SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number 0-15355
J.A.M., INC.
(exact name of registrant as specified in its charter)
NEW YORK 16-1092174
(State of Incorporation) (IRS Employer Identification No.)
530 WILLOWBROOK OFFICE PARK, FAIRPORT, NEW YORK 14450
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 716-385-6740
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common STOCK, $.01 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X
No______
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
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The aggregate market value of common stock held by non-affiliates of the
Registrant at March 29, 1996 was not verifiable due to delisting.
The number of shares of the Registrant's voting stock outstanding on March 29,
1996 was 15,274,447.
Portions of the 1995 Annual Report to stockholders of Registrant are
incorporated by reference in Parts I and II of this Report.
The Index of Exhibits filed with this Report begins at page 16.
The total number of pages in this Report is 39.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL DEVELOPMENT OF BUSINESS. The information contained in the J.A.M., Inc.
1995 Annual Report to Stockholders for the year ended December 31, 1995 ("1995
Annual Report") on pages 1 through 7 inclusive is incorporated herein by
reference.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. The business operations of
J.A.M., Inc. are primarily development of interactive multimedia products and
services. At the present time, J.A.M. can offer clients "Total Turnkey
Solutions" that encompass both hardware and customized software and
applications. Such solutions might range from stand alone CD-ROM based
multimedia applications to video-on-demand computer-based multimedia
applications such as kiosks or server-based applications utilizing local and
wide area networking. Using our technology and expertise, J.A.M. can offer
immensely effective solutions to our clients in the areas of training,
education, public information, corporate communications, sales, and marketing.
INFORMATION AS TO LINES OF BUSINESS. The Company's multimedia product and
services include:
SALES OF IT2000 PRODUCT AND RELATED HARDWARE AND SOFTWARE -- This includes
IT2000 digital video file servers, kiosks, PCs, and support hardware and
software including DCP (Digital Conversion Process) which consists of the
conversion of existing paper and analog-based materials to digital platforms.
DCP is ideal for the conversion of video and videodisc programs to multimedia
PC platforms.
DEVELOPMENT OF MULTIMEDIA APPLICATIONS AND CONTENT -- Sales of production
services and custom development of projects to meet the various needs to our
customers (training, informational, sales and marketing, database
requirements).
NETWORK CONSULTING AND INTEGRATION SERVICES -- Sales of consulting and
integration services to enable customers to upgrade their computing
environments and implement multimedia networking.
IN-HOUSE SERVICES include:
* Multimedia Design/Production
* Video Production/Post Production/Computer Graphics
* Instructional Design/Writing
* CD-ROM & CD-i Production/Mastering
* Conversion of Existing Material to Digital Platforms
* Network Design/Integration
NARRATIVE DESCRIPTION OF BUSINESS.
The information contained in the J.A.M., Inc. 1995 Annual Report, page 4, is
incorporated herein by reference, to sub-paragraphs (i) and (ii) of this sub
item.
PRINCIPAL PRODUCTS CUSTOM-DESIGNED TRAINING PROGRAMS.
For the years ended December 31, 1995, 1994, and 1993, the Company derived
approximately 95%, 95%, and 75%, respectively, of its revenues from the
production and design of interactive multimedia training and communications
programs.
VIDEO PRODUCTION AND POST- PRODUCTION SERVICES.
Video production and post- production services, which include production
related to training programs, accounted for approximately 5%, 5%, and 10% of
the Company's revenues for the years ended December 31, 1995, 1994, and 1993
respectively.
DEPENDENCE UPON KEY CUSTOMERS. During 1995, the Company had three (3) major
customer which had approximately $721,600 (46%) of total revenues for 1995, as
compared to approximately $200,000 (38%) in 1994, and approximately $388,000
(47%) in 1993.
BACKLOG. In 1995, the Company produced multimedia and communications services
under contracts with its customers. The backlog at the end of 1995 was
approximately $350,000.
COMPETITION. In marketing its services, the Company competes for sales with
many other businesses in training and multimedia communication services.
Several companies also compete directly with the Company in providing video-
based, computer-based, and interactive videodisc training programs. Many of
the Company's competitors have available greater financial, technical, and
marketing resources than the Company.
EMPLOYEES. At December 31, 1995, the Company employed 20 full-time employees.
Such employees included 3 officers, 4 administrative and sales personnel, 2
video production professionals, 7 software
programmers and designers, and 4 instructional designers. The Company also
employs a number of part-time employees and independent contractors depending
on the volume and types of services required for various contracts. None of
the Company's employees currently are represented by a labor union. Management
believes that employee relations are good.
In its production of recorded performances, the Company engages various artists
and other production personnel who may be members of unions. The Company has
not entered into any labor agreement with any such union, but complies with the
terms of union agreements when dealing with union members.
EXECUTIVE OFFICERS OF THE REGISTRANT. John A. Marszalek is the founder of the
Company and has served as its President and as a Director since its
incorporation in 1977.
Prior to founding the Company, Mr. Marszalek served as general manager of two
radio broadcast facilities in Rochester. He holds a Masters Degree from the
University of Katowicace, Poland.
ITEM 2. PROPERTIES. During August of 1992, the Company moved its headquarters
to Fairport, which is a suburb of Rochester, New York, to reduce its expenses.
The President of the Company personally guaranteed the five year lease
agreement. The Company leases approximately 5,000 square feet of office space
under a six-year net lease agreement expiring August 31, 1998, at an annual
rental of approximately $70,000. This is a reduction of the Company's former
annual rental by $36,000 per year.
In December, 1995, the Company signed a second lease agreement for an
additional 2,300 square feet on a one-year net lease at an annual rental of
approximately $36,000 per year.
ITEM 3. LEGAL PROCEEDINGS. Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not Applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS. The information concerning the principal market, sales, prices,
number of holders, dividends and dividend policy for the common stock of the
Company, contained in the J.A.M., Inc. 1995 Annual Report, Page 5, is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA. The information contained in the tabulation
"Five Year Summary of Selected Financial Information" in the J.A.M., Inc. 1995
Annual Report, page 8, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. The information bearing the same title contained in the
J.A.M., Inc. 1995 Annual Report, pages 6 through 7, is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial
statements, prepared by the Company and contained in the J.A.M., Inc. 1995
Annual Report, pages 9 through 14 inclusive, are incorporated herein by
reference. Other financial schedules are filed herewith as
part of this Report, see Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES. The information concerning this matter appears at page
7 of the Company's 1995 Annual Report, and is incorporated herein by reference.
PART III
ITEM 10. DIRECTORS OF THE REGISTRANT. The Company was not able to hold an
Annual Meeting in 1995 due to lack of a quorum.
JOHN A. MARSZALEK. Mr. Marszalek, 47 years of age, is the founder of the
Company and has served as its President and as a Director since its
incorporation in 1977. Prior to founding the Company, Mr. Marszalek served as
general manager of two radio broadcast facilities in Rochester, New York.
