentence if such option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Sections 424(a) of the Code. In addition, the exercise price for
any incentive stock option granted to any employee owning more than 10% of our
common stock may not be less than 110% of the fair market value of our common
stock on the date of grant.
The exercise price of each non-statutory stock option granted under the plan
shall not be less than 100% of the fair market value of the stock subject to the
option on the date the option is granted. Notwithstanding the foregoing, a
non-statutory stock option may be granted with an exercise price lower than that
set forth in the preceding sentence if such option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provision of Section 424(a) of the Code. The Board of Directors shall determine
additional terms including term, consideration vesting and early exercise at the
time of grant.
STOCK BONUS AWARDS OTHER THAN OPTIONS. The Committee will also have the
authority to grant stock bonus awards pursuant to the terms of stock bonus
agreement. Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Committee shall deem appropriate. The terms and
conditions of stock bonus agreements may change from time to time, and the terms
and conditions of separate stock bonus agreements need not be identical.
FEDERAL INCOME TAX CONSEQUENCES OF AWARDS
The following is general summary as of this date of the federal income tax
consequences to us and to U.S. participants for awards granted under the Plan.
The federal tax laws may change and the federal, state and local tax
consequences for any participant will depend upon his or her individual
circumstances. Tax consequences for any particular individual may be different.
INCENTIVE STOCK OPTIONS. For federal income tax purposes, the holder of an
incentive stock option receives no taxable income at the time of the grant or
exercise of the incentive stock option. If such person retains the Common Stock
for a period of at least two years after the option is granted and one year
after the option is exercised, any gain upon the subsequent sale of the Common
Stock will be taxed as a long-term capital gain. A participant who disposes of
shares acquired by exercise of an incentive stock option prior to the expiration
of two years after the option is granted or one year after the option is
exercised will realize ordinary income as of the exercise date equal to the
difference between the exercise price and fair market value of the share on the
exercise date. Any additional gain or loss recognized upon any later disposition
of the shares would be capital gain or loss. The difference between the option
exercise price and the fair market value of the shares on the exercise date of
an incentive stock option is an adjustment in computing the holder's alternative
minimum taxable income and may be subject to an alternative minimum tax which is
paid if such tax exceeds the regular tax for the year.
NON-STATUTORY STOCK OPTIONS. A participant who receives a non-statutory stock
option with an exercise price equal to the fair market value of the stock on the
grant date generally will not realize taxable income on the grant of such
option, but will realize ordinary income at the time of exercise of the option
equal to the difference between the option exercise price and the fair market
value of the shares on the date of exercise. Any additional gain or loss
recognized upon any later disposition of shares would be capital gain or loss.
Any taxable income recognized in connection with an option exercise by an
employee or former employee of the company is subject to tax withholding by us.
-15-
STOCK AWARDS. Stock awards will generally be taxed in the same manner as
non-statutory stock options. However, a restricted stock award is subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the Code to
the extent the award will be forfeited in the event that the participant ceases
to provide services to us. As a result of this substantial risk of forfeiture,
the participant will not recognize ordinary income at the time of award.
Instead, the participant will recognize ordinary income on the dates when the
stock is no longer subject to a substantial risk of forfeiture, or when the
stock becomes transferable, if earlier. The participant's ordinary income is
measured as the difference between the amount paid for the stock, if any, and
the fair market value of the stock on the date the stock is no longer subject to
forfeiture.
The participant may accelerate his or her recognition of ordinary income, if
any, and begin his or her capital gains holding period by timely filing (i.e.,
within thirty (30) days of the award) an election pursuant to Section 83(b) of
the Code. In such event, the ordinary income recognized, if any, is measured as
the difference between the amount paid for the stock, if any, and the fair
market value of the stock on the date of award, and the capital gain holding
period commences on such date. The ordinary income recognized by an employee or
former employee will be subject to tax withholding by us. If the stock award
consists of stock units, no taxable income is reportable when stock units are
granted to a participant or upon vesting. Upon settlement, the participant will
recognize ordinary income in an amount equal to the value of the payment
received pursuant to the stock units.
TAX EFFECT FOR OUR COMPANY. Unless limited by Section 162(m) of the Code, we
generally will be entitled to a tax deduction in connection with an award under
the Plan in an amount equal to the ordinary income realized by a participant at
the time the participant recognizes such income (for example, upon the exercise
of a stock option).
SECTION 162(M) LIMITS. Section 162(m) of the Code places a limit of $1,000,000
on the amount of compensation that we may deduct in any one year with respect to
each of our five most highly paid executive officers. Certain performance-based
compensation approved by stockholders is not subject to the deduction limit. The
Plan is qualified such that awards under the Plan may constitute
performance-based compensation not subject to Section 162(m) of the Code. One of
the requirements for equity compensation plans is that there must be a limit to
the number of shares granted to any one individual under the plan. Accordingly,
the Plan provides that no employee may be granted more than 100,000 shares in
any calendar year.
The Plan is not qualified under the provisions of section 401(a) of the Code and
is not subject to any provisions of the Employee Retirement Income Security Act
of 1974.
THE BOARD RECOMMENDS A VOTE "FOR" THIS PROPOSAL TO APPROVE THE AMENDMENT TO THE
2000 EQUITY INCENTIVE PLAN
PROPOSAL NUMBER FOUR:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
On April 29, 2005, McGladrey & Pullen, LLP, our former auditors declined to
stand for re-appointment as our independent accountants due to the restrictions
imposed by Section 208(a) of the Sarbanes-Oxley Act of 2002 and the rules and
regulations of the Securities Exchange Commission that prohibit partners on the
audit engagement team from providing audit services to the issuer for more than
five consecutive years and from returning to audit services with the same issuer
within five years. During the years ended December 31, 2004 and 2003 and through
April 29, 2005, there were no disagreements with McGladrey & Pullen, LLP on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which, if not resolved to McGladrey & Pullen, LLP's
satisfaction, would have caused them to make reference to the subject matter of
such disagreements in connection with their report on the Company's financial
statements for such years.
-16-
The Company appointed the firm of Piercy Bowler Taylor & Kern to serve as
independent public accountants of the Company for the period ending (nine
months) September 30, 2005, effective April 29, 2005.
During the years ended December 31, 2004 and 2003 and through the date of
appointment, the Company did not consult with Piercy Bowler Taylor & Kern with
respect to the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements.
The Company anticipates that a representative of Piercy Bowler Taylor and
Kern will be present at the annual meeting. The representative will have the
opportunity to make a statement if they desire to do so. It is expected the
representative will not be available to respond to questions.
