0000950137-01-503879.txt : 20011010
0000950137-01-503879.hdr.sgml : 20011010
ACCESSION NUMBER: 0000950137-01-503879
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011030
FILED AS OF DATE: 20011004
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ACTIVE IQ TECHNOLOGIES INC
CENTRAL INDEX KEY: 0000912875
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531]
IRS NUMBER: 412004369
STATE OF INCORPORATION: CO
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-12401
FILM NUMBER: 1752358
BUSINESS ADDRESS:
STREET 1: 601 CARLSON PARKWAY
STREET 2: SUITE 1500
CITY: MINNETONKA
STATE: MN
ZIP: 55305
BUSINESS PHONE: 9524495000
MAIL ADDRESS:
STREET 1: 601 CARLSON PARKWAY
STREET 2: SUITE 1500
CITY: MINNETONKA
STATE: MN
ZIP: 55305
FORMER COMPANY:
FORMER CONFORMED NAME: METEOR INDUSTRIES INC
DATE OF NAME CHANGE: 19960313
DEF 14A
1
c65282def14a.txt
DEFINITIVE PROXY STATEMENT
1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12
ACTIVE IQ TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
(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:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the 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:
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2
[ACTIVE IQ(TM) TECHNOLOGIES LOGO]
--------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 30, 2001
--------------------------------
Please take notice that the Annual Meeting of Shareholders of Active IQ
Technologies, Inc. (formerly Meteor Industries, Inc.) (the "Company") will be
held, pursuant to due call by the Board of Directors of the Company, at 601
Carlson Parkway, 2nd Floor, Conference Room 3, Minnetonka, MN 55305, on Tuesday,
October 30, 2001, at 10:00 a.m. (Central time), or at any adjournment thereof,
for the following purposes:
1. To elect six directors to the Board of Directors of
the Company;
2. To approve an amendment to the Company's 1999 Stock
Option Plan (as amended) increasing the number of
shares of common stock reserved for issuance
thereunder from 1,300,000 shares to 2,500,000 shares;
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Shareholders of record at the close of business on October 2, 2001 are
entitled to notice of and to vote at the meeting. Each shareholder is entitled
to one vote on all matters to be voted on at the meeting.
Your attention is directed to the Proxy Statement accompanying this
Notice for a more complete statement of the matters to be considered at the
meeting. Also enclosed is a copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 2000.
You are cordially invited to attend the meeting. Whether or not you
plan to attend the meeting, please sign, date and return your Proxy in the
return envelope provided as soon as possible. Your cooperation in promptly
signing and returning the enclosed Proxy will help avoid further solicitation
expense to the Company.
By Order of the Board of Directors,
/s/ Kenneth W. Brimmer
----------------------
Kenneth W. Brimmer
Chairman and Chief Executive Officer
Dated: October 5, 2001
Minnetonka, Minnesota 55305
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
3
ACTIVE IQ TECHNOLOGIES, INC.
601 CARLSON PARKWAY, SUITE 1550
MINNETONKA, MINNESOTA 55305
------------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 2001 AT 10:00 A.M. (CENTRAL TIME)
------------------------------
PROXIES AND VOTING
This Proxy Statement is furnished to the shareholders of Active IQ
Technologies, Inc., a Minnesota corporation (formerly Meteor Industries, Inc., a
Colorado corporation) (the "Company"), in connection with the solicitation by
the Board of Directors of the Company of proxies to be used at the Annual
Meeting of Shareholders to be held on Tuesday, October 30, 2001 at 10:00 a.m.
(Central time), at 601 Carlson Parkway, 2nd Floor, Conference Room 3,
Minnetonka, Minnesota 55305, and at any adjournment thereof, for the purposes
set forth in the attached Notice of Annual Meeting. The approximate date on
which this Proxy Statement and the accompanying proxy were first sent or given
to shareholders of the Company was October 5, 2001.
The cost of soliciting Proxies, including preparing, assembling and
mailing the Proxies and soliciting material, will be borne by the Company.
Directors, officers and regular employees of the Company may, without
compensation other than their regular compensation, solicit Proxies personally
or by telephone.
Any shareholder giving a Proxy may revoke it at any time prior to its
use at the Annual Meeting by giving written notice of such revocation to the
Secretary or other officer of the Company or by filing a new written Proxy with
an officer of the Company. Personal attendance at the Annual Meeting is not, by
itself, sufficient to revoke a Proxy unless written notice of the revocation of
a subsequent Proxy is delivered to an officer before the Proxy intended to be
revoked or superseded is used at the Annual Meeting.
The presence at the Annual Meeting in person or by proxy of the holders
of a majority of the outstanding shares of the Company's Common Stock and its
Series B Convertible Preferred Stock (voting together as a single class)
entitled to vote shall constitute a quorum for the transaction of business.
Proxies not revoked will be voted in accordance with the instructions specified
by shareholders by means of the ballot provided on the Proxy for that purpose.
Proxies which are signed but which lack any specific instructions with respect
to any proposal will, subject to the following, be voted in favor of the
proposals set forth in the Notice of Annual Meeting and in favor of the slate of
directors proposed by the Board of Directors as listed herein. If a shareholder
abstains from voting as to any proposal, then the shares held by such
shareholder shall be deemed present at the Annual Meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such proposal, but shall not be deemed to have been voted in favor of such
proposal. Abstentions as to any proposal, therefore, will have the same effect
as votes against such proposal. If a broker returns a "non-vote" proxy,
indicating a lack of voting instruction by the beneficial holder of the shares
and a lack of discretionary authority on the part of the broker to vote on a
particular proposal, then the shares covered by such non-vote proxy shall be
deemed present at the Annual Meeting for purposes of determining a quorum, but
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shall not be deemed to be present at the Annual Meeting for purposes of
calculating the vote required for approval of such proposal.
OUTSTANDING SHARES AND VOTING RIGHTS
Shareholders of record on October 2, 2001 will be entitled to receive
notice of and vote at the meeting. As of the record date, there were outstanding
and entitled to be voted at the meeting 10,277,227 shares of Common Stock and
365,000 shares of Series B Convertible Preferred Stock, each share being
entitled to one vote on all matters. Shareholders are not entitled to cumulative
voting rights.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following information concerning beneficial ownership of Common
Stock of the Company is furnished as of the record date, unless otherwise
indicated, with respect to all persons known by the Company to be the owner, of
record or beneficially, of more than five percent of the outstanding Common
Stock of the Company. Unless otherwise indicated, the shareholders listed in the
table below have sole voting and investment powers with respect to the shares
indicated.
SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
------------------------------------ ------------------ ----------------
Boston Financial Partners, Inc. ..................... 830,000 (1) 7.8
17 Bayns Hill Road
Boxford, MA 01921
Gulfstream Financial Partners, LLC .................. 730,000 (2) 6.7
2401 PGA Boulevard, Suite 190
Palm Beach Gardens, FL 33410
Wayne W. Mills ...................................... 2,143,334 (3) 19.2
5020 Blake Road
Edina, MN 55436
Stellent, Inc. ...................................... 939,119 (4) 8.9
7777 Golden Triangle Drive
Eden Prairie, MN 55344
------------------
(1) Includes 350,000 shares issuable upon the exercise of warrants
issued to Thomas Brazil, president of Boston Financial
Partners, Inc., in connection with a financial advisory
services agreement with our company.
(2) Includes 615,000 shares issuable upon the exercise (at a price
of $5.50 per share) of a warrant issued upon the Meteor
Industries-activeIQ Technologies merger in consideration of
financial advisory services rendered, which warrant was then
exchanged for Class B Redeemable Warrants.
(3) Includes 30,000 shares owned by Sea Spray, Ltd., a foreign
corporation of which Mr. Mills is the sole shareholder, and
150,000 shares owned by Mr. Mills' spouse. Mr. Mills disclaims
beneficial ownership of his spouse's shares. Also includes
100,000 shares issuable upon the exercise (at a price of $2.50
per share) of a warrant issued in connection with the Series B
Convertible Preferred Stock and 298,334 shares issuable upon
the exercise (at a price of $5.50 per share) of Class B
Redeemable Warrants. Also includes the following held in the
name of Blake Capital Partners LLC, an entity solely owned by
Mr. Mills: 65,000 shares of Common Stock; 500,000 shares
issuable upon the exercise (at a price of $3.00 per share) of
a warrant issued as compensation for financial advisory
services rendered in connection with the Meteor
Industries-activeIQ Technologies merger; and 15,000 shares
issuable upon the exercise (at a price of $7.15 per share) of
publicly traded warrants.
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(4) Includes (i) 307,648 shares issuable upon the exercise of
Class B Redeemable Warrants, (ii) 20,000 shares issuable upon
the exercise (at a price of $2.75 per share) of a warrant
issued in connection with an August 2000 financing, and (iii)
13,334 shares issuable upon the exercise of Class B Redeemable
Warrants that are issuable upon exercise of the warrant
described in (ii).
SHARE OWNERSHIP OF MANAGEMENT
The following table lists, as of October 2, 2001, the beneficial
ownership of Common Stock for all directors, each of the Company's executive
officers and all directors and executive officers as a group.
SHARES
NAME BENEFICIALLY OWNED (1) PERCENT OF CLASS
----- ---------------------- ----------------
Kenneth W. Brimmer (2) ............................ 727,835 6.8
Ronald E. Eibensteiner (3) ........................ 683,334 6.5
Kenneth S. Kaufman ............................... 1,000 *
Steven R. Levine (4) .............................. 13,467 *
D. Bradly Olah (5) ................................ 850,334 8.0
Steven A. Weiss (6) ............................... 40,268 *
All directors and officers as a group (7) ......... 2,404,814 20.9
-----------
* Represents less than 1 percent
(1) Except as otherwise indicated, each person possesses sole
voting and investment power with respect to the shares shown
as beneficially owned.
