SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
MARKETING SERVICES GROUP, INC.
------------------------------
(Exact name of Registrant as specified in charter)
Nevada 88-0085608
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
333 Seventh Avenue, New York, NY 10001
--------------------------------------
(Address of Principal Executive Offices)
MARKETING SERVICES GROUP, INC. 1999 STOCK OPTION PLAN
-----------------------------------------------------
and
AN EXECUTIVE EMPLOYMENT AGREEMENT
---------------------------------
(Full title of the Plans)
and
AN INCREASE TO THE MARKETING SERVICES GROUP, INC. 1991 STOCK OPTION PLAN
------------------------------------------------------------------------
(Full title of the Plans)
Cindy H. Hill
333 Seventh Avenue, New York, NY 10001
--------------------------------------
(Name and address of agent for service)
(212)594-7688
-------------
(Telephone number, including area code, of agent for service)
COPY TO:
Alan I. Annex, Esq., Camhy Karlinsky & Stein LLP
1740 Broadway, 16th Floor, New York, NY 10019-4315
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title of Amount to Proposed maximum Proposed maximum Amount of
Securities to be offering price aggregate registration
be registered registered(1) per share(2) offering price(2) fee
- --------------------------------------------------------------------------------
Common stock,
$0.01 par value 1,600,000 $25.19 $25,252,875 $7,652.39
per share
- --------------------------------------------------------------------------------
(1) This Registration Statement covers (i) 1,000,000 shares authorized to be
issued under the Marketing Services Group, Inc. 1999 Stock Option Plan; (ii)
400,000 shares authorized to be issued under an Executive Employment Agreement;
and (iii) 200,000 shares authorized to be issued under the Marketing Services
Group, Inc. 1991 Stock Option Plan.
(2) Estimated solely for calculating the amount of the registration fee,
pursuant to Rule 457(h) under the Securities Act of 1933, as amended. Pursuant
to Rules 457(c) and (h) of the Securities Act, the proposed maximum offering
price per Common Share subject to outstanding options ("Options") issued
pursuant to the Plan has been calculated on the basis of the average exercise
price of outstanding Options, and the proposed maximum offering price per Common
Share available for grant under the Plan that are not subject to outstanding
Options has been calculated on the basis of the average of the high and low
price per Common Share, as reported by Nasdaq on July 2, 1999.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10 (a) PROSPECTUS
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with the
Introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents, filed with the Securities and Exchange Commission
(the "Commission") by Marketing Services Group, Inc., a Nevada Corporation,
("MSGI" or the "Company"), are incorporated herein by reference.
(a) Annual report filed on Form 10-KSB for the fiscal year ended June 30, 1998,
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended ( the "Exchange Act").
(b) Quarterly report on Form 10-Q for the nine months ended March 31, 1999.
(c) Quarterly report on Form 10-Q for the six months ended December 31, 1998.
(d) Quarterly report on Form 10-Q for the three months ended September 30,
1998.
(e) Current report on Form 8-K filed on May 24, 1999 regarding the completion
of the acquisition of CMG Direct Corporation.
(f) Current report on Form 8-K filed on March 24, 1999 regarding the Company's
intention to acquire CMG Direct Corporation.
(g) Current report on Form 8-K filed on February 1, 1999 regarding the
acquisition of Stevens-Knox & Associates, Stevens-Knox List Brokerage and
Stevens-Knox International as amended on April 6, 1999.
(h) Current report on Form 8-K filed on October 2, 1998 regarding the Company's
intention to buy back up to 1,000,000 shares of its common stock.
In addition, all documents filed by MSGI with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all the securities offered hereby have been sold
or which deregisters all securities then remaining unsold shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of the
filing of such documents with the Commission.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The validity of the Common Stock offered hereby has been passed upon for
the Company by Lionel Sawyer & Collins, Las Vegas, Nevada.
<PAGE>
Item 6. Indemnification of Directors and Officers
The Restated Articles provide that Directors and officers of the Company
shall not be personally liable to the Company or its stockholders for damages
for breach of fiduciary duty as a Director or officer, except for (i) acts or
omissions which involve intentional misconduct, fraud, or a knowing violation of
law or (ii) the payment of dividends in violation of the provisions of Chapter
78 of the NRS. The Restated Articles further provide that, if the NRS is amended
to authorize corporate action further eliminating or limiting the personal
liability of Directors and officers, then the liability of a Director or officer
of the Company shall be eliminated or limited to the full extent permitted by
the NRS. Any repeal or modification of all or any portion of the limitation on
liability contained in the Restated Articles by the stockholders of the Company
shall not adversely affect any right or protection of a Director or officer of
the Company with respect to any acts or omissions occurring prior to the time of
such repeal or modification.