In the event ratification by the stockholders of the appointment of Piercy
Bowler Taylor and Kern as the Company's independent registered public
accountants is not obtained, our Board of Directors will reconsider such
appointment.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Piercy Bowler Taylor and Kern or McGladrey & Pullen LLC performed the
services listed below and was paid the fees listed below for the nine month
period ended September 30, 2005 and the fiscal years ended December 31, 2004 and
2003, respectively:
AUDIT FEES
2005(1) 2004(2) 2003(2)
$42,409 $33,340 $29,682
(1) During 2005, of the $42,409, $20,029 and $22,380 of the fees were paid to
McGaldrey & Pullen LLC and Piercy Bowler Taylor and Kern, respectively.
(2) The fees were paid to McGladrey & Pullen LLC.
Audit Fees consists of fees billed for professional services rendered for
the audits of our financial statements, reviews of interim financial statements
included in quarterly reports, services performed in connection with filings
with the Securities and Exchange Commission and related comfort letters and
other services that are normally provided by Piercy Bowler Taylor and Kern or
McGladrey & Pullen in connection with statutory and regulatory filings or
engagements.
Audit-Related Fees consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of our financial statements. There were no other audit-related fees billed for
2005, 2004 or 2003 by Piercy Bowler Taylor and Kern or McGladrey & Pullen.
Tax Fees consists of fees billed for professional services for tax
compliance, tax advice and tax planning. These services include assistance
regarding federal, state and local tax compliance and consultation in connection
with various transactions and acquisitions. There were no fees billed by Piercy
Bowler Taylor and Kern or McGladrey & Pullen for tax compliance, tax advice and
tax planning for 2005, 2004 or 2003.
-17-
All Other Fees consists of fees billed for accounting services related to
stock options and financing matters. No other fees were billed for 2005, 2004 or
2003 by Piercy Bowler Taylor and Kern or McGladrey & Pullen.
PRE-APPROVAL OF SERVICES BY THE INDEPENDENT AUDITOR
Since we do not have an Audit Committee to pre-approve the services
performed by the Company's independent registered public accountants during
2005, our Board of Directors approved all services performed and will continue
to do so until such time as a Audit Committee is established. The Board of
Directors will, on an annual basis, consider and, if appropriate, approve the
provision of audit and non-audit services by Piercy Bowler Taylor and Kern.
Thereafter, the Board of Directors will, as necessary, consider and, if
appropriate, approve the provision of additional audit and non-audit services by
Piercy Bowler Taylor & Kern, which are not prohibited by law.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL TO
RATIFY THE APPOINTMENT OF PIERCY BOWLER TAYLOR & KERN AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE
YEAR ENDING SEPTEMBER 30, 2006
FORWARD-LOOKING STATEMENTS
This proxy statement includes statements that are not historical facts.
These statements are "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995 and are based, among other things, on
the Company's current plans and expectations relating to expectations of
anticipated growth in the future and future success under various circumstances.
As such, these forward-looking statements involve uncertainty and risk.
Other factors and assumptions not identified above could also cause the
actual results to differ materially from those set forth in any forward-looking
statement. The Company does not undertake any obligation to update the
forward-looking statements contained in this proxy statement to reflect actual
results, changes in assumptions, or changes in other factors affecting these
forward-looking statements.
FUTURE STOCKHOLDER PROPOSALS
It is anticipated that the release date for the Company's proxy statement
and form of proxy for this current annual meeting of stockholders will be March
o, 2006. The deadline for submission of stockholder proposals to be included in
the proxy statement and form of proxy for the Company's next Annual Meeting of
stockholders will be o, 2006. Stockholder proposals must satisfy the conditions
established by the Securities and Exchange Commission for stockholder proposals
in order to be included in the Company's proxy statement for that meeting.
For any stockholder that intends to present a proposal that will not be
included in the proxy statement for the Company's 2007 Annual Meeting, but is
instead sought to be presented directly at the 2007 Annual Meeting, SEC rules
permit management to vote proxies in its discretion if we: (1) receive notice of
the proposal before the close of business on o, 2007 and advise stockholders in
the 2007 proxy statement about the nature of the matter and how management
intends to vote on such matter; or (2) do not receive notice of the proposal
prior to the close of business on o, 2007.
Proposals or notices of intention to present proposals should be addressed
to: Eric M. Polis, Secretary, ASI Technology Corporation, 980 American Pacific
Drive, Suite 111, Henderson, Nevada 89014.
-18-
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the SECURITIES EXCHANGE
ACT OF 1934. We file reports, proxy statements and other information with the
SEC. You may read and copy these reports, proxy statements and other information
at the SEC's Public Reference Section at One Station Place, 100 F Street, NE,
Washington, DC 20549. You may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an
Internet website, located at www.sec.gov, that contains reports, proxy
statements and other information regarding our company.
BY ORDER OF THE BOARD OF DIRECTORS OF ASI TECHNOLOGY CORPORATION
Jerry E. Polis
President
o, 2006
-19-
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
ASI TECHNOLOGY CORPORATION
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
ASI TECHNOLOGY CORPORATION and the certificate of incorporation of the
Corporation was filed on ______________, _______.
2. The Restated Articles of incorporation of the Corporation is hereby
amended by striking the Section 7(a) thereof and by substituting in lieu of said
Section the following:
"7. (A) Classes of Stock: The Corporation is
authorized to issue two classes of stock to
be designated, respectively. "Common Stock"
and "Preferred Stock". The total number of
shares, which the corporation is authorized
to issue is thirty one million (31,000,000)
shares, each with a par value of $0.02 per
share. Thirty million (30,000,000) shares
shall be Common Stock and One Million
(1,000,000) shares shall be Preferred
Stock."
3. The foregoing was duly adopted in accordance with Sections 78.315(2) of
Nevada Revised Statues by resolution of the Board of Directors of the
Corporation on o, 2006 and approved by the holders of a majority of the capital
stock outstanding and entitled to vote at the annual meeting of stockholders of
the Corporation on o, 2006.
Signed as of the o day o, 2006.
-------------------------------------------
o
ATTESTED TO:
- ------------------------------------
o
Exhibit A, Page -1-
EXHIBIT B
ASI TECHNOLOGY CORPORATION
2000 EQUITY INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this plan is the ASI 2000 Equity Incentive Plan (the "Plan").
The Plan was adopted by the Board (defined below) on July 5, 2000 and approved
by the stockholders of the Company (defined below) on August 23, 2000. The
purpose of the Plan is to enable the Company to attract and retain highly
qualified personnel who will contribute to the Company's success and to provide
incentives to Participants (defined below) that are linked directly to increases
in stockholder value and will therefore inure to the benefit of all stockholders
of the Company.