(2) Includes 207,834 shares issuable upon exercise of certain
warrants. Also includes 190,000 shares issuable upon exercise
of options which vest within 60 days.
(3) Includes 233,334 shares issuable upon exercise of certain
warrants, of which 133,334 are owned by Wyncrest Capital,
Inc., of which Mr. Eibensteiner is the sole director. Also
includes 200,000 shares owned by Wyncrest Capital, Inc. Also
includes 100,000 shares issuable upon exercisable of options
which vest within 60 days.
(4) Represents shares issuable upon exercise of options which vest
within 60 days.
(5) Includes 204,501 shares issuable upon exercise of certain
warrants. Also includes 133,333 shares issuable upon exercise
of options which vest within 60 days. Also includes 165,000
shares and 110,000 shares issuable upon exercise of certain
warrants owned by Mr. Olah's spouse; and 15,000 shares and
10,000 shares issuable upon exercise of certain warrants owned
by the D. Bradly Olah Irrevocable Trust.
(6) Includes 8,000 shares issuable upon exercise (at a price of
$5.50 per share) of certain warrants. Also includes 20,267
shares issuable upon exercise of options which vest within 60
days.
(7) Includes 785,206 shares issuable upon exercise of certain
warrants. Also includes 473,401 shares issuable upon exercise
of options which vest within 60 days.
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ELECTION OF DIRECTORS TO THE BOARD OF DIRECTORS
(PROPOSAL NO. 1)
Six directors are to be elected at the Annual Meeting, each director to
hold office until the next Annual Meeting of Shareholders, or until his
successor is elected and qualified. All of the persons listed below have served
as directors of the Company since the Meteor Industries-activeIQ Technologies
merger, which was completed on April 30, 2001. Each of the nominees listed below
has consented to serve as a director, if elected, until the next annual meeting
of the Company's shareholders or until his successor is duly elected and
qualified. The Board of Directors proposes for election the nominees listed
below:
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- --------------
Kenneth W. Brimmer 46 Chairman, Chief Executive 2001
Officer and Chief Financial
Officer
Ronald E. Eibensteiner 50 Director 2001
Kenneth S. Kaufman 35 Director 2001
Steven R. Levine 61 Director 2001
D. Bradly Olah 36 Director, President, Chief 2001
Operating Officer and Secretary
Steven A. Weiss 38 Director 2001
KENNETH W. BRIMMER currently serves as our Chairman, Chief Executive
Officer and Chief Financial Officer. Having been appointed to the board of
directors of activeIQ Technologies Inc. in 1999, Mr. Brimmer served that company
as its Chairman and Chief Executive Officer until its merger with Meteor
Industries, Inc. (the Company's predecessor) on April 30, 2001. Mr. Brimmer was
President of Rainforest Cafe, Inc. from April 1997 until April 2000 and was
Treasurer from its inception in 1995. Mr. Brimmer is also Chairman of both
Hypertension Diagnostics, Inc., and Oxboro Medical, Inc, both of which are
NASDAQ listed companies.
D. BRADLY OLAH, one of the co-founders of activeIQ Technologies Inc.,
is currently our President and Chief Operating Officer and a member of our board
of directors. He formerly served activeIQ Technologies as its Executive Vice
President from November 1999 to March 2001 and as Chief Executive Officer from
April 1996 to November 1999. Mr. Olah was also a member of activeIQ
Technologies' board of directors from its inception in April 1996 until its
merger with Meteor Industries, Inc. (the Company's predecessor) and has been
actively involved in its business development. He was a director of Natural
Resources Geophysical Corporation from 1996 until 1998, when it was sold to
Eagle Geophysical of Houston, Texas. He was also the founder/Chairman and Chief
Executive Officer and a director of Innovative Gaming Corporation of America
from 1991 through February 1996 and also served as the Chief Financial Officer
of that company from 1991 to 1993.
RONALD E. EIBENSTEINER has been a director of the Company since April
30, 2001, the effective date of the Meteor Industries, Inc.-activeIQ
Technologies Inc. He was initially appointed to the board of directors of
activeIQ Technologies in September 2000. Mr. Eibensteiner is the president of
Wyncrest Capital, Inc. and has been a seed investor in several early stage
technology companies. Since May 1996, Mr. Eibensteiner has been chairman of the
board of directors of OneLink, Inc., a publicly-traded company that provides
Internet-delivered business intelligence services to the telecommunications
industry. From March 1996 until March 2001, he served as a director of Stellent,
Inc. (formerly known as
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IntraNet Solutions, Inc.) (Nasdaq: STEL), a provider of Web-based document
management solutions for corporate intranets. Mr. Eibensteiner co-founded
Diametrics Medical, Inc., a manufacturer of blood gas diagnostic systems, and
was chairman of Prodea Software Corporation, a data warehousing software
company, until its sale to Platinum technology, inc., in January 1996.
STEVEN A. WEISS was formerly a director of activeIQ Technologies Inc.
and was appointed to the Company's board or directors following the Meteor
Industries-activeIQ Technologies merger on April 30, 2001. Mr. Weiss co-founded
Casino Data Systems, Inc., a designer, manufacturer and distributor of
innovative, technology-driven products for the gaming industry, serving as its
Chairman from June 1990 to August 1994 and from November 1994 to June 2001, when
it was acquired by Aristocrat Leisure Ltd.
STEPHEN R. LEVINE also was appointed to the Company's board of
directors following the merger of Meteor Industries, Inc. and activeIQ
Technologies Inc., having been a director of the latter company since October
1999. Dr. Levine is a computer science professional with over 30 years' software
and hardware experience. Dr. Levine has received an award as a pioneer in the
field of computer graphics and was one of the original founders of ACM SigGraph.
He is currently Chief Technology Officer for the Temporal Bone Foundation, a
nonprofit foundation dedicated to understanding the morphology of the middle ear
and uncovering reasons for its dysfunction, particularly in newborns and
infants. Dr. Levine is responsible for all aspects of technology at the Temporal
Bone Foundation.
KENNETH S. KAUFMAN was appointed to the Company's board of directors on
April 30, 2001. Since 1999, Mr. Kaufman has been employed by A-Life Medical,
Inc., a leading provider of natural language processing and artificial
intelligence in healthcare applications, and he currently serves as that
company's chief operating officer. From 1997 until to 1999, Mr. Kaufman was the
Chief Executive Officer of Dietsite.com, a leading provider of nutritional and
healthcare content and services on the Internet. Dietsite.com was acquired in
1999. Between 1998 and 2001, Mr. Kaufman served as the Vice President of Sales
for ChannelHealth.com, an IDX Company, a subsidiary of IDX Systems Corporation,
a leading supplier of health care software. Between the years of 1997 and 1998,
Mr. Kaufman also served as the Director of Strategic Accounts for IDX Systems
Corporation. Between 1995 and 1997 served as Director of Product Marketing and
Development for IDX Systems Corporation.
VOTE REQUIRED
The affirmative vote of the holders of the greater of (1) a majority of
the voting power of the shares represented in person or by proxy at the Annual
Meeting, or (2) a majority of the voting power of the minimum number of shares
entitled to vote that would constitute a quorum for the transaction of business
at the Annual Meeting, is required for election to the Board of Directors of
each of the six nominees named above. A shareholder who abstains with respect to
the election of directors is considered to be present and entitled to vote on
the election of directors at the Annual Meeting, and is in effect casting a
negative vote, but a shareholder (including a broker) who does not give
authority to a proxy to vote, or withholds authority to vote on the election of
directors, shall not be considered present and entitled to vote on the election
of directors. If a proxy is signed and returned without indicating any voting
instructions, the shares represented by such proxy will be voted FOR the
election of the foregoing nominees. If any nominee should withdraw or otherwise
become unavailable for reasons not presently known, the proxies which would have
otherwise been voted for such nominee will be voted for such substitute nominee
as may be selected by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR ALL OF
THE NOMINEES LISTED ABOVE.
BOARD COMMITTEES
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The standing committees of the Board of Directors for the fiscal year
ended December 31, 2000 were as follows:
NAME OF COMMITTEE MEMBERSHIP
----------------- ----------
Compensation Committee Irwin Kaufman, Richard Dana and Dennis Staal
Audit Committee Irwin Kaufman, Richard Dana and Dennis Staal
During fiscal 2000, the Board of Directors held three meetings and
there were two meetings of the Company's Compensation Committee. During fiscal
2000, directors and committee members sometimes took action without formal
meetings by written consent of all of such members. All of the Company's
directors were present for at least 75 percent of the meetings of the Board, and
each of the committee members were present for at least 75 percent of all
committee meetings in 2000. All of the directors of the Company who were in
office at the end of fiscal 2000 resigned as of April 30, 2001, the effective
date of the Meteor Industries-activeIQ Technologies merger.
The Company's current Compensation Committee, which consists of Messrs.
Eibensteiner, Weiss and Kaufman, provides recommendations concerning salaries
and bonuses for officers of the Company and stock options for officers and
employees of the Company. The Company's current Audit Committee also consists of
Messrs. Eibensteiner, Weiss and Kaufman, all of whom are "independent directors"
within the meaning of the rules and regulations of the Nasdaq Stock Market. The
function of the Audit Committee is, among other things, to review the extent and
scope of the audit and non-audit services rendered by the Company's independent
accountants, review internal accounting procedures and controls, review the
internal audit function of the Company and review the independence of the
Company's independent accountants. A copy of the Company's Audit Committee
Charter is attached hereto as EXHIBIT A.
