SCHEDULE 14A
Information Required in Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Check the appropriate box:
/X/ Preliminary Information Statement
/ / Definitive Information Statement
NORTHWEST HORIZON CORPORATION
(Name of Company As Specified In Charter)
Not Applicable
(Name of Person(s) Filing the Information Statement if other than Company)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
1) Title of each class of securities to which transaction applies:
Common Stock, par value $0.0001 per share
2) Aggregate number of securities to which transaction applies:
13,150,000
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
/__/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
1
NORTHWEST HORIZON CORPORATION
413 Churchill Avenue N.
Ottawa, Ontario, Canada K1Z 5C7
613-724-2484
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 8, 2005
The Annual Meeting of Stockholders (the "Annual Meeting") of Northwest
Horizon Corporation, a Nevada corporation (the "Company"), will be held at 9:00
a.m., local time, on July 8, 2005 at 1 Place Ville-Marie, Suite 2821, Montreal,
Quebec Canada H3B 4R4, for the following purposes:
(1) To elect five members to the Company's Board of Directors to hold
office until the Company's Annual Meeting of Stockholders in 2006 or
until his successor is duly elected and qualified; and
(2) To ratify the appointment of Raymond Chabot Grant Thornton LLP, as
the Company's Independent Registered Public Accounting Firm for the
fiscal year ending December 31, 2004; and
(3) To ratify the Company's 2005 Stock Option Plan; and
(4) To approve a name change to Dairy Fresh Farms, Inc.; and
(5) To transact such other business as may properly come before the
Annual Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on May 20,
2005, as the record date for determining those Stockholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournment thereof.
By Order of the Board of Directors
Ottawa, Canada /s/ Robert Harrison
April 29, 2005 ------------------------
ROBERT HARRISON
CHIEF EXECUTIVE OFFICER
THE BOARD OF DIRECTORS REQUESTS THAT YOU COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD PROMPTLY. YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL
MEETING IN PERSON. THE RETURN OF THE ENCLOSED PROXY CARD WILL NOT AFFECT YOUR
RIGHT TO REVOKE YOUR PROXY OR TO VOTE IN PERSON IF YOU DO ATTEND THE ANNUAL
MEETING.
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NORTHWEST HORIZON CORPORATION
413 Churchill Avenue N.
Ottawa, Ontario, Canada K1Z 5C7
613-724-2484
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Northwest Horizon Corporation, a
Nevada corporation (the "Company"), of proxies from the holders of the Company's
common stock, par value $.001 per share (the "Common Stock"), for use at the
Annual Meeting of Stockholders of the Company to be held at 1:00 p.m., local
time, on July 8, 2005 at 1 Place Ville-Marie, Suite 2821, Montreal, Quebec
Canada H3B 4R4, and at any adjournment thereof (the "Annual Meeting"), pursuant
to the enclosed Notice of Annual Meeting of Stockholders.
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to Stockholders is May 20, 2005. Stockholders should
review the information provided herein in conjunction with the Company's amended
2004 Annual Report, which was filed with the Securities and Exchange Commission
on April 19, 2005 and the Company quarterly filings on Form 10-QSB. The
Company's principal executive offices are located at 413 Churchill Avenue N.,
Ottawa, Ontario, Canada K1Z 5C7 613-724-2484.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. Stockholders who hold their shares through an intermediary must
provide instructions on voting as requested by their bank or broker. The giving
of a proxy does not preclude the right to vote in person should any shareholder
giving the proxy so desire. Stockholders have an unconditional right to revoke
their proxy at any time prior to the exercise thereof, either in person at the
Annual Meeting or by filing with the Company's Secretary at the Company's
executive office a written revocation or duly executed proxy bearing a later
date; however, no such revocation will be effective until written notice of the
revocation is received by the Company at or prior to the Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement,
the Notice of Annual Meeting of Stockholders and the enclosed proxy will be
borne by the Company. In addition to the use of the mail, employees of the
Company may solicit proxies personally and by telephone. The Company's employees
will receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies. The Company may reimburse
such persons for their expenses in so doing.
OTHER MATTERS; DISCRETIONARY VOTING
Our Board of Directors does not know of any matters, other than as
described in the notice of Meeting attached to this Proxy Statement, that are to
come before the Meeting.
If the requested proxy is given to vote at the Meeting, the persons
named in such proxy will have authority to vote in accordance with their best
judgment on any other matter that is properly presented at the Meeting for
action, including without limitation, any proposal to adjourn the Meeting or
otherwise concerning the conduct of the Meeting.
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RIGHT TO REVOKE PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by:
o filing with the President of the Company, before the polls are
closed with respect to the vote, a written notice of revocation
bearing a later date than the proxy;
o duly executing a subsequent proxy relating to the same shares of
common stock and delivering it to the President of the Company; or
o attending the Meeting and voting in person (although attendance at
the Meeting will not in and of itself constitute a revocation of a
proxy).
Any written notice revoking a proxy should be sent to: Robert Harrison,
Northwest Horizon Corporation, 413 Churchill Avenue N., Ottawa, Ontario, Canada
K1Z 5C7 613-724-2484.
PURPOSE OF THE MEETING
At the Annual Meeting, the Company's Stockholders will consider and
vote upon the following matters:
(1) To elect five members to the Company's Board of Directors to hold
office until the Company's Annual Meeting of Stockholders in 2006 or
until his successor is duly elected and qualified; and
(2) To ratify the appointment of Raymond Chabot Grant Thornton LLP, as
the Company's Independent Registered Public Accounting Firm for the
fiscal year ending December 31, 2004; and
(3) To ratify the Company's 2005 Stock Option Plan; and
(4) To approve a name change to Dairy Fresh Farms, Inc.; and
(5) To transact such other business as may properly come before the
Annual Meeting and any adjournment thereof.
Unless contrary instructions are indicated on the enclosed proxy,
all shares represented by valid proxies received pursuant to this solicitation
(and which have not been revoked in accordance with the procedures set forth
above) will be voted (a) FOR the election of the nominees for director named
below; (b) FOR the proposal to ratify the appointment of Raymond Chabot Grant
Thornton LLP, as the Company's Independent Registered Public Accounting Firm;
(c) FOR the ratification of the Company's 2005 Stock Option Plan and (d) FOR the
approval of the name change to Dairy Fresh Farms, Inc. In the event a
shareholder specifies a different choice by means of the enclosed proxy, such
shareholder's shares will be voted in accordance with the specification so made.
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MARKET FOR COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
There is not currently a public trading market for the Company's
securities.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on May 20, 2005 as
the record date (the "Record Date") for determining Stockholders of the Company
entitled to receive notice of and to vote at the Annual Meeting. As of the date
herein there are 13,150,000 shares of Common Stock, $.001 par value (the "Common
Stock") issued and outstanding, all of which are entitled to be voted at the
Annual Meeting. Each share of Common Stock is entitled to one vote on each
matter submitted to Stockholders for approval at the Annual Meeting.
