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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A/a INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Section 240.14a-11(c) or Section 240.14a-12
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VIEW SYSTEMS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person Filing Proxy Statement, if not 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: Not
Applicable
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(2) Aggregate number of securities to which transaction applies: Not
Applicable
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): Not
Applicable
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(3) Proposed maximum aggregate value of transaction: Not Applicable
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(5) Total fee paid: Not Applicable
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[ ] Fee paid previously with preliminary materials.
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[ ] 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: Not Applicable
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(2) Form, Schedule or Registration Statement No.: Not Applicable
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(3) Filing Party: Not Applicable
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(4) Date Filed: Not Applicable
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VIEW SYSTEMS, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 28, 2000
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TO THE STOCKHOLDERS OF VIEW SYSTEMS, INC.:
It is my pleasure to invite you to the Annual Meeting of Stockholders (the
"Annual Meeting") of VIEW SYSTEMS, INC., a Florida corporation (the "Company"),
at 9:00 a.m.,Eastern Standard Time, on July 28, 2000, at the offices of View
Systems, Inc., 9693 Gerwig Lane, Suite O, Columbia, Maryland 21046, for the
following purposes:
1. To elect five (4) directors to serve for the ensuing year and until their
successors are elected;
2. To appoint Stegman & Co. as our independent auditors for the year ending
December 31, 2000;
3. To adopt our View Systems, Inc. 2000 Restricted Share Plan;
4. To transact such other business as may properly come before the Annual
Meeting or any postponements or adjournments thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
Only stockholders of record at the close of business on July 10, 2000, are
entitled to notice of and to vote at the Annual Meeting. We are mailing proxy
solicitation material to our stockholders commencing on or about July 10, 2000.
We must receive your proxy on or before July 26, 2000, in order for your proxy
to be voted at the meeting.
You are invited to attend the Annual Meeting in person. Regardless of
whether you intend attend the meeting in person, we urge you to read the
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attached proxy statement and sign and date the accompanying proxy card and
return it in the enclosed postage-prepaid envelope. It is important that your
shares be represented at the meeting. YOU MAY REVOKE YOUR PROXY IN THE MANNER
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE IT HAS BEEN
VOTED AT THE ANNUAL MEETING. ANY STOCKHOLDER ATTENDING THE ANNUAL MEETING MAY
VOTE IN PERSON EVEN IF HE OR SHE HAS RETURNED A PROXY.
By Order of the Board of Directors
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Andrew L. Jiranek
VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
Columbia, Maryland
June 23, 2000
YOUR VOTE IS IMPORTANT
Table of Contents
<TABLE>
<S> <C>
GENERAL INFORMATION..............................................................4
INFORMATION REGARDING THE MEETING................................................4
PROPOASAL NO. 1 ELECTION OF DIRECTORS............................................7
PROPOSAL NO. 2 APPOINTMENT OF INDEPENDENT AUDITORS...............................9
PROPOSAL NO. 3 ADOPTION OF RESTRICTED SHARE PLAN.................................9
BENEFICIAL OWNERSHIP............................................................11
EXECUTIVE COMPENSATION..........................................................12
CERTAIN TRANSACTIONS............................................................15
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT.......................16
OTHER MATTERS...................................................................17
</TABLE>
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VIEW SYSTEMS, INC.
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PROXY STATEMENT FOR THE
2000 ANNUAL MEETING OF STOCKHOLDERS
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INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL INFORMATION
The enclosed proxy is solicited on behalf of VIEW SYSTEMS,INC. (the
"Company") for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held on Friday, July 28, 2000, at 1:00p.m., local time, or at any
adjournment or postponement thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting
will be held at our principal executive offices at 9693 Gerwig Lane, Suite O,
Columbia, Maryland 21046. The telephone number at that location is (410)
290-5919. When proxies are properly dated, executed and returned, the shares
they represent will be voted at the Annual Meeting in accordance with the
instructions of the stockholder. If no specific instructions are given, the
shares will be voted for the election of the nominees for directors set forth
herein, for the adoption of our Restricted Share Plan, for the ratification of
the appointment of STEGMAN & COMPANY as independent auditors as set forth herein
and, at the discretion of the proxy holder, upon such other business as may
properly come before the Annual Meeting or any adjournment or postponement
thereof.
These proxy solicitation materials, the accompanying proxy card and the
Company's annual report to shareholders as set forth on Form 10KSB for the year
ended December 31, 1999, will be first mailed to stockholders on or about July
10, 2000, to all stockholders entitled to vote at the Annual Meeting. We have
included the information required by Rule 14a-3 of the Rules of the Securities
and Exchange Commission in this proxy statement, including the information
contained on Form 10KSB which contains audited financial statements for our last
two fiscal years, ended December 31, 1998, and 1999.
INFORMATION REGARDING THE MEETING
You will be entitled to vote, either in person or by proxy, at the meeting
on:
- The election of five (4) directors to serve for the ensuing year and
until their successors are elected;
- The appointment of Stegman & Company as our independent auditors for
the year ending December 31, 2000;
- The adoption of our View Systems, Inc. 2000 Restricted Share Plan;
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- The transaction of such other business as may properly come before
the Annual Meeting or any postponements or adjournments thereof.
BOARD OF DIRECTORS RECOMMENDATION
The Board recommends a vote FOR the election of nominees for the Board of
Directors, FOR the adoption of the View Systems, Inc. 2000 Restricted Share
Plan, and FOR the appointment of Stegman & Company as our independent auditors
for 2000.
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on July 10, 2000, are
entitled to notice of and to vote at the Annual Meeting. As of the date of this
proxy, 8,386,080 shares of our Common Stock, $0.001 par value, were issued and
outstanding.