COMPENSATION OF DIRECTORS
Directors do not presently receive any compensation from the Company
for attending Board or Committee meetings, although the Company does reimburse
directors for expenses incurred in attending such meetings.
CERTAIN TRANSACTIONS
Immediately prior to the Meteor Industries-activeIQ Technologies merger
transaction, which was completed on April 30, 2001, the Company sold all of its
assets relating to its former oil and gas distribution business to Capco Energy,
Inc. Ilyas Chaudary, Dennis Staal and Irwin Kaufman, all of whom were directors
of the Company during fiscal 2000, are also directors of Capco Energy. In
consideration for the assets, the Company received from Capco Energy cash in the
amount of $4,697,501, a 9-month promissory note in the amount of $500,000 and
100,833 shares of the Company's common stock, which were held by Capco Energy.
During fiscal 2000, the Company also had total sales to Capco of $9,494,000 and
lease income of $268,000. Since April 30, 2001, no officer or director of the
Company has had any relationship with Capco Energy.
In satisfaction of a subscription receivable for the purchase of
100,000 shares of the Company's common stock, Ronald Eibensteiner, a member of
the Company's board of directors, delivered to the Company a cash payment in the
amount of $75,000 and a 2-month promissory note in the principal
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amount of $200,000. Interest accrues on the principal balance at 6.75 percent
per annum, the prime rate for short-term borrowings as of the date of the note.
During the 2000 fiscal year, the Company entered into a consulting
agreement with Richard Dana, one of its former directors. Total fees paid to Mr.
Dana in fiscal 2000 pursuant to the consulting agreement were $67,500.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended (the "1934 Act"),
requires the Company's directors, executive officers and beneficial owners of
more than 10 percent of the Company's common stock to file with the Securities
and Exchange Commission certain reports regarding their ownership of common
stock or any changes in such ownership. Executive officers, directors and
greater than 10 percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms that they file.
Based solely upon the review of copies of such reports received by it,
and/or written representations from certain reporting persons that no Forms 5
were required for such persons, the Company believes that, during the year ended
December 31, 2000, the reporting persons have complied with Section 16(a) of the
1934 Act.
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EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the total compensation paid by the
Company during its last three completed fiscal years to the persons who served
as Chief Executive Officer of the Company and the other most highly compensated
executive officers of the Company during the fiscal year which ended December
31, 2000.
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------- ------------
AWARDS
------
OTHER
ANNUAL SECURITIES
COMPENSATION UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) OPTIONS (#)
--------------------------- ---- ---------- --------- ------------ -----------
Edward J. Names 2000 125,000 0 8,978* 180,000
President and Chief 1999 125,000 0 9,015* 77,069
Executive Officer 1998 105,000 0 8,078* 33,910
-------------
* Represents premiums paid on health insurance policies and the use of
a Company vehicle.
OPTION/SAR GRANTS DURING 2000 FISCAL YEAR
The following table sets forth the options that were granted to the
executive officers named in the Summary Compensation Table during the Company's
last fiscal year which ended December 31, 2000.
PERCENT OF POTENTIAL REALIZABLE VALUE
NUMBER OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTION/SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
----------------------- -------------- -------------- -------------- -------------- -------------- --------------
Edward J. Names .... 15,000 2.1 2.75 4/11/05 37,720 58,400
35,000 4.8 2.75 4/11/05 88,013 136,267
55,000 7.6 2.75 4/11/05 138,306 214,134
75,000 10.4 2.75 4/11/05 188,600 292,002
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS/SARS AT MONEY OPTIONS/SARS AT
SHARES DEC. 31, 2000 DEC. 31, 2000
ACQUIRED VALUE --------------------------------- ---------------------------------
NAME ON EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------------- ---------------- ---------- ------------- --------------- ------------- ---------------
Edward J. Names .......... 0 0 393,979 244,979 0 0
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EMPLOYMENT ARRANGEMENTS AND COMPENSATION OF CURRENT EXECUTIVE OFFICERS
On April 30, 2001, the effective time of the Meteor Industries-activeIQ
Technologies merger transaction, and in accordance with the terms of such
transaction, all of the Company's officers and directors resigned. Since that
date, Kenneth W. Brimmer has served as the Company's Chairman, Chief Executive
Officer and Chief Financial Officer, and D. Bradly Olah has served as the
Company's President and Chief Operating Officer in addition to being a member of
the Company's board of directors. In addition to Messrs. Brimmer and Olah,
Messrs. Eibensteiner, Kaufman, Levine and Weiss have also served as directors of
the Company since April 30, 2001.
Mr. Brimmer is employed pursuant to an employment agreement with the
Company effective as of May 1, 2001. The initial term of the agreement expires
on May 1, 2004. In addition to an annual salary of $125,000, Mr. Brimmer is
entitled to an annual bonus of up to 75 percent of his salary upon the
achievement of certain corporate objectives and a $250,000 bonus when the
Company has raised an aggregate of $12 million in equity financings, of which
approximately $9 million has been raised to date. Mr. Brimmer was also awarded
an option to purchase up to 250,000 shares of Common Stock at a price of $5.00
per share, which option vests in equal installments over four years.
Mr. Olah is also employed pursuant to an employment agreement with the
Company effective as of May 1, 2001. Pursuant to the terms of that agreement,
Mr. Olah is entitled to an annual salary of $150,000 and is eligible for an
annual bonus of up to 100 percent of his salary upon the achievement of certain
corporate objectives. Mr. Olah was also awarded options to purchase up to
300,000 shares of the Company's Common Stock at a price of $5.00 per share,
which option vests in equal installments over four years.
Each of Mr. Brimmer's and Mr. Olah's employment agreements further
provide that in the event their respective employment with the Company is
terminated without "cause" (as defined therein), they are entitled to a lump sum
payment equal to their most recent base salary. Further, in the event there is a
"change of control" of the Company and their respective employment is terminated
within one year of such change of control, then they are entitled to receive
their respective base salaries for a period of 24 months. If Mr. Brimmer or Mr.
Olah, respectively, are still employed by the Company on the first anniversary
of a change of control, then they would be entitled to a bonus equal to their
respective then-current base salaries, which shall be in addition to any other
bonus for which either may be eligible. "Change of control" is defined in the
employment agreements to include: (1) when any person becomes the beneficial
owner of 50 percent or more of the combined voting power of the Company; (2) the
shareholders of the Company approve of a plan to merge the Company with another
such that the holders of the Company's outstanding stock immediately prior to
such merger hold less than 50 percent of the stock of the combined entity
following the merger; (3) at least 80 percent of the Company's assets are sold
to an entity not affiliated with the Company; (4) less than a majority of the
board of directors is comprised of persons who are currently directors or who
were appointed by at least a majority of the current directors.
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Compensation of Current Executive Officers
The following table sets forth information with respect to the
compensation of our Chief Executive Officer and our other executives whose total
compensation for the current fiscal year will exceed $100,000.
SHARES
UNDERLYING 2001
NAME AND PRINCIPAL POSITION 2001 SALARY OPTION AWARDS
--------------------------- --------------- -----------------
Kenneth W. Brimmer .............................................. $125,000 250,000
Chairman, Chief Executive Officer and
Chief Financial Officer
D. Bradly Olah .................................................. 150,000 300,000
President, Chief Operating Officer and
Secretary
Options of Current Executive Officers
The following table provides information related to the number of
options held by the Company's current executive officers as of September 30,
2001, including the portion of options that are exercisable and the exercise
prices.
NUMBER OF SHARES UNDERLYING
UNEXERCISED OPTIONS AT SEP. 30, 2001
-------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISE PRICE
------ ----------------- ------------------ ------------------
Kenneth W. Brimmer .............................................. 50,000 200,000 $5.00
Chairman, Chief Executive Officer and 120,000 80,000 1.00
Chief Financial Officer
D. Bradly Olah .................................................. 60,000 240,000 5.00
President, Chief Operating Officer and 60,000 40,000 1.00
Secretary 3,333 0 15.00
COMPENSATION COMMITTEE
The Company's former board of directors (as it existed prior to April
30, 2001) approved the formation of a compensation committee on November 10,
1998. The compensation committee had responsibility to recommend salaries and
short-term and long-term incentive compensation levels for all executive
officers of the Company and its subsidiaries. It also advised the board of
directors on the administration of the Company's Incentive Stock Option Plan,
the 1998 Incentive Equity Plan, and made recommendations concerning bonuses and
other incentive compensation for Company personnel.
During the fiscal year ended December 31, 2000, the compensation
committee consisted of three non-employee directors. The philosophy of the
compensation committee was to provide a compensation package for each executive
officer that incentivizes the individual to fully support the Company's business
objective and to maximize shareholder value. These compensation packages
generally consisted of a base salary, short-term incentives in the form of
discretionary cash bonuses, and long-term incentives in the form of stock
options.
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Since the merger transaction between Meteor Industries and activeIQ
Technologies was pending shortly after the conclusion of the 2000 fiscal year,
the Compensation Committee did not issue a report concerning the compensation of
the Company's officers during the 2000 fiscal year or any recommendation on the
compensation of such officers for the 2001 fiscal year. Subsequent to the
effective date of the merger transaction, the Company's current board of
directors adopted a new compensation committee charter and appointed Messrs.