PETER A. SPINA. Dr. Spina, 57 years of age, has been a Director since June,
1989. He is President of Monroe Community College in Rochester, New York. He
also serves as a director and officer of Blue Cross and Blue Shield of
Rochester, New York, a director of Trinity Liquid Assets Trust, a director of
Home Care Research of Rochester, New York, and is past president of the
Association of Public Community Colleges.
DAVID DELLA PENTA. Mr. DellaPenta, 47 years of age, was elected to the Board
of Directors at the September 22, 1994 meeting. He is the President of Nalge
Corporation, a Rochester, NY-based manufacturer of high-quality plastic
products sold into the scientific research, industrial, and consumer markets
worldwide.
There are no family relationships between any Director, executive officer, or
person nominated or chosen by the Board to become a Director or executive
officer. The Board of Directors held four meetings during 1995, and all of the
incumbent Directors attended more than 75% of the aggregate of the total number
of Board meetings and total number of meetings held by all committees of the
Board on which they serve.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. Section 16(a) of the
Securities Exchange Act of 1934 requires the Company's officers and directors
and persons who own more than ten percent of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc. Officers, directors, and greater than
ten percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during 1995, all filing
requirements applicable to its officers, directors, and greater than ten
percent beneficial owners were in compliance.
ITEM 11. EXECUTIVE COMPENSATION. Under the SEC's executive compensation
disclosure rules, information is required to be provided with respect to the
compensation and benefits paid by the Company for all services rendered during
1995, 1994 and 1993 to five individuals: the person who was, at December 31,
1995, serving as the Company's Chief Executive Officer, and the four other
individuals who were, as of December 31, 1995, the other four most highly
compensated executive officers of the Company whose 1995 salary and bonus
exceeded $50,000 in amount. Accordingly, the following table setting forth
this information applies three (3) employees of J.A.M. in 1995:
SALARY BONUS
John A. Marszalek $61,836
Louis Camerlengo $55,000 $7,500
David Colaizzi $50,000 $3,000
Lee Maxey $50,000 $1,312.50
MANAGEMENT COMPENSATION. The Company's President, Mr. Marszalek, has an
employment agreement with the Company, effective as of December 3, 1986. The
agreement extends through December 31, 2000, and provides that Mr. Marszalek is
to serve full-time Chief Executive Officer and Chairman of the Board of the
Company. Pursuant to this agreement, Mr. Marszalek is entitled to participate
in any benefit plans or programs for executive officers or employees that may
be in effect from time to time and is entitled to reimbursement for the use of
an automobile. It also provides for the payment of the greater of one year's
salary or his then current salary for the remainder of the contract term in
connection with his termination without cause prior to the expiration of the
agreement.
COMPENSATION OF DIRECTORS. Directors do not receive any compensation for
services as a Director. Directors of the Company are reimbursed for out-of-
pocket expenses incurred on the Company's behalf.
COMPENSATION PURSUANT TO PLANS. STOCK OPTION PLAN. In May of 1986, the
shareholders of the Company approved the Incentive Stock Option Plan (the "ISO
Plan") for officers and key employees. The ISO Plan authorizes the issuance of
options to purchase up to 200,000 shares of the Company's common stock.
Options granted under the ISO Plan are intended to qualify as "incentive stock
options" under the Internal Revenue Code of 1986, as amended. Under the ISO
Plan, options may be granted at not less than 100% (110% in the case of 10% or
greater shareholders) of the fair market value of the Company's common stock on
the date of grant. Options granted under the ISO Plan must be exercised, if at
all, within ten years from the date of grant (five years in the case of 10% or
greater shareholders) and no option may be granted more than ten years from the
date of adoption of the Plan. Options granted under the ISO Plan may not be
transferred, except by will or by the laws of descent and distribution.
Options granted under
the plan must be exercised, if at all, within three months after termination of
employment for any reason except death or disability and within 60 days after
death or within one year after termination of employment due to disability.
The Board of Directors of the Company, or the Compensation Committee of the
Board, has the power to impose limitations, conditions, and restrictions in
connection with the grant of
any option.
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COMPENSATION PURSUANT TO PLANS. (Cont'd)
On September 22, 1994, the Board of Directors approved an Incentive Stock
Option Plan (the "ISO Plan") for officers and key employees. On December 14,
1995, the Board appointed one (1) new officer to the Company: David Colaizzi
as Vice President of MultiMedia. Robin Rutkowski has resigned from the
Company as of July 11, 1995. The Board also granted David Colaizzi a stock
option of 40,000 shares under the ISO Plan. Louis Camerlengo, Vice President
of Sales and Marketing has 65,000 shares of stock options previously granted
in 1994. The Board also granted Mr. Marszalek's right to exercise his option
to acquire 3,000,000 additional shares by converting $150,000 of the Officer
Loan. The Board recommended and authorized the President of the Company to
develop a proposal for employees incentive program similar to a 401K plan.
1987 STOCK OPTION PLAN. In May of 1988, the shareholders of the Company
approved the 1987 Stock Option Plan (the "1987 Plan") under which options to
purchase stock may be granted to officers and other key employees of the
Company. The 1987 Plan authorizes the issuance of options to purchase up to
500,000 shares of the common stock of the Company. The provisions of this plan
are substantially the same as those of the Incentive Stock Option Plan, except
that the 1987 Plan authorizes the issuance of both options intended to qualify
as "incentive stock options" under the Internal Revenue Code of 1986, as
well as options that do not so qualify. As of December 31, 1995, there were
options outstanding to purchase up to 365,000 shares of Common Stock of the
Company. No options were exercised under the 1987 Plan. Mr. Marszalek has no
options under this plan.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The
following table sets forth as of March 29, 1996, the number and percentage of
outstanding shares of common stock beneficially owned by each Director of the
Company, by all Directors and current officers of the Company as a group, and
by each person known to the Company to be the beneficial owner of more than 5%
of the Company's common stock. The Company believes that each individual in
this group has sole investment and voting power with respect to his shares
unless
otherwise noted:
Number of Percentage of Shares
NAME OF NOMINEE SHARES OUTSTANDING
John A. Marszalek* 5,042,716 33%
Peter A. Spina** 100,000 1%
David DellaPenta** 100,000 1%
**Includes 100,000 shares issuable under stock options presently exercisable
at $.04 per share.
* Mr. Marszalek, with an address c/o 530 Willowbrook Office Park, Fairport,
New York 14450, is the only person known to the Company to beneficially own
more than 5% of its outstanding common stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Not Applicable
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K. The following documents are filed as part of this Report.
The following financial statements are contained in the J.A.M., Inc. 1995
Annual Report and are incorporated herein by reference in Item 8 of this
Report:
- Balance Sheets, December 31, 1995 and 1994
- Statements of Operations for the years ended December 31, 1995, 1994 and
1993.
- Statements of Stockholders' Equity for the years ended December 31, 1995,
1994 and 1993.
- Statements of Cash Flows for the years ended December 31, 1995, 1994 and
1993.