ATTENDANCE AT THE MEETING
All of the stockholders on July 10, 2000, can attend. Due to limited space
in the meeting room, we are limiting persons who can attend the meeting to our
stockholders, their representatives, our employees and directors and our
representatives.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company at or before the taking of the vote at the
Annual Meeting a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of the Company at or before the taking of the
vote at the Annual Meeting or (iii) attending the Annual Meeting and voting in
person (although attendance at the Annual Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be delivered to View Systems, Inc. at 9693 Gerwig Lane,
Suite O, Columbia, Maryland 21046, Attention: Secretary, or hand-delivered to
our Secretary at or before the taking of the vote at the Annual Meeting.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting. Stockholders do not have the right
to cumulate their votes in the election of directors.
We will bear the cost of soliciting proxies. In addition, we may reimburse
brokerage firms and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation material to such beneficial owners. In
addition, proxies may be solicited by directors, officers and employees of the
Company in person or by telephone, telegram or other means of communication. No
additional compensation will be paid for such services.
You may vote by signing and dating the proxy card you receive with this
proxy statement and returning it in the prepaid envelope. If you return your
signed proxy card but do no mark the boxes showing how you wish to vote, your
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shares will be voted FOR the four proposals. Additionally, all comments written
on the proxy card or elsewhere will be forwarded to our management, but your
identity will be kept confidential unless you ask that your name be disclosed.
The shares on your proxy card represent all of your shares, including those
shares held in your accounts at various brokerages. If you do not return your
proxy card, your shares will not be voted.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date. They may be present at the meeting or represented by proxy. There must be
a quorum for the meeting to be held, and a proposal must be approved by more
than 50% of the shares voting at a meeting at which there is a quorum to be
adopted. The 4 nominees for director receiving the highest number of affirmative
votes will be elected as directors. Shares that are voted "FOR", "AGAINST" or
"ABSTAIN" on a matter are treated as being present at the Annual Meeting for
purposes of establishing a quorum and are also treated as shares "represented
and voting" at the Annual Meeting (the "Votes Cast") with respect to such
matter.
If you submit a properly executed proxy card, even if you abstain from
voting, then you will be considered part of the quorum. However, abstentions are
not counted in the tally of votes FOR or AGAINST a proposal.
Broker non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but will not be counted for
purposes of determining the number of Votes Cast with respect to the proposal on
which the broker has expressly not voted. Thus, a broker non-vote will not
affect the outcome of the voting on a proposal.
VOTING ON "OTHER BUSINESS"
Although we do not know of any other business to be considered at the
meeting other than the proposals described in this proxy statement, if any other
business is presented at the meeting, your signed proxy card gives authority to
Gunther Than, our President and CEO, to vote on those matters at his discretion.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
The rules of the Securities and Exchange Commission provide that stockholder
proposals may be considered for inclusion in the proxy material for our annual
meetings under certain circumstances. The Company currently intends to hold its
2001 Annual Meeting of Stockholders on July 2, 2001 and to mail proxy statements
relating to such meeting on June 2, 2001. The date by which stockholder
proposals must be received by the Company for inclusion in the proxy statement
and form of proxy for its 2001 Annual Meeting of Stockholders is March 15, 2001.
Such stockholder proposals need to be accompanied by specific information
regarding the proposal. Such stockholder proposals should be submitted to View
Systems, Inc. at 9693 Gerwig Lane, Suite O, Columbia, Md. 21046, Attention:
Secretary.
The proxy card for the 2001 Annual Meeting of Stockholders will grant the
proxy holder discretionary authority to vote on any matter raised at the 2001
Annual Meeting of Stockholders. If a stockholder intends to submit a
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proposal at the 2001 Annual Meeting of Stockholders, which is not eligible
for inclusion in the proxy statement, and a form of proxy relating to that
meeting, the stockholder must do so no later than February 15, 2001. If such
stockholder fails to comply with the foregoing notice provision, the proxy
holder will be allowed to use his discretionary voting authority when and if
the proposal is raised at the 2001 Annual Meeting of Stockholders.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
NOMINEES
A board of four (4) directors is to be elected at the Annual
Meeting. Unless otherwise instructed, the proxy holder will vote the proxies
received by them for the four (4) nominees named below, all of whom are
presently directors of the Company. In the event that any nominee is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for a nominee who shall be designated by the present Board of
Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holder intends to vote all
proxies received by him in such a manner as will assure the election of as many
of the nominees listed below as possible, and, in such event, the specific
nominees to be voted for will be determined by the proxy holder. We are not
aware of any nominee who will be unable or will decline to serve as a director.
The term of office for each person elected as a director will continue until the
next annual meeting of the stockholders or until such director's successor has
been duly elected and qualified.
VOTE REQUIRED
The four nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected to the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE NOMINEES
LISTED BELOW.
The names of the nominees and certain information about them as of June 23,
2000, are set forth below:
<TABLE>
<CAPTION>
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Name of Nominee Age Position with the Since
Company
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<S> <C> <C> <C>
Martin Maassen 58 Chairman of the Board Dir.-May, 1999
of Directors Chr-April,2000
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Michael Bagnoli 42 Director May, 1999
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Gunther Than 53 Director September, 1998
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David Barbara 49 Director May, 1999
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</TABLE>
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Dr. Martin Maassen has served as a Director of the Company since May 1999.
In April, 2000, Dr. Maassen was appointed Chairman of the Board by the current
Directors, after Gunther Than stepped down as Chairman of the Board. Dr. Maassen
is board-certified in internal medicine and emergency medicine and has served as
a staff physician in the emergency departments of Jackson County, Deaconess,
Union and St. Elizabeth hospitals in Indiana since 1977. Since 1996, he has been
the President of Lafayette Emergency Care, P.C. in
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Lafayette, Indiana. In addition to practicing medicine he maintains an
expertise in computer technologies and their medical applications. He holds a
Bachelors and a MD degree from Indiana University.
Dr. Michael Bagnoli has served as a Director of the Company since May, 1999.