Eibensteiner, Kaufman and Weiss to serve as committee members. The current
compensation committee has yet to meet, although it intends to do so on a
regular basis in the future.
BOARD AUDIT COMMITTEE
In June 2000, the Company's former board of directors approved the
formation of an audit committee and adopted an audit committee charter. That
audit committee never met, however, and did not issue a report with respect to
the Company's financial statements relating to the year ended December 31, 2000.
Following the completion of the Meteor Industries-activeIQ Technologies
merger, the Company's current board of directors adopted the audit charter
attached hereto as EXHIBIT A and appointed Messrs. Eibensteiner, Kaufman and
Weiss as the committee members, all of whom are "independent" in accordance with
the rules of the Nasdaq Stock Market. The primary purpose of the Audit Committee
is to assist the Board of Directors in fulfilling its oversight responsibilities
relating to accounting reporting practices and the quality and integrity of the
financial reports and other publicly disseminated financial information of the
Company.
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PROPOSAL TO INCREASE THE NUMBER OF SHARES
RESERVED UNDER THE 1999 STOCK OPTION PLAN
(PROPOSAL NO. 2)
In connection with the Meteor Industries-activeIQ Technologies merger,
the Company assumed and continued the activeIQ Technologies 1999 Stock Option
Plan. On July 20, 2001, the Board of Directors approved an amendment to the
Company's 1999 Stock Option Plan (the "Plan"), subject to approval of the
Company's shareholders, to increase the total number of shares reserved for
issuance upon exercise of options to be granted under the Plan. The amendment
increases the number of shares from 1,300,000 to 2,500,000 shares.
SUMMARY OF THE 1999 STOCK OPTION PLAN
The brief summary of the Plan which follows is qualified in its
entirety by reference to the complete text, a copy of which is attached to this
Proxy Statement as EXHIBIT B.
General. The purpose of the Plan is to increase shareholder value and
to advance the interests of the Company by furnishing a variety of economic
incentives ("Incentives") designed to attract, retain and motivate employees of
and consultants to the Company.
The Plan provides that a committee (the "Committee") composed of at
least two disinterested members of the board of directors of the Company may
grant Incentives in the following forms: (a) stock options; (b) stock
appreciation rights; (c) stock awards; (d) restricted stock; (e) performance
shares; and (f) cash awards. Incentives may be granted to participants who are
employees of or consultants to the Company (including officers and directors of
the Company who are also employees of or consultants to the Company) selected
from time to time by the Committee.
The number of shares of common stock which may be issued under the Plan
if this amendment is approved may not exceed 2,500,000 shares, subject to
adjustment in the event of a merger, recapitalization or other corporate
restructuring. This represents approximately 24.3 percent of the outstanding
shares of Common Stock on October 2, 2001. On October 2, 2001, the closing sale
price of the Common Stock as reported by Nasdaq was $3.00 per share.
Stock Options. Under the Plan, the Committee may grant non-qualified
and incentive stock options to eligible participants to purchase shares of
common stock from the Company. The Plan confers on the Committee discretion,
with respect to any such stock option, to determine the number and purchase
price of the shares subject to the option, the term of each option and the time
or times during its term when the option becomes exercisable. The purchase price
for incentive stock options may not be less than the fair market value of the
shares subject to the option on the date of grant. The number of shares subject
to an option will be reduced proportionately to the extent that the optionee
exercises a related SAR. The term of a non-qualified option may not exceed 10
years and one day from the date of grant and the term of an incentive stock
option may not exceed 10 years from the date of grant. Any option shall become
immediately exercisable in the event of specified changes in corporate ownership
or control. The Committee may accelerate the exercisability of any option or may
determine to cancel stock options in order to make a participant eligible for
the grant of an option at a lower price. The Committee may approve the purchase
by the Company of an unexercised stock option for the difference between the
exercise price and the fair market value of the shares covered by such option.
The option price may be paid in cash, check, bank draft or by delivery
of shares of common stock valued at their fair market value at the time of
purchase or by withholding from the shares issuable
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upon exercise of the option shares of common stock valued at their fair market
value or as otherwise authorized by the Committee.
In the event that an optionee ceases to be an employee of or consultant
to the Company for any reason, including death, any stock option or unexercised
portion thereof which was otherwise exercisable on the date of termination of
employment shall expire at the time or times established by the Committee.
Stock Appreciation Rights. A stock appreciation right or a "SAR" is a
right to receive, without payment to the Company, a number of shares, cash or
any combination thereof, the amount of which is determined pursuant to the
formula described below. A SAR may be granted with respect to any stock option
granted under the Plan, or alone, without reference to any stock option. A SAR
granted with respect to any stock option may be granted concurrently with the
grant of such option or at such later time as determined by the Committee and as
to all or any portion of the shares subject to the option.
The Plan confers on the Committee discretion to determine the number of
shares as to which a SAR will relate as well as the duration and exercisability
of a SAR. In the case of a SAR granted with respect to a stock option, the
number of shares of common stock to which the SAR pertains will be reduced in
the same proportion that the holder exercises the related option. The term of a
SAR may not exceed ten years and one day from the date of grant. Unless
otherwise provided by the Committee, a SAR will be exercisable for the same time
period as the stock option to which it relates is exercisable. Any SAR shall
become immediately exercisable in the event of specified changes in corporate
ownership or control. The Committee may accelerate the exercisability of any
SAR.
Upon exercise of a SAR, the holder is entitled to receive an amount
which is equal to the aggregate amount of the appreciation in the shares of
common stock as to which the SAR is exercised. For this purpose, the
"appreciation" in the shares consists of the amount by which the fair market
value of the shares of common stock on the exercise date exceeds (a) in the case
of a SAR related to a stock option, the purchase price of the shares under the
option or (b) in the case of a SAR granted alone, without reference to a related
stock option, an amount determined by the Committee at the time of grant. The
Committee may pay the amount of this appreciation to the holder of the SAR by
the delivery of common stock, cash, or any combination of common stock and cash.
Restricted Stock. Restricted stock consists of the sale or transfer by
the Company to an eligible participant of one or more shares of common stock
which are subject to restrictions on their sale or other transfer by the
employee. The price at which restricted stock will be sold will be determined by
the Committee, and it may vary from time to time and among employees and may be
less than the fair market value of the shares at the date of sale. All shares of
restricted stock will be subject to such restrictions as the Committee may
determine. Subject to these restrictions and the other requirements of the Plan,
a participant receiving restricted stock shall have all of the rights of a
shareholder as to those shares.
Stock Awards. Stock awards consist of the transfer by the Company to an
eligible participant of shares of common stock, without payment, as additional
compensation for services to the Company. The number of shares transferred
pursuant to any stock award will be determined by the Committee.
Performance Shares. Performance shares consist of the grant by the
Company to an eligible participant of a contingent right to receive cash or
payment of shares of common stock. The performance shares shall be paid in
shares of common stock to the extent performance objectives set forth in the
grant are achieved. The number of shares granted and the performance criteria
will be determined by the Committee.
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Non-Transferability of Most Incentives. No stock option, SAR,
performance share or restricted stock granted under the Plan is transferable by
its holder, except in the event of the holder's death, by will or the laws of
descent and distribution. During an employee's lifetime, an Incentive may be
exercised only by him or her or by his or her guardian or legal representative.
Amendment to the Plan. The Board of Directors may amend or discontinue
the Plan at any time. However, no such amendment or discontinuance may, subject
to adjustment in the event of a merger, recapitalization, or other corporate
restructuring, (a) change or impair, without the consent of the recipient
thereof, an Incentive previously granted, (b) materially increase the maximum
number of shares of Common Stock which may be issued to all participants under
the Plan, (c) materially change or expand the types of Incentives that may be
granted under the Plan, (d) materially modify the requirements as to eligibility
for participation in the Plan, or (e) materially increase the benefits accruing
to participants. Certain Plan amendments require shareholder approval, including
amendments which would materially increase benefits accruing to participants,
increase the number of securities issuable under the Plan, or change the
requirements for eligibility under the Plan.
Federal Income Tax Consequences. The following discussion sets forth
certain United States income tax considerations concerning the ownership of
common stock. These tax considerations are stated in general terms and are based
on the Internal Revenue Code of 1986, as amended, regulations thereunder and
judicial and administrative interpretations thereof. This discussion does not
address state or local tax considerations with respect to the ownership of
common stock. Moreover, the tax considerations relevant to ownership of common
stock may vary depending on a holder's particular status.
Under existing Federal income tax provisions, a participant who
receives a stock option, performance shares or a SAR under the Plan or who
purchases or receives shares of restricted stock under the Plan which are
subject to restrictions which create a "substantial risk of forfeiture" (within
the meaning of section 83 of the Internal Revenue Code) will not normally
realize any income, nor will the Company normally receive any deduction for
federal income tax purposes, in the year such Incentive is granted. A
participant who receives a stock award under the Plan consisting of shares of
common stock will realize ordinary income in the year of the award and in an
amount equal to the fair market value of the shares of common stock covered by
the award on the date it is made, and the Company will be entitled to a
deduction equal to the amount the participant is required to treat as ordinary
income. A participant who receives a cash award will realize ordinary income in
the year the award is paid equal to the amount thereof, and the amount of the
cash will be deductible by the Company.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the participant will realize ordinary income measured by the
difference between the aggregate purchase price of the shares of common stock as
to which the option is exercised and the aggregate fair market value of shares
of the common stock on the exercise date, and the Company will be entitled to a
deduction in the year the option is exercised equal to the amount the
participate is required to treat as ordinary income.