- Notes to Financial Statements
SCHEDULES - The following schedules are filed as a part of this Report:
- V Property, plant and equipment
- VI Accumulated depreciation, depletion and amortization
- VIII Valuation and qualifying accounts and reserves
- X Supplemental Income Statement Information
Other schedules are omitted because of the absence of conditions under which
they are required or because the required information is given in the financial
statements or the notes thereto.
EXHIBITS - See Exhibit Index attached.
REPORTS ON FORM 8-K. No report on Form 8-K was filed during the fourth
quarter of 1995.
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
For The Years Ended December 31, 1995, 1994, and 1993
Balance at Balance
beginning at end
CLASSIFICATION OF YEAR ADDITIONS RETIREMENTS OF YEAR
December 31, 1995:
Leasehold improvements $ 13,183 $ 14,766 $ 0 $ 27,949
Production equipment 258,732 242,640 0 501,372
Design and development
equipment 137,416 0 511 136,905
Office furniture and
equipment 151,239 0 88,025 63,214
$ 560,570 $257,406 $88,536 $729,440
December 31, 1994:
Leasehold improvements $ 10,722 $ 17,227 $ 14,766 $ 13,183
Production equipment 327,955 23,277 92,500 258,732
Design and development
equipment 190,268 2,644 55,496 137,416
Office furniture and
equipment 112,514 65,758 27,033 151,239
$ 641,459 $108,906 $189,795 $ 560,570
December 31, 1993:
Leasehold improvements $ 10,722 $ 0 $ 0 $ 10,722
Production equipment 327,955 0 0 327,955
Design and development
equipment 147,943 42,325 0 190,268
Office furniture and
equipment 87,508 25,292 286 112,514
$ 574,128 $ 67,617 $ 286 $641,459
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SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
For the Years Ended December 31, 1995, 1994 and 1993
Balance at Balance
beginning at end
CLASSIFICATION OF YEAR ADDITIONS RETIREMENTS OF YEAR
December 31, 1995:
Leasehold improvements $ 969 $ 1,843 $ 0 $ 2,812
Production equipment 243,598 138,772 0 382,370
Design and development
equipment 132,153 11,789 0 143,942
Office furniture and
equipment 65,651 0 34,144 31,507
$ 442,371 $152,404 $ 34,144 $ 560,631
December 31, 1994:
Leasehold improvements 2,820 940 2,791 969
Production equipment 275,822 94,109 126,333 243,598
Design and development
equipment 131,405 63,159 62,411 132,153
Office furniture and
equipment 46,077 32,691 13,117 65,651
$ 456,124 $190,899 $ 204,652 $ 442,371
December 31, 1993:
Leasehold improvements $ 120 $ 2,700 $ 0 $ 2,820
Production equipment 254,222 21,600 0 275,822
Design and development
equipment 120,605 10,800 0 131,405
Office furniture
and equipment 27,177 18,900 0 46,077
$ 402,124 $ 54,000 $ 0 $ 456,124
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SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Years Ended December 31, 1995, 1994 and 1993
Additions
Balance at Charged to Balance
beginning Costs and Deduc- at end
DESCRIPTION OF YEAR EXPENSES TIONS (1) OF YEAR
Allowance for doubtful
accounts - deducted from
accounts and notes receivable
in the balance sheet
December 31, 1995 $ 3,600 $ 0 $ 1,803 $1,797
December 31, 1994 $ 3,600 $ 0 $ 0 $3,600
December 31, 1993 $ 3,600 $ 0 $ 0 $3,600
(1) uncollectable accounts written off.
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SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
For The Years Ended December 31, 1995, 1994, and 1993
ITEM CHARGED TO COSTS AND EXPENSES
1995 1994 1993
Maintenance and repairs $ * $ 8,609 $ *____
Depreciation and amortization
of intangible assets, pre-
operating costs and similar
deferrals $ 0 $46,082 $55,000
Taxes, other than payroll and
income taxes $ * $ * $ *_____
Royalties $ 0 $ 0 $ *_____
Advertising costs $28,409 $ 8,072 $ *_____
* Less than 1% of total sales.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
J.A.M., Inc.
Dated: March 29, 1996 By:/s/John A. Marszalek
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons, on behalf of the Company
and in the capacities and on the dates indicated:
Dated: March 29, 1996 By:/s/ John A. Marszalek
John A. Marszalek
President and Chief
Executive Officer,
Director
Dated: March 29, 1996 By: /s/ Peter A. Spina
Peter A. Spina
Director
Dated: March 29,1996 By: /s/ David DellaPenta
David DellaPenta
Director
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EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION LOCATION
3-1 Restated Certificate of Filed herewith
Incorporation of
J.A.M., Inc., as amended.
3-2 Bylaws of J.A.M., Inc. Filed herewith
4-1 Form of Common Stock Certificate of Incorporated by Reference to
J.A.M., Inc. Exhibit 4 (a) to Registrant's
S-18, registration no.
33-7486-NY, declared effective
November 10, 1986
10-1 Employment Agreement between Registrant Filed herewith
and John A. Marszalek dated July 17, 1986.
10-2 Registrant's Incentive Stock Option Plan Filed herewith
10-3 Registrant's 1987 Stock Option Plan Filed herewith
10-4 Employee Agreement Regarding Filed herewith
Proprietary Information and Inventions
between Registrant and
John A. Marszalek
11 Statement re: Computation of Per Share *
Earnings.
13 J.A.M., Inc. 1995 Annual Report Filed herewith
to Shareholders
27 Financial Data Schedule Filed only with
EDGAR filing, per
Reg. S-K, Rule 601
(c)(1)(v)
*See Note 2 to the Notes to Consolidated Financial Statements incorporated by
reference in Item e of this Report.
EXHIBIT 3-1
RESTATED CERTIFICATE OF INCORPORATION
OF
J.A.M., INC.
Under Section 807 of the
Business Corporation Law
We, John A. Marszalek and Anthony W. Busch, the President and
Secretary respectively, of J.A.M., Inc., hereby certify:
A. The name of the corporation is J.A.M., Inc. The corporation was
formed under the name of JAM T.V. & Radio Productions, Inc.
B. The certificate of its incorporation was filed by the Department
of State on May 31, 1977.
C. The Certificate of Incorporation, as amended heretofore, is
hereby further amended as follows: (i) to change the number of shares which
the corporation is authorized to issue from 2,000,000 shares of common
stock, having a par value of $.01 per share, to 16,000,000 shares of common
stock, having a par value of $.01 per share; (2) to change each of the
issued and outstanding shares of the common stock of the corporation, par
value $.01, into 3.144147 shares of common stock, $.01 par value; (3) to
change the post office address to which the Secretary of State shall mail a
copy of any process against the corporation served upon him.