Dr. Bagnoli holds degrees as a medical doctor and a dental specialist. Since
1988 he has practiced dentistry in the specialty area of oral and masiofacial
surgery. Through his practice, he introduced orthroscopic surgery along with the
full scope of arthroplastic and total joint reconstruction to the community. Dr.
Bagnoli was founder, CEO and president of a successful medical products company,
Biotek, Inc., which sold to a larger interest in 1994.
Gunther Than has served as President and Chief Executive Officer since
September, 1998. He also served as Chariman of the Board from September, 1998 to
April, 2000, and, thereafter, as a Director. From 1994 - 1998, Mr. Than was the
founder, President and CEO or RealView Systems and View Technologies, Inc. Mr.
Than continues as President, CEO and board member of View Technologies.
Prior to founding RealView and View Technologies, Mr. Than held a variety of
business management positions including:
- Founder and President, EasyView Systems, Inc., a developer of software for
use in the furniture industry
- Founder and President, National Systems and Software, Inc., a retail
distributor of computer hardware and software
- General Manager, Rutland Biotech, Vancouver, Canada, a developer of medical
and health related proprietary products
- Vice President of Information Systems, Patterson Dental Corporation, one of
the largest U.S. dental product supply corporations
- Director of Information Systems, Salkin and Linoff, a Minneapolis retailer
of soft goods and ladies apparel, with $100 MM in sales and over 500 retail
outlets including Peck & Peck
- Manager of Systems and Programs, Fairway Foods, a $2 billion sales division
of Holiday Worldwide, Inc.
- Systems Programmer, Twin Disc, Inc., a Wisconsin manufacturer of power
transmissions for heavy equipment, ships and construction implements
Mr. Than is a graduate of the University of Wisconsin, with a dual degree in
engineering physics and applied mathematics.
Dr. David Barbara has served as a Director of the Company since May, 1999.
Dr. Barbara has held a variety of executive positions with hospitals in
Lafayette, Indiana. From 1994 to 1997, Dr. Barbara was a surgeon with the
Arnette Clinic in Lafayette, Indiana and from 1997 to 1998, Dr. Barbara was a
surgeon for the Vein Treatment Center in Indianapolis, Indiana. Since 1998, he
has been a surgeon with_a 120-physician multi-specialty clinic in Atlanta,
Georgia. He holds a BA from Xavier University and MD from the University of
Kentucky, and is a board certified surgeon.
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BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors of the Company conducted all of its business through
written consents and various members met informally at different times and
corresponded approximately 30-50 timers during 1999. There were approximately 20
actions by written consent during 1999. The Board of Directors has appointed an
Audit Committee and a Compensation Committee.
The Audit Committee was not appointed until April, 2000, and, therefore, the
Company did not have an audit committee during 1999. The committee is composed
of Drs. Maassen and Bagnoli. These members are independent. The Committee has
engaged Charlie Davis of Davis, Sita and Company, an independent accounting
firm, to provide it with advice. The Board has adopted a charter in connection
with appointing the audit committee which charter is subject to review by the
committee and change. Generally, the committee is primarily responsible for
approving the services performed by the Company's independent auditors and for
reviewing and evaluating the Company's accounting principles and its system of
internal accounting controls.
The Compensation Committee currently consists of Drs. Maassen, Bagnoli and
Barbara. This committee conducted all of its business through written consents
and various members met informally and corresponded approximately 20 times
during 1999. This committee reviews the Company's executive compensation policy,
compensation and incentive stock plans and issuances of stock as compensation
and makes recommendations to the full Board of Directors for approval.
BOARD OF DIRECTORS COMPENSATION
Directors do not receive any cash compensation for their services as members
of the Board of Directors, although they are reimbursed for their expenses in
attending out-of-town meetings. There are no other family relationships between
directors and executive officers of the Company, except that Linda Than, who is
the Company's Comptroller, is Gunther Than's wife.
PROPOSAL NO. 2-- APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected STEGMAN & COMPANY, independent auditors,
to audit the consolidated financial statements of the Company for the fiscal
year ending December 31, 2000, and recommends that stockholders vote for
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
STEGMAN & COMPANY has audited the Company's financial statements since 1998,
and it audited the statements of Xyros Systems, Inc., for the years ended
December 31, 1997, and 1998. Its representatives are expected to be present at
the Annual Meeting with the opportunity to make a statement if they desire to do
so and are expected to be available to respond to appropriate questions.
Prior to becoming a reporting company under the Securities Exchange Act of
1934, the Company acquired three privately held companies, RealView Systems,
Inc., Eastern Tech Manufacturing Corp. and Xyros Systems. All financial
statements and financial information for View Systems have been restated to
include the amounts and results of operations of RealView Systems Xyros and
Eastern Tech for all periods.
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Prior to the acquisitions, RealView Systems had engaged the accounting firm
of Katz, Abosch, Windesheim, Gershman & Freedman, P.A. to provide audit
accounting services and to render an independent audit report, dated June 1,
1998, of the financial statements of RealView Systems, Inc., as of December 31,
1997, and the related statements of operations, stockholders' equity and cash
flows for the year then ended and for the period from September 15, 1993
(inception) to December 31, 1997. In that report, Katz, Abosch gave an
unqualified opinion that the financial statements for RealView fairly, and in
all material respects, represented the financial position of RealView Systems.
Similarly, Eastern Tech engaged Davis, Sita & Co. to provide audit accounting
services and to render an independent audit report of the financial statements
of Eastern Tech as of June 30, 1997, and 1998, and the related statements of
operations, stockholders' equity and cash flows for the year then ended. In that
report, Davis, Sita gave an unqualified opinion that the financial statements
for Eastern Tech fairly, and in all material respects, represented the financial
position of Eastern Tech.