Options which qualify as incentive stock options are entitled to
special tax treatment. Under existing federal income tax law, if shares
purchased pursuant to the exercise of such an option are not disposed of by the
optionee within two years from the date of granting of the option or within one
year after the transfer of the shares to the optionee, whichever is longer, then
(i) no income will be recognized to the optionee upon the exercise of the
option; (ii) any gain or loss will be recognized to the optionee only upon
ultimate disposition of the shares and, assuming the shares constitute capital
assets in the optionee's hands, will be treated as long-term capital gain or
loss; (iii) the optionee's basis in the shares purchased will be equal to the
amount of cash paid for such shares; and (iv) the Company will not be entitled
to a federal income tax deduction in connection with the exercise of the option.
The Company
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understands that the difference between the option price and the fair market
value of the shares acquired upon exercise of an incentive stock option will be
treated as an "item of tax preference" for purposes of the alternative minimum
tax. In addition, incentive stock options exercised more than three months after
retirement are treated as non-qualified options.
The Company further understands that if the optionee disposes of the
shares acquired by exercise of an incentive stock option before the expiration
of the holding period described above, the optionee must treat as ordinary
income in the year of that disposition an amount equal to the difference between
the optionee's basis in the shares and the lesser of the fair market value of
the shares on the date of exercise or the selling price. In addition, the
Company will be entitled to a deduction equal to the amount the participant is
required to treat as ordinary income.
If the exercise price of an option is paid by surrender of previously
owned shares, the basis of the shares received in replacement of the previously
owned shares is carried over. If the option is a nonstatutory option, the gain
recognized on exercise is added to the basis. If the option is an incentive
stock option, the optionee will recognize gain if the shares surrendered were
acquired through the exercise of an incentive stock option and have not been
held for the applicable holding period. This gain will be added to the basis of
the shares received in replacement of the previously owned shares.
When a stock appreciation right granted pursuant to the Plan is
exercised, the participant will realize ordinary income in the year the right is
exercised equal to the value of the appreciation which he or she is entitled to
receive pursuant to the formula described above, and the Company will be
entitled to a deduction in the same year and in the same amount.
A participant who receives restricted stock or performance shares
subject to restrictions which create a "substantial risk of forfeiture" (within
the meaning of section 83 of the Internal Revenue Code) will normally realize
taxable income on the date the shares become transferable or no longer subject
to substantial risk of forfeiture or on the date of their earlier disposition.
The amount of such taxable income will be equal to the amount by which the fair
market value of the shares of common stock on the date such restrictions lapse
(or any earlier date on which the shares are disposed of) exceeds their purchase
price, if any. A participant may elect, however, to include in income in the
year of purchase or grant the excess of the fair market value of the shares of
common stock (without regard to any restrictions) on the date of purchase or
grant over its purchase price. The Company will be entitled to a deduction for
compensation paid in the same year and in the same amount as income is realized
by the employee.
VOTE REQUIRED
The Board of Directors recommends that the shareholders of the Company
approve the increase in the shares reserved under the 1999 Stock Option Plan.
The affirmative vote of a majority of the shares represented at the Annual
Meeting and entitled to vote is required for approval.
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INDEPENDENT PUBLIC ACCOUNTANTS
CHANGE IN INDEPENDENT ACCOUNTANTS
Following the Meteor Industries-activeIQ Technologies merger, which was
completed April 30, 2001, the Company's board of directors selected Arthur
Andersen LLP to be the Company's independent accountants for the fiscal year
ending December 31, 2001. Arthur Andersen LLP had reviewed and audited the
financial statements of activeIQ Technologies Inc. for the years ended December
31, 1998, 1999 and 2000. The Company expects that a representative of Arthur
Andersen LLP will be in attendance at the Annual Meeting and will be available
to answer shareholder questions.
Prior to April 30, 2001, the Company's independent public accountants
were PricewaterhouseCoopers LLP. In connection with its audits of the Company's
financial statements for the fiscal years ended December 31, 1999 and 2000,
there had been no disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreements if not resolved to the satisfaction of
PricewaterhouseCoopers LLP would have cause them to make reference to such
disagreements in their report on the financial statements for such years. The
reports of PricewaterhouseCoopers LLP for the past two completed fiscal years
contained no adverse opinion or disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope or accounting principle. The Company
does not expect any representatives of PricewaterhouseCoopers LLP to attend the
Annual Meeting.
FEES BILLED TO COMPANY BY PRICEWATERHOUSECOOPERS LLP DURING FISCAL 2000
Audit Fees. Audit fees billed to the Company by PricewaterhouseCoopers
LLP during the Company's 2000 fiscal year for review of the Company's annual
financial statements and those financial statements included in the Company's
quarterly reports on Form 10-Q totaled $171,600.
Financial Information Systems Design and Implementation Fees. The
Company did not engage PricewaterhouseCoopers LLP to provide advice to the
Company regarding financial information systems design and implementation during
the fiscal year ended December 31, 2000.
All Other Fees. Fees billed to the Company by PricewaterhouseCoopers
LLP during the Company's 2000 fiscal year for all other non-audit services
rendered to the Company, including tax related services, totaled $318,984.
The board of directors of the Company, as it existed prior to April 30,
2001, reviewed the fees billed to the Company by PricewaterhouseCoopers LLP
during fiscal year 2000 and determined that the receipt of these fees by
PricewaterhouseCoopers LLP is compatible with that firm maintaining its
independence. The Company's board of directors (as it existed prior to April 30,
2001) also considered whether provision of the above non-audit services was
compatible with PricewaterhouseCoopers LLP's independence and determined that
such services were compatible with maintaining that firm's independence.
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SHAREHOLDER PROPOSALS
Any shareholder who desires to submit a proposal for action by the
shareholders at the 2002 annual meeting must submit such proposal in writing to
Active IQ Technologies, Inc., 601 Carlson Parkway, Suite 1550, Minnetonka,
Minnesota 55305, Attention: Chairman by January 5, 2002. Due to the complexity
of the respective rights of the shareholders and the Company in this area, any
shareholder desiring to propose such an action is advised to consult with his or
her legal counsel with respect to such rights. It is suggested that any such
proposal be submitted by certified mail, return receipt requested.
On May 21, 1998, the SEC adopted an amendment to Rule 14a-4, as
promulgated under the Securities and Exchange Act of 1934. The amendment to
14a-4(c)(1) governs the Company's use of its discretionary proxy voting
authority with respect to a shareholder proposal which the stockholder has not
sought to include in the Company's proxy statement. The new amendment provides
that if a proponent of a proposal fails to notify the Company at least 45 days
before the date of mailing of the prior year's proxy statement, then the
management proxies will be allowed to use their discretionary voting authority
when the proposal is raised at the meeting, without any discussion of the matter
in the proxy statement.
With respect to the Company's 2002 Annual Meeting of Shareholders, if
the Company is not provided notice of a shareholder proposal which the
shareholder has not previously sought to include in the Company's proxy
statement by January 5, 2002, the management proxies will be allowed to use
their discretionary authority as outlined above.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at
the meeting. If any other matter does properly come before the meeting, the
appointees named in the Proxy will vote the Proxies in accordance with their
best judgment.
The Company will furnish, without charge, a copy of its Annual Report
on form 10-K for the fiscal year ended December 31, 2000 to any shareholder of
the Company upon written request. Such requests should be sent to Active IQ
Technologies, Inc., Mark D. Dacko, Controller, 601 Carlson Parkway, Suite 1550,
Minnetonka, MN 55305.
By order of Board of Directors,
/s/ Kenneth W. Brimmer
----------------------
Kenneth W. Brimmer
Chairman and Chief Executive Officer
Dated: October 5, 2001
Minnetonka, Minnesota
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EXHIBIT A
ACTIVE IQ TECHNOLOGIES, INC.
AUDIT COMMITTEE CHARTER
There shall be a Committee of Active IQ Technologies, Inc. ("AIQ")
Board of Directors to be known as the Audit Committee (the "Committee"). The
Committee shall be composed of outside directors who are independent of
management of AIQ and are free of any relationship that in the opinion of the
Board of Directors would interfere with their exercise of independent judgment
as a Committee member ("Independent Directors"). The Committee shall consist of
at least three Independent Directors.
The Committee shall provide assistance to the Board of Directors in
fulfilling their responsibility to shareholders, potential shareholders and the
Investment community relating to the quality and integrity of AIQ'S accounting
and financial reporting practices. In so doing, it is the responsibility of the
Committee to maintain free and open means of communications between the
directors, the independent auditors, and the financial management of AIQ.
In carrying out these responsibilities, the Committee will:
1. Review and recommend to the Board of Directors, the engagement
or termination of AIQ'S independent auditors.
2. Meet with the independent auditors and financial management of
AIQ to review the scope of the proposed audit for each year
and the audit procedures to be utilized and, at the conclusion
thereof, review such audit including any comments or
recommendations of the independent auditors.
3. Review the independence of AIQ'S independent auditors.
4. Review with the independent auditors and with AIQ'S financial
accounting personnel, the adequacy and effectiveness of
accounting and financial controls of AIQ and consider any
recommendations for improvement of such internal controls.
5. Prior to the release of the annual report to shareholders, the
Committee should review the financial statements with the
independent auditors to ensure satisfactory disclosure and
content. Any changes in accounting principles should be
reviewed.
6. Examine and consider such other matters in relation to the
internal and external audit of AIQ'S accounts and in relation
to the financial affairs of and its accounts as the Committee
may, in its own discretion, determine to be desirable.