D. The text of the Certificate of Incorporation, as amended
heretofore, is hereby restated as further amended to read as herein set
forth in full:
1. The name of the corporation shall be: J.A.M., Inc.
2. The purpose or purposes for which this corporation is formed
are as follows, to wit:
To devise, prepare, publish, print, manufacture, produce, buy, hire,
or otherwise acquire, use, sell, lease, license others to use, export,
import or otherwise turn to account or dispose of, exhibit, distribute and
deal in audio or visual productions, including, without limitation, still
and motion pictures, films, microfilms, tapes, sound recordings, mechanical
or otherwise, phonograph records and television productions, and any and
all parts, apparatus, equipment, supplies, materials, chemicals,
implements, devices and goods useful in manufacturing, producing,
receiving, collecting, transcribing, reproducing, exhibiting, transmitting,
publishing, broadcasting, telecasting or otherwise deal with the same.
To acquire by lease, purchase, contract, concession, license or
otherwise, to erect or otherwise construct and to own, use, manage, lease,
operate and control motion picture studios, film branches or exchanges,
distributing centers, warehouses, storerooms, laboratories, film developing
and printing plants, television studios, radio broadcasting and telecasting
systems or stations and other buildings and structures.
To acquire such property, real and personal, as may be necessary to
conduct such business.
The powers, rights and privileges provided in this Certificate of
Incorporation are not to be deemed to be in limitation of similar, other or
additional powers, rights and privileges granted or permitted to a
corporation by the Business Corporation Law, it being intended that this
corporation shall have the right to engage in such similar activities as
like corporations may lawfully engage in under the Business Corporation Law
of the State of New York, as now in effect, or as hereafter promulgated.
To do everything necessary, suitable or proper for the accomplishment,
attainment or furtherance of, to do every other act or thing incidental to,
appurtenant to, growing out of or connected with, the purposes, objects or
powers set forth in this Certificate of Incorporation, whether alone or in
association with others; to possess all the rights, powers and privileges
now or hereafter conferred by the laws of the State of New York upon a
corporation organized under the laws of the State of New York and, in
general, to carry on any of the activities and to do any of the things set
forth to the same extent and as fully as a natural person or partnership
might or could do; provided, that nothing herein set forth shall be
construed as authorizing the corporation to possess any purpose, object, or
power, or to do any act or thing forbidden by law to a corporation
organized under the laws of the State of New York.
3. The office of the corporation is to be located in the County of
Monroe, State of New York.
4. The aggregate number of shares which the corporation shall have
the authority to issue is 16,000,000 shares, all of which shall be common
shares having a par value of $.01 per share.
5. The Secretary of State is designated as agent of the corporation
upon whom process against it may be served. The post office address to
which the Secretary of State shall mail a copy of any process against the
corporation served upon him is: c/o J.A.M., Inc., 300 Main Street, East
Rochester, New York 14445.
6. The corporation's initial accounting period for reporting the
franchise tax on business corporations imposed by Article 9-A of the Tax
Law shall end December 31, 1977.
7. Notwithstanding anything to the contrary herein contained, no
holder of shares of the corporation of any class now or hereafter
authorized shall have any preferential or preemptive rights to subscribe
for, purchase or receive any shares of the corporation of any class, now or
hereafter, or any options or warrants for such shares, or any right to
subscribe for or purchase such shares, or any securities convertible into
or exchangeable for such shares, which may at any time be issued, sold or
offered by sale by the corporation.
E. The foregoing amendments to paragraph 4 provide for a change of
issued shares of common stock. The number of issued shares of common stock
is 1,258,205 shares. The terms of the change are that each issued share of
common stock, will be changed into 3.144147 shares of common stock. In
lieu of issuing any fractional shares as a result of the change, the
corporation will pay, to shareholders who would be entitled to receive
fractional shares, cash in the amount of the fair value of such fractional
shares as of the date of this Restated Certificate of Incorporation as
filed by the Department of State. As a result of the change of shares of
common stock, the 1,258,205 issued shares will be changed into 3,955,967
shares.
F. The foregoing amendments to paragraph 4 were duly authorized by
vote of the Board of Directors of the corporation, followed by vote of the
holders of the majority of all outstanding shares entitled to vote thereon
at a meeting of the shareholders duly held.
G. The foregoing amendment to paragraph 5 was duly authorized by
vote of the Board of Directors at a meeting duly held.
IN WITNESS WHEREOF, we have executed this Certificate and affirm the
truth of the statements herein set forth under penalty of perjury this 1st
day of May, 1986.
/s/ John A. Marszalek
______________________________
John A. Marszalek, President
/s/ Anthony W. Busch
_____________________________
Anthony W. Busch, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
J.A.M., INC.
Under Section 803 of the
Business Corporation Law
The undersigned, being the President and Secretary, respectively, of
J.A.M., Inc., certify that:
1. The name of the corporation is J.A.M., Inc. The Corporation was
formed under the name of JAM T.V. & Radio Productions, Inc.
2. The certificate of its incorporation was filed by the Department
of State on May 31, 1977.
3. The Certificate of Incorporation, as previously amended, is
hereby amended as authorized by Section 801 of the Business Corporation Law
to add a new paragraph 8 eliminating the personal liability of directors to
the corporation or its shareholders for damages for certain breaches of
duty in such capacity, as permitted by Section 402(b) of the Business
Corporation Law.
4. So as to accomplish the foregoing amendment, there shall be added
to the Certificate of Incorporation a new Paragraph 8, which shall read in
its entirety as follows:
"8. No director of the corporation shall be personally liable to the
corporation or its shareholders for damages for any breach of
duty in such capacity except where a judgment or other final
adjudication adverse to said director establishes: (i) that the
director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law; or (ii)
that the director personally gained in fact a financial profit or
other advantage to which the director was not legally entitled;
or (iii) that the director's acts violated Section 719 of the New
York Business Corporation Law. If the New York Business
Corporation Law is hereafter amended to authorize corporation
action further eliminating or limiting the personal liability of
directors, then the liability of directors of the corporation
shall be eliminated or limited to the fullest extent permitted by
the New York Business Corporation Law, as so amended."
5. The foregoing amendment was duly authorized by a vote of the
Board of Directors of the corporation, followed by a vote of the holders of
a majority of all outstanding shares entitled to vote thereon at a meeting
of shareholders duly held.
IN WITNESS WHEREOF, we have executed this Certificate and affirm the
truth of the statements herein set forth under penalty of perjury this 5th
day of May, 1988.
/s/ John A. Marszalek
__________________________
John A. Marszalek, President
/s/ Anthony W. Busch
__________________________
Anthony W. Busch, Secretary
BY-LAWS
OF
J.A.M., INC.
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE
The principal office of the Corporation shall be located in the
city, Town or Incorporated Village and County set forth in the
Certificate of Incorporation.
SECTION 2. ADDITIONAL OFFICES
The Corporation may designate offices and place of business at such
other places, within or without the State of New York, as the Board of
Directors may, from time to time, designate or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. TIME AND PLACE
Meetings of the shareholders of the Corporation may be held at such
time and place within or without the State of New York as shall be stated
in the notice of the meeting, or in a duly executed waiver of notice
thereof.
SECTION 2. ANNUAL MEETING
The annual meeting of the shareholders shall be held on May 31 at
the principal office of the Corporation or such other place as the Board
of Directors shall authorize. The meeting shall be for the purpose of
electing directors and for the transaction of such other business as may
be brought before it. If such date should be a legal holiday, the
meeting shall be held on the next business day following, at the same
hour.