The presence, in person or by proxy, of at least a majority of the
total number of shares of Common Stock outstanding on the Record Date will
constitute a quorum for purposes of the Annual Meeting. If less than a majority
of the outstanding shares of Common Stock are represented at the Annual Meeting,
a majority of the shares so represented may adjourn the Annual Meeting from time
to time without further notice. A plurality of the votes cast by holders of the
Common Stock will be required for the election of directors. The ratification of
the appointment of Raymond Chabot Grant Thornton LLP, as the Company's
Independent Registered Public Accounting Firm for the fiscal year ending
December 31, 2004, and the ratification of the Company's 2005 Stock Option Plan,
will be approved if the number of shares of Common Stock voted in favor of
ratification exceeds the number of shares voted against it. Abstentions and
broker non-votes will be counted as shares present at the Annual Meeting for
purposes of determining a quorum. With respect to the outcome of any matter
brought before the Annual Meeting (i) abstentions will be considered as shares
present and entitled to vote at the Annual Meeting, but will not be counted as
votes cast for or against any given matter and (ii) broker non-votes will not be
considered shares present and entitled to vote. Because directors will be
elected by a plurality of the votes cast at the Annual Meeting and the other
matters to be acted upon at the Annual Meeting will be approved if the number of
votes cast in favor of the matter exceeds the number of votes cast against it,
abstentions and broker non-votes will have no effect on the outcome of the
proposals to be voted upon at the Annual Meeting.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the Annual Meeting. Such inspector(s) shall determine
the number of shares of Common Stock represented at the Annual Meeting, the
existence of a quorum, and the validity and effect of proxies, and shall
receive, count, and tabulate ballots and votes, and determine the results
thereof.
A list of Stockholders entitled to vote at the Annual Meeting will
be available for examination by any shareholder at the Company's principal
executive office in the United States for a period of 10 days prior to the
Annual Meeting, and at the Annual Meeting itself.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 29, 2005 by: (i) each person
known to the Company to own beneficially more than five percent of the Common
Stock; (ii) each director of the Company and nominee for election as a director;
(iii) each executive officer named in the Summary Compensation Table; and (iv)
all executive officers and directors as a group. Percentage of beneficial
ownership is based on 13,150,000 shares of common stock outstanding as of April
29, 2005.
------------------------------------------------------------------------
Number of
Name of Shareholder Shares Owned Percentage
------------------------------------------------------------------------
Dairy Technologies Inc. (1) 2,416,666 18.34%
------------------------------------------------------------------------
Finkelstein Capital Inc. (2) 1,028,600 7.8%
------------------------------------------------------------------------
Robert C. Harrison Ltd (3) 1,208,333 9.18%
------------------------------------------------------------------------
Purple Cow Investments Inc. (4) 5,825,001 44.3%
------------------------------------------------------------------------
Les Services Financiers Francis Mailhot (5) 223,750 1.7%
------------------------------------------------------------------------
Total Shares Held by Directors 10,702,350 81.39%
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) Dairy Technologies Inc. is owned and controlled by Richard Farrell
(50%) a Director of the Northwest Horizon Corp. and it is also owned by
David Hibbard (50%) who is an affiliate of Northwest Horizon Corp.
(2) Finkelstein Capital Inc. owns 1,1028,600 shares and Francis Mailhot is
25% beneficial owner of Finkelstein Capital Inc, and Francis Mailhot is
a Director of Northwest Horizon Corp.
(3) Robert C. Harrison Ltd is a Company owned and controlled by Robert C.
Harrison, who is the President and CEO and a Director of Northwest
Horizon Corp.
(4) Purple Cow Investments Inc. is a Company owned and controlled by
Nicolas Matossian (22%), Mr. Matossian is the Chairman of the Board of
Directors of Northwest Horizon, Ian Morrice (22%), Mr. Morrice is the
Executive Vice-President of Northwest Horizon and Don Paterson (22%)
who is the Chief Financial Officer and (34%) of Purple Cow Investment
is owned by friends and family members of the major shareholders.
(5) Les Services Financiers Francis Mailhot is a Company owned and
controlled by Francis Mailhot, a Northwest Horizon Corp. Director.
BOARD OF DIRECTORS
The current Board of Directors consists of Robert Harrison, Don
Paterson, Francis Mailhot, Richard Farrell and Nicholas Matossian.
COMMITTEES OF THE BOARD OF DIRECTORS
On our April 12, 2005 Board of Directors meeting, we authorized an Audit
Committee, Compensation Committee and Governance Committee. Once those
respective Committees initially meet and establish their charter, they will
report to the Board of Directors. The Audit Committee will oversee financial
reporting and corporate governance, the responsibilities of which currently
reside with the Board of Directors. The Audit Committee's responsibilities will
include assisting the Board of Directors in its oversight of our financial
statements; our compliance with legal and regulatory requirements, including SEC
requirements regarding audit related matters; the performance of our accounting
and reporting processes; and the independent auditors' qualifications,
independence, performance and audits. The Audit Committee will have the
authority to conduct any investigation appropriate to fulfilling its
responsibilities and has direct access to the independent auditors as well as to
all of our personnel. The Audit Committee will also have the authority to
engage, at our expense, special legal, accounting or such other consultants it
deems necessary to assist in the performance of its duties.
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EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years ended
December 31, 2004, 2003, and 2002 the compensation awarded to, paid to, or
earned by, our Chief Executive Officer and our four other most highly
compensation executive officers whose total compensation during the last fiscal
year exceeded $100,000.
Annual Compensation Long-Term Compensation
------------------------------------ -----------------------------------
Stock
Restricted Option All
Name & Position Year Salary($) Bonus($) Other($) Awards($) (#) L/TIP($) Other
- ------------------------------ ---- -------- ------- -------- ---------- ------ -------- -----
Robert Harrison 2002 0 0 0 0 0 0 0
Chief Executive Officer * 2003 0 0 0 0 0 0 0
Francis Mailhot 2004 0 0 0 0 0 0 0
Past Chief Executive Officer** 2002 0 0 0 0 0 0 0
2003 0 0 0 0 0 0 0
2004 0 0 0 0 0 0 0
Mr. Rick Cox 2002 0 0 0 0 0 0 0
Past Chief Executive Officer*** 2003 0 0 0 0 0 0 0
2004 0 0 0 0 0 0 0
- ----------
* Appointed as Chief Executive Officer on March 30, 2005.
** Appointed as Chief Executive Officer on December 15, 2004 and resigned on
March 30, 2005.
***Resigned on December 15, 2004.
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Employment Agreements, Termination of Employment and Change-in-Control
Arrangement
There are no executive employment agreements between our executive
officers and us. There are no changes of control arrangements, either by means
of a compensatory plan, agreement, or otherwise, involving our current or former
executive officers.
Compensation of Directors
Our management intends to implement a program to acknowledge and
compensate our non-employee directors for their contributions to our company.
Subject to ratification by our Board of Directors, we intend to compensate our
non-employee directors in substantially the following manner: Non-employee
directors will be reimbursed for the expenses that they incur in attending board
meetings. In addition, we may establish a plan pursuant to which non-employee
directors can receive a grant of options to purchase a certain number of shares
of our common stock. The exercise price of such options would be 100% of the
fair market value of such shares on the grant date, subject to adjustment under
the plan, and would expire five years from the grant date. Such options would
not qualify as incentive stock options under the Internal Revenue Code
Employee directors are not compensated in their role as directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our executive officers, directors and persons who own more than 10% of a
registered class of our equity securities to file certain reports with the SEC
regarding ownership of, and transactions in, our securities. Such officers,
directors and 10% shareholders are also required by the SEC to furnish us with
all Section 16(a) forms that they file.
Based solely on our review of such forms furnished to us and written
representations from certain reporting persons, we believe that all filing
requirements applicable to our executive officers, directors and more than 10%
stockholders were complied with during the fiscal year ended December 31, 2004.
Audit and certain other fees paid to accountants
For Year Ended December 31, 2004.