7. Consult directly with AIQ'S independent auditors with respect
to the above matters, to the extent the Committee may, in its
own discretion, determine to be advisable.
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8. Within the scope of its duties, the Committee has the right
and the responsibility to investigate or have investigated any
variance or matter of concern brought to its attention. It
specifically has the power to consult with legal counsel or
retain outside counsel for this purpose if, in its judgment,
that is appropriate.
9. Review and approve (with the concurrence of a majority of the
disinterested directors of AIQ) any transactions with
affiliated parties.
10. At all meetings of the Committee, sufficient opportunity
should be made available for the independent auditors to meet
with members of the Committee without members of the
management present. Among items for potential discussion in
these meetings are the independent auditors evaluation of
AIQ'S financial and accounting personnel, and the cooperation
which the independent auditors received during the course of
their audit.
11. Minutes and Reports of all meetings of the Committee shall be
given to the Board of Directors.
In carrying out their responsibilities, the Committee should remain
operationally flexible in order that it can best react to changing conditions
and environment and to assure the directors and shareholders that the corporate
accounting and financial reporting practices of AIQ are in accordance with all
requirements and are of the highest quality.
It is acknowledged that the scope of activity being undertaken by the
Committee is evolving actively at this time. Therefore, the Board may choose to
alter or amend this charter at any time.
A-2
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EXHIBIT B
ACTIVE IQ TECHNOLOGIES, INC.
1999 STOCK OPTION PLAN
(amended as of March 20, 2000)
1. Purpose. The purpose of the 1999 Stock Option Plan (the "Plan") of
Active IQ Technologies, Inc. (the "Company") is to increase shareholder value
and to advance the interests of the Company by attracting, retaining and
motivating employees and certain key consultants of the Company by furnishing
opportunities to purchase or receive shares of Common Stock, $.01 par value, of
the Company ("Common Stock") pursuant to the Plan.
2. Administration. The Plan shall be administered by the Board of
Directors or by a stock option committee (the "Committee") of the Board of
Directors of the Company. The Committee shall consist of not less than two
directors of the Company and shall be appointed from time to time by the Board
of Directors of the Company. If the Company stock becomes the subject of a
public offering, the Committee shall then consist of not less than two directors
who shall be appointed from time to time by the Board, each of which such
appointees shall be a "disinterested person" within the meaning of Rule 16b-3 of
the Securities Exchange Act of 1934, and the regulations promulgated thereunder
(the "1934 Act"). The Board of Directors of the Company may from time to time
appoint members of the Committee in substitution for, or in addition to, members
previously appointed, and may fill vacancies, however caused, in the Committee.
The Committee shall select one of its members as its chairman and shall hold its
meetings at such times and places, as it shall deem advisable. A majority of the
Committee's members shall constitute a quorum. All action of the Committee shall
be taken by the majority of its members. Any action may be taken by a written
instrument signed by majority of the members and actions so taken shall be fully
effective as if it had been made by a majority vote at a meeting duly called and
held. The Committee may appoint a secretary, shall keep minutes of its meetings
and shall make such rules and regulations for the conduct of its business as it
shall deem advisable. The Committee shall have complete authority to award
Incentives under the Plan, to interpret the Plan, and to make any other
determination which it believes necessary and advisable for the proper
administration of the Plan. The Committee's decisions and matters relating to
the Plan shall be final and conclusive on the Company and its participants.
3. Eligible Participants. Employees of or consultants to the Company or
its subsidiaries or affiliates (including officers and directors, but excluding
directors who are not also employees of or consultants to the Company or its
subsidiaries or affiliates), shall become eligible to receive Incentives under
the Plan when designated by the Committee. Participants may be designated
individually or by groups or categories (for example, by pay grade), as the
Committee deems appropriate. Participation by officers of the Company or its
subsidiaries or affiliates and any performance objectives relating to such
officers must be approved by the Committee. Participation by others and any
performance objectives relating to others may be approved by groups or
categories (for example, by pay grade) and authority to designate participants
who are not officers and to set or modify such targets may be delegated.
4. Types of Incentives. Incentives under the Plan may be granted in any
one or a combination of the following forms: (a) incentive stock options and
non-statutory stock options (section 6); (b) stock appreciation rights ("SARs")
(section 7); (c) stock awards (section 8); (d) restricted stock (section 8); and
(e) performance shares (section 9).
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5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as provided in
Section 10.6, the number of shares of Common Stock which may be issued
under the Plan shall not exceed One Million Three Hundred Thousand
(1,300,000) shares of Common Stock.
5.2. Cancellation. To the extent that cash in lieu of shares
of Common Stock is delivered upon the exercise of a SAR pursuant to
Section 7.4, the Company shall be deemed, for purposes of applying the
limitation on the number of shares, to have issued the greater of the
number of shares of Common Stock which it was entitled to issue upon
such exercise or on the exercise of any related option. In the event
that a stock option or SAR granted hereunder expires or is terminated
or canceled unexercised as to any shares of Common Stock, such shares
may again be issued under the Plan either pursuant to stock options,
SARs or otherwise. In the event that shares of Common Stock are issued
as restricted stock or pursuant to a stock award and thereafter are
forfeited or reacquired by the Company pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired shares may again be
issued under the Plan, either as restricted stock, pursuant to stock
awards or otherwise. The Committee may also determine to cancel, and
agree to the cancellation of, stock options in order to make a
participant eligible for the grant of a stock option at a lower price
than the option to be canceled.
5.3. Type of Common Stock. Common Stock issued under the Plan
in connection with stock options, SARs, performance shares, restricted
stock or stock awards, may be authorized and unissued shares.
6. Stock Options. A stock option is a right to purchase shares of
Common Stock from the Company. Each stock option granted by the Committee under
this Plan shall be subject to the following terms and conditions:
6.1. Price. The option price per share shall be determined by
the Committee.
6.2. Number. The number of shares of Common Stock subject to
the option shall be determined by the Committee, subject to adjustment
as provided in Section 10.6. The number of shares of Common Stock
subject to a stock option shall be reduced in the same proportion that
the holder thereof exercises a SAR if any SAR is granted in conjunction
with or related to the stock option.
6.3. Duration and Time for Exercise. Subject to earlier
termination as provided in Section 10.4, the term of each stock option
shall be determined by the Committee but shall not exceed ten years and
one day from the date of grant. Each stock option shall become
exercisable at such time or times during its term as shall be
determined by the Committee at the time of grant. No stock option may
be exercised during the first six months of its term. Except as
provided by the preceding sentence, the Committee may accelerate the
exercisability of any stock option. Subject to the foregoing and with
the approval of the Committee, all or any part of the shares of Common
Stock with respect to which the right to purchase has accrued may be
purchased by the Company at the time of such accrual or at any time or
times thereafter during the term of the option.
6.4. Manner of Exercise. A stock option may be exercised, in
whole or in part, by giving written notice to the Company, specifying
the number of shares of Common Stock to be purchased and accompanied by
the full purchase price for such shares. The option price shall be
B-2
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payable in United States dollars upon exercise of the option and may be
paid by cash; uncertified or certified check; bank draft; by delivery
of shares of Common Stock in payment of all or any part of the option
price, which shares shall be valued for this purpose at the Fair Market
Value on the date such option is exercised; by instructing the Company
to withhold from the shares of Common Stock issuable upon exercise of
the stock option shares of Common Stock in payment of all or any part
of the option price, which shares shall be valued for this purpose at
the Fair Market Value or in such other manner as may be authorized from
time to time by the Committee. Prior to the issuance of shares of
Common Stock upon the exercise of a stock option, a participant shall
have no rights as a shareholder.
6.5. Incentive Stock Options. Notwithstanding anything in
the Plan to the contrary, the following additional provisions shall
apply to the grant of stock options which are intended to qualify as
Incentive Stock Options (as such term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended):
(a) The aggregate Fair Market Value (determined as of
the time the option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable
for the first time by any participant during any calendar year
(under all of the Company's plans) shall not exceed $100,000.
(b) Any Incentive Stock Option certificate authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events be
consistent with and contain all provisions required in order
to qualify the options as Incentive Stock Options.
(c) All Incentive Stock Options must be granted
within ten years from the earlier of the date on which this
Plan was adopted by Board of Directors or the date this Plan
was approved by the shareholders.
(d) Unless sooner exercised, all Incentive Stock
Options shall expire no later than 10 years after the date of
grant.
(e) The option price for Incentive Stock Options
shall be not less than the Fair Market Value of the Common
Stock subject to the option on the date of grant.
(f) No Incentive Stock Options shall be granted to
any participant who, at the time such option is granted, would
own (within the meaning of Section 422 of the Code) stock
possessing more than 10% of the total combined voting power of
all classes of stock of the employer corporation or of its
parent or subsidiary corporation.
7. Stock Appreciation Rights. A SAR is a right to receive,
without payment to the Company, a number of shares of Common Stock, cash or any
combination thereof, the amount of which is determined pursuant to the formula
set forth in Section 7.4. A SAR may be granted (a) with respect to any stock
option granted under this Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as to all or any
portion of the shares of Common Stock subject to the stock option), or (b)
alone, without reference to any related stock option. Each SAR granted by the
Committee under this Plan shall be subject to the following terms and
conditions:
7.1. Number. Each SAR granted to any participant shall
relate to such number of shares of Common Stock as shall be determined
by the Committee, subject to adjustment as provided in Section 10.6. In
the case of a SAR granted with respect to a stock option, the
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number of shares of Common Stock to which the SAR pertains shall be
reduced in the same proportion that the holder of the option exercises
the related stock option.