SECTION 3. NOTICE OF ANNUAL MEETING
Written notice of the place, date and hour of the annual meeting of
shareholders shall be given by the Secretary as required by law; by
serving personally or mailing, not less than ten days, nor more than
fifty days previous to such meeting, postage prepaid, a copy of such
notice, addressed to each shareholder entitled to vote at such meeting.
Any and all notices of such meeting may be waived by any shareholder by
written waiver or by attendance thereat, whether in person or by proxy.
SECTION 4. SPECIAL MEETINGS
Special meetings of the shareholders may be called by the President
or the Board of Directors, at the written request of the holders of at
least twenty percent of the shares of the Corporation issued and
outstanding and entitled to vote thereat. Such requests shall state the
purpose or purposes of the proposed meeting.
SECTION 5. NOTICE OF SPECIAL MEETING
Notice of special meetings of the shareholders shall be given by the
President or the Secretary, and shall be served personally or by mail
addressed to each shareholder of record at his last known address not
less than ten nor more than fifty days prior to the date of such meeting.
The notice of such meeting shall contain a statement of the business to
be transacted thereat. No business other than that specified in the
notice of the meeting shall be transacted at any such special meeting.
Notice of special meeting may be waived by any shareholder by written
waiver or by attendance thereat, in person, or by proxy.
SECTION 6. QUORUM
Except as otherwise provided by law, or by the Certificate of
Incorporation or these by-laws, the holders of a majority of the shares
of the Corporation outstanding and entitled to vote thereat shall be
necessary to and shall constitute a quorum for the transaction of
business at all meetings of the shareholders; provided, however, that
when a specified item of business is required to be voted on by a class
or series, voting as a class, the holders of a majority of the shares of
such class or series issued and outstanding and entitled to vote thereat
shall constitute a quorum for the transaction of such specified items of
business. A lesser number, when not constituting a quorum, may adjourn
the meeting from time to time until a quorum shall be present or
represented. At such adjourned meeting at which a quorum may be present,
any business may be transacted which might have been transacted at the
meeting as originally notified.
SECTION 7. VOTING
At any meeting of the shareholders, every shareholder having the
right to vote shall be entitled to vote in person or by proxy. Each
shareholder shall have one vote for each share of stock having voting
power which is registered in his name on the books of the Corporation.
Except where another date shall have been fixed as a record date for the
determination of its shareholders entitled to vote, no share of stock
shall be voted at any election of Directors which shall have been
transferred on the books of the Corporation within twenty days next
preceding such election of Directors. At any meeting of the
shareholders, except as otherwise provided by statute, or by the
Certificate of Incorporation or by these By-Laws, the vote of the holders
of a majority of the shares present in person or by proxy shall decide
any questions before such meeting.
SECTION 8. PROXIES
A proxy, to be valid, shall be executed in writing by the
shareholder or by his attorney-in-fact. No proxy shall be valid after
the expiration of eleven (11) months from the date thereof, unless
otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the shareholder executing it, except in those cases where an
irrevocable proxy is permitted by law.
SECTION 9. WRITTEN CONSENTS
Whenever shareholders are required or permitted to take any action
by vote, such action may be taken without a meeting on written consent,
setting forth the action taken, signed by the holders of all outstanding
shares entitled to vote thereon.
ARTICLE III
DIRECTORS
SECTION 1. BOARD OF DIRECTORS
Subject to any provision in the Certificate of Incorporation, the
business of the corporation shall be managed by the Board of Directors,
each of which shall be at least eighteen years of age.
SECTION 2. NUMBER AND TENURE
The number of Directors constituting the entire Board of Directors
shall be fixed from time to time by resolution of the shareholders, but
shall in no event be less than three, except that where all the shares of
the Corporation are owned beneficially and of record by less than three
shareholders, the number of Directors may be less than three, but not
less than the number of shareholders. The number of Directors on the
initial Board of Directors shall be one (1).
Directors shall be elected at the annual meeting of the
shareholders, except as provided in Section 4 of this Article III.
Except as otherwise provided by the Certificate of Incorporation, each
Director shall be elected to serve until his successor has been elected
and qualified.
SECTION 3. RESIGNATION AND REMOVAL
Any Director may resign at any time. Except as otherwise provided
by law, the Board of Directors may, by majority vote of all Directors
then in office, remove a Director for cause. Subject to applicable
provisions of law, any and all of the Directors may be removed with or
without cause, by vote of the shareholders.
SECTION 4. VACANCIES
Except as otherwise provided by the Certificate of Incorporation, if
any vacancies occur in the Board of Directors by reason of the death,
resignation, retirement, disqualification or removal from office of any
Director with cause, or if any new Directorships are created, all of the
Directors then in office, although less than a quorum, may, by majority
vote, choose a successor or successors, or fill the newly created
Directorships, and the Directors so chosen shall hold office until the
next annual meeting of shareholders and until their successors shall be
duly elected and qualified, unless sooner displaced; provided, however,
that if in the event of any such vacancy, the Directors remaining in
office shall be unable, by majority vote, to fill such vacancy within
thirty days of the occurrence thereof, the President or Secretary may
call a special meeting of the shareholders at which such vacancy shall be
filled. In the event of any vacancy created by removal from office of
any Director without cause, such special meeting of the shareholders
shall be so called within thirty days of the occurrence thereof, at
which meeting such vacancy may be filled.
SECTION 5. DUTIES OF DIRECTORS
The Board of Directors shall have the control of general management
of the affairs and business of the Corporation unless otherwise provided
in the Certificate of Incorporation. Such Directors shall in all cases
act as a Board regularly convened by a majority at their meetings, and
direct the management and business of the corporation as they may deem
proper, not inconsistent with these By-Laws and the laws of the State of
New York.
ARTICLE IV
MEETING OF THE BOARD
SECTION 1. PLACE
Except as otherwise provided in the Certificate of Incorporation,
the Board of Directors of the Corporation may hold meetings, both regular
and special, either within or without the State of New York as may be
determined by the Board of Directors.
SECTION 2. REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without
notice at such time and at such place as shall from time to time be
determined by the Board of Directors.
SECTION 3. SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by the
Chairman of the Board, if any, or by the President on two days' notice to
each Director, either personally or by mail or by telegram; special
meetings shall be called by the Chairman, President or Secretary in a
like manner and on like notice on the written request of one Director.
SECTION 4. QUORUM AND VOTING
At all meetings of the Board of Directors, except as otherwise
provided by the Certificate of Incorporation, or by these by-laws, a
majority of the Board of Directors shall constitute a quorum. However, a
lesser number when not constituting a quorum may adjourn the meeting from
time to time until a quorum shall be present. Notice of any such
adjournment shall be given to any Directors who were not present and,
unless announced at the meeting, to the other Directors.
SECTION 5. COMPENSATION
Directors, as such, shall not receive any stated salary for their
services, but, by resolution of the Board of Directors, a fixed fee and
expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board; provided, however, that nothing
herein contained shall be construed to preclude any Director from serving
the Corporation in any other capacity and receiving compensation
therefor.