Audit Fees
The aggregate fees billed by Raymond Chabot Grant Thornton LLP for audit of the
Company's annual financial statements were $10,000 for the fiscal year ended
December 31, 2004.
Audit-Related Fees
Raymond Chabot Grant Thornton LLP did not bill the Company any amounts for
assurance and related services that were related to its audit or review of the
Company's financial statements during the fiscal years ending December 31, 2004.
Tax Fees
The aggregate fees billed by Raymond Chabot Grant Thornton LLP for tax
compliance, advice and planning were $0 for the fiscal year ended December 31,
2004.
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All Other Fees
Raymond Chabot Grant Thornton LLP did not bill the Company for any products and
services other than the foregoing during the fiscal years ended December 31,
2004.
For Year Ended December 31, 2003.
Audit Fees
The aggregate fees billed by Amisano Hanson for audit of the Company's annual
financial statements were $4,500 for the fiscal year ended December 31, 2003,
which included the aggregate fees billed by Amisano Hanson for review of the
Company's financial statements included in its quarterly reports on Form 10-QSB.
Audit-Related Fees
Amisano Hanson did not bill the Company any amounts for assurance and related
services that were related to its audit or review of the Company's financial
statements during the fiscal years ending December 31, 2003.
Tax Fees
The aggregate fees billed by Amisano Hanson for tax compliance, advice and
planning were $0 for the fiscal year ended December 31, 2003.
All Other Fees
Amisano Hanson did not bill the Company for any products and services other than
the foregoing during the fiscal year ended December 31, 2003.
Determination of Independence
Our Board of Directors has determined that the fees received by Amisano
Hanson and Raymond Chabot Grant Thornton LLP respectively for professional
services are compatible with maintaining their respective independence.
Code of Conduct and Ethics
The Company has adopted a Code of Ethics that applies to its principal
executive officer, principal financial officer or controller or persons
performing similar functions. Such Code of Ethics was filed as Exhibit 14.1 to
the Company's Annual Report on Form 10-KSB filed on April 15, 2005.
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PROPOSAL 1 - ELECTION OF DIRECTORS
At the Annual Meeting, three directors are to be elected to hold
office until the next Annual Meeting of Stockholders and until their successor
has been elected and qualified. There are three nominees for director. Each
nominee is currently a member of the Board of Directors. The person named in the
enclosed proxy card has advised that, unless otherwise directed on the proxy
card, they intend to vote FOR the election of the nominees. Should any nominee
become unable or unwilling to accept nomination or election for any reason,
persons named in the enclosed proxy card may vote for a substitute nominee
designated by the Board of Directors. The Company has no reason to believe the
nominees named will be unable or unwilling to serve if elected.
Nominees
NAME POSITION
---- --------
Robert Harrison Chief Executive Officer/President/Director
Don Paterson Chief Financial Officer/Director
Francis Mailhot Director
Richard Farrell Director
Dr. Nicholas Matossian. Chairman of the Board
Mr. Robert Harrison became President and CEO of Dairy Fresh Technologies, Ltd,
(the Canadian company which merged into the Company) in October 2002. His
academic background is extensive, including Accounting, Finance, Human Resources
and Marketing from Sheridan College in Toronto, Ontario; Strategic Planning,
International Agri-Business from Harvard Business School in Boston, Mass.
His skill summary includes expert sales contract negotiator, highly developed
leadership skills, complete understanding of the branding, licensing,
distribution and warehousing business in Canada and the United States.
From 1966-1990 at Neilson Dairy, a division of George Weston Limited, he rose to
Senior Vice President and General Manager of the Dairy Frozen Division (sales
$500 million), with over 700 employees both salaried and unionized remaining
strike-free under his stewardship. From 1991-1996 he was President and CEO of
Robert C. Harrison Food Brokers Inc. He created a unique food and non-food
brokerage business with a focus on food and mass-merchandising retailers
nationally and, excellent relationship development with Loblaws, A&P, Provigo,
Sobey's, Safeway and Loeb.
1997-2002 Mr. Harrison was President and CEO of Stoney Creek Ice Cream Delicious
Alternative Desserts Ltd. He revamped the manufacturing, warehousing and
distribution to make a world-class dairy manufacturing facility. He negotiated
licensing and trademark agreements with notable companies such as Cadbury
(frozen desserts), Movenpick Ice Cream (Switzerland), Ben & Jerry's Ice Cream
(Vermont, U.S.) and exclusive distribution agreement with Tropicana frozen
products.
Mr. Paterson was appointed CFO of Dairy Fresh Technologies, Ltd, (the Canadian
company which merged into the Company) on December 1, 2001. His educational
background includes B.Com from the University of Ottawa 1973-1977 and St.
10
Francis Xavier University 1971-1972. Chartered Accountant Designation Alberta
Institute 1979 and Ontario Institute 1980.
His career includes controllership of Lumonics Inc., a publicly traded
manufacturer of laser equipment for medical and industrial applications with
sales of $50 million and Vice President Finance of a national food service
company with sales value in excess of $22 million. He is currently owner of
Paterson & Company, an Ottawa based public accounting firm servicing a variety
of retail, construction and service companies. As well, he is a management
consultant, Immigration Investment Program (Canada) (1991 to present). Mr.
Paterson is a past Director of the Ottawa Senators Hockey Club (NHL).
Francis Mailhot, is Managing Director at Finkelstein Capital Inc, a Mergers &
Acquisition boutique firm specialized in the smallcap market. Mr. Mailhot was
President and CEO of Northwest Horizon a US reporting corporation, to coordinate
the reverse merger with Dairy Fresh Farms Inc. He was also President and CEO of
Millennium Capital Ventures Holdings Inc. during the merger with Nuevo Financial
Inc.(Formerly Telediscount Communications Inc.) a New York based corporation and
was President and CEO of OSK Capital III during the merger with Ideal Medical
Inc. a Houston , Texas based corporation. Prior to that he was a key player in
coordinating many deals in the smallcap market. He was also instrumental in
helping companies positioning themselves for new round of financing. Mr Mailhot
has also operated businesses in the telecom industry in the 90's. He pursued his
studies in finance at Montreal's Hautes Etudes Commerciales (HEC) from 1991 to
1994 and is an active participant to the New York Capital Roundtable and also a
member of the Canadian Association of New York.
Richard Farrell has been an investment banker in Australia for 10 years with
various advisory firms, including Ernst & Young Corporate Finance, Deloitte
Touche Corporate Finance and Beerworth & Partners (M&A). His experiences
includes mergers and acquisitions, capital raisings, commercial law, licensing
arrangements and corporate structuring.
Dr. Nicholas Matossian became CEO of Dairy Fresh Technologies, Ltd, (the
Canadian company which merged into the Company) on December 1, 2001. His
educational background includes a B.A. from McGill University, Montreal, a
M.B.A. from Harvard University, Boston and a Ph.D. from McGill University,
Montreal.
Dr. Matossian was a Professor of Economics, Faculty of Management at McGill
University in Montreal 1967-1970; Director of Operations Manitoba Development
Corporation 1970-1973; Managing Partner ERA Consulting Economics Inc.; Economic
and Business Consultant to the Federal Government (CDN) and to Major
Corporations and Financial Institutions 1973-1992. Senior Consultant and later
Chief Operating Officer Cedar Group Inc., publicly listed U.S. Holding
Corporation (sales of U.S. $600 million) and owner of Dominion Bridge Inc.