We requested and received Katz, Abosch's and Davis, Sita's authorization to
include the results of their audits in various of our public filings with the
Commission. As a matter of its own internal policy, Katz, Abosch does not
provide audit accounting services to public companies. Therefore, it did not
offer to provide audit accounting services to View Systems after it decided to
go public and we engaged another company, Stegman & Company, that does provide
audit accounting services to public companies. Since we had already engaged
Stegman & Company for View, we did need to use the services of Davis, Sita &
Company as independent auditors.
Neither Katz, Abosch nor Davis, Sita & Company rendered an adverse opinion
or disclaimer of opinion with regard to their audits, nor was their audit work
modified as to uncertainty, audit scope, or accounting principles. The decision
to engage Stegman & Company as our auditors was approved by both our board of
directors and shareholders. We did not have any disagreements with Katz, Abosch
or Davis, Sita on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF
THE APPOINTMENT OF STEGMAN & COMPANY AS THE COMPANY'S INDEPENDENT AUDITORS.
PROPOSAL NO. 3--RATIFICATION OF
APPROVAL OF VIEW SYSTEMS, INC. 2000 RESTRICTED SHARE PLAN
Our Board has adopted and approved the View Systems, Inc. 2000 Restricted
Share Plan.
Our restricted share plan provides for grants to employees, officers,
independent directors and consultants of shares of our common stock. The purpose
of the plan is to enable us to attract and retain the best available personnel
and to encourage stock ownership by our employees, officers, independent
directors and consultants in order to give them a greater personal stake in our
successes.
Our Board of Directors and our Compensation Committee administers the plan
and is responsible for determining the type, amount and terms of any
consideration awarded to a recipient. Under the plan, any rights to stock vest
in a recipient in accordance with the terms of the plan and agreement governing
the grant.
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DESCRIPTION OF THE PLAN.
Eligibility. All of our and our subsidiaries' employees, officers and
independent directors are eligible to participate in the plan. Our non-employee
agents, consultants, advisors and independent contractors are also eligible to
participate. We currently have approximately 27 employees, officers and
directors eligible to participate in the plan.
The plan is administered by the Board and the Compensation Committee which
designates from time to time the individuals to whom awards are made under the
plan, the amount of any such award and the price and other terms and conditions
of any such award. The Board may delegate any or all authority for
administration of the plan to a committee of the Board. Subject to the
provisions of the plan, the Board and the Compensation Committee may adopt and
amend rules and regulations relating to the administration of the plan. Only the
Board may amend, modify or terminate the plan.
Types of Awards. The plan permits us to grant shares of our common stock.
Our common stock awarded under the plan may be authorized and unissued shares or
shares acquired in the market. If any award granted under the plan expires,
terminates or is cancelled, or if shares sold or awarded under the plan are
forfeited to or repurchased by us, the shares again become available for
issuance under the plan.
The plan shall continue in effect until April, 2010, subject to earlier
termination by the Board. The Board may suspend or terminate the plan at any
time.
The Board and Compensation Committee determine the persons to whom shares of
our common stock are granted, the number of shares to be covered by each grant,
the vesting period of each grant and the other terms of each grant. We do not
receive any monetary consideration upon the granting of options.
Grants of shares vest in accordance with the terms of an agreement entered
into at the time of grant. Upon the occurrence of certain conditions, the number
of shares subject to the grant vests in the shareholder, less the amount
necessary to satisfy our withholding obligations to taxing authorities.
The grants of shares of our common stock would require charges to our income
at the time of the grant and/or over the life of the award based upon whether
the shares of our common stock had a readily ascertainable market value on the
date of grant.
Share Restructure; Extraordinary Event. The plan provides that, if the
number of outstanding shares of our common stock is increased or decreased or
changed into or exchanged for a different number or kind of our shares or
securities or of another corporation by reason of any recapitalization, stock
split or similar transaction, appropriate adjustment will be made by the Board
in the number and kind of shares available for awards under the plan. In the
event of an Extraordinary event, which means the commencement of a tender offer
for our shares or assets, then any restrictions on the shares shall lapse.
TAX CONSEQUENCES.
An employee who receives stock in connection with the performance of
services will generally realize taxable income at the time of receipt unless the
shares are substantially nonvested for purposes of Section 83 of the Code and no
Section 83(b) election is made. If the shares are not vested at
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the time of receipt, the employee will realize taxable income in each year in
which a portion of the shares substantially vest, unless the employee elects
to accelerate the recognition of income under Section 83(b) within 30 days
after the original transfer. We will generally be entitled to a tax deduction
in the amount includible as income by the employee at the same time or times
as the employee recognizes income equal to the amount of the cash bonus paid
at the time of receipt.
BOARD RECOMENDATION
The Board unanimously recommends that you vote FOR the adoption of our 2000
Equity Incentive Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 23, 2000 (except as noted) certain
information with respect to the beneficial ownership of our Common Stock by (i)
each of our directors, (ii) each of the executive officers named in the Summary
Compensation Table below, (iii) certain key persons who materially participate
in the management of the Company; and (iv) all directors and executive officers
as a group. Except as indicated in the footnotes to this table, the persons and
entities named in the table have sole voting and investment power with respect
to all shares of Common Stock shown as beneficially owned by them, subject to
community property laws where applicable.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER AND
RELATIONSHIP TO US SHARES PERCENT
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<S> <C> <C>
OFFICERS, DIRECTORS AND 5% SHAREHOLDERS COMMON STOCK
BENEFICIALLY OWNED
Gunther Than, President, CEO and Director 2,181,800 26.9%
Bruce Lesniak Senior V.P. of Corporate Development 198,000 2.1%
Andrew L. Jiranek, V.P., Secretary, General Counsel 125,200 1.5%
Martin J. Maassen, Chairman of the Board 247,800 1.5%
David Bruggeman, Vice President of Engineering 39,000 1.1%
Mike Bagnoli Director 40,000 0.6%
Rubin Investment Group 3,300,000 28%
All Executive Officers, Directors & 5%
Shareholders as a Group (6 persons)] 2,810,800 61.7%
</TABLE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Common Stock subject to options or
warrants currently exercisable or exercisable within 60 days of June 23, 2000
are deemed to be beneficially owned by the person holding such option or warrant
for computing the percentage ownership of such person, but are not treated as
outstanding for computing the percentage of any other person.