For purposes of the Plan, the following terms shall be defined as set forth
below:
(a) "Administrator" means the Board, or if and to the extent the Board
does not administer the Plan, the Committee in accordance with Section 2 below.
(b) "Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
(c) "Award" means any award under the Plan.
(d) "Award Agreement" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.
(e) "Board" means the Board of Directors of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
(g) "Committee" means any committee the Board may appoint to
administer the Plan. To the extent necessary and desirable, the Committee shall
be composed entirely of individuals who meet the qualifications referred to in
Section 162(m) of the Code and Rule 16b-3 under the Exchange Act. If at any time
or to any extent the Board shall not administer the Plan, then the functions of
the Board specified in the Plan shall be exercised by the Committee.
(h) "Common Stock" means the common stock, par value $0.001 per share,
of the Company.
(i) "Company" means ASI, a Nevada corporation (or any successor
corporation).
(j) "Deferred Stock" means the right to receive Shares at the end of a
specified deferral period granted pursuant to Section 8 below.
(k) "Disability" means the inability of a Participant to perform
substantially his or her duties and responsibilities to the Company or to any
Parent or Subsidiary by reason of a physical or mental disability or infirmity
(i) for a continuous period of six months, or (ii) at such earlier time as the
Participant submits medical evidence satisfactory to the Administrator that the
Participant has a physical or mental disability or infirmity that will likely
prevent the Participant from returning to the performance of the Participant's
Exhibit B, Page -1-
work duties for six months or longer. The date of such Disability shall be the
last day of such six-month period or the day on which the Participant submits
such satisfactory medical evidence, as the case may be.
(l) "Eligible Recipient" means an officer, director, employee,
consultant or advisor of the Company or of any Parent or Subsidiary.
(m) "Employee Director" means any director of the Company who is also
an employee of the Company or of any Parent or Subsidiary.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(o) "Exercise Price" means the per share price at which a holder of an
Award may purchase the Shares issuable upon exercise of the Award.
(p) "Fair Market Value" as of a particular date shall mean the fair
market value of a share of Common Stock as determined by the Administrator in
its sole discretion; provided, however, that (i) if the Common Stock is admitted
to trading on a national securities exchange, fair market value of a share of
Common Stock on any date shall be the closing sale price reported for such share
on such exchange on such date or, if no sale was reported on such date, on the
last date preceding such date on which a sale was reported, (ii) if the Common
Stock is admitted to quotation on the National Association of Securities Dealers
Automated Quotation ("Nasdaq") System or other comparable quotation system and
has been designated as a National Market System ("NMS") security, fair market
value of a share of Common Stock on any date shall be the closing sale price
reported for such share on such system on such date or, if no sale was reported
on such date, on the last date preceding such date on which a sale was reported,
(iii) if the Common Stock is admitted to quotation on the Nasdaq System but has
not been designated as an NMS security, fair market value of a share of Common
Stock on any date shall be the average of the highest bid and lowest asked
prices of such share on such system on such date or, if no bid and ask prices
were reported on such date, on the last date preceding such date on which both
bid and ask prices were reported; (iv) in the case of a Limited Stock
Appreciation Right, the fair market value of a share of Common Stock shall be
the "Change in Control Price" (as defined in the Award Agreement evidencing such
Limited Stock Appreciation Right) of a share of Common Stock as of the date of
exercise.
(q) "Incentive Stock Option" means any Option intended to be
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(r) "Limited Stock Appreciation Right" means a Stock Appreciation
Right that can be exercised only in the event of a "Change in Control" (as
defined in the Award Agreement evidencing such Limited Stock Appreciation
Right).
(s) "Non-Employee Director" means a director of the Company who is not
an employee of the Company or of any Parent or Subsidiary.
(t) "Non-Qualified Stock Option" means any Option that is not an
Incentive Stock Option, including any Option that provides (as of the time such
Option is granted) that it will not be treated as an Incentive Stock Option.
(u) "Option" means an option to purchase Shares granted pursuant to
Section 6 below.
(v) "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.
Exhibit B, Page -2-
(w) "Participant" means (i) any Eligible Recipient selected by the
Administrator, pursuant to the Administrator's authority in Section 2 below, to
receive grants of Options, Stock Appreciation Rights, Limited Stock Appreciation
Rights, awards of Restricted Stock, Deferred Stock, or Performance Shares or any
combination of the foregoing, or (ii) any Non-Employee Director who is eligible
to receive grants of Options pursuant to Section 6(i) below.
(x) "Performance Shares" means Shares that are subject to restrictions
based upon the attainment of specified performance objectives granted pursuant
to Section 8 below.
(y) "Registration Statement" means the registration statement on Form
S-1 filed with the Securities and Exchange Commission for the initial
underwritten public offering of the Common Stock.
(z) "Restricted Stock" means Shares subject to certain restrictions
granted pursuant to Section 8 below.
(aa) "Shares" means shares of Common Stock reserved for issuance under
the Plan, as adjusted pursuant to Sections 3 and 4, and any successor security.
(bb) "Stock Appreciation Right" means the right pursuant to an Award
granted under Section 7 below to receive an amount equal to the excess, if any,
of (i) the Fair Market Value, as of the date such Stock Appreciation Right or
portion thereof is surrendered, of the Shares covered by such right or such
portion thereof, over (ii) the aggregate Exercise Price of such right or such
portion thereof.
(cc) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations (other than the last corporation) in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered in accordance with the requirements of
Section 162(m) of the Code (but only to the extent necessary and desirable to
maintain qualification of Awards under the Plan under Section 162(m) of the
Code) and, to the extent applicable, Rule 16b-3 under the Exchange Act ("Rule
16b-3"), by the Board or, at the Board's sole discretion, by the Committee,
which shall be appointed by the Board, and which shall serve at the pleasure of
the Board.