(Pipeline and Fabrication) Canada SteenBecker HVAC Contractors Canada / U.S.;
Unimetric Corporation Industrial Fasteners U.S. / France; McConnell Dowell
Corporation (66% owned) Engineering and Construction. Publicly listed Australian
Corp. Davie Shipbuilding-Ship and Platform Builders, Canada. During his tenure
as COO, Dr. Matossian was a Director of the parent and of each of the
subsidiaries. Since November, 2004, Dr. Matossian has been a director of
Huntingdon Capital Ltd., a public corporation trading on the Toronto Stock
Exchange.
Other accomplishments of Dr. Matossian include his position as City Councilor
for the City of Westmount (Montreal) since 1990. He was awarded Canada Council
Grant for Economic Research. Knighted to the Order of St. Maurice & Lazare
Dynastic Order of the Royal House of Savoy (Italy). He is Chairman of Fund N-77
for the Montreal Children's Hospital.
11
BOARD OF DIRECTORS
Directors are elected at the Company's annual meeting of Stockholders
and serve for one year until the next annual Stockholders' meeting or until
their successors are elected and qualified. Officers are elected by the Board of
Directors and their terms of office are, except to the extent governed by
employment contract, at the discretion of the Board. The Company reimburses all
Directors for their expenses in connection with their activities as directors of
the Company. Directors of the Company who are also employees of the Company will
not receive additional compensation for their services as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES AS
DIRECTORS TO SERVE UNTIL THE COMPANY'S ANNUAL MEETING OF STOCKHOLDERS
IN 2006 AND UNTIL THEIR SUCCESSORS HAVE BEEN ELECTED AND QUALIFIED.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors appointed Raymond Chabot Grant Thornton LLP, as
the Company's Independent Registered Public Accounting Firm for the fiscal year
ending December 31, 2004. A representative of Raymond Chabot Grant Thornton LLP
may be present at the Annual Meeting, and will have an opportunity to make a
statement if such representative desires to do so and is expected to be
available to respond to appropriate questions. The affirmative vote of a
majority of the votes cast is necessary to appoint Raymond Chabot Grant Thornton
LLP.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF RAYMOND CHABOT GRANT THORNTON LLP, AS THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2004.
PROPOSAL 3 - RATIFICATION OF THE COMPANY'S 2005 STOCK OPTION PLAN
2005 STOCK OPTION PLAN
This summary is qualified in its entirety by the terms of the
2005 Stock Option Plan, a copy of which is attached hereto as Exhibit A. The
2005 Stock Option Plan provides for the granting of (i) options to purchase
Common Stock that qualify as "incentive stock options" ("Incentive Stock
Options" or "ISOs") within the meaning of Section 422 of the Internal Revenue
Code (the "Code"), (ii) options to purchase Common Stock that do not qualify as
Incentive Stock Options ("Nonqualified Options" or "NQSOs") and (iii) restricted
stock. The total number of shares of Common Stock with respect to which awards
may be granted under the 2005 Stock Option Plan shall be two million (2,000,000)
shares of common stock.
The 2005 Stock Option Plan is administered by a committee currently
consisting of the Board of Directors (the "Committee"). The Committee is
generally empowered to interpret the Stock Option Plan; to prescribe rules and
regulations relating thereto; to determine the terms of the option agreements;
to amend the option agreements with the consent of the optionee; to determine
the key employees and directors to whom options are to be granted; and to
determine the number of shares subject to each option and the exercise price
thereof. The per share exercise price of options granted under the Stock Option
Plan will be not less than 100% (110% for ISOs if the optionee owns more than
10% of the common stock) of the fair market value per share of common stock on
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the date the options are granted. The Stock Option also provides for the
issuance of stock appreciation rights at the discretion of the Committee and
provides for the issuance of restricted stock awards at the discretion of the
Committee.
Options will be exercisable for a term that will not be greater than
ten years from the date of grant (five years from the date of grant of an ISO if
the optionee owns more than 10% of the common stock). In the event of the
termination of the relationship between the option holder and the Company for
cause (as defined in the Stock Option Plan), all options granted to that option
holder terminate immediately. Options may be exercised during the option
holder's lifetime only by the option holder or his or her guardian or legal
representative.
Options granted pursuant to the Stock Option Plan which are ISOs are
intended to enjoy the attendant tax benefits provided under Sections 421 and 422
of the Internal Revenue Code of 1986, as amended. Accordingly, the Stock Option
Plan provides that the aggregate fair market value (determined at the time an
ISO is granted) of the common stock subject to ISOs exercisable for the first
time by an option holder during any calendar year (under all plans of the
Company) may not exceed $100,000. The Board of Directors of the Company may
modify, suspend or terminate the Stock Option Plan; provided, however, that
certain material modifications affecting the Stock Option Plan must be approved
by the stockholders, and any change in the Stock Option Plan that may adversely
affect an option holder's rights under an option previously granted under the
Stock Option Plan requires the consent of the option holder.
The Committee may grant shares of Common Stock on such terms and
conditions and subject to such repurchase or forfeiture restrictions, if any, as
the Committee shall determine in its sole discretion ("Restricted Stock"), which
terms, conditions and restrictions shall be set forth in the instrument
evidencing the Restricted Stock award. The Committee may provide that the
forfeiture restrictions shall lapse on the passage of time, the attainment of
one or more performance targets established by the Committee or the occurrence
of such other event or events determined to be appropriate by the Committee. The
grantee of a Restricted Stock award shall have the right to receive dividends
with respect to the shares of Common Stock subject to a Restricted Stock award,
to vote the shares of Common Stock subject thereto and to enjoy all other
stockholder rights with respect to the shares of Common Stock subject thereto,
except that, unless provided otherwise, (i) the grantee shall not be entitled to
delivery of the Common Stock certificate until the applicable forfeiture
restrictions have expired, (ii) the Company or an escrow agent shall retain
custody of the shares of Common Stock until the forfeiture restrictions have
expired, (iii) the grantee may not transfer the Common Stock until the
forfeiture restrictions have expired and (iv) a breach of the terms and
conditions established by the Committee pursuant to the Restricted Stock
agreement shall cause a forfeiture of the Restricted Stock award.
The Committee may grant Stock Appreciation Rights (SARs). A stock
appreciation right generally permits a Participant who receives it to receive,
upon exercise, shares of Common Stock equal in value to the excess of (a) the
fair market value, on the date of exercise, of the shares of Common Stock with
respect to which the SAR is being exercised, over (b) the exercise price of the
SAR for such shares. The 2005 Stock Option Plan provides for the grant of SARs,
either in tandem with options or on a freestanding basis. With respect to a
tandem SAR, the exercise of the option (or the SAR) will result in the
cancellation of the related SAR (or option) to the extent of the number of
shares in respect of which such option or SAR has been exercised.
The Committee, in its sole discretion, may waive the repurchase or
forfeiture period and any other terms, conditions or restrictions on any
Restricted Stock under such circumstances and subject to such terms and
conditions as the Committee shall deem appropriate. However, the Committee may
not waive the repurchase or forfeiture period with respect to a Restricted Stock
award that has been granted if such award has been designed to meet the
exception for performance-based compensation under Section 162(m) of the Code.
13
The 2005 Stock Option Plan may be amended, terminated or suspended by
the Board at any time. The 2005 Stock Option Plan will terminate not later than
the ten-year anniversary of its effective date. However, awards granted before
the termination of the 2005 Stock Option Plan may extend beyond that date in
accordance with their terms.
The Board of Directors of the Company believes that the 2005 Stock
Option Plan reserves sufficient additional shares to provide for additional
grants to employees in the near future in order to attract and retain such key
personnel.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE COMPANY'S 2005 STOCK OPTION PLAN.