The By-Laws provide for indemnification of the officers and Directors of
the Company, as the case may be, against any liability, cost or expense incurred
by such Director or officer by reason of the fact that such person is or was a
Director, officer, employee or agent of the Company, except to the extent that
such indemnification is prohibited by Chapter 78 of the NRS.
Section 78.751 of the NRS provides that a corporation may, and in certain
cases, must, indemnify any person who was or is a party, or is threatened to be
made a party, to any threatened, pending or completed action, suit or proceeding
(other than certain actions by, or in right of, the Corporation), by reason of
the fact that such person is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
and, in the case of a non-derivative action, judgments, fines and amounts paid
in settlement, actually and reasonably incurred by such person, in connection
with the action, suit or proceeding, if, in either type of action, such person
acted in good faith and in a manner which such person reasonably believed to be
in, or not opposed to, the best interests of the corporation. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent does not, of itself, create a
presumption that the person did not act in good faith and in a manner which such
person reasonably believed to be in, or not opposed to, the best interests of
the corporation and that, with respect to any criminal action or proceeding,
such person had reasonable cause to believe that such person's conduct was
unlawful.
Indemnification may not be made, in a derivative action, for any claim,
issue or matter as to which such a person had been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation, or for amounts paid in settlement to the corporation,
unless, and only to the extent that, the court in which the action or suit was
brought or other court of competent jurisdiction determines upon application
that, in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such expenses as the court deems proper.
The Company's By-Laws provide that the expenses of officers and Directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred, and in advance of the final
disposition of the action, upon receipt of an undertaking by, or on behalf of,
the Director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that such person is not entitled to be
indemnified by the corporation, unless ordered by a court or advanced (as
described above), any indemnification must be made by the corporation, only as
authorized in the specific case, upon a determination that the indemnification
of the Director, officer, employee or agent is proper in the circumstances. The
determination must be made either by the stockholders, or by the Board of
Directors by a majority vote of a quorum consisting of Directors who were not
parties to the act, suit or proceeding. If a majority vote of a quorum
consisting of Directors who were not parties to the act, suit or proceeding so
orders, or if a quorum consisting of Directors who were not parties to the act,
suit or proceeding cannot be obtained, the determination must be made by
independent legal counsel in a written opinion.
Insofar as indemnification for Directors, officers and controlling persons
of the Company with respect to liabilities arising under the Securities Act may
be granted pursuant to the provisions described above, or otherwise, the Company
has been advised that, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
Item 7. Exemption from Registration Claimed
Not applicable
Item 8. Exhibits
Exhibit No.
----------
4.1 The Marketing Services Group, Inc. 1999 Stock Option Plan
4.2 The Marketing Services Group, Inc. 1991 Stock Option Plan
(previously filed on Form S-8 on July 7, 1997)
4.3 Executive Employment Agreement
5.1 Opinion of Lionel Sawyer & Collins
23.1 Consent of Lionel Sawyer & Collins (contained in the Opinion filed
as Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers, LLP
Item 9. Undertakings
MSGI hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
That, for purposes of determining any liability under the Securities Act,
each filing of MSGI's Annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
That, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of MSGI pursuant to the foregoing provisions, or otherwise, MSGI has been
advised that, in the opinion of the Commission, such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by MSGI of expenses incurred or paid by a
director, officer or controlling person of MSGI in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, MSGI will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of New York, State of New York, on June 28, 1999.
MARKETING SERVICES GROUP, INC.
By: /s/ J. Jeremy Barbera
---------------------
J. Jeremy Barbera
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on June 28, 1999.
Signature Title
--------- -----
/s/ J. Jeremy Barbera
--------------------- Chairman of the Board and Chief Executive Officer
J. Jeremy Barbera (Principal Executive Officer)
/s/ Cindy H. Hill Chief Financial Officer (Principal Financial and
----------------- Accounting Officer)
Cindy H. Hill
/s/ Alan I. Annex Director
-----------------
Alan I. Annex
/s/ S. James Coppersmith Director
------------------------
S. James Coppersmith
/s/ Seymour Jones Director
-----------------
Seymour Jones
/s/ C. Anthony Wainwright Director
-------------------------
C. Anthony Wainwright
/s/ John T. Gerlach Director
-------------------
John T. Gerlach
Exhibit 4.1
MARKETING SERVICES GROUP, INC.