7.2. Duration. Subject to earlier termination as provided
in Section 10.4, the term of each SAR shall be determined by the
Committee but shall not exceed ten years and one day from the date of
grant. Unless otherwise provided by the Committee, each SAR shall
become exercisable at such time or times, to such extent and upon such
conditions as the stock option, if any, to which it relates is
exercisable. No SAR may be exercised during the first twelve months of
its term. Except as provided in the preceding sentence, the Committee
may in its discretion accelerate the exercisability of any SAR.
7.3. Exercise. A SAR may be exercised, in whole or in
part, by giving written notice to the Company, specifying the number of
SARs which the holder wishes to exercise. Upon receipt of such written
notice, the Company shall, within 90 days thereafter, deliver to the
exercising holder certificates for the shares of Common Stock or cash
or both, as determined by the Committee, to which the holder is
entitled pursuant to Section 7.4.
7.4. Payment. Subject to the right of the Committee to
deliver cash in lieu of shares of Common Stock (which, as it pertains
to officers and directors of the Company, shall comply with all
requirements of the 1934 Act), the number of shares of Common Stock
which shall be issuable upon the exercise of a SAR shall be determined
by dividing:
(a) the number of shares of Common Stock as to which
the SAR is exercised multiplied by the amount of the
appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair Market
Value of the shares of Common Stock subject to the SAR on the
exercise date exceeds (1) in the case of a SAR related to a
stock option, the purchase price of the shares of Common Stock
under the stock option or (2) in the case of a SAR granted
alone, without reference to a related stock option, an amount
which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 10.6); by
(b) the Fair Market Value of a share of Common Stock on
the exercise date. In lieu of issuing shares of Common Stock
upon the exercise of a SAR, the Committee may elect to pay the
holder of the SAR cash equal to the Fair Market Value on the
exercise date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock
shall be issued upon the exercise of a SAR; instead, the
holder of the SAR shall be entitled to receive a cash
adjustment equal to the same fraction of the Fair Market Value
of a share of Common Stock on the exercise date or to purchase
the portion necessary to make a whole share at its Fair Market
Value on the date of exercise.
8. Stock Awards and Restricted Stock. A stock award consists of
the transfer by the Company to a participant of shares of Common Stock, without
other payment therefor, as additional compensation for services to the Company.
A share of restricted stock consists of shares of Common Stock which are sold or
transferred by the Company to a participant at a price determined by the
Committee (which price shall be at least equal to the minimum price required by
applicable law for the issuance of a share of Common Stock) and subject to
restrictions on their sale or other transfer by the participant. The transfer of
Common Stock pursuant to stock awards and the transfer and sale of restricted
stock shall be subject to the following terms and conditions:
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8.1. Number of Shares. The number of shares to be
transferred or sold by the Company to a participant pursuant to a stock
award or as restricted stock shall be determined by the Committee.
8.2. Sale Price. The Committee shall determine the price,
if any, at which shares of restricted stock shall be sold to a
participant, which may vary from time to time and among participants
and which may be below the Fair Market Value of such shares of Common
Stock at the date of sale.
8.3. Restrictions. All shares of restricted stock
transferred or sold hereunder shall be subject to such restrictions as
the Committee may determine, including, without limitation any or all
of the following:
(a) a prohibition against the sale, transfer, pledge
or other encumbrance of the shares of restricted stock, such
prohibition to lapse at such time or times as the Committee
shall determine (whether in annual or more frequent
installments, at the time of the death, disability or
retirement of the holder of such shares, or otherwise);
(b) a requirement that the holder of shares of
restricted stock forfeit, or (in the case of shares sold to a
participant) resell back to the Company at his or her cost,
all or a part of such shares in the event of termination of
his or her employment or consulting engagement during any
period in which such shares are subject to restrictions
(c) such other conditions or restrictions as the
Committee may deem advisable.
8.4. Escrow. In order to enforce the restrictions imposed
by the Committee pursuant to Section 8.3, the participant receiving
restricted stock shall enter into an agreement with the Company setting
forth the conditions of the grant. Shares of restricted stock shall be
registered in the name of the participant and deposited, together with
a stock power endorsed in blank, with the Company. Each such
certificate shall bear a legend in substantially the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933 or the securities
law of any state. The shares have been acquired for investment
and without a view to their distribution and may not be sold
or otherwise disposed of in the absence of any effective
registration statement for the shares under the Securities Act
of 1933 or unless an exemption from registration is available
under the securities laws.
The transferability of this certificate and the shares of
Common Stock represented by it are subject to the terms and
conditions (including conditions of forfeiture) contained in
the 1999 Stock Option Plan of activeIQ Technologies Inc. (the
"Company"), and an agreement entered into between the
registered owner and the Company. A copy of the Plan and the
agreement is on file in the office of the secretary of the
Company.
8.5. End of Restrictions. Subject to Section 10.5, at the
end of any time period during which the shares of restricted stock are
subject to forfeiture and restrictions on transfer, such shares will be
delivered free of all restrictions to the participant or to the
participant's legal representative, beneficiary or heir.
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8.6. Shareholder. Subject to the terms and conditions of the
Plan, each participant receiving restricted stock shall have all the
rights of a shareholder with respect to shares of stock during any
period in which such shares are subject to forfeiture and restrictions
on transfer, including without limitation, the right to vote such
shares. Dividends paid in cash or property other than Common Stock with
respect to shares of restricted stock shall be paid to the participant
currently.
9. Performance Shares. A performance share consists of an award
which shall be paid in shares of Common Stock, as described below. The grant of
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:
9.1. Performance Objectives. Each performance share will be
subject to performance objectives for the Company or one of its
operating units to be achieved by the end of a specified period. The
number of performance shares granted shall be determined by the
Committee and may be subject to such terms and conditions, as the
Committee shall determine. If the performance objectives are achieved,
each participant will be paid in shares of Common Stock or cash. If
such objectives are not met, each grant of performance shares may
provide for lesser payments in accordance with formulas established in
the award.
9.2. Not Shareholder. The grant of performance shares to a
participant shall not create any rights in such participant as a
shareholder of the Company, until the payment of shares of Common Stock
with respect to an award.
9.3. No Adjustments. No adjustment shall be made in
performance shares granted on account of cash dividends which may be
paid or other rights which may be issued to the holders of Common Stock
prior to the end of any period for which performance objectives were
established.
9.4. Expiration of Performance Share. If any participant's
employment or consulting engagement with the Company is terminated for
any reason other than normal retirement, death or disability prior to
the achievement of the participant's stated performance objectives, all
the participant's rights on the performance shares shall expire and
terminate unless otherwise determined by the Committee. In the event of
termination of employment by reason of death, disability, or normal
retirement, the Committee, in its own discretion may determine what
portions, if any, of the performance shares should be paid to the
participant.
10. General.
10.1. Effective Date. The Plan will become effective on June
1, 1999.
10.2. Duration. The Plan shall remain in effect until all
Incentives granted under the Plan have either been satisfied by the
issuance of shares of Common Stock or the payment of cash or been
terminated under the terms of the Plan and all restrictions imposed on
shares of Common Stock in connection with their issuance under the Plan
have lapsed. No Incentives may be granted under the Plan after the
tenth anniversary of the date the Plan is approved by the shareholders
of the Company.
10.3. Non-transferability of Incentives. No stock option, SAR,
restricted stock or performance award may be transferred, pledged or
assigned by the holder thereof (except, in the event of the holder's
death, by will or the laws of descent and distribution to the limited
extent
B-6
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provided in the Plan or in the Incentive) or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder, and
the Company shall not be required to recognize any attempted assignment
of such rights by any participant. Notwithstanding the preceding
sentence, stock options may be transferred by the holder thereof to
family members, trusts or charities. During a participant's lifetime,
an Incentive may be exercised only by him or her, by his or her
guardian or legal representative or, in the case of stock options, by
the transferees permitted by the preceding sentence.
10.4. Effect of Termination of Employment or Death. In the
event that a participant ceases to be an employee of or consultant to
the Company for any reason, including death, any Incentives may be
exercised or shall expire at such times as may be determined by the
Committee.
10.5. Additional Condition. Notwithstanding anything in this
Plan to the contrary: (a) the Company may, if it shall determine it
necessary or desirable for any reason, at the time of award of any
Incentive or the issuance of any shares of Common Stock pursuant to any
Incentive, require the recipient of the Incentive, as a condition to
the receipt thereof or to the receipt of shares of Common Stock issued
pursuant thereto, to deliver to the Company a written representation of
present intention to acquire the Incentive or the shares of Common
Stock issued pursuant thereto for his own account for investment and
not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of any Incentive
or the shares of Common Stock issuable pursuant thereto is necessary on
any securities exchange or under any federal or state securities or
blue sky law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with the award of any Incentive, the issuance of shares of
Common Stock pursuant thereto, or the removal of any restrictions
imposed on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restrictions shall
not be removed, as the case may be, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Company.
10.6. Adjustment. In the event of any merger, consolidation or
reorganization of the Company with any other corporation or
corporations, there shall be substituted for each of the shares of
Common Stock then subject to the Plan, including shares subject to
restrictions, options, or achievement of performance share objectives,
the number and kind of shares of stock or other securities to which the
holders of the shares of Common Stock will be entitled pursuant to the
transaction. In the event of any recapitalization, stock dividend,
stock split, combination of shares or other change in the Common Stock,
the number of shares of Common Stock then subject to the Plan,
including shares subject to restrictions, options or achievements of
performance shares, shall be adjusted in proportion to the change in
outstanding shares of Common Stock. In the event of any such
adjustments, the purchase price of any option, the performance
objectives of any Incentive, and the shares of Common Stock issuable
pursuant to any Incentive shall be adjusted as and to the extent
appropriate, in the discretion of the Committee, to provide
participants with the same relative rights before and after such
adjustment.