Pursuant to the terms of the Plan, the Administrator shall have the power
and authority to grant to Eligible Recipients Options, Stock Appreciation Rights
or Limited Stock Appreciation Rights, Awards of Restricted Stock, Deferred Stock
or Performance Shares or any combination of the foregoing. The Administrator
shall have the authority:
(a) to select those Eligible Recipients who shall be Participants;
(b) to determine whether and to what extent Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, Awards of Restricted
Stock, Deferred Stock or Performance Shares or a combination of any of the
foregoing, are to be granted hereunder to Participants;
(c) to determine the number of Shares to be covered by each Award
granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of each Award granted hereunder (including, but not limited
to, (x) the restrictions applicable to Awards of Restricted Stock or Deferred
Stock and the conditions under which restrictions applicable to such Awards of
Restricted Stock or Deferred Stock shall lapse, and (ii) the performance goals
and periods applicable to Awards of Performance Shares);
Exhibit B, Page -3-
(e) to determine the terms and conditions, not inconsistent with the
terms of the Plan, that shall govern all written instruments evidencing Options,
Stock Appreciation Rights, Limited Stock Appreciation Rights, Awards of
Restricted Stock, Deferred Stock or Performance Shares or any combination of the
foregoing granted hereunder;
(f) to reduce the Exercise Price of any Option to the then current
Fair Market Value if the Fair Market Value of the Shares covered by such Option
has declined since the date such Option was granted; and
(g) the Committee may, at any time or from time to time, authorize the
Company, with the consent of the respective Participants, to issue new Awards in
exchange for the surrender and cancellation of any or all outstanding Awards.
The Committee may at any time buy from a Participant an Award previously granted
with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Committee and the
Participant shall agree.
The Administrator shall have the authority, in its sole discretion, to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable; to interpret
the terms and provisions of the Plan and any Award issued under the Plan (and
any Award Agreement relating thereto); and to otherwise supervise the
administration of the Plan.
All decisions made by the Administrator pursuant to the provisions of the
Plan shall be final, conclusive and binding on all persons, including the
Company and the Participants.
SECTION 3. SHARES SUBJECT TO PLAN.
The total number of shares of Common Stock reserved and available for
issuance under the Plan shall be 250,000 shares (after giving effect to the
one-for-ten reverse split of the Common Stock approved by the Company's
stockholders concurrently with the approval of this Plan by the stockholders).
Such shares may consist, in whole or in part, of authorized and unissued shares
or treasury shares. The aggregate number of Shares as to which Options, Stock
Appreciation Rights, and Awards of Restricted Stock, Deferred Stock and
Performance Shares may be granted to any Participant during any calendar year
may not, subject to adjustment as provided in this Section 3, exceed 80% of the
Shares reserved for the purposes of the Plan.
Consistent with the provisions of Section 162(m) of the Code, as from time
to time applicable, to the extent that (i) an Option expires or is otherwise
terminated without being exercised, or (ii) any Shares subject to any Award of
Restricted Stock, Deferred Stock or Performance Shares granted hereunder are
forfeited, such Shares shall again be available for issuance in connection with
future Awards granted under the Plan. If any Shares have been pledged as
collateral for indebtedness incurred by a Participant in connection with the
exercise of an Option and such Shares are returned to the Company in
satisfaction of such indebtedness, such Shares shall again be available for
issuance in connection with future Awards granted under the Plan.
In the event of any stock dividend, recapitalization, stock split, reverse
stock split (other than the one-for-ten reverse stock split referred to above),
subdivision, combination, reclassification or similar change in the capital
structure of the Company without consideration, an equitable substitution or
proportionate adjustment shall be made in (i) the aggregate number of Shares
reserved for issuance under the Plan, (ii) the kind, number and Exercise Prices
of Shares subject to outstanding Options, and (iii) the kind, number and
Exercise Prices of Shares subject to outstanding Awards of Restricted Stock,
Deferred Stock and Performance Shares, in each case as may be determined by the
Administrator, in its sole discretion, subject to any required action by the
Board or the stockholders of the Company and in compliance with applicable
securities laws; provided, however, that fractions of a Share shall not be
issued but shall either be paid in cash at Fair Market Value or shall be rounded
up to the nearest whole share, as determined by the Committee. An adjusted
Exercise Price shall also be used to determine the amount payable by the Company
upon the exercise of any Stock Appreciation Right or Limited Stock Appreciation
Right related to any Option.
Exhibit B, Page -4-
SECTION 4. CORPORATE TRANSACTIONS.
(a) Assumption or Replacement of Awards by Successor. In the event of (i) a
merger or consolidation in which the Company is not the surviving corporation
(other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the stockholders of the Company and
the Awards granted under the Plan are assumed or replaced by the successor
corporation, which assumption shall be binding on all Participants); (ii) a
dissolution or liquidation of the Company; (iii) the sale of substantially all
of the assets of the Company; or (iv) any other transaction that qualifies as a
"corporate transaction" under Section 424(a) of the Code wherein the
stockholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Awards may be assumed
or replaced by the successor corporation (if any) or Parent thereof, which
assumption or replacement shall be binding on all Participants. In the
alternative, the successor corporation or Parent thereof may substitute
equivalent awards or provide substantially similar consideration to Participants
as was provided to stockholders of the Company (after taking into account the
existing provisions of the Awards). The successor corporation or Parent thereof
may also issue, in place of outstanding shares of the Company held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) or Parent thereof does not assume or substitute
awards, as provided above, pursuant to a transaction described in this Section
4(a), such Awards shall automatically become fully vested and exercisable and be
released from any restrictions on transfer and repurchase or forfeiture rights,
immediately prior to the specified effective date of such transaction, for all
the Shares at the time represented by such Awards. In such event, effective upon
the consummation of the transaction, or at such other time and on such
conditions as the Board shall determine, all outstanding Awards under the Plan
shall terminate and cease to remain outstanding, except to the extent assumed by
the successor corporation or its Parent.
(b) Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 4, in the event of
the occurrence of any transaction described in Section 4(a), any outstanding
Awards shall be treated as provided in the applicable Award Agreement or plan of
merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."
(c) Assumption of Awards by the Company. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either (i) granting an Award under the Plan in substitution of such other
company's award; or (ii) assuming such award as if it had been granted under the
Plan if the terms of such assumed award could be applied to an award granted
under the Plan. Such substitution or assumption shall be permissible if the
holder of the substituted or assumed award would have been eligible to be
granted an Award under the Plan if the other company had applied the rules of
the Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted approximately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
SECTION 5. ELIGIBILITY.
Eligible Recipients shall be eligible to be granted Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, Awards of Restricted
Stock, Deferred Stock or Performance Shares or any combination of the foregoing
hereunder. The Participants under the Plan shall be selected from time to time
by the Administrator, in its sole discretion, from among the Eligible
Recipients, and the Administrator shall determine, in its sole discretion, the
number of Shares covered by each such Award.
Exhibit B, Page -5-
SECTION 6. OPTIONS.
Options may be granted alone or in addition to other Awards granted under
the Plan. Any Option granted under the Plan shall be in such form as the
Administrator may from time to time approve, and the provisions of each Option
need not be the same with respect to each Participant. Participants who are
granted Options shall enter into an Award Agreement with the Company, in such
form as the Administrator shall determine, which Award Agreement shall set
forth, among other things, the Exercise Price of the Option, the term of the
Option and provisions regarding exercisability of the Option granted thereunder.