1999 INCENTIVE AND NONQUALIFIED
STOCK OPTION PLAN
---------------------------
1. Purpose
The purpose of this Stock Option Plan (the "Plan") is to retain and
attract key employees (which term, as used herein, shall include officers), and
directors, of Marketing Services Group, Inc. (or any successor thereto) ("MSGI")
or a parent (if any) or any subsidiary thereof (collectively, unless the context
otherwise requires, the "Company"), consultants, and advisors to the Company,
and other persons or entities providing goods or services to the Company by
enabling them to acquire a proprietary interest in the Company through the
ownership of shares of the Corporation's common stock, $.01 par value per share
("Share"). As used herein, the term "parent" or "subsidiary" shall mean any
present or future Company which is or would be a "parent Company" or "subsidiary
Company" of the Company as the term is defined in section 424 of the Internal
Revenue Code of 1986, as amended (the "Code") (determined as if the Company were
the employer Company). Such directors, consultants, advisors, and other persons
or entities providing goods or services to the Company and entitled to receive
options hereunder are hereinafter collectively referred to as the "Associates,"
and the relationship of the Associates to the Company is hereinafter referred to
as "association with" the Company. A key employee or Associate to whom an option
has been granted is referred to as a "Grantee". Such ownership will provide such
Grantees with a more direct stake in the future welfare of the Company and
encourage them to remain employed by or associated with the Company. It is also
expected that the Plan will encourage qualified persons to seek and accept
employment or association with the Company.
2. Administration
(a) The Plan shall be administered by the Compensation Committee of the
Company as from time to time constituted (the "Committee").
(b) The Committee shall consist of not less than two persons appointed by
the Board of Directors of MSGI (the "Board") from among its members. A person
may serve on the Committee only if he or she (i) is a "Non-employee Director"
for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and (ii) satisfies the requirements of an "outside director"
for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"). The Committee may, subject to the provisions of the Plan, from
time to time establish such rules and regulations and delegate such authority to
administer the Plan as it deems appropriate for the proper administration of the
Plan, except that no such delegation shall be made in the case of awards
intended to be qualified under Section 162(m) of the Code. The decisions of the
Committee or its authorized delegatees shall be final, conclusive, and binding
with respect to the interpretation and administration of the Plan and any grant
made under it.
(c) Subject to the terms and conditions of the Plan, the Committee shall
be responsible for the overall management and administration of the Plan and
shall have such authority as shall be necessary or appropriate in order to carry
out its responsibilities, including, without limitation, the authority to (i)
interpret and construe the Plan and to determine the terms of all options
granted pursuant to the Plan, including, but not limited to, the persons to
whom, and the time or times at which grants shall be made, the number of options
to be included in the grants, the number of options which shall be treated as
incentive stock options (in the case of options granted to employees) as
described in section 422 of the Code, the number of options which do not qualify
as incentive stock options ("nonqualified options"), and the terms and
conditions thereof; (ii) to adopt rules and regulations and to prescribe forms
for the operation and administration of the Plan; and (iii) to take any other
action not inconsistent with the provisions of the Plan that it may deem
necessary or appropriate.
3. Eligibility and Participation
(a) Key employees and Associates are eligible to receive options. Each
option shall be granted, and the number of Shares and the vesting schedule of
such Shares subject thereto shall be determined by the Committee.
(b) Directors who are not officers of the Company shall receive, on an
annual basis on the last trading day of each June starting June 1999, stock
options for 10,000 Shares, at an exercise price equal to the fair market value
of the stock on the date of grant, and such options shall vest immediately upon
grant. The fair market value shall be determined in accordance with Section 8
hereof.
(c) Notwithstanding subsection 5(a), the Committee may grant options to a
person not then in the employ of the Company, in order to induce such person to
become employed by the Company, provided that the grant of options to such
person shall be conditioned upon such person becoming an employee at, or prior
to, the time of execution of an Option Agreement evidencing such Options, and in
no event shall any such person have any rights with respect to Options granted
pursuant to the Plan prior to becoming an employee.