PROPOSAL 4 - AMEND THE ARTICLES OF INCORPORATION TO CHANGE OF NAME OF THE
COMPANY
We previously completed a merger between Dairy Fresh Technologies Ltd.,
a Canadian company ("Diary"), and 6351492 CANADA INC., a Canadian corporation
("Canada Inc.") and the Company, resulting in the business of Dairy being merged
into the Company. Management believes that changing the name to Dairy Fresh
Farms, Inc. will properly reflect the current business of the Company. Following
approval of the name change, the change will become effective upon the filing
with the Secretary of the State of Nevada an Amendment to our Articles of
Incorporation reflecting the new name.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE AMENDMENT
TO THE ARTICLES OF INCORPORATION TO CHANGE OF NAME OF THE COMPANY
14
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING INFORMATION
This Proxy Statement contains forward-looking statements. Certain matters
discussed herein are forward-looking statements within the meaning of the
Private Litigation Reform Act of 1995. Certain, but not necessarily all, of such
statements can be identified by the use of forward-looking terminology, such as
"believes," "expects," "may," "will," "should," "estimates" or "anticipates" or
the negative thereof or comparable terminology. All forward-looking statements
involve known and unknown risks, uncertainties and other factors, which may
cause the actual transactions, results, performance or achievements of the
company to be materially different from any future transactions, results,
performance or achievements expressed or implied by such forward-looking
statements. These may include, but are not limited to: (a) matters described in
this Proxy Statement and matters described in "Note on Forward-Looking
Statements" in our Annual Report on Form 10-KSB for the year ended December 31,
2004, (b) the ability to operate our business after the closing in a manner that
will enhance stockholder value. Although we believe the expectations reflected
in such forward-looking statements are based upon reasonable assumptions and
business opportunities, we can give no assurance that our expectations will be
attained or that any deviations will not be material. We undertake no obligation
to publicly release the result of any revisions to these forward-looking
statements that may be made to reflect any future events or circumstances.
15
ADDITIONAL INFORMATION
If you have any questions about the actions described above, you may
contact counsel for the company, Joseph I. Emas, 1224 Washington Avenue, Miami
Beach, Florida 33139 (305) 531-1174.
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance with the requirements thereof, file
reports, proxy statements and other information with the Securities and Exchange
Commission ("SEC"). Copies of these reports, proxy statements and other
information can be obtained at the SEC's public reference facilities at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C., 20549.
Additionally, these filings may be viewed at the SEC's website at
http://www.sec.gov.
We filed our annual report for the fiscal year ended December 31, 2004
on Form 10-KSB with the SEC, a copy of which is being provided with this proxy
statement. A copy of past annual reports on Form 10-KSB (except for certain
exhibits thereto), may be obtained, upon written request by any stockholder to
Joseph I. Emas, 1224 Washington Avenue, Miami Beach, Florida 33139 (305)
531-1174. Copies of all exhibits to the annual reports on Form 10-KSB are
available upon a similar request.
INFORMATION INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference and to be
a part hereof from the date of filing of such documents:
Annual Report on Form 10-KSB/A for the fiscal year ended December 31,
2004 a copy of which is being provided with this proxy statement.
Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2004,
June 30, 2004 and September 30, 2004.
All documents filed by the Company with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement and prior to the effective date of the action taken described herein,
including the Annual Report on Form 10-KSB/A for the fiscal year ended December
31, 2004.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Information Statement to the extent that a statement
contained herein or in any other subsequently filed document that also is, or is
deemed to be, incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Information
Statement.
This Information Statement incorporates, by reference, certain
documents that are not presented herein or delivered herewith. Copies of any
such documents, other than exhibits to such documents which are not specifically
incorporated by reference herein, are available without charge to any person,
including any stockholder, to whom this Information Statement is delivered, upon
written or oral request to our Secretary at our address and telephone number set
forth herein.
16
SHAREHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING
Under SEC rules, shareholders intending to present a proposal at the
Annual Meeting in 2006 and have it included in our proxy statement must submit
the proposal in writing to Robert Harrison, at413 Churchill Avenue N., Ottawa,
Ontario, Canada K1Z 5C7 613-724-2484. We must receive the proposal no later than
December 31, 2005.
Shareholders intending to present a proposal at the Annual Meeting
in 2006, but not to include the proposal in our proxy statement, must comply
with the requirements set forth in Regulation 14a-8 of the Security Exchange Act
of 1934, as amended (the "Exchange Act"). The Exchange Act requires, among other
things, that a shareholder must submit a written notice of intent to present
such a proposal that is received by our Secretary no less than 120 days prior to
the anniversary of the first mailing of the Company's proxy statement for the
immediately preceding year's annual meeting. Therefore, the Company must receive
notice of such proposal for the Annual Meeting in 2006 no later than January 20,
2006. If the notice is after January 20, 2006, it will be considered untimely
and we will not be required to present it at the Annual Meeting in 2006. The
Company reserves the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not comply with these
and other applicable requirements. The form of proxy and this Proxy Statement
have been approved by the Board of Directors and are being mailed and delivered
to shareholders by its authority.
/s/ Robert Harrison
Robert Harrison
Chief Executive Officer and Director
Ottawa, Canada
April 29, 2005
17
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
OF
NORTHWEST HORIZON CORPORATION
PROXY -- ANNUAL MEETING OF SHAREHOLDERS -_____________, 2005
The undersigned, revoking all previous proxies, hereby appoint(s)
Robert Harrison as Proxy, with full power of substitution, to represent and to
vote all Common Stock of Northwest Horizon Corporation owned by the undersigned
at the Annual Meeting of Shareholders to be held in___________________, on
______________, including any original or subsequent adjournment thereof, with
respect to the proposals set forth in the Notice of Annual Meeting and Proxy
Statement. No business other than matters described below is expected to come
before the meeting, but should any other matter requiring a vote of shareholders
arise, the person named herein will vote thereon in accordance with his best
judgment. All powers may be exercised by said Proxy. Receipt of the Notice of
Annual Meeting and Proxy Statement is hereby acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING.
ELECTION OF DIRECTORS. Nominees: Robert Harrison, Don Paterson, Francis
Mailhot, Richard Farrell and Nicholas Matossian.
[ ] FOR ALL NOMINEE LISTED (Except as specified
here:______________)
OR
[ ] WITHHOLDING AUTHORITY to vote for the nominee listed
above
2. Proposal to Ratify the Appointment of Raymond Chabot Grant Thornton
LLP, as the Company's Independent Registered Public Accounting Firm.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to Ratify the 2005 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this proxy will be voted as directed. IF NO
SPECIFIC DIRECTION IS GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR THE NOMINEE NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2 AND PROPOSAL 3.
Dated ____________________________, 2005
- ----------------------------- ----------------------------------
(Print Name) (Signature)
Where there is more than one owner, each should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your full
title as such. If executed by a corporation or partnership, the proxy should be
signed in the corporate or partnership name by a duly authorized officer or
other duly authorized person, indicating such officer's or other person's title.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
18
Exhibit A
--------------------------------------
NORTHWEST HORIZON CORPORATION
2005 STOCK OPTION PLAN
--------------------------------------
1. Purpose. The purpose of this Plan is to advance the interests of
Northwest Horizon Corporation, a Nevada corporation (the "Company"), by
providing an additional incentive to attract, retain and motivate highly
qualified and competent persons who are key to the Company, including key
employees, consultants, independent contractors, Officers and Directors, and
upon whose efforts and judgment the success of the Company and its Subsidiaries
is largely dependent, by authorizing the grant of options to purchase Common
Stock of the Company and other related benefits to persons who are eligible to
participate hereunder, thereby encouraging stock ownership in the Company by
such persons, all upon and subject to the terms and conditions of this Plan.