The Options granted under the Plan may be of two types: (i) Incentive Stock
Options and (ii) Non-Qualified Stock Options.
The Administrator shall have the authority to grant to any officer or
employee of the Company or of any Parent or Subsidiary (including directors who
are also officers of the Company) Incentive Stock Options, Non-Qualified Stock
Options, or both types of Options (in each case with or without Stock
Appreciation Rights or Limited Stock Appreciation Rights). Directors who are not
also officers of the Company or of any Parent or Subsidiary, consultants or
advisors to the Company or to any Parent or Subsidiary may only be granted
Non-Qualified Stock Options (with or without Stock Appreciation Rights or
Limited Stock Appreciation Rights). To the extent that any Option does not
qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option. More than one Option may be granted to the same
Participant and be outstanding concurrently hereunder.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:
(a) Option Exercise Price. The per share Exercise Price of Shares
purchasable under an Option shall be determined by the Administrator in its sole
discretion at the time of grant but shall not, (i) in the case of Incentive
Stock Options, be less than 100% of the Fair Market Value of the Common Stock on
such date, (ii) in the case of Non-Qualified Stock Options intended to qualify
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, be less than 100% of the Fair Market Value of the Common Stock on such
date, and (iii) in any event, be less than the par value (if any) of the Common
Stock. If a Participant owns or is deemed to own (by reason of the attribution
rules applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or of any Parent or
Subsidiary and an Incentive Stock Option is granted to such Participant, the per
share Exercise Price of such Incentive Stock Option (to the extent required at
the time of grant by the Code shall be no less than 110% of the Fair Market
Value of the Common Stock on the date such Incentive Stock Option is granted.
(b) Option Term. The term of each Option shall be fixed by the
Administrator, but no Option shall be exercisable more than ten years after the
date such Option is granted; provided, however, that if an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or of any Parent or Subsidiary and an Incentive Stock Option is granted
to such employee, the term of such Incentive Stock Option (to the extent
required by the Code at the time of grant) shall be no more than five years from
the date of grant.
(c) Exercisability. Options shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined by the
Administrator at or after the time of grant. The Administrator may provide at
the time of grant, in its sole discretion, that any Option shall be exercisable
only in installments, and the Administrator may waive such installment exercise
provisions at any time, in whole or in part, based on such factors as the
Administrator may determine, in its sole discretion, including but not limited
to in connection with any "change in control" of the Company (as defined in the
Award Agreement evidencing such Option).
Exhibit B, Page -6-
(d) Method of Exercise. Subject to Section 6(c), Options may be
exercised in whole or in part at any time during the Option period, by giving
written notice of exercise to the Company specifying the number of Shares to be
purchased, accompanied by payment in full of the aggregate Exercise Price of the
Shares so purchased in cash or its equivalent, as determined by the
Administrator. In addition, payment for Shares purchased pursuant to the Plan
may be made, where expressly approved for the Participant by the Committee and
where permitted by law:
(i) by cancellation of indebtedness of the Company to the
Participant;
(ii) by surrender of shares of Common Stock that either (1) have
been owned by Participant for more than six (6) months and have been paid for
within the meaning of SEC Rule 144 (and, if such shares were purchased from the
Company by use of a promissory note, such note has been fully paid with respect
to such Shares); or (2) were obtained by Participant in the public market;
(iii) by waiver of compensation due or accrued to Participant for
services rendered;
(iv) by tender of property;
(v) with respect only to purchases upon exercise of an Option,
and provided that a public market for the Common Stock exists: (i) through a
"same day sale" commitment from Participant and a broker-dealer that is a member
of the National Association of Securities Dealers (an "NASD Dealer") whereby the
Participant irrevocably elects to exercise the Option and to sell a portion of
the Shares so purchased to pay for the aggregate Exercise Price of the Shares so
purchased, and whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward such Exercise Price directly to the Company; or (ii) through a
"margin" commitment from Participant and an NASD Dealer whereby Participant
irrevocably elects to exercise the Option and to pledge the Shares so purchased
to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the aggregate Exercise Price of the Shares so purchased,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward such Exercise Price directly to the Company;
(vi) in the case of the exercise of a Non-Qualified Stock Option,
in the form of Restricted Stock or Performance Shares subject to an Award
hereunder (based, in each case, on the Fair Market Value of the Common Stock on
the date the Option is exercised); provided, however, that in the case of an
Incentive Stock Option, the right to make payment in the form of already owned
shares of Common Stock may be authorized only at the time of grant. If payment
of the Exercise Price of a Non-Qualified Stock Option is made in whole or in
part in the form of Restricted Stock or Performance Shares, the Shares received
upon the exercise of such Option shall be restricted in accordance with the
original terms of the Restricted Stock Award or Performance Shares Award in
question, except that the Administrator may direct that such restrictions shall
apply only to that number of Shares equal to the number of shares surrendered
upon the exercise of such Option.
(vii) by any combination of the foregoing or
(viii) by any other form of consideration permitted by applicable
law.
A Participant shall generally have the rights to dividends and any
other rights of a stockholder with respect to the Shares subject to the Option
only after the Participant has given written notice of exercise, has paid in
full for such Shares, and, if requested, has given the representation described
in Section 11(b).
The Administrator may require the surrender of all or a portion of any
Option granted under the Plan as a condition precedent to the grant of a new
Option. Subject to the provisions of the Plan, such new Option shall be
exercisable at the Exercise Price, during such period and on such other terms
and conditions as are specified by the Administrator at the time the new Option
is granted. Consistent with the provisions of Section 162(m), to the extent
applicable, upon their surrender, Options shall be canceled and the Shares
previously subject to such canceled Options shall again be available for future
grants of Options and other Awards hereunder.