(2) Includes the following numbers of options to acquire shares of common stock
which are exercisable within 60 days of June 23, 2000: for Gunther Than,
349,000; for Bruce Lesniak, 48,000; for Andrew Jiranek, 18,000; and for all
directors and executive officers, 404,000. Gunther Than's wife, Linda Than, who
is our comptroller, and Chief Financial Officer owns 150,200 shares
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of our common stock. Mr. Jiranek influences the investment power and voting
power of 6,000 shares held by his three children. Mr. Jiranek does not
disclaim beneficial ownership of his childrens' shares. Rubin Investment
Group holds 1,065,000 shares of common stock and warrants to acquire
2,235,000 shares at $2.00 per share. The percentage of ownership was
calculated based on a fully diluted basis, unlike the other percentages of
ownership calculated in the table. Rubin Investment Group is an accredited
investor entity owned by Dan J. Rubin, Ca. resident and accredited investor.
(3) The address for each beneficial owner listed above is View Systems,
Inc., 9693 Gerwig Lane, Suite O, Columbia, Maryland 21046.
EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned in each of the
last three years by the Company's Chief Executive Officer who is the only
executive officer that received compensation in excess of $100,000
(collectively the "Named Executive Officers") in the fiscal year ended
December 31, 1999:
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
NAME AND ALL SECURITIES
PRINCIPAL OTHER UNDERLYING RESTRICTED
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS STOCK
-------- ---- ------ ----- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gunther Than 1999 $72,000 $900,000(1) -- 120,000 $405,000
President, CEO
and Chairman
1998 0 0 0 0 0
1997 0 0 0 0 0
</TABLE>
--------------------------------------------------------------------------------
1 Bonus amount represents fair value on date of receipt of 300,000
shares awarded in exchange for a covenant not to compete and
covenant not to solicit employees and customers and 250,000 shares
awarded as bonus for effecting acquisition of Eastern Tech.
2 The restricted stock awards were valued at $1.35 per share. We
recognized a discount from the public trading price based on the
restrictions on the shares.
OPTION/SAR GRANTS
The following table sets forth certain information concerning option/SAR
grants for the year ended December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
NAME AND UNDERLYING GRANTED TO EXERCISE
PRINCIPAL OPTIONS/SARS EMPLOYEES IN PRICE PER EXPIRATION
& POSITION GRANTED FISCAL YEAR SHARE DATE
<S> <C> <C> <C> <C>
Gunther Than, 250,000 100% $2.00 None
President, CEO
and Chairman
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
60,000 55% $ .01 July 1, 2004
60,000 74% $2.07 Aug.18, 2005
</TABLE>
- The 250,000 share option was awarded as a bonus for bringing about
the acquisition of ETMC.
- Mr. Than has been granted an incentive stock option under our stock
option plan to acquire 60,000 shares that vests at the rate of 5,000
options per month commencing September 16, 1999.
- Mr. Than has been granted a non-qualified option under our stock
option plan to acquire 60,000 shares which vests at the rate of
5,000 options per month commencing July 1, 1999.
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND YEAR END VALUES
The following table sets forth certain information concerning option
exercises and options held for the fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS OPTIONS/SARS
ACQUIRED AT FY-END @ FY/END ($)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME AND POSITION EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
----------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Gunther Than 0 0 320,000 37,200
President, Chief exercisable
Executive Officer 50,000
and Director unexercisable
</TABLE>
- We recognized $37,200 in expenses associated with the issuance of
options to Gunther Than in 1999.
LONG TERM INCENTIVE PLANS
The following table sets forth certain information concerning long term
incentive plan awards for the fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL NUMBER OF SHARES TERM UNTIL
& POSITION OF RESTRICTED STOCK PAYOUT
<S> <C> <C>
Gunther Than 300,000 --
President, Chief
Executive Officer
and Chairman
</TABLE>
- 150,000 vested in 1999 and 150,000 vested in 2000.
GUNTHER THAN, PRESIDENT, CEO, DIRECTOR
Mr. Than has an executive employment agreement for $6,000 per month. Under
the agreement, he received 300,000 shares of our common stock in exchange for a
covenant-not-to-compete or solicit our employees. Mr. Than's employment
agreement will continue in effect unless terminated by either Mr.
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<PAGE>
Than or us on a sixty-day notice.
BRUCE LESNIAK, SENIOR VICE-PRESIDENT OF CORPORATE DEVELOPMENT
Mr. Lesniak has an independent contractor agreement for $4,000 per month.
Either party may cancel said agreement on thirty days notice. Mr. Lesniak has
also participated in our restricted share plan for 140,000 fully vested shares,
and we recognized $140,000 in expense associated with the issuance of these
shares. We have also agreed, for every month of service, beginning July 1, 1999,
to grant Mr. Lesniak options to purchase 4,000 shares for a nominal option
price. In addition, Mr. Lesniak is to receive commissions for sales of products
and any negotiated business combination he procures, upon such terms as are
subsequently agreed at the time the opportunity is identified.
ANDREW L. JIRANEK, VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
Mr. Jiranek has an employment agreement for $6,000.00 per month. Either
party may cancel the agreement on sixty days notice. Mr. Jiranek has
participated in our restricted share plan for 100,000 fully vested shares, and
we have recognized $135,000 in expense in 1999. Mr. Jiranek has also received,
under our 1999 stock option plan, an incentive stock option to purchase a total
of 18,000 shares and a non-qualified stock option to purchase a total of 18,000
shares. These options vest under the stock option plan at the rate of 1,500
incentive options and 1,500 non-qualified options every month, beginning
September 16, 1999, and July 1, 1999, respectively.