SECTION 6. PARTICIPATION IN MEETINGS BY TELEPHONE
Any one or more members of the Board of Directors or any committee
thereof may participate in a meeting of such board or committee by means
of a conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same
time, such participation constituting presence in person at the meeting.
ARTICLE V
NOTICES
SECTION 1. FORM AND DELIVERY
Notices to Directors and shareholders shall be in writing and may be
delivered personally or by mail or telegram. Notice by mail shall be
deemed to be given at the time when deposited in the post office or a
letter box, in a postpaid sealed wrapper, and addressed to Directors or
shareholders at their addresses appearing on the records of the
Corporation.
SECTION 2. WAIVER
Whenever a notice is required to be given by any statute, the
Certificate of Incorporation or these by-laws, a waiver thereof, in
writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to
such notice. In addition, any shareholder attending a meeting of the
shareholders in person or by proxy without protesting prior to the
conclusion of the meeting the lack of notice thereof to him, and any
Director attending a meeting of the Board of Directors without protesting
prior to the meeting or at its commencement, such lack of notice shall be
conclusively deemed to have waived notice of such meeting.
ARTICLE VI
OFFICERS
SECTION 1. OFFICES
The officers of the Corporation shall be a President, one or more
Vice Presidents, a Secretary, a Treasurer, and such other officers
including a Chairman of the Board as may be determined by the Board of
Directors. Any two or more of the offices may be held by the same
person, except the office of President and Secretary; provided, however,
that if all of the issued and outstanding stock of the Corporation is
owned by one person, such person may hold all or any combination of
offices.
SECTION 2. AUTHORITY AND DUTIES
All officers, as between themselves and the Corporation, shall have
such authority and perform such duties in the management of the
Corporation as may be provided in these by-laws, or, to the extent not so
provided, by the Board of Directors.
SECTION 3. TERM OF OFFICE AND REMOVAL
All officers shall be elected by the Board of Directors and shall
hold office until the meeting of the Board of Directors following the
next annual meeting of shareholders, and until his successor has been
elected or appointed and qualified.
SECTION 4. COMPENSATION
The compensation of all officers of the Corporation shall be fixed
by the Board of Directors, and the compensation of agents hall either be
so fixed or shall be fixed by officers thereunto duly authorized.
SECTION 5. VACANCIES
If any office becomes vacant for any reason, the Board of Directors
shall fill the vacancy. Any officer so appointed or elected by the Board
of Directors shall serve only until the unexpired term of his predecessor
shall have expired, unless re-elected by the Board of Directors.
SECTION 6. THE PRESIDENT
The President shall be the Chief Executive Officer of the
Corporation; in the absence of the Chairman of the Board, or if there is
no Chairman of the board, he shall preside at all meetings of the
shareholders and Directors; he shall have general and active management
and control of the business and affairs of the Corporation, subject to
the control of the Board of Directors, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
SECTION 7. THE VICE-PRESIDENT
The Vice-President, or if there be more than one, the Vice-
Presidents, in order of their seniority or in any other order determined
by the Board of Directors, shall, in the absence or disability of the
President, perform the duties and exercise the powers of the President,
and shall generally assist the President and perform such other duties as
the Board of Directors or the President shall prescribe.
SECTION 8. THE SECRETARY
The Secretary shall attend all meetings of the Board of Directors
and all meetings of the shareholders and record all votes and the minutes
of all proceedings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall
give, or cause to be given, notice of all meetings of the shareholders
and special meetings of the Board of Directors and shall perform such
other duties as may be prescribed by the Board of Directors or President,
under whose supervision he shall act. He shall keep in safe custody the
seal of the Corporation, and when authorized by the Board, affix the same
to any instrument requiring it, and when so affixed, it shall be attested
by his signature or by the signature of the Treasurer or an Assistant
Treasurer or Assistant Secretary. He shall keep in safe custody the
books and records as the Board may direct and shall perform all other
duties incident to the office of Secretary.
SECTION 9. THE TREASURER
The Treasurer shall have the care and custody of the corporate
funds, and other valuable effects, including securities, and shall keep
full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all monies and other
valuable effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors, taking
proper vouchers for such disbursements, and shall render to the President
and the Directors, at the regular meeting of the Board of Directors, or
whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Corporation.
SECTION 10. DELEGATION OF DUTIES
In the case of the absence of any officer of the Corporation, or for
any reason of the Board may deem sufficient, the Board may, except as
otherwise provided in these by-laws, delegate the powers or duties of
such officers to any other officer or any Director for the time being,
provided that a majority of the entire Board concur therein.
SECTION 11. BONDS
In case the Board of Directors shall so require, any officer or
agent of the Corporation shall give the Corporation a bond for such term,
in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his
office and for the restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or
under his control belonging to the Corporation.
ARTICLE VII
SHARE CERTIFICATES
SECTION 1. FORM OF CERTIFICATE
The certificates for share of the Corporation shall be in such form
as shall be determined by the Board of Directors and shall be numbered
consecutively and entered in the books of the Corporation as they are
issued. Each certificate shall exhibit the registered holder's name and
the number and class of shares.
SECTION 2. SIGNATURE
The certificates for shares of the Corporation shall be signed by
the President or a Vice-President and the Treasurer or the Secretary, and
shall bear the seal of the Corporation or a facsimile thereof.
SECTION 3. LOST CERTIFICATES
The Board of Directors may direct a new share certificate or
certificates to be issues in place of any certificate or certificates
theretofore issues by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate to be lost or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost or destroyed certificate or certificates
or his legal representative, to give the Corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against
the Corporation with respect to the certificate alleged to have been lost
or destroyed.
SECTION 4. REGISTRATION OF TRANSFER
Upon surrender to the Corporation or any transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it
shall be the duty of the Corporation or such transfer agent to issue a
new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
SECTION 5. REGISTERED SHAREHOLDER
Except as otherwise provided by law, the Corporation shall be
entitled to recognize the exclusive right of a person registered on its
books as the owner of share to received dividends or other distributions,
and to vote as such owner, and to hold liable for calls and assessments a
person registered on its books as the owner of shares, and shall not be
bound to recognize any equitable or legal claim to or interest in such
share or shares on the part of any person, whether or not it has actual
or other notice thereof, except as otherwise provided by the laws of the
State of New York.
SECTION 6. RECORD DATE
For the purpose of determining the shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment thereof,
or to express consent or to dissent from any proposal without a meeting,
or for the purpose of determining shareholders entitled to receive
payment of any dividend or the allotment of any rights, or for the
purpose of any other action affecting interests of shareholders, the
Board of Directors may fix, in advance, a record date. Such date shall
be not more than fifty nor less than ten days before the date of any such
meeting, nor more than fifty days prior to any other action.