Exhibit B, Page -7-
(e) Loans. The Company or any Parent or Subsidiary may make loans
available to Option holders in connection with the exercise of outstanding
Options, as the Administrator, in its sole discretion, may determine. Such loans
shall (i) be evidenced by promissory notes entered into by the Option holders in
favor of the Company or any Parent or Subsidiary, (ii) be subject to the terms
and conditions set forth in this Section 6(e) and such other terms and
conditions, not inconsistent with the Plan, as the Administrator shall
determine, (iii) bear interest at the applicable Federal interest rate or such
other rate as the Administrator shall determine, and (iv) be subject to Board
approval (or to approval by the Administrator to the extent the Board may
delegate such authority). In no event may the principal amount of any such loan
exceed the sum of (x) the aggregate Exercise Price less the par value (if any)
of the Shares covered by the Option, or portion thereof, exercised by the
holder, and (y) any Federal, state, and local income tax attributable to such
exercise. The initial term of the loan, the schedule of payments of principal
and interest under the loan, the extent to which the loan is to be with or
without recourse against the holder with respect to principal and/or interest
and the conditions upon which the loan will become payable in the event of the
holder's termination of service to the Company or to any Parent or Subsidiary
shall be determined by the Administrator. Unless the Administrator determines
otherwise, when a loan is made, Shares having an aggregate Fair Market Value at
least equal to the principal amount of the loan shall be pledged by the holder
to the Company as security for payment of the unpaid balance of the loan, and
such pledge shall be evidenced by a pledge agreement, the terms of which shall
be determined by the Administrator, in its sole discretion; provided, however,
that each loan shall comply with all applicable laws, regulations and rules of
the Board of Governors of the Federal Reserve System and any other governmental
agency having jurisdiction.
(f) Non-Transferability of Options. Except under the laws of descent
and distribution, the Participant shall not be permitted to sell, transfer,
pledge or assign any Option, and all Options shall be exercisable, during the
Participant's lifetime, only by the Participant; provided, however, that the
Participant shall be permitted to transfer one or more Non-Qualified Stock
Options to a trust controlled by the Participant during the Participant's
lifetime for estate planning purposes.
(g) Termination of Employment or Service. If a Participant's
employment with or service as a director, consultant or advisor to the Company
or to any Parent or Subsidiary terminates by reason of his or her death,
Disability or for any other reason, the Option may thereafter be exercised to
the extent provided in the Award Agreement evidencing such Option, or as
otherwise determined by the Administrator.
(h) Annual Limit on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of Shares with respect to which Incentive Stock Options
granted to a Participant under this Plan and all other option plans of the
Company or of any Parent or Subsidiary become exercisable for the first time by
the Participant during any calendar year exceeds $100,000 (as determined in
accordance with Section 422(d) of the Code), the portion of such Incentive Stock
Options in excess of $100,000 shall be treated as Non-Qualified Stock Options.
SECTION 7. STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS.
Stock Appreciation Rights and Limited Stock Appreciation Rights may be
granted either alone ("Free Standing Rights") or in conjunction with all or part
of any Option granted under the Plan ("Related Rights"). In the case of a
Non-Qualified Stock Option, Related Rights may be granted either at or after the
time of the grant of such Option. In the case of an Incentive Stock Option,
Related Rights may be granted only at the time of the grant of the Incentive
Stock Option. The Administrator shall determine the Eligible Recipients to whom,
and the time or times at which, grants of Stock Appreciation Rights or Limited
Stock Appreciation Rights shall be made; the number of Shares to be awarded, the
Exercise Price (or, in the case of a Limited Stock Appreciation Right, the
"Change in Control" price), and all other conditions of Stock Appreciation
Rights and Limited Stock Appreciation Rights. The provisions of Stock
Appreciation Rights and Limited Stock Appreciation Rights need not be the same
with respect to each Participant.
Exhibit B, Page -8-
Stock Appreciation Rights and Limited Stock Appreciation Rights granted
under the Plan shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Administrator shall deem desirable:
(a) Awards. The prospective recipient of a Stock Appreciation Right or
Limited Stock Appreciation Right shall not have any rights with respect to such
Award, unless and until such recipient has executed an Award Agreement
evidencing the Award (a "Stock Appreciation Right Agreement" or "Limited Stock
Appreciation Right Agreement," as appropriate) and delivered a fully executed
copy thereof to the Company, within a period of sixty days (or such other period
as the Administrator may specify) after the award date. Participants who are
granted Stock Appreciation Rights or Limited Stock Appreciation Rights shall
have no rights as stockholders of the Company with respect to the grant or
exercise of such rights.
(b) Exercisability.
(i) Stock Appreciation Rights that are Free Standing Rights
("Free Standing Stock Appreciation Rights") shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant; provided, however, that no Free Standing Stock
Appreciation Right shall be exercisable during the first six months of its term,
except that this additional limitation shall not apply in the event of a
Participant's death or Disability prior to the expiration of such six-month
period.
(ii) Stock Appreciation Rights that are Related Rights ("Related
Stock Appreciation Rights") shall be exercisable only at such time or times and
to the extent that the Options to which they relate shall be exercisable in
accordance with the provisions of Section 6 above and this Section 7 of the
Plan; provided, however, that a Related Stock Appreciation Right granted in
connection with an Incentive Stock Option shall be exercisable only if and when
the Fair Market Value of the Common Stock subject to the Incentive Stock Option
exceeds the Exercise Price of such Option; provided, further, that no Related
Stock Appreciation Right shall be exercisable during the first six months of its
term, except that this additional limitation shall not apply in the event of a
Participant's death or Disability prior to the expiration of such six-month
period.
(iii) Limited Stock Appreciation Rights shall only be exercised
within the 30-day period following a "Change in Control" (as defined by the
Administrator in the Limited Stock Appreciation Right Agreement evidencing such
right) and, with respect to Limited Stock Appreciation Rights that are Related
Rights ("Related Limited Stock Appreciation Rights"), only to the extent that
the Options to which they relate shall be exercisable in accordance with the
provisions of Section 6 above and this Section 7 of the Plan.
(c) Payment Upon Exercise.
(i) Upon the exercise of a Free Standing Stock Appreciation
Right, the Participant shall be entitled to receive up to, but not more than, an
amount in cash or that number of Shares (or any combination of cash and Shares)
equal in value to the excess of the Fair Market Value as of the date of exercise
over the per share Exercise Price specified in the Free Standing Stock
Appreciation Right (which Exercise Price shall be no less than 100% of the Fair
Market Value of the Common Stock on the date of grant) multiplied by the number
of Shares in respect of which the Free Standing Stock Appreciation Right is
being exercised, with the Administrator having the right to determine the form
of payment.
(ii) A Related Right may be exercised by a Participant by
surrendering the applicable portion of the related Option. Upon such exercise
and surrender, the Participant shall be entitled to receive up to, but not more
than, an amount in cash or that number of Shares (or any combination of cash and
Shares) equal in value to the excess of the Fair Market Value as of the date of
exercise over the per share Exercise Price specified in the related Option
multiplied by the number of Shares in respect of which the Related Stock
Appreciation Right is being exercised, with the Administrator having the right
to determine the form of payment. Options which have been so surrendered, in
whole or in part, shall no longer be exercisable to the extent the Related
Rights have been so exercised.