2. Definitions. As used herein, the following terms shall have the
meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cause" shall mean any of the following:
(i) a determination by the Company that there has
been a willful, reckless or grossly negligent failure by the Optionee to perform
his or her duties as an employee of the Company;
(ii) a determination by the Company that there has
been a willful breach by the Optionee of any of the material terms or provisions
of any employment agreement between such Optionee and the Company;
(iii) any conduct by the Optionee that either results
in his or her conviction of a felony under the laws of the United States of
America or any state thereof, or of an equivalent crime under the laws of any
other jurisdiction;
(iv) a determination by the Company that the Optionee
has committed an act or acts involving fraud, embezzlement, misappropriation,
theft, breach of fiduciary duty or material dishonesty against the Company, its
properties or personnel;
(v) any act by the Optionee that the Company
determines to be in willful or wanton disregard of the Company's best interests,
or which results, or is intended to result, directly or indirectly, in improper
gain or personal enrichment of the Optionee at the expense of the Company;
(vi) a determination by the Company that there has
been a willful, reckless or grossly negligent failure by the Optionee to comply
with any rules, regulations, policies or procedures of the Company, or that the
Optionee has engaged in any act, behavior or conduct demonstrating a deliberate
and material violation or disregard of standards of behavior that the Company
has a right to expect of its employees; or
(vii) if the Optionee, while employed by the Company
and for two years thereafter, violates a confidentiality and/or noncompete
agreement with the Company, or fails to safeguard, divulges, communicates, uses
to the detriment of the Company or for the benefit of any person or persons, or
misuses in any way, any Confidential Information; provided, however, that, if
the Optionee has entered into a written employment agreement with the Company
which remains effective and which expressly provides for a termination of such
Optionee's employment for "cause," the term "Cause" as used herein shall have
the meaning as set forth in the Optionee's employment agreement in lieu of the
definition of "Cause" set forth in this Section 2(b).
(c) "Change of Control" shall mean the acquisition by any
person or group (as that term is defined in the Exchange Act, and the rules
promulgated pursuant to that act) in a single transaction or a series of
transactions of thirty percent (30%) or more in voting power of the outstanding
stock of the Company and a change of the composition of the Board of Directors
so that, within two years after the acquisition took place, a majority of the
members of the Board of Directors of the Company, or of any corporation with
which the Company may be consolidated or merged, are persons who were not
directors or officers of the Company or one of its Subsidiaries immediately
prior to the acquisition, or to the first of a series of transactions which
resulted in the acquisition of thirty percent (30%) or more in voting power of
the outstanding stock of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Committee" shall mean the stock option committee
appointed by the Board or, if not appointed, the Board.
(f) "Common Stock" shall mean the Company's Common Stock, par
value $.001 per share.
(g) "Director" shall mean a member of the Board.
(h) "Employee" shall mean any person, including officers,
directors, consultants and independent contractors employed by the Company or
any parent or Subsidiary of the Company within the meaning of Section 3401(c) of
the regulators promulgated thereunder.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(j) "Fair Market Value" of a Share on any date of reference
shall be the Closing Price of a share of Common Stock on the business day
immediately preceding such date, unless the Committee in its sole discretion
shall determine otherwise in a fair and uniform manner. For this purpose, the
"Closing Price" of the Common Stock on any business day shall be (i) if the
Common Stock is listed or admitted for trading on any United States national
securities exchange, or if actual transactions are otherwise reported on a
2
consolidated transaction reporting system, the last reported sale price of the
Common Stock on such exchange or reporting system, as reported in any newspaper
of general circulation, (ii) if the Common Stock is quoted on The Nasdaq Stock
Market ("Nasdaq"), or any similar system of automated dissemination of
quotations of securities prices in common use, the mean between the closing high
bid and low asked quotations for such day of the Common Stock on such system, or
(iii) if neither clause (i) nor (ii) is applicable, the mean between the high
bid and low asked quotations for the Common Stock as reported by the National
Quotation Bureau, Incorporated if at least two securities dealers have inserted
both bid and asked quotations for the Common Stock on at least five of the 10
preceding days. If the information set forth in clauses (i) through (iii) above
is unavailable or inapplicable to the Company (e.g., if the Company's Common
Stock is not then publicly traded or quoted), then the "Fair Market Value" of a
Share shall be the fair market value (i.e., the price at which a willing seller
would sell a Share to a willing buyer when neither is acting under compulsion
and when both have reasonable knowledge of all relevant facts) of a share of the
Common Stock on the business day immediately preceding such date as the
Committee in its sole and absolute discretion shall determine in a fair and
uniform manner.
(k) "Incentive Stock Option" shall mean an incentive stock
option as defined in Section 422 of the Code.
(l) "Non-Statutory Stock Option" or "Nonqualified Stock
Option" shall mean an Option which is not an Incentive Stock Option.
(m) "Officer" shall mean the Company's chairman, president,
principal financial officer, principal accounting officer (or, if there is no
such accounting officer, the controller), any vice-president of the Company in
charge of a principal business unit, division or function (such as sales,
administration or finance), any other officer who performs a policy-making
function, or any other person who performs similar policy-making functions for
the Company. Officers of Subsidiaries shall be deemed Officers of the Company if
they perform such policy-making functions for the Company. As used in this
paragraph, the phrase "policy-making function" does not include policy-making
functions that are not significant. Unless specified otherwise in a resolution
by the Board, an "executive officer" pursuant to Item 401(b) of Regulation S-K
(17 C.F.R. ss. 229.401(b)) shall be only such person designated as an "Officer"
pursuant to the foregoing provisions of this paragraph.
(n) "Option" (when capitalized) shall mean any stock option
granted under this Plan.
(o) "Optionee" shall mean a person to whom an Option is
granted under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(p) "Plan" shall mean this 2005 Stock Option Plan of the
Company, which Plan shall be effective upon approval by the Board, subject to
approval, within 12 months of the date thereof by holders of a majority of the
Company's issued and outstanding Common Stock of the Company.
3
(q) "Share" or "Shares" shall mean a share or shares, as the
case may be, of the Common Stock, as adjusted in accordance with Section 10 of
this Plan.
(r) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50 percent or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
3. Shares and Options. Subject to adjustment in accordance with Section
10 hereof, the Company may issue up to two million (2,000,000) Shares from
Shares held in the Company's treasury or from authorized and unissued Shares
through the exercise of Options issued pursuant to the provisions of this Plan.
If any Option granted under this Plan shall terminate, expire, or be canceled,
forfeited or surrendered as to any Shares, the Shares relating to such lapsed
Option shall be available for issuance pursuant to new Options subsequently
granted under this Plan. Upon the grant of any Option hereunder, the authorized
and unissued Shares to which such Option relates shall be reserved for issuance
to permit exercise under this Plan. Subject to the provisions of Section 14
hereof, an Option granted hereunder shall be either an Incentive Stock Option or
a Non-Statutory Stock Option as determined by the Committee at the time of grant
of such Option and shall clearly state whether it is an Incentive Stock Option
or Non-Statutory Stock Option. All Incentive Stock Options shall be granted
within 10 years from the effective date of this Plan.