In each such case, except as otherwise provided by law, only such
persons as shall be shareholders of record on the date so fixed shall be
entitled to notice of, and to vote at, such meeting and any adjournment
thereof, or to express such consent or dissent, or to receive payment of
such dividend, or such allotment of rights, or otherwise to be recognized
as shareholders for the related purpose, notwithstanding any registration
of transfer of shares on the books of the Corporation after any such
record date so fixed.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 1. FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution of
the Board of Directors.
SECTION 2. DIVIDENDS
Dividends upon the capital stock of the Corporation may be declared
by the Board of Directors at any regular or special meeting and may be
paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the Certificate of Incorporation and the law.
SECTION 3. RESERVES
Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper
as a reserve fund to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Corporation, or for such
other purposes as the Board of Directors shall deem conducive to the
interest of the Corporation, and the Board of Directors may modify or
abolish any such reserve in the manner in which it was created.
SECTION 4. CHECKS
All checks or demands for money or notes of the Corporation shall be
signed by such officer or officers or such other person or persons as the
Board of Directors may from time to time designate.
SECTION 5. SEAL
The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and with words "Corporate Seal
New York". The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or otherwise reproduced.
ARTICLE IX
AMENDMENTS
SECTION 1. ADOPTION, AMENDMENT AND REPEAL OF BY-LAWS
By-Laws of the Corporation may be adopted, amended or repealed by
vote of the holders of the shares at any time entitled to vote in the
election of any Directors. By-Laws of the Corporation may also be
adopted, amended or repealed by the Board of Directors, but any by-law
adopted by the Board of Directors may be amended or repealed by the
shareholders entitled to vote thereon as herein provided.
SECTION 2. AMENDMENTS AFFECTING ELECTION OF DIRECTORS, NOTICE
If any by-law regulating an impending election of Directors is adopted,
amended or repealed by the Board, there shall be set forth in the notice
of the next meeting of shareholders for the election of Directors the by-
law so adopted, amended or repealed, together with a concise statement of
the change made.
1
EMPLOYMENT AGREEMENT
Employment Agreement made this 1st day of January, 1995 by and
between J.A.M., INC., a New York corporation ("JAM"), and JOHN A.
MARSZALEK ("employee").
WHEREAS, Employee currently serves as the President and CEO of JAM
and faithfully has discharged the duties and responsibilities of such
position; and
WHEREAS, the Board of Directors of JAM has approved and adopted an
Employment Agreement between JAM and Employee, on January 1, 1995, upon
the same terms and conditions as set forth herein; and
WHEREAS, JAM and Employee desire to enter into an Employment
Agreement upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and of
the covenants and agreements herein provided, the parties hereto agree as
follows:
1.0 TERM OF EMPLOYMENT.
1.1 JAM hereby employs Employee, and Employee hereby accepts
employment with JAM, all in accordance with the terms and conditions
hereof, for a term commencing on the 1st day of January, 1995 and
continuing for a period of five years, unless sooner terminated as
hereinafter provided (the "Employment Period").
2.0 DUTIES.
2.1 During the Employment Period, Employee shall be employed by JAM
as the President and CEO of JAM and shall have such duties,
responsibilities and powers as are customary and appropriate for such
officers. Employee shall report directly to the Board of Directors of
JAM.
2.2 During the Employment Period, Employee shall devote his entire
business time, energies, best efforts, attention and ability to the
business of JAM and its affiliates, shall faithfully and diligently
perform the duties of his employment with JAM, and shall do all
reasonably in his power to promote, develop and extend the business of
JAM.
3.0 COMPENSATION.
3.1 During the Employment Period, JAM agrees to pay Employee as
compensation for his services under this Agreement a base salary at an
annual rate of not less than $100,000. In the event that JAM is
profitable for the year ended December 31, 1995, as reflected in its
Statement of Operations for such year as reviewed by its independent
accountants, then such salary shall automatically be increased to an
annual rate of $110,000, retroactive to the commencement date of the term
of this Agreement. If JAM is not profitable for such fiscal year, such
salary shall be increased to an annual rate of $110,000 on the first day
of the month following that calendar quarter in which JAM is profitable.
As, when and if the base salary is increased to $110,000 as aforesaid,
such salary shall thereafter be increased by annually increments of
$10,000 each during the term thereof. The Board of Directors of JAM may
consider further increases in Employee's base salary under this
Agreement, and will consider granting bonuses and other benefits to
Employee at such times as the Board may deem appropriate.
3.2 Upon submission of appropriate invoices or vouchers, JAM shall
pay or reimburse Employee for all reasonable expenses incurred by the
Employee in the performance of his duties hereunder in furtherance of the
business, and in keeping with the policies, of JAM.
3.3 Employee shall be entitled to participate in any fringe benefit
plan available to JAM's employees as in effect from time to time, to the
extent that he may be eligible to do so under the applicable provisions
of the plan, with full credit for years of service to JAM as if such
service had been rendered to JAM. Employee shall be entitled to receive
such benefits as automobile use or allowance.
3.4 Employee shall be entitled to four (4) weeks vacation in each
year of the Employment Period, such vacation to be taken at such time or
times as he shall elect with the prior approval of the Board, and also
shall be entitled to receive full compensation hereunder during any
period of disability, subject to a limitation of eighteen (18) months of
continued salary and benefits with respect to any single disability.
3.5 In addition to participation in any fringe benefit plan
available to JAM's employees generally, Employee also shall be entitled
to participate in JAM's stock option plan, profit-sharing plan, and in
any fringe benefit plan for senior management of JAM which provides
benefits for such senior management based upon the profitability or asset
growth of JAM.
4.0 TERMINATION BY DEATH.
4.1 If Employee dies during the Employment Period, JAM's
obligations under this Agreement shall terminate immediately and
Employee's estate or legal representative shall be entitled to all
arrearage of salary and expenses, and a pro rate share of other benefits
accrued at such time.
5.0 SUSPENSION AND TERMINATION OTHER THAN BY DEATH.
5.1 JAM's Board of Directors may terminate Employee's employment at
any time, but any termination by the Board of Directors other than
termination for cause shall not prejudice Employee's right to
compensation or other benefits under this Agreement. Termination for
cause shall mean termination because of willful misconduct or gross
negligence in the performance of his duties pursuant to the terms of this
Agreement, or termination directed by any regulatory authority. In the
event Employee is terminated without cause prior to the expiration of the
term of this Agreement, he shall receive as termination pay the greater
of one (I) one year's salary at the then current rate of compensation or
(ii) his then current salary for the remainder of the Employment Period.
5.2 Employee shall have no right to receive compensation or other
benefits for any period after termination for cause, except that vested
rights of Employee, including, without limitation, rights accruing to
Employee pursuant to any Retirement Plan and a pro rate amount equal to
the salary which would have been payable during any vacation time not
taken during the calendar year of such termination, shall not be
affected.
5.3 In the event that JAM does not intend to offer employment to
Employee at the expiration of the term of this Agreement or, in the event
that JAM elects to terminate the employment of Employee after the
expiration of the term, then JAM shall provide Employee with notice of
such election not to renew or to terminate at least one hundred eighty
(180) days prior to the effective date of termination.