Exhibit B, Page -10-
(iii) Upon the exercise of a Limited Stock Appreciation Right,
the Participant shall be entitled to receive an amount in cash equal in value to
the excess of the "Change in Control Price" (as defined in the Award Agreement
evidencing such Limited Stock Appreciation Right) of a share of Common Stock
Share as of the date of exercise over (A) the per share Exercise Price specified
in the related Option, or (B) in the case of a Limited Stock Appreciation Right
which is a Free Standing Stock Appreciation Right, the per share Exercise Price
specified in the Free Standing Stock Appreciation Right, such excess to be
multiplied by the number of Shares in respect of which the Limited Stock
Appreciation Right shall have been exercised.
(d) Non-Transferability.
(i) Free Standing Stock Appreciation Rights shall be transferable
only when and to the extent that an Option would be transferable under Section
6(f) of the Plan.
(ii) Related Stock Appreciation Rights shall be transferable only
when and to the extent that the underlying Option would be transferable under
Section 6(f) of the Plan.
(iii) Limited Stock Appreciation Rights shall be transferable
only when and to the extent that an Option would be transferable under Section
6(f) of the Plan.
(e) Termination of Employment or Service
(i) In the event of the termination of employment or service of a
Participant who has been granted one or more Free Standing Stock Appreciation
Rights, such rights shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Administrator at or
after grant.
(ii) In the event of the termination of employment or service of
a Participant who has been granted one or more Related Stock Appreciation
Rights, such rights shall be exercisable at such time or times and subject to
such terms and conditions as set forth in the related Options.
(iii) In the event of the termination of employment or service of
a Participant who has been granted one or more Limited Stock Appreciation
Rights, such rights shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Administrator at or
after grant.
(f) Term.
(i) The term of each Free Standing Stock Appreciation Right shall
be fixed by the Administrator, but no Free Standing Stock Appreciation Right
shall be exercisable more than ten years after the date such right is granted.
(ii) The term of each Related Stock Appreciation Right shall be
the term of the Option to which it relates, but no Related Stock Appreciation
Right shall be exercisable more than ten years after the date such right is
granted.
(iii) The term of each Limited Stock Appreciation Right shall be
fixed by the Administrator, but no Limited Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.
Exhibit B, Page -10-
SECTION 8. RESTRICTED STOCK, DEFERRED STOCK AND PERFORMANCE SHARES.
Awards of Restricted Stock, Deferred Stock or Performance Shares may be
issued either alone or in addition to other Awards granted under the Plan. The
Administrator shall determine the Eligible Recipients to whom, and the time or
times at which, Awards of Restricted Stock, Deferred Stock or Performance Shares
shall be made; the number of Shares to be awarded; the Exercise Price, if any,
to be paid by the Participant for the acquisition of Restricted Stock, Deferred
Stock or Performance Shares; the Restricted Period (as defined in Section 8(b))
applicable to Awards of Restricted Stock or Deferred Stock; the performance
objectives applicable to Awards of Deferred Stock or Performance Shares; and all
other conditions of the Awards of Restricted Stock, Deferred Stock and
Performance Shares. Subject to the requirements of Section 162(m) of the Code,
as applicable, the Administrator may also condition the grant of the Award of
Restricted Stock, Deferred Stock or Performance Shares upon the exercise of
Options, or upon such other criteria as the Administrator may determine, in its
sole discretion. The provisions of the Awards of Restricted Stock, Deferred
Stock or Performance Shares need not be the same with respect to each
Participant. In the sole discretion of the Administrator, loans may be made to
Participants in connection with the purchase of Restricted Stock under
substantially the same terms and conditions as provided in Section 6(e) of the
Plan with respect to the exercise of Options.
(a) Awards and Certificates. The prospective recipient of Awards of
Restricted Stock, Deferred Stock or Performance Shares shall not have any rights
with respect to any such Award, unless and until such recipient has executed an
Award Agreement evidencing the Award (a "Restricted Stock Award Agreement,"
"Deferred Stock Award Agreement" or "Performance Shares Award Agreement," as
appropriate) and delivered a fully executed copy thereof to the Company, within
a period of sixty days (or such other period as the Administrator may specify)
after the award date. Except as otherwise provided below in Section 8(b), (i)
each Participant who is granted an Award of Restricted Stock or Performance
Shares shall be issued a stock certificate in respect of such shares of
Restricted Stock or Performance Shares; and (ii) such certificate shall be
registered in the name of the Participant, and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to any such
Award.
The Company may require that the stock certificates evidencing
Restricted Stock or Performance Shares granted hereunder be held in the custody
of the Company until the restrictions thereon shall have lapsed, and that, as a
condition of any Award of Restricted Stock or Performance Shares, the
Participant shall have delivered a stock power, endorsed in blank, relating to
the Shares covered by such Award.
With respect to Awards of Deferred Stock, at the expiration of the
Restricted Period, stock certificates in respect of such Shares of Deferred
Stock shall be delivered to the Participant, or his legal representative, in a
number equal to the number of Shares covered by the Deferred Stock Award.
(b) Restrictions and Conditions. The Awards of Restricted Stock,
Deferred Stock and Performance Shares granted pursuant to this Section 8 shall
be subject to the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the Restricted
Stock Award Agreement, Deferred Stock Award Agreement or Performance Shares
Award Agreement, as appropriate, governing any such Award, during such period as
may be set by the Administrator commencing on the date of grant (the "Restricted
Period"), the Participant shall not be permitted to sell, transfer, pledge or
assign shares of Restricted Stock, Deferred Stock or Performance Shares awarded
under the Plan; provided, however, that the Administrator may, in its sole
discretion, provide for the lapse of such restrictions in installments and may
accelerate or waive such restrictions in whole or in part based on such factors
and such circumstances as the Administrator may determine, in its sole
discretion, including, but not limited to, the attainment of certain performance
related goals, the Participant's termination of employment or service as a
director, consultant or advisor to the Company or any Parent or Subsidiary, the
Participant's death or Disability or the occurrence of a "change in control" as
defined in the Restricted Stock Award Agreement, Deferred Stock Award Agreement
or Performance Shares Award Agreement, as appropriate, evidencing such Award.
Exhibit B, Page -11-
(ii) Except as provided in Section 8(c)(i), the Participant shall
generally have the rights of a stockholder of the Company with respect to
Restricted Stock or Performance Shares during the Restricted Period. The
Participant shall generally not have the rights of a stockholder with respect to
Shares subject to Awards of Deferred Stock during the Restricted Period;
provided, however, that dividends declared during the Restricted Period with
respect to the number of Shares covered by Awards of Deferred Stock shall be
paid to the Participant. Certificates for unrestricted Shares shall be delivered
to the Participant promptly after, and only after, the Restricted Period shall
expire without forfeiture in respect of such Awards of Restricted Stock,
Deferred Stock or Performance Shares except as the Administrator, in its sole
discretion, shall otherwise determine.