4. Shares Subject to the Plan
(a) Options shall be evidenced by written agreements, the form of which
shall be approved by the Committee, which shall, among other things (i)
designate the option as either an incentive stock option or a nonqualified stock
option, (ii) specify the number of shares covered by the option; (iii) specify
the exercise price, determined in accordance with paragraph 7 hereof, for the
Shares subject to the option; (iv) specify the option period determined in
accordance with paragraph 6 hereof; (v) set forth specifically or incorporate by
reference the applicable provisions of the Plan; and (vi) contain such other
terms and conditions consistent with the Plan as the Committee may, in its
discretion, prescribe.
(b) The Shares to be offered and delivered under the Plan, pursuant to the
exercise of an option, shall be authorized and unissued Shares or reacquired
Shares, as the Committee may from time to time determine. Subject to adjustment
as provided in paragraph 13 hereof, the aggregate number of Shares to be
delivered under the Plan shall not exceed 1,000,000 Shares. If an option expires
or terminates for any reason during the term of the Plan prior to the exercise
thereof in full, the Shares subject to but not delivered under such option shall
be available for options thereafter granted.
5. Incentive Stock options
(a) An option designated by the Committee as an "incentive stock option"
is intended to qualify as an "incentive stock option" within the meaning of
section 422 of the Code. An incentive stock option shall be granted only to an
employee of the Company.
(b) No incentive stock option shall provide any person with a right to
purchase Shares to the extent that such right first becomes exercisable during a
prescribed calendar year and the sum of (i) the fair market value (determined as
of the date of grant) of the Shares subject to such incentive stock option which
first become available for purchase during such calendar year, plus (ii) the
fair market value (determined as of the date of grant) of all Shares subject to
incentive stock options previously granted to such person under all plans of the
Company first become available for purchase during such calendar year exceeds
$100,000.
(c) Without prior written notice to the Committee, a Grantee may not
dispose of Shares acquired pursuant to the exercise of an incentive stock option
until after the later of (i) the second anniversary of the date on which the
incentive stock option was granted, or (ii) the first anniversary of the date on
which the Shares were acquired; provided, however, that a transfer to a trustee,
receiver, or other fiduciary in any insolvency proceeding, as described in
section 422(c)(3) of the Code, shall not be deemed to be such a disposition. The
Grantee shall make appropriate arrangements with the Company for any taxes which
the Company is obligated to collect in connection with any disposition of Shares
acquired pursuant to the exercise of an incentive stock option, including any
Federal, state or local withholding taxes.
(d) Should Section 422 of the Code be amended during the term of the Plan,
the Committee may modify the Plan consistently with such amendment.
6. Term of Option Period
The term during which options may be granted under the Plan shall expire
on January 11, 2009 and the option period during which each option may be
exercised shall, subject to the provisions of paragraph 12 hereof, expire no
later than the tenth anniversary (the fifth anniversary in the case of incentive
stock options granted to a person who owns (within the meaning of section 424(d)
of the Code) more than 10 percent of the total combined voting power of all
classes of stock of the Company at the time such option is granted) from the
date the option is granted, as may be determined by the Committee.
7. Option Price
The price at which Shares may be purchased upon exercise of a particular
option shall be such price as may be fixed by the Committee but in no event less
than the minimum required in order to comply with any applicable law, rule or
regulation and, in the case of incentive stock options, shall not be less than
100 percent, or in the case of incentive stock options granted to an optionee
who is a 10 percent stockholder (within the meaning of paragraph 6 hereof),
shall not be less than 110 percent, of the fair market value (as defined in
paragraph 8) of such Shares on the date such option is granted.
8. Stock as Form of Exercise Payment
At the discretion of the Committee, a Grantee who owns Shares may be
permitted to use such Shares, with the value thereof to be determined as the
fair market value of such Shares on the day prior to the date of exercise of the
option, to pay all or part of the option price required under the Plan. For
purposes of the Plan, "fair market value" of a Share on any given date shall be
determined by the Committee as follows: (a) if the Shares are listed for trading
on one or more national securities exchanges, or is traded on the automated
quotation system of NASDAQ, the last reported sales price on the principal such
exchange or on NASDAQ on the date in question, or if such Shares shall not have
been traded on such principal exchange on such date, the last reported sales
price on such principal exchange or on NASDAQ on the first day prior thereto on
which such Shares were so traded; or (b) if the Shares are not listed for
trading on a national securities exchange or on NASDAQ, but are traded in the
over-the-counter market, the closing bid price for Shares on the date in
question, or if there is no such bid price for Shares on such date, the closing
bid price on the first day prior thereto on which such price existed; or (c) if
neither (a) or (b) is applicable, by any means fair and reasonably by the
Committee, which determination shall be final and binding on all parties.