10.7. Incentive Plans and Agreements. Except in the case of
stock awards or cash awards, the terms of each Incentive shall be
stated in a plan or agreement approved by the Committee. The Committee
may also determine to enter into agreements with holders of options to
reclassify or convert certain outstanding options, within the terms of
the Plan, as Incentive
B-7
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Stock Options or as non-statutory stock options and in order to
eliminate SARs with respect to all or part of such options and any
other previously issued options.
10.8. Withholding.
(a) The Company shall have the right to withhold from
any payments made under the Plan or to collect as a condition
of payment, any taxes required by law to be withheld. At any
time when a participant is required to pay to the Company an
amount required to be withheld under applicable income tax
laws in connection with a distribution of Common Stock or upon
exercise of an option or SAR, the participant may satisfy this
obligation in whole or in part by electing (the "Election") to
have the Company withhold from the distribution shares of
Common Stock having a value up to the amount required to be
withheld. The value of the shares to be withheld shall be
based on the Fair Market Value of the Common Stock on the date
that the amount of tax to be withheld shall be determined
("Tax Date").
(b) Each Election must be made prior to the Tax Date.
The Committee may disapprove of any Election, may suspend or
terminate the right to make Elections, or may provide with
respect to any Incentive that the right to make Elections
shall not apply to such Incentive. An Election is irrevocable.
(c) If a participant is an officer or director of the
Company within the meaning of Section 16 of the 1934 Act, then
an Election must comply with all of the requirements of the
1934 Act.
10.9. No Continued Employment, Engagement or Right to
Corporate Assets. No participant under the Plan shall have any right,
because of his or her participation, to continue in the employ of, or
to continue his or her consulting engagement for, the Company for any
period of time or to any right to continue his or her present or any
other rate of compensation. Nothing contained in the Plan shall be
construed as giving an employee, a consultant, such person's
beneficiaries or any other person any equity or interests of any kind
in the assets of the Company or creating a trust of any kind or a
fiduciary relationship of any kind between the Company and any such
person.
10.10. Deferral Permitted. Payment of cash or distribution
of any shares of Common Stock to which a participant is entitled under
any Incentive shall be made as provided in the Incentive. Payment may
be deferred at the option of the participant if provided in the
Incentive.
10.11. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time. However, no such amendment or
discontinuance shall, subject to adjustment under Section 10.6, (a)
change or impair, without the consent of the recipient, an Incentive
previously granted, (b) increase the maximum number of shares of Common
Stock which may be issued to all participants under the Plan, (c)
change or expand the types of Incentives that may be granted under the
Plan, (d) change the class of persons eligible to receive Incentives
under the Plan, or (e) materially increase the benefits accruing to
participants under the Plan.
10.12 Immediate Acceleration of Incentives. Notwithstanding
any provision in this Plan or in any Incentive to the contrary, (a) the
restriction on all shares of restricted stock award shall lapse
immediately, (b) all outstanding options and SARs will become
exercisable immediately, and (c) all performance shares shall be deemed
to be met and payment made
B-8
30
immediately, if any of the following events occur unless otherwise
determined by the Board of Directors and a majority of the Continuing
Directors (as defined below):
(1) any person or group of persons becomes the
beneficial owner of 30% or more of any equity security of the
Company entitled to vote for the election of directors; or
(2) a majority of the members of the Board of
Directors of the Company is replaced within the period of less
than two years by directors not nominated and approved by the
Board of Directors; or
(3) the shareholders of the Company approve the sale
or other disposition of all or substantially all of the
Company's assets (including a plan of liquidation); or
(4) the shareholders of the Company approve the
reorganization, merger or consolidation of the Company or a
statutory exchange of outstanding voting securities of the
Company, unless, immediately following such reorganization,
merger, consolidation or exchange, all or substantially all of
the persons who were the beneficial owners, respectively, of
voting securities and Common Stock of the Company immediately
prior to such reorganization, merger, consolidation or
exchange beneficially own, directly or indirectly, more than
50% of, respectively, the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors and the then outstanding shares of
common stock, as the case may be, of the corporation resulting
from such reorganization, merger, consolidation or exchange in
substantially the same proportions as their ownership,
immediately prior to such reorganization, merger,
consolidation or exchange, of the voting securities and Common
Stock of the Company, as the case may be.
For purposes of this Section 10.12, beneficial ownership by a
person or group of persons shall be determined in accordance with
Regulation 13D (or any similar successor regulation) promulgated by the
Securities and Exchange Commission pursuant to the 1934 Act. Beneficial
ownership of more than 30% of an equity security may be established by
any reasonable method, but shall be presumed conclusively as to any
person who files a Schedule 13D report with the Securities and Exchange
Commission reporting such ownership. If the restrictions and
forfeitability periods are eliminated by reason of provision (1), the
limitations of this Plan shall not become applicable again should the
person cease to own 30% or more of any equity security of the Company.
For purposes of this Section 10.12, "Continuing Directors" are
directors (a) who were in office prior to the time of any of provisions
(1), (2) or (3) occurred or any person publicly announced an intention
to acquire 20% or more of any equity security of the Company, (b)
directors in office for a period of more than two years, and (c)
directors nominated and approved by the Continuing Directors.
10.13. Dilution and Other Adjustments. In the event of any
change in the outstanding Common Stock of the Company by reason of any
stock split, stock dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, a sale by the
Company of substantially all of its assets, any distribution to
shareholders other than a normal cash dividend, or other extraordinary
or unusual event, the number or kind of shares subject to an Incentive,
and the option price per share under all outstanding options shall be
automatically adjusted so that the proportionate interest of the
B-9
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participant shall be maintained as before the occurrence of such event;
such adjustment in outstanding Incentives shall be made without change
in any option exercise price applicable to the unexercised portion of
such Incentive and with a corresponding adjustment in the option
exercise price per share, if any, and such adjustment shall be
conclusive and binding for all purposes of the Plan.
10.14. Definition of Fair Market Value. For purposes of this
Plan, the "Fair Market Value" of a share of Common Stock at a specified
date shall, unless otherwise expressly provided in this Plan, be the
amount which the Committee determines in good faith to be 100% of the
fair market value of such a share as of the date in question; provided,
however, that notwithstanding the foregoing, if such shares are listed
on a U.S. securities exchange or are quoted on the Nasdaq National
Market System or Nasdaq SmallCap Stock Market ("Nasdaq"), then Fair
Market Value shall be determined by reference to the last sale price of
a share of Common Stock on such U.S. securities exchange or Nasdaq on
the applicable date. If such U.S. securities exchange or Nasdaq is
closed for trading on such date, or if the Common Stock does not trade
on such date, then the last sale price used shall be the one on the
date the Common Stock last traded on such U.S. securities exchange or
Nasdaq.
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ACTIVE IQ TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 30, 2001
The undersigned, a shareholder of Active IQ Technologies, Inc., hereby
appoints Kenneth W. Brimmer and D. Bradly Olah, and each of them, as proxies,
with full power of substitution, to vote on behalf of the undersigned the number
of shares which the undersigned is then entitled to vote, at the Annual Meeting
of Shareholders of Active IQ Technologies, Inc. to be held at 601 Carlson
Parkway, 2nd Floor, Conference Room #3, Minnetonka, Minnesota, 55305, on
Tuesday, October 30, 2001, at 10:00 a.m., and at any and all adjournments
thereof, with all the powers which the undersigned would possess if personally
present, upon:
(1) ELECTION OF DIRECTORS
[ ] FOR all nominees [ ] WITHHOLD
AUTHORITY to vote for (except as marked to the contrary below) all nominees
listed below:
1 - Kenneth W. Brimmer 4 - Steven R. Levine
2 - Ronald E. Eibensteiner 5 - D. Bradly Olah
3 - Kenneth S. Kaufman 6 - Steven A. Weiss
INSTRUCTION: To withhold authority
to vote for any indicated nominee,
write the number(s) of that ----------------------------
nominee(s) in the box provided to | |
the right. ----------------------------
(2) To approve an amendment to the Company's 1999 Stock Option Plan to
increase the number of shares of Common Stock reserved for issuance
thereunder from 1,300,000 shares to 2,500,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Upon such other business as may properly come before the meeting or any
adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR APPROVAL OF
THE AMENDMENT TO THE 1999 STOCK OPTION PLAN.
(Continued, and TO BE COMPLETED AND SIGNED, on the reverse side)
33
(Continued from other side)
The undersigned hereby revokes all previous proxies relating to the
shares covered hereby and acknowledges receipt of the Notice and Proxy Statement
relating to the Annual Meeting of Shareholders.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. When
properly executed, this proxy will be voted on the proposals set forth herein as
directed by the shareholder, but if no direction is made in the space provided,
this proxy will be voted FOR the election of all nominees for director and FOR
approval of the amendment to the 1999 Stock Option Plan.
Dated , 2001
------------------------------
x
--------------------------------------------
x
--------------------------------------------
(Shareholder must sign exactly as the name appears at
left. When signed as a corporate officer, executor,
administrator, trustee, guardian, etc., please give
full title as such. Both joint tenants must sign.)