DAVID C. BRUGGEMAN, VICE PRESIDENT OF ENGINEERING
Mr. Bruggeman has an employment agreement with us for $6,000 per month. The
agreement may be canceled by either party on thirty days notice. Mr. Bruggeman
has participated in our restricted share plan for 48,000 shares, and we
recognized $24,000 in expense associated with the issuance of these shares in
1999. These shares are vesting at a rate of 4,000 shares per month beginning
March 1, 1999.
JOHN CURRAN, VICE PRESIDENT OF MANUFACTURING
Mr. Curran has an employment agreement with ETMC for $5,000 per month. The
agreement may be canceled by either party on thirty days notice. Mr. Curran has
also received 12,000 shares under our restricted share plan, and we recognized
$12,000 in expense associated with the issuance of these shares in 1999. These
shares are vesting at a rate of 1,000 shares per month beginning July 1, 1999.
EMPLOYMENT AGREEMENTS
We have adopted a policy of entering into employment agreements with our
senior management, and have entered into such agreements with Messrs. Than,
Bruggeman, Curran, Lesniak and Jiranek. The terms of the employment agreements
for Messrs. Than and Jiranek, provide that if termination is without cause,
these executives are entitled to severance payments for three (3) years equal to
the salary and bonuses they received in the year prior to termination. Bonuses
are determined in the discretion of the board of directors. These agreements
expressly survive acquisition by another company.
Our employment agreements include non-compete agreements and
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<PAGE>
confidentiality provisions which survive termination. In the event that we
seek enforcement of our confidentiality and non-compete agreements in court,
it is possible that the court may strike all or part of an agreement on the
grounds that it is unenforceable or unnecessary to protect our interests.
These agreements expressly survive acquisition by another company.
CERTAIN TRANSACTIONS
The following information summarizes certain transactions we engaged in
during the last two years, or we propose to engage in, involving our executive
officers, directors, 5% stockholders or immediate family members of those
persons:
Prior to the acquisition of Real View in October 1998, our principal
shareholders were Pamela Wilkinson with 974,800 shares and Julie Birns with
975,200 shares.
Gunther Than, Chairman of the Board, President and CEO, acquired 1,046,800
shares of common stock as a result of our acquisition of RealView Systems.
Leokadia Than, Gunther Than's mother, received 200,000 shares through the
exchange of RealView shares.
On May 27, 1999, we entered into a redemption agreement with Mr. Than,
whereby we redeemed 25,000 shares of common stock owned by Mr. Than in exchange
for a total cash payment of $50,000. As part of this agreement, we granted Mr.
Than an option to purchase back these 25,000 shares for $50,000, plus interest
on $50,000 from May 27, 1999, to the date of redemption, at a rate of 10% per
annum.
On September 30, 1999, we redeemed 34,860 shares of common stock of Gunther
Than in exchange for forgiveness of $67,719.35 in loans Gunther Than had taken
from us during 1999. As part of this agreement, Mr. Than was granted an option
to purchase these 34,860 shares back for $67,719.35, plus interest at the rate
of 10% per annum thereon from September 30, 1999, to the date of redemption. Mr.
Than continues to be indebted in the amount of approximately $40,000 in loans he
has taken from the Company during 1999.
For information concerning stock and options awarded to Mr. Than during 1998
and 1999, see "Executive Compensation," beginning at page 48
We have issued 200,000 shares of common stock to Leokadia Than, Gunther
Than's mother, in exchange for forgiveness of loans totaling $177,000 and unpaid
and accrued interest in the amount of $33,000 on these loans. In December, 1999,
we loaned Leokadia Than $35,000. There are no certain terms for repayment of
this loan. In addition, Ms. Than purchased 10,000 shares of the common stock of
RealView Systems, Inc. and exchanged this stock certificate for 13,333 shares of
the common stock of View Systems, Inc. in July, 1999. Mr. Than disclaims
beneficial ownership of Leokadia Than's shares.
For information concerning stock and options awarded to Andrew L. Jiranek,
Bruce Lesniak, David Bruggeman and John Curran, see "Executive Compensation,"
beginning at page 48.
Martin Maassen, Chairman of Board, received $21,000 in consulting fees from
us prior to becoming a director. He also purchased 111,000 shares from us on
August 18, 1999, as part of our rule 506 offering at terms established for that
offering. Dr. Maassen has purchased approximately 146,000
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<PAGE>
additional shares on the open market.
Dr. Michael Bagnoli purchased 20,000 shares from us on August 8, 1999, as
part of our Rule 506 offering, and another 20,000 shares as part of our November
11, 1999 offering.
Linda Than, the wife of Gunther Than, and our Comptroller, received 100,000
shares under our restricted share plan and was the recipient of 66,700 shares in
the RealView share exchange.
The former shareholders and management of Xyros loaned monies to Xyros for
working capital, and took back promissory notes, which mature on December 31,
1999, and accrue interest at the rate of 10% per annum. As part of our
acquisition of Xyros, we agreed to guaranty the repayment of this indebtedness.
As of March 31, 2000, the outstanding principal amount of these loans had been
paid down to $110,000. Some of the management of Xyros became involved in our
management following the acquisition and some did not.
View Technologies, Inc., a privately held Colorado corporation founded in
1994, is a related company. It was founded and organized by Gunther Than, our
President, CEO and chairman. Mr. Than is also President, CEO and chairman of
View Technologies. View Technologies produces software and hardware products
used in computer networks which transmit and store diagnostic medical imagery.
Some of the shareholders of View Technologies were also shareholders in RealView
Systems, Inc., a company acquired by us in October 1998.
We share human resources with View Technologies. We account for any
resources that are jointly used. From time to time, as is necessary, View
Systems and/or View Technologies will loan each other funds. On September 30,
1999, we redeemed 130,937 shares of common stock, held by View Technologies for
the redemption price of $2.13 per share, canceling View Technologies
indebtedness of $278,895.81 to us. View Technologies is in debt to us in the
approximate amount of $90,000, as of December 31, 2000, approximately $30,000 of
which was advanced in the fourth quarter of 1999. In the first quarter of 2000,
we advanced an additional 9,000 to View Technologies. We believe we will be able
to collect the indebtedness owed by View Technologies to View Systems.