9. Exercise of Options
(a) Each option granted shall be exercisable in whole or in part at any
time, or from time to time, during the option period as the Committee may
provide in the terms of such option; provided that the election to exercise an
option shall be made in accordance with applicable federal and state laws and
regulations.
(b) No option may at any time be exercised with respect to a fractional
share.
(c) No Shares shall be delivered pursuant to the exercise of any option,
in whole or in part, until qualified for delivery under such securities laws and
regulations as may be deemed by the Committee to be applicable thereto, until
such Shares are listed on each securities exchange on which Shares may then be
listed, until, in the case of the exercise of an option, payment in full of the
option price is received by the Company in cash or stock as provided in
paragraph 8 and until payment in cash of any applicable withholding taxes is
received by the Company. Unless prior to the exercise of the option the Shares
issuable upon such exercise have been registered with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, the
notice of exercise shall be accompanied by a representation or agreement of the
individual exercising the option to the Company to the effect that such Shares
are being acquired for investment and not with a view to the resale or
distribution thereof or such other documentation as may be required by the
Company unless in the opinion of counsel to the Company such representation,
agreement, or documentation is not necessary to comply with said Act. No holder
of an option, or such holder's legal representative, legatee, or distributee
shall be or be deemed to be a holder of any shares subject to such option unless
and until a certificate or certificates therefor is issued in his name.
10. Acceleration of Vesting
(a) An option shall automatically be vested and immediately exercisable in
full upon the occurrence of any of the following events:
(i) Any person within the meaning of Sections 13(d) and 14(d) of the
1934 Act, other than the Company, has become the beneficial owner, within
the meaning of Rule 13d-3 under the 1934 Act, of 51 percent or more of the
combined voting power of the Company's then outstanding voting securities,
unless such ownership by such person has been approved by the Board
immediately prior to the acquisition of such securities by such person;
(ii) The first day on which shares of the Company's common stock are
purchased pursuant to a tender offer or exchange offer, unless such offer
is made by the Company or unless such offer has been approved or not
opposed by the Board;
(iii) The stockholders of the Company have approved an agreement to
merge or consolidate with or into another Company (and the Company is not
the survivor of such merger or consolidation) or an agreement to sell or
otherwise dispose of all or substantially all of the Company's assets
(including a plan of liquidation), unless the Committee has resolved that
options shall not automatically vest; or
(iv) During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or the
nomination for the election by the Company's stockholders of each new
director was approved by a vote of at least a majority of the directors
then still in office who were directors at the beginning of the period.
(b) Other than upon the occurrence of any of the events described in
paragraph 10(a), the Committee shall have the authority at any time or from time
to time to accelerate the vesting of any individual option and to permit any
stock option not theretofore exercisable to become immediately exercisable.
11. Transfer of Options
Options granted under the Plan may not be transferred except by will or
the laws of descent and distribution and, during the lifetime of the Grantee to
whom granted, may be exercised only by such or by such Grantee's guardian or
legal representative. Any attempted transfer, assignment, pledge or
hypothecation, or the levy of any attachment or similar process, shall render
the option subject thereto null and void.
12. Termination of Employment
(a) Except as specifically provided in this paragraph 12, if the Grantee's
employment or association with the Company shall terminate for any reason before
the option has vested in full, then the unvested portion of the option shall
automatically terminate on the date of termination of employment or association
and all rights and interests of the Grantee in and to such unvested portion
shall thereupon terminate.
(b) After the date on which an option vests, if the Grantee's employment
by or association with the Company is terminated for any reason, the option
shall be exercisable for the lesser of (i) three (3) months from the date of
such termination or (ii) the balance of such option's term; provided, however,
that in the event that the termination is as a result of the death or disability
(within the meaning of section 22(e)(3) of the Code) of the Grantee, the options
held by such Grantee which were otherwise exercisable on the date of his
termination of employment shall expire unless exercised by such Grantee, or, in
the case of the death of a Grantee, by his heirs, legatees, or personal
representatives, within a period of twelve (12) months after the date of
termination of employment. In no event, however, shall any option be exercisable
after ten years from the date it was granted. Nothing in the Plan or in any
option shall confer upon any Grantee the right to continue in the employ of the
Company or interfere in any way with the right of the Company to terminate the
employment of a Grantee at any time. The Committee's determination that a
Grantee's employment has terminated and the date thereof shall be final and
conclusive on all persons affected thereby.