4. Limitations. Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options to the extent that the
aggregate Fair Market Value (determined at the time the Option is granted) of
the Shares, with respect to which Options meeting the requirements of Code
Section 422(b) are exercisable for the first time by any individual during any
calendar year (under all stock option or similar plans of the Company and any
Subsidiary), exceeds $100,000.
5. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an option agreement that
may contain any term deemed necessary or desirable by the Committee, provided
such terms are not inconsistent with this Plan or any applicable law. Optionees
shall be those persons selected by the Committee from the class of all regular
Employees of the Company or its Subsidiaries, including Employee Directors and
Officers who are regular or former regular employees of the Company, Directors
who are not regular employees of the Company, as well as consultants to the
Company. Any person who files with the Committee, in a form satisfactory to the
Committee, a written waiver of eligibility to receive any Option under this Plan
shall not be eligible to receive any Option under this Plan for the duration of
such waiver.
(b) In granting Options, the Committee shall take into
consideration the contribution the person has made, or is expected to make, to
the success of the Company or its Subsidiaries and such other factors as the
Committee shall determine. The Committee shall also have the authority to
4
consult with and receive recommendations from Officers and other personnel of
the Company and its Subsidiaries with regard to these matters. The Committee may
from time to time in granting Options under this Plan prescribe such terms and
conditions concerning such Options as it deems appropriate, provided that such
terms and conditions are not more favorable to an Optionee than those expressly
permitted herein; provided further, however, that to the extent not cancelled
pursuant to Section 9(b) hereof, upon a Change in Control, any Options that have
not yet vested, may, in the sole discretion of the Committee, vest upon such
Change in Control.
(c) The Options granted to employees under this Plan shall be
in addition to regular salaries, pension, life insurance or other benefits
related to their employment with the Company or its Subsidiaries. Neither this
Plan nor any Option granted under this Plan shall confer upon any person any
right to employment or continuance of employment (or related salary and
benefits) by the Company or its Subsidiaries.
6. Exercise Price. The exercise price per Share of any Option shall be
any price determined by the Committee but in no event shall the exercise price
per Share of any Option be less than the Fair Market Value of the Shares
underlying such Option on the date such Option is granted and, in the case of an
Incentive Stock Option granted to a 10% stockholder, the per Share exercise
price will not be less than 110% of the Fair Market Value. Re-granted Options,
or Options which are canceled and then re-granted covering such canceled
Options, will, for purposes of this Section 6, be deemed to have been granted on
the date of the re-granting.
7. Exercise of Options.
(a) An Option shall be deemed exercised when (i) the Company
has received written notice of such exercise in accordance with the terms of the
Option, (ii) full payment of the aggregate option price of the Shares as to
which the Option is exercised has been made, (iii) the Optionee has agreed to be
bound by the terms, provisions and conditions of any applicable stockholders'
agreement, and (iv) arrangements that are satisfactory to the Committee in its
sole discretion have been made for the Optionee's payment to the Company of the
amount that is necessary for the Company or the Subsidiary employing the
Optionee to withhold in accordance with applicable Federal or state tax
withholding requirements. Unless further limited by the Committee in any Option,
the exercise price of any Shares purchased pursuant to the exercise of such
Option shall be paid in cash, by certified or official bank check, by money
order, with Shares or by a combination of the above; provided, however, that the
Committee in its sole discretion may accept a personal check in full or partial
payment of any Shares. The Company in its sole discretion may, on an individual
basis or pursuant to a general program established by the Committee in
connection with this Plan, lend money to an Optionee to exercise all or a
portion of the Option granted hereunder. If the exercise price is paid in whole
or part with the Optionee's promissory note, such note shall (i) provide for
full recourse to the maker, (ii) be collateralized by the pledge of the Shares
that the Optionee purchases upon exercise of such Option, (iii) bear interest at
a rate no less than the rate of interest payable by the Company to its principal
lender, and (iv) contain such other terms as the Committee in its sole
discretion shall require.
5
(b) No Optionee shall be deemed to be a holder of any Shares
subject to an Option unless and until a stock certificate or certificates for
such Shares are issued to such person(s) under the terms of this Plan. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
expressly provided in Section 10 hereof.
(c) Any Option may, in the discretion of the Committee, be
exercised pursuant to a "cashless" or "net issue" exercise. In lieu of
exercising the Option as specified in subsection (a) above, the Optionee may pay
in whole or in part with Shares, the number of which shall be determined by
dividing (a) the aggregate Fair Value of such Shares otherwise issuable upon
exercise of the Option minus the aggregate Exercise Price of such Option by (b)
the Fair Value of one such Share, or the Optionee may pay in whole or in part
through a reduction in the number of Shares received through the exercise of the
Option equal to the quotient of the (a) aggregate Fair Value of all the Shares
issuable upon exercise of the Option minus the aggregate Exercise Price of such
Option (b) divided by the Fair Value of one such share. If the exercise price is
paid in whole or in part with Shares, the value of the Shares surrendered shall
be their Fair Market Value on the date the Option is exercised.
8. Exercisability of Options. Any Option shall become exercisable in
such amounts, at such intervals, upon such events or occurrences and upon such
other terms and conditions as shall be provided in an individual Option
agreement evidencing such Option, except as otherwise provided in Section 5(b)
or this Section 8.
(a) The expiration date(s) of an Option shall be determined by
the Committee at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date of grant of the
Option.
(b) Unless otherwise expressly provided in any Option as
approved by the Committee, notwithstanding the exercise schedule set forth in
any Option, each outstanding Option, may, in the sole discretion of the
Committee, become fully exercisable upon the date of the occurrence of any
Change of Control, but, unless otherwise expressly provided in any Option, no
earlier than six months after the date of grant, and if and only if Optionee is
in the employ of the Company on such date.
(c) The Committee may in its sole discretion accelerate the
date on which any Option may be exercised and may accelerate the vesting of any
Shares subject to any Option or previously acquired by the exercise of any
Option.
9. Termination of Option Period.
(a) Unless otherwise expressly provided in any Option, the
unexercised portion of any Option shall automatically and without notice
immediately terminate and become forfeited, null and void at the time of the
earliest to occur of the following:
6
(i) three months after the date on which the
Optionee's employment is terminated for any reason other than by reason of (A)
Cause, (B) the termination of the Optionee's employment with the Company by such
Optionee following less than 60 days' prior written notice to the Company of
such termination (an "Improper Termination"), (C) a mental or physical
disability (within the meaning of Section 22(e) of the Code) as determined by a
medical doctor satisfactory to the Committee, or (D) death;
(ii) immediately upon (A) the termination by the
Company of the Optionee's employment for Cause, or (B) an Improper Termination;
(iii) one year after the date on which the Optionee's
employment is terminated by reason of a mental or physical disability (within
the meaning of Code Section 22(e)) as determined by a medical doctor
satisfactory to the Committee or the later of three months after the date on
which the Optionee shall die if such death shall occur during the one-year
period specified herein; or
(iv) the later of (a) one year after the date of
termination of the Optionee's employment by reason of death of the employee, or
(b) three months after the date on which the Optionee shall die if such death
shall occur during the one year period specified in Subsection 9(a)(iii) hereof.
(b) The Committee in its sole discretion may, by giving
written notice ("cancellation notice"), cancel effective upon the date of the
consummation of any corporate transaction described in Subsection 10(d) hereof,
any Option that remains unexercised on such date. Such cancellation notice shall
be given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.