The board of directors approved all of these transactions on terms it
believes were as fair as those attainable from third parties.
Our policy in dealing with transactions between a related party and us is
intended to make each transaction fair and on market terms. All transactions
involving compensation, including options and restricted stock grants, must be
approved by the Compensation Committee. All other transactions must be approved
by a majority of directors who are not interested in the transaction after full
disclosure by the related party.
Gunther Than is a director of MediaComm Broadcasting. We own 840,000 shares
of MediaComm. In November 1999, Mr. Than received options to acquire 150,000
shares of MediaComm for $2.00 per share. The options were granted as
compensation for his services as a director.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act of 1934, as amended, and regulations of
the Securities and Exchange Commission (the "SEC") thereunder require the
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Company's executive officers and directors, and persons who own more than
10% of a registered class of the Company's equity securities, to file reports
of initial ownership and changes in ownership with the SEC. Officers,
directors and greater than ten percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms
they file. To the Company's knowledge, based solely on review of the copies
of such forms received by the Company, or on written representations from
certain reporting persons that no other reports were required for such
persons, during the period from January 1, 1998 to December 31, 1998, all of
the Section 16(a) filing requirements applicable to the Company's executive
officers, directors and 10% stockholders were complied with, except that
(1)Gunther Than, Andrew Jiranek, Lawrence Seiler, Martin Maassen, David
Barbara and Michael Bagnoli did not file their initial Form 3s until October
29, 1999, when such forms were due on October 13, 1999; (2) Michael Bagnoli
did not file his Form 4 reporting the acquisition of 20,000 shares of our
common stock in a private placement approximately 30 days late; (3) Martin
Maassen filed an amended Form 3 to correct the amount of shares that he
reported that he initialed owned on October 13, 1999.
EXHIBITS
INDEX OF EXHIBITS
4.1 View Systems, Inc. 2000 Restricted Share Plan
OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is
the intention of the persons named in the accompanying proxy to vote the
shares represented as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
By: /s/ Andrew L. Jiranek
VICE PRESIDENT, SECRETARY
AND GENERAL COUNSEL
Dated: June 23, 2000
PROXY
ANNUAL MEETING OF SHAREHOLDERS
VIEW SYSTEMS, INC.
9693 Gerwig Lane, Suite O
Columbia, Maryland 21046
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of View Systems, Inc., acknowledges receipt of
the Notice of Annual Meeting of Stockholders and Proxy Statement, and appoints
Gunther Than Proxy and attorney-in-fact, with the power to appoint his
substitute, and hereby authorizes him to represent and to vote as designated on
the reverse, all the shares of Common Stock of View Systems, Inc. held of record
by the undersigned on July 10, 2000, at the Annual
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Meeting of Stockholders to be held on July 28, 2000, or any adjournment
thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND, WHEN
PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL PROPOSALS AND ELECTION SET FORTH IN THIS PROXY.
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE|
/X/ Please mark your vote
as in this example.
FOR AGAINST ABSTAIN
1. PROPOSAL TO ELECT DIRECTORS
Nominees:
Martin Maassen [ ] [ ] [ ]
Gunther Than
Michael Bagnoli [ ] [ ] [ ]
David Barbara [ ] [ ] [ ]
(INSTRUCTION: to withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. PROPOSAL TO APPROVE [ ] [ ] [ ]
THE APPOINTMENT
OF STEGMAN & COMPANY AS
THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE
CORPORATION.
3. PROPOSAL TO APPROVE ADOPTION OF RESTRICTED SHARE PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4.IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This proxy, when properly executed will be voted in the manner directed herein
by the undersigned stockholder, if no direction is made, this proxy will be
voted FOR Proposals 1, 2 and 3.
BY SIGNING THIS PROXY, YOU REPRESENT AND WARRANT TO THE CORPORATION THAT YOU
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<PAGE>
ARE ENTITLED TO VOTE THE NUMBER OF SHARES IN THE MANNER PRESCRIBED. THE
CORPORATION MAY RELY UPON THIS REPRESENTATION AND YOU AGREE TO PROVIDE THE
CORPORATION, UPON REQUEST, WITH EVIDENCE THAT YOU ARE AUTHORIZED TO VOTE THE
SHARES AS REPRESENTED.
PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS ON THE CORPORATION'S RECORDS, AND
INDICATE THE NUMBER AND CLASS OF SHARES OF COMMON STOCK OF THE CORPORATION YOU
HELD AS OF JULY 10, 2000. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD
SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION OR OTHER ENTITY, PLEASE SIGN IN
FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY BY USING THE ENCLOSED
ENVELOPE.
Dated _________, 2000
-------------------------- --------------------------
(Signature of Shareholder) (Signature of Shareholder
if held jointly)
Exact name(s) of Shareholder(s), as set forth in the corporation's records:
-----------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
-----------------------------------------------------------------------------
Exhibit 4.1
VIEW SYSTEMS, INC.
2000 RESTRICTED SHARE PLAN
1. PURPOSE. The purpose of this 2000 RESTRICTED SHARE PLAN ("Plan") is to
further the interests of VIEW SYSTEMS, INC. (the "Company") by providing
incentives for directors, officers and employees of the Company who may be
designated for participation therein ("Participants") and to provide additional
means of attracting and retaining competent personnel.