(c) The Committee may, if it determines that to do so would be in the
Company's best interests, provide in a specific case or cases for the exercise
of options which would otherwise terminate upon termination of employment or
association with the Company for any reason, upon such terms and conditions as
the Committee determines to be appropriate.
(d) In the case of a Grantee on an approved leave of absence, the
Committee may, if it determines that to do so would be in the best interests of
the Company, provide in a specific case for continuation of options during such
leave of absence, such continuation to be on such terms and conditions as the
Committee determines to be appropriate. Leaves of absence for such period and
purposes conforming to the personnel policy of the Company as may be approved by
the Committee shall not be deemed terminations or interruptions of employment.
13. Adjustments Upon Changes in Capitalization
(a) If Shares are hereafter changed by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, combination,
or exchange of shares or the like, or dividends payable in Shares, an
appropriate adjustment shall be made by the Committee in the aggregate number of
Shares available under the Plan and in the number of Shares and price per Share
subject to outstanding options. If the Company shall be reorganized,
consolidated, or merged with another Company, or if all or substantially all of
the assets of the Company shall be sold or exchanged, the holder of an option
shall, after the occurrence of such a corporate event, be entitled to receive
upon the exercise of his option the same number and kind of Shares of stock or
the same amount of property, cash, or securities as he would have been entitled
to receive upon the happening of any such corporate event as if he had exercised
such option and had been, immediately prior to such event, the holder of the
number of Shares covered by such option. All adjustments made pursuant to this
paragraph to the terms or conditions of an incentive stock option shall be
subject to the requirements of section 424 of the Code.
(b) Any adjustment in the number of Shares shall apply proportionately to
only the unexercised portion of any option granted hereunder. If fractions of a
Share would result from any such adjustment, the adjustment shall be revised to
the next higher whole number of Shares.
14. Termination, Modification, and Amendment
(a) The Plan shall terminate on January 11, 2009, which is 10 years from
the earlier of the date of its adoption by the Board or the date on which the
Plan is approved by the stockholders of MSGI and no option shall be granted
after termination of the Plan.
(b) The Board or the Committee may at any time terminate the Plan or from
time to time make such modifications or amendments of the Plan as it may deem
advisable or appropriate, but no amendment, alteration, or discontinuation shall
be made (i) which would adversely impair the rights of a participant under an
option theretofore granted, without the participant's consent, or (ii) which
without the approval of the shareholders of the Corporation would cause the Plan
to no longer comply with Rule l6b-3 under the Securities Exchange Act of 1934,
Section 422 of the Code or any other regulatory requirements.
(c) No termination, modification, or amendment of the Plan, may, without
the consent of the Grantee, adversely affect the rights conferred by such
option.
15. Miscellaneous
(a) Nothing contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
(b) The Committee shall have the right to condition any grant of any
option under the Plan upon the recipient's execution and delivery to the
Corporation of an agreement not to compete with the Corporation during the
recipient's employment or service with the Corporation and for such period
thereafter as shall be determined by the Committee. Such covenant against
competition shall be in a form satisfactory to the Committee.
(c) Nothing in the Plan gives to any person any right to continued
employment by the Corporation or to continued service as a consultant to the
Corporation or limits in any way the right of the Corporation or the
Corporation's shareholders at any time to terminate or alter the terms of that
employment or service.
(d) The Plan shall be governed by and construed in accordance with the
laws of the State of New York.
16. Effective Date
The Plan became effective on January 12, 1999 upon the adoption by the
Board subject to the approval by the affirmative vote of the holders of a
majority of the outstanding shares of the Company which occurred on March 29,
1999. All options granted prior to the date of such stockholder approval shall
be subject to such approval.