(c) Upon termination of Optionee's employment as described in
this Section 9, or otherwise, any Option (or portion thereof) not previously
vested or not yet exercisable pursuant to Section 8 of this Plan or the vesting
schedule set forth in such Option shall be immediately canceled.
10. Adjustment of Shares.
(a) If at any time while this Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split, combination or exchange
of Shares (other than any such exchange or issuance of Shares through which
Shares are issued to effect an acquisition of another business or entity or the
Company's purchase of Shares to exercise a "call" purchase option), then and in
such event:
(i) appropriate adjustment shall be made in the
maximum number of Shares available for grant under this Plan, so that the same
percentage of the Company's issued and outstanding Shares shall continue to be
subject to being so optioned;
7
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then subject to any
outstanding Option, so that the same percentage of the Company's issued and
outstanding Shares shall remain subject to purchase at the same aggregate
exercise price; and
(iii) such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.
(b) Subject to the specific terms of any Option, the Committee
may change the terms of Options outstanding under this Plan, with respect to the
option price or the number of Shares subject to the Options, or both, when, in
the Committee's sole discretion, such adjustments become appropriate by reason
of a corporate transaction described in Subsection 10(d) hereof, or otherwise.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into or exchangeable for shares of its capital stock of
any class, either in connection with a direct or underwritten sale, or upon the
exercise of rights or warrants to subscribe therefor or purchase such Shares, or
upon conversion of obligations of the Company into such Shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of or exercise price of Shares then subject to
outstanding Options granted under this Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under this Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, reclassifications, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business; (ii) any
merger or consolidation of the Company or to which the Company is a party; (iii)
any issuance by the Company of debt securities, or preferred or preference stock
that would rank senior to or above the Shares subject to outstanding Options;
(iv) any purchase or issuance by the Company of Shares or other classes of
common stock or common equity securities; (v) the dissolution or liquidation of
the Company; (vi) any sale, transfer, encumbrance, pledge or assignment of all
or any part of the assets or business of the Company; or (vii) any other
corporate act or proceeding, whether of a similar character or otherwise.
(e) The Optionee shall receive written notice within a
reasonable time prior to the consummation of such action advising the Optionee
of any of the foregoing. The Committee may, in the exercise of its sole
discretion, in such instances declare that any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his or her
Option.
11. Transferability. No Option or stock appreciation right granted
hereunder shall be sold, pledged, assigned, hypothecated, disposed or otherwise
transferred by the Optionee other than by will or the laws of descent and
distribution, unless otherwise authorized by the Board, and no Option or stock
appreciation right shall be exercisable during the Optionee's lifetime by any
person other than the Optionee.
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12. Issuance of Shares. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(i) a representation and warranty by the Optionee to
the Company, at the time any Option is exercised, that he is acquiring the
Shares to be issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(ii) an agreement and undertaking to comply with all
of the terms, restrictions and provisions set forth in any then applicable
stockholders' agreement relating to the Shares, including, without limitation,
any restrictions on transferability, any rights of first refusal and any option
of the Company to "call" or purchase such Shares under then applicable
agreements, and
(iii) any restrictive legend or legends, to be
embossed or imprinted on Share certificates, that are, in the discretion of the
Committee, necessary or appropriate to comply with the provisions of any
securities law or other restriction applicable to the issuance of the Shares.
13. Stock Appreciation Rights. The Committee may grant stock
appreciation rights to Employees, either or tandem with Options that have been
or are granted under the Plan or with respect to a number of Shares on which an
Option is not granted. A stock appreciation right shall entitle the holder to
receive, with respect to each Share as to which the right is exercised, payment
in an amount equal to the excess of the Share's Fair Market Value on the date
the right is exercised over its Fair Market Value on the date the right was
granted. Such payment may be made in cash or in Shares valued at the Fair Market
Value as of the date of surrender, or partly in cash and partly in Shares, as
determined by the Committee in its sole discretion. The Committee may establish
a maximum appreciation value payable for stock appreciation rights.
14. Restricted Stock Awards. The Committee may grant restricted stock
awards under the Plan in Shares or denominated in units of Shares. The
Committee, in its sole discretion, may make such awards subject to conditions
and restrictions, as set forth in the instrument evidencing the award, which may
be based on continuous service with the Company or the attainment of certain
performance goals related to profits, profit growth, cash-flow or shareholder
returns, where such goals may be stated in absolute terms or relative to
comparison companies or indices to be achieved during a period of time.
15. Administration of this Plan.
(a) This Plan shall be administered by the Committee, which
shall consist of not less than two Directors. The Committee shall have all of
the powers of the Board with respect to this Plan. Any member of the Committee
may be removed at any time, with or without cause, by resolution of the Board
and any vacancy occurring in the membership of the Committee may be filled by
appointment by the Board.
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(b) Subject to the provisions of this Plan, the Committee
shall have the authority, in its sole discretion, to: (i) grant Options, (ii)
determine the exercise price per Share at which Options may be exercised, (iii)
determine the Optionees to whom, and time or times at which, Options shall be
granted, (iv) determine the number of Shares to be represented by each Option,
(v) determine the terms, conditions and provisions of each Option granted (which
need not be identical) and, with the consent of the holder thereof, modify or
amend each Option, (vi) defer (with the consent of the Optionee) or accelerate
the exercise date of any Option, and (vii) make all other determinations deemed
necessary or advisable for the administration of this Plan, including
re-pricing, canceling and regranting Options.
(c) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of this Plan. The Committee's
determinations and its interpretation and construction of any provision of this
Plan shall be final, conclusive and binding upon all Optionees and any holders
of any Options granted under this Plan.
(d) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at a
meeting of the Committee or (ii) without a meeting by the unanimous written
approval of the members of the Committee.
(e) No member of the Committee, or any Officer or Director of
the Company or its Subsidiaries, shall be personally liable for any act or
omission made in good faith in connection with this Plan.
16. Incentive Options for 10% Stockholders. Notwithstanding any other
provisions of this Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly or indirectly (through attribution under
Section 424(d) of the Code) at the date of grant, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or of
its Subsidiary) at the date of grant unless the exercise price of such Option is
at least 110% of the Fair Market Value of the Shares subject to such Option on
the date the Option is granted, and such Option by its terms is not exercisable
after the expiration of 10 years from the date such Option is granted.
17. Interpretation.
(a) This Plan shall be administered and interpreted so that
all Incentive Stock Options granted under this Plan will qualify as Incentive
Stock Options under Section 422 of the Code. If any provision of this Plan
should be held invalid for the granting of Incentive Stock Options or illegal
for any reason, such determination shall not affect the remaining provisions
hereof, and this Plan shall be construed and enforced as if such provision had
never been included in this Plan.
(b) This Plan shall be governed by the laws of the State of
New York.
(c) Headings contained in this Plan are for convenience only
and shall in no manner be construed as part of this Plan or affect the meaning
or interpretation of any part of this Plan.
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(d) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
(e) Time shall be of the essence with respect to all time
periods specified for the giving of notices to the company hereunder, as well as
all time periods for the expiration and termination of Options in accordance
with Section 9 hereof (or as otherwise set forth in an option agreement).
18. Amendment and Discontinuation of this Plan. Either the Board or the
Committee may from time to time amend this Plan or any Option without the
consent or approval of the stockholders of the Company; provided, however, that,
except to the extent provided in Section 9, no amendment or suspension of this
Plan or any Option issued hereunder shall substantially impair any Option
previously granted to any Optionee without the consent of such Optionee.
19. Termination Date. This Plan shall terminate ten years after the
date of adoption by the Board of Directors
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