2. ADMINISTRATION. The Executive Compensation Committee (the "Committee")
consisting of 3 nonemployee members of the Board of Directors of the Company
shall administer the Plan. The Committee will make all discretionary decisions
involving the Plan. A majority of the Committee shall constitute a quorum, and
the acts of a majority shall be the acts of the Committee. The Committee shall
have the sole authority to (i) award shares
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under the Plan; (ii) consistent with the Plan, determine the provisions of
the Restricted Share Agreements entered into hereunder, including the shares
to be awarded, the restrictions and other terms and conditions applicable to
each award of shares under the Plan; (iii) interpret the Plan and the
Restricted Share Agreements evidencing the restrictions imposed upon stock
awarded under the Plan and the shares awarded under the Plan; (iv) adopt,
amend and rescind rules and regulations for the administration of the Plan;
and (v) generally administer the Plan and make all determinations in
connection therewith which may be necessary or advisable, and all such
actions of the Committee shall be binding upon all participants. Any decision
or selection reduced to writing and signed by all of the members of the
Committee shall be as fully effective as if it had been made at a meeting
duly held. The determinations of the Committee in the administration of the
Plan, as described herein, shall be final and conclusive.
3. PARTICIPANTS. The Committee shall determine and designate from time to
time those directors, officers and employees of the Company who are eligible to
participate in the Plan. Pursuant to this Plan, the Committee may award to
Participants shares of common stock, par value $.001 per share ("Shares"), of
the Company, subject to certain restrictions and risk of forfeiture, in such
amounts and upon such terms as the Committee shall from time to time determine.
The Committee shall determine, in its sole discretion, the number of shares to
be awarded ("Awards") to each such employee selected. The Committee may, within
the terms of the Plan, be selective and non-uniform with respect to its
determination of the amount of Awards and the eligible employees to whom such
Awards are made.
4. SHARES SUBJECT TO THE PLAN. The Company has reserved 2,000,000 Shares for
issuance to Participants under the Plan ("Restricted Shares"). If any Awards
granted under this Plan are forfeited, in whole or in part, the Restricted
Shares so released from the Award may be the subject of other Awards under the
Plan.
5. SHARE RESTRUCTURE. In the event there is any change in the Company's
Shares, as by stock splits, reverse stock splits, stock dividends, or other
relevant changes in the capitalization of the Company occurring after the
adoption of this Plan by the Board, the number and type of Restricted Shares
available for Awards under the Plan shall be appropriately adjusted by the
Committee. The decision of the Committee as to the amount and timing of any such
adjustment shall be conclusive.
6. EFFECT OF AWARD. The granting of an Award shall take place only when a
Restricted Share Agreement (the "Agreement") substantially in the form of the
agreement attached hereto is executed by the Company and the Participant. Such
Agreement shall contain such further terms and conditions, not inconsistent with
the terms of this Plan, related to the grant of the Restricted Shares. By
accepting the Award and executing the Agreement, each Participant undertakes and
agrees to be bound by all terms and provisions of this Plan and the Agreement.
The execution of the Agreement shall entitle such Participant to receive the
number of Restricted Shares specified in the Agreement, subject to the
restrictions contained in the Agreement.
7. RESTRICTIONS.
(a) The term "Restricted Period" as to any Restricted Shares refers
to the period of time that such Restricted Shares are subject to the
restrictions contained herein and in the Agreement.
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(b) During the Restricted Period:
(i) No Restricted Shares may be transferred by the Participant;
(ii) The Restricted Shares shall be forfeited and shall
automatically be transferred to the Company in the event of termination of
the Participant's employment with the Company for any reason other than an
Extraordinary Event (as defined in Section 8); and
(iii) The Restricted Shares shall be subject to such other terms,
conditions and restrictions as determined by the Committee and set forth in
the Agreement
(c) With respect to any Restricted Shares awarded under this Plan, the
Committee, in it sole and absolute discretion, shall specify the Restricted
Period in the Agreement.
8. EXTRAORDINARY EVENT. In the event of the commencement of a tender offer
(other than by the Company) for any of the Company's common shares or a sale or
transfer, in one or a series of transactions, of assets having a fair market
value of 50% or more of the fair market value of all assets of the Company, or a
merger, consolidation or share exchange pursuant to which the common shares of
the Company are or may be exchanged for or converted into cash, property or
securities of another issuer, or the liquidation of the Company (an
"Extraordinary Event"), then the restrictions on the Restricted Shares shall
terminate and lapse immediately, without risk of forfeiture, on the "Event
Date." The "Event Date" is the date of the commencement of a tender offer, if
the Extraordinary Event is a tender offer, and in the case of any other
Extraordinary Event, the day preceding the record date in respect of such
Extraordinary Event, or if no record date is fixed, the day preceding the date
as of which shareholders of record become entitled to the consideration payable
in respect of such Extraordinary Event. Notwithstanding the foregoing, the
termination of the restrictions shall be conditioned on the actual occurrence
and completion of the Extraordinary Event.
9. PLAN LOANS. The Company recognizes that it is not in the best interests
of the Company for the Participant to sell Shares (or be required to sell
Shares, whether or not such Shares have been granted under the Plan) in order to
be able to pay taxes due as a result of any Awards made under the Plan.
Consequently, the Committee, upon the reasonable request of Participants, is
authorized to and shall make loans to Participants ("Plan Loans") in amounts
equal to the Participants' tax obligations resulting from any Award hereunder.
The Plan Loans shall be made at such rates and upon such other terms as the
Committee deems reasonable or appropriate. The Committee is further authorized
to forgive repayment of all or any part of any Plan Loan at any time or from
time to time, unconditionally or subject to such conditions as the Committee
deems reasonable or appropriate.
10. AMENDMENTS AND TERMINATION. The Committee may amend, suspend,
discontinue or terminate the Plan, but no such action may, without the consent
of the holder of any Award granted hereunder, alter or impair such Award.
11. PERIOD OF PLAN. The Plan has been adopted by the Board of Directors on,
and shall be effective as of, March 15, 2000. Unless extended or earlier
terminated by the board of Directors, the Plan shall continue in effect
22
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until, and shall terminate on, the tenth anniversary of the effective date of
the Plan.
23