(iii) The rights of Participants granted Awards of Restricted
Stock, Deferred Stock or Performance Shares upon termination of employment or
service as a director, consultant or advisor to the Company or to any Parent or
Subsidiary terminates for any reason during the Restricted Period shall be set
forth in the Restricted Stock Award Agreement, Deferred Stock Award Agreement or
Performance Shares Award Agreement, as appropriate, governing such Awards.
SECTION 9. AMENDMENT AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any Award theretofore granted without such Participant's
consent, or that, without the approval of the stockholders (as described below),
would:
(a) except as provided in Section 3 of the Plan, increase the total
number of Shares reserved for issuance under the Plan;
(b) change the class of officers, directors, employees, consultants
and advisors eligible to participate in the Plan; or
(c) extend the maximum Option period under Section 6(b) of the Plan.
Notwithstanding the foregoing, stockholder approval under this Section 9
shall only be required at such time and under such circumstances as stockholder
approval would be required under Section 162(m) of the Code or other applicable
law, rule or regulation with respect to any material amendment to an employee
benefit plan of the Company.
The Administrator may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Section 3 of Plan, no such
amendment shall impair the rights of any Participant without his or her consent.
SECTION 10. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.
SECTION 11. GENERAL PROVISIONS.
(a) Shares shall not be issued pursuant to the exercise of any Award
granted hereunder unless the exercise of such Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act and the requirements of any stock exchange upon which
the Common Stock may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
Exhibit B, Page -12-
(b) The Administrator may require each person acquiring Shares to represent
to and agree with the Company in writing that such person is acquiring the
Shares without a view to distribution thereof. The certificates for such Shares
may include any legend which the Administrator deems appropriate to reflect any
restrictions on transfer.
All certificates for Shares delivered under the Plan shall be subject to
such stock-transfer orders and other restrictions as the Administrator may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable Federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
(c) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval,
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any Eligible Recipient any right to continued employment or
service with the Company or any Parent or Subsidiary, as the case may be, nor
shall it interfere in any way with the right of the Company or any Parent or
Subsidiary to terminate the employment or service of any of its Eligible
Recipients at any time.
(d) Each Participant shall, no later than the date as of which the value of
an Award first becomes includable in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
Award. The obligations of the Company under the Plan shall be conditional on the
making of such payments or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Participant.
(e) No member of the Board or the Administrator, nor any officer or
employee of the Company acting on behalf of the Board or the Administrator,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
SECTION 12. STOCKHOLDER APPROVAL; EFFECTIVE DATE OF PLAN; EFFECTIVE DATE OF
AMENDMENTS.
(a) The grant of any Award hereunder shall be contingent upon stockholder
approval of the Plan being obtained within 12 months before or after the date
the Board adopts the Plan.
(b) Subject to the approval of the Plan by the stockholders of the Company
within twelve (12) months before or after the date the Plan is adopted by the
Board, the Plan shall be effective as of July 5, 2000.
SECTION 13 TERM OF PLAN.
No Option, Stock Appreciation Right, Limited Stock Appreciation Right, or
Awards of Restricted Stock, Deferred Stock or Performance Shares shall be
granted pursuant to the Plan on or after July 5, 2010, but Awards theretofore
granted may extend beyond that date.
Exhibit B, Page -13-
ASI TECHNOLOGY CORPORATION
980 AMERICAN PACIFIC DRIVE, SUITE 111
HENDERSON, NEVADA 89014
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jerry E. Polis and Eric M. Polis as
proxies, each with full power of substitution, to represent and vote as
designated on the reverse side, all the shares of Common Stock of ASI Technology
Corporation held of record by the undersigned on ____________, 2006, at the
Annual Meeting of Stockholders to be held at o, on o, 2006 or any adjournment or
postponement thereof. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN FAVOUR OF THE ELECTION OF
THE NAMED NOMINEES TO THE BOARD AND FOR THE APPROVAL OF ALL OTHER PROPOSALS.
THE UNDERSIGNED HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN.
- --------------------------------------------------------------------------------
TO BE REPRESENTED AT THE MEETING, THIS PROXY FORM MUST BE RECEIVED AT THE OFFICE
OF TRANSFER ONLINE, INC., THE TRANSFER AGENT OF THE COMPANY, BY MAIL NO LATER
THAN FORTY-EIGHT (48) HOURS (EXCLUDING SATURDAYS SUNDAYS AND HOLIDAYS) PRIOR TO
THE TIME OF THE MEETING, OR ADJOURNMENT THEREOF OR MAY BE ACCEPTED BY THE
CHAIRMAN OF THE MEETING PRIOR TO THE COMMENCEMENT OF THE MEETING. THE MAILING
ADDRESS IS: TRANSFER ONLINE, INC , 317 SW ALDER STREET, 2ND FLOOR, PORTLAND,
OREGON 97204, PHONE NUMBER: (503) 227.2950. FACSIMILE NUMBER: (503) 227.6874,
EMAIL: INFO@TRANSFERONLINE.COM AND WEBSITE ADDRESS: WWW.TRANSFERONLINE.COM
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS OF
ASI TECHNOLOGY CORPORATION
o, 2006
Please date, sign and mail your proxy card in the envelope
provided as soon as possible.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
AND "FOR" PROPOSALS 1 THROUGH __.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE 7
- --------------------------------------------------------------------------------
1. Election of Directors. Nominees:
[ ] FOR ALL NOMINEES [ ] Jerry E. Polis
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES [ ] Eric M. Polis
[ ] FOR ALL EXCEPT (see instruction below) [ ] Dawayne R. Jacobs
INSTRUCTION: To withhold authority to vote [ ] Gerald L. Ehrens
for any individual nominee(s), mark "FOR
ALL EXCEPT" and fill in the box next to [ ] Richard A. Fait
each nominee you wish to withhold as shown
here:|X|
For Against Abstain
2. To approve an amendment to the Company's [ ] [ ] [ ]
Restated Article of Incorporation to increase
the number of authorized shares of common
stock from 10,000,000 to 30,000,000.
3. To approve an amendment to the Company's 2000 [ ] [ ] [ ]
Equity Incentive Plan.
4. To ratify the selection of Piercy Bowler [ ] [ ] [ ]
Taylor and Kern as the Company's independent
registered public accounting firm.
To change the address on your account, please check the box at right and [ ]
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
____________________________________ ____________________________________
Signature of Stockholder: Signature of Stockholder:
Date: Date:
NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.