Exhibit 4.3
MARKETING SERVICES GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT effective as of the 14th day of
May, 1999, by and between MARKETING SERVICES GROUP, INC. ("MSGI") (the
"Company") and EDWARD MULLEN (the "Optionee");
WHEREAS, pursuant to an employment agreement dated April 7, 1999,
the Company is obliged to grant to the Optionee, a stock option to
purchase shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), and
WHEREAS, pursuant to the same employment agreement, the parties
hereto desire to enter into this agreement (the "Agreement") for the
purpose of evidencing the grant of such stock option and setting forth
certain of the terms and conditions governing the exercise thereof;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Options. The Company hereby grants to the Optionee a stock option to
purchase an aggregate of FOUR HUNDRED THOUSAND (400,000) shares of Common Stock
(the "Option"), subject to the terms and conditions set forth herein.
2. Exercise Price. The exercise price per share of Common Stock subject to the
Option is $5.17.
3. Term. Subject to each and every one of the terms, conditions and limitations
(including cancellation) set forth in this Agreement, the Option may be
exercised by the Optionee in the following installments:
Total Shares Subject
Vesting Date to Option which may be Exercised
----------- --------------------------------
Immediately 133,000
June 1, 1999 to
May 1, 2001 on 11,125 per month
the first of every for 24 months
month for 24 months (total options=267,000)
The options are subject to accelerated vesting upon a Change in
Control as defined and set forth in the employment agreement.
Except as otherwise provided for in the employment agreement, these
options shall terminate on or before the earlier of (i) ninety (90) days after
the termination of Optionee's relationship to the Company as an employee of, or
consultant to, the Company or any of its subsidiaries or affiliates, (ii) upon
the Optionee's death, or (iii) seven (7) years from the date hereof, and any
shares not purchased on or before the earlier of occurrence of one of these
events may not thereafter be purchased. For the purpose of making determinations
as to termination event number (i) preceding, decisions by the Company's Board
of Directors as to when such relationships have been terminated shall be binding
on the Optionee, provided that notice of such termination has been provided to
all parties by way of notice of resignation given by the Optionee or by notice
of termination given by the Company to the Optionee.
4. Exercise. Subject to such administrative regulations as may be adopted from
time to time, the Options may be exercised within the limitations in Section 3
above, in whole or in part, by delivery of written notice to the Secretary of
the Company by the Optionee indicating the number of shares of Common Stock as
to which the Option is exercised. Such notice shall be accompanied by payment of
the exercise price (the "Exercise Price") which shall be an amount equal to the
result obtained by multiplying (i) the exercise price per share times (ii) the
total number of shares of Common Stock being purchased by the Optionee pursuant
to the exercise of all or any portion of the Option. Subject to the terms of the
Plan, the Exercise Price shall be paid in United States Dollars, in cash,
certified or cashier's check, or by money order, or with shares of Common Stock,
or by a combination of the above. Shares of Common Stock utilized in full or
partial payment of the Exercise Price shall be valued at their "Fair Market
Value" on the date of exercise, as such term is defined in the Plan.
5. Delivery of Certificates.
(a) As soon as practicable following the exercise of all or a portion
of the Option by the Optionee, the Company shall deliver or cause to be
delivered to the Optionee a certificate or certificates representing the shares
of Common Stock acquired pursuant to such exercise.
(b) Prior to the issuance of any certificate representing shares of
Common Stock as to which the Option has been exercised, the Optionee shall pay
to the Company in a form satisfactory to the Company, the amount, if any, which
the Company reasonably determines to be necessary to withhold in accordance with
applicable income tax withholding requirements.
(c) An Optionee shall have the rights of a shareholder only with
respect to those shares of Common Stock covered by the Option which have been
registered in the Optionee's name in the share register of the Company upon the
due exercise of the Option.
6. No Transfer or Assignment. The Option granted hereby may not be
transferred in any manner, other than by will or the laws of descent and
distribution; may be exercised during the Optionee's lifetime only by the
Optionee or his guardian or legal representative; and may not be assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
or subject to execution, attachment or similar process.
7. Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Nevada.
8. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings and arrangements, both oral and written, among
the parties hereto with respect to such subject matter except for the employment
agreement dated April 7, 1999. To the extent there are any inconsistencies in
both this agreement and the employment agreement, the employment agreement shall
govern. This Agreement may not he amended or modified in any way, other than by
a written instrument executed by each of the parties hereto.
9. Benefits; Binding Effect. Subject to Section 6 hereof, this Agreement
shall inure to the benefit of, and be binding upon, the parties hereto and their
respective heirs, executors, administrators, successors and assigns.
10. Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation hereof.
11. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which shall be deemed to be an original, and both
of which shall be deemed to be one and the same instrument.
12. Other Documents. The Optionee agrees to execute and deliver to the
Company any and all documents or instruments which are either deemed advisable
by the Company or required to be delivered to give effect to all of the terms
and provisions of this Agreement.
13. Not an Employment Agreement. Nothing contained herein or in the Plan
shall obligate or require the Company to employ the Optionee for any period of
time, nor restrict, in any way, the Company's ability to terminate the
employment of the Optionee (if applicable) or any other relationship the
Optionee may have with the Company, under separate agreement(s).
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
MARKETING SERVICES GROUP, INC. OPTIONEE:
(signature)
/s/ Edward Mullen
By: /s/ Jeremy Barbera -----------------
------------------ Name: Edward Mullen
Name: J. Jeremy Barbera -------------
----------------- Address: 173 Waban Hill Road
Title: Chairman & CEO -------------------
Chestnut Hill, MA 02167
-----------------------
Exhibit 5.1 and 23.1
June 28, 1999
Marketing Services Group, Inc.
333 Seventh Avenue
New York, New York 10001
Re: Registration Statement on Form S-8;
Marketing Services Group, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Marketing Services Group, Inc.,
a Nevada corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-8 (the "Registration Statement"), filed by the
Company with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), relating to the registration and
issuance by the Company of 1,600,000 shares (the "Shares") of common stock, par
value $0.01 per share (the "Common Stock"), of the Company, including (i)
1,000,000 shares authorized for issuance under The Marketing Services Group,
Inc. 1999 Stock Option Plan, (ii) 400,000 shares authorized for issuance under
an executive employment agreement, and (iii) 200,000 shares authorized for
issuance under The Marketing Services Group, Inc. 1991 Stock Option Plan (the
"1999 Stock Plan", the "Executive Employment Agreement" and the "1991 Stock
Plan," respectively).
This opinion is being furnished to you in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
In connection with the opinions hereinafter given, we have examined
copies of the following documents: (i) the Registration Statement, (ii) the 1999
Stock Plan, (iii) the Executive Employment Agreement, (iv) the 1991 Stock Plan,
(v) the Articles of Incorporation of the Company, as currently in effect, (vi)
the By-laws of the Company, as currently in effect, (vii) a specimen certificate
representing the Shares and (viii) copies of certain resolutions adopted by the
Board of Directors of the Company relating to, among other things, the 1999
Stock Plan, the Executive Employment Agreement, the 1991 Stock Plan and related
matters.
We have also examined originals or copies certified or otherwise
identified to our satisfaction of such other corporate records and certificates
of public officials as we have deemed necessary or advisable for the purposes of
this opinion. We have assumed the authenticity of all documents submitted to us
as originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to originals of all copies of all documents submitted
to us.
We have relied upon the certificates of all public officials and
corporate officers with respect to the accuracy of all matters contained
therein, including, but not limited to, the officer's certificate attached
hereto as Exhibit A.
Based upon and subject to the foregoing, and assuming the conformity
of the certificates representing the Shares to the form of specimen thereof
examined by us, we are of the opinion that the Shares have been duly authorized
by requisite corporate action by the Company, and, when issued, delivered and
paid for in accordance with the terms and conditions of 1999 Stock Plan, the
Executive Employment Agreement and the 1991 Stock Plan, respectively, will be
validly issued, fully paid and non-assessable.
Nothing herein shall be deemed an opinion as to the laws of any
jurisdiction other than the State of Nevada.
This opinion is intended solely for the use of the Company in
connection with the registration of the Shares. It may not be relied upon by any
other person or for any other purpose, or reproduced without the written consent
of this firm; provided, however, we hereby consent to the filing of this opinion
as an exhibit to the Registration Statement. In giving this consent, we do not
thereby admit that we are in the category of person whose consent is required
under Section 7 of the 1933 Act or the rules and regulations of the Commission
promulgated thereunder.
Very truly yours,
/s/ Lionel Sawyer & Collins
---------------------------
Lionel Sawyer & Collins
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated September 9, 1998 relating to the
financial statements, which appears in Marketing Services Group, Inc.'s Annual
Report on Form 10-KSB for the year ended June 30, 1998.
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
New York, New York
June 28, 1999