6.0 BUSINESS MATERIALS, COVENANT TO REPORT.
6.1 All written materials, records, and documents made by Employee
or coming into his possession concerning the business or affairs of JAM
shall be the sole property of JAM and, upon the termination of his
employment with JAM or upon the request of JA at any time, Employee shall
deliver promptly the same to JA and shall retain no copies thereof.
Prior to any termination of employment hereunder, Employee agrees to
render to JAM such reports of the activities undertaken by Employee or
conducted under Employee's direction pursuant hereto during the
Employment Period as JAM reasonable may request.
7.0 BINDING EFFECT; BENEFITS.
7.1 This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives. Insofar as Employee is
concerned, this Agreement, being personal, cannot be assigned.
8.0 NOTICES.
8.1 All notices and other communications which are required or
permitted hereunder shall be in writing and shall be sufficient if
delivered or mailed by registered or certified mail, postage prepaid, to
the following addresses or such other address as any party hereto shall
be specified by notice in writing to the other party hereto:
If to Employee: John A. Marszalek
2940 East Avenue
Rochester, New York l46l0
If to JAM: J.A.M., Inc.
530 Willowbrook Office Park
Fairport, New York l4450
All such notices and communications shall be deemed to have been received
on the date of delivery thereof or the fifth business day after the
mailing thereof, whichever is earlier.
9.0 ENTIRE AGREEMENT.
9.1 This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements and understandings,
oral or written, between the parties hereto with respect to the subject
matter hereof.
10.0 AMENDMENTS AND WAIVERS.
10.1 This Agreement may not be modified or amended except by an
instrument or instruments in writing signed by the party against whom
enforcement of any such modification or amendment is sought. The waiver
by any party hereto of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent breach.
11.0 SECTION AND OTHER HEADINGS.
11.1 The section and other headings contained in this Agreement are
for reference purposes only and shall not be deemed to be part of this
Agreement or to control or affect the meaning or construction of any
provision of this Agreement.
12.0 SEVERABILITY.
12.1 If any term or provision of this Agreement is held or deemed to
be invalid or unenforceable, in whole or in part, by a court of competent
jurisdiction, this Agreement shall be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provision of this Agreement.
13.0 GOVERNING LAW.
13.1 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
J.A.M., INC.
By: _______________________________
__________________________________
John A. Marszalek
1
J.A.M., INC.
INCENTIVE STOCK OPTION PLAN
1. PURPOSE. This Incentive Stock Option Plan (the "Plan" is
intended as an incentive for, and to encourage stock ownership by certain
officers and key employees of J.A.M., Inc. (the "Company") by the granting
of options to purchase common stock in the Company, which options are
qualified for treatment as "incentive stock options" under the provisions
of Section 422A of the Internal Revenue Code of 1954, as amended, and/or
the Internal Revenue Code of 1986, as amended, as the case may be (the
"Code"). The purpose of making available incentive stock options to certain
officers and key employees of the Company is to allow them to acquire or
increase their proprietary interest in the success of the Company, as well
as to encourage them to remain in the employ of the Company.
2. STOCK. The stock subject to options hereunder shall be shares of
the Company's authorized but unissued or reacquired common stock, par value
$.01 per share. The aggregate number of shares which may be issued under
options pursuant to this Plan shall not exceed 200,000 shares of common
stock. With respect to incentive stock options granted prior to January 1,
1987, the number of shares as to which options may be granted to any one
individual during any calendar year shall be limited to a number of shares
which shall not exceed $100,000 in fair market value on the grant date(s)
of such option(s), plus any "unused limit carryover" to such calendar year
within the meaning of Section 422A(c) (4) of the Code. With respect to
incentive stock options granted on or after January 1, 1987, the aggregate
fair market value (determined at the time of the grant of the option) of
the shares as to which options are first exercisable by any optionee during
any calendar year (under all stock option plans of the Company) shall not
exceed $100,000. In the event that any outstanding option under the Plan
for any reason expires or is terminated, the shares of stock allocable to
the unexercised portion of such options may again be subjected to options
under the Plan.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors who
may, from time to time, issue orders or adopt resolutions, not inconsistent
with the provisions of this Plan, to interpret the provisions and supervise
the administration of this Plan.
(b) The Board of Directors may, from time to time, appoint a
stock option plan committee, consisting of not less than three (3)
directors, none of whom shall be eligible to participate in this Plan while
members of the Committee (the "Committee"). The Board of Directors may
delegate to such committee power to select the particular employees who are
to receive options and to determine the number of shares to be optioned to
each such employee.
(c) MEDIUM AND TIME OF PAYMENT. The option price f or shares
purchased upon the exercise of any option, shall be paid in full at the
time of such purchase in cash (including cash, bank draft or money order).
(d) TERM AND EXERCISE OF OPTIONS. Each option granted under the
Plan shall specifically include all provisions limiting the exercisability
thereof which are required to be included in such option in order to
qualify such option as an incentive stock option under Section 422A of the
Code. Except as otherwise determined by the Board of Directors or the
Committee, and specifically provided in the agreement, no option shall be
exercisable, either in whole or in part prior to one (1) year f rom the
date it is granted. Incentive stock options granted prior to January 1,
1987 may not be exercised while there is outstanding, within the meaning of
Section 422A(c)(7) of the Code as then in effect, any incentive stock
option previously granted to the optionee to purchase shares of the
Company. Except as otherwise determined by the Board of Directors or the
Committee, and subject to the right of cumulation provided in the last
sentence of this paragraph, each option shall be exercisable as to not more
than one-third (1/3) of the total number of shares covered thereby during
each twelve (12) month period, commencing twelve (12) months from the date
of the granting of the option, until all shares covered by the option shall
have been purchased. No option shall be exercisable after the expiration
of ten (10) years from the date it is granted, provided, however, that no
option granted to a person then owning more than ten percent (10%) of the
voting power of all classes of the Company's stock shall be exercisable
after the expiration of five (5) years from the date it is granted. During
the lifetime of the optionee, the option shall be exercisable only by the
optionee, and shall not be assignable or transferable by the optionee, and
no other person shall acquire any rights therein. To the extent not
exercised, installments shall accumulate and shall be exercisable in whole
or in part, in any subsequent period, but, in no event, later than ten (10)
years from the date the option is granted.
(e) RECAPITALIZATION. In the event that the shares of common
stock of the Company, as presently constituted, shall be changed into or
exchanged for a different number or kind of shares of stock or other
securities of the Company or another company, whether by reason of merger,
consolidation, recapitalization, reclassification, split-ups, combination
of shares or otherwise,, or if the number of shares of common stock shall
be increased through the payment of a stock dividend, then such adjustment
shall be made in the terms of outstanding options granted under the Plan,
and the number and kind of shares for which options may thereafter be
granted under the Plan, as may be necessary to reflect the foregoing
events.
(f) RIGHTS AS A STOCKHOLDER. An optionee or transferee of an
option shall have no right as a stockholder with respect to any shares
covered by an option until the date of issuance of a stock certificate for
such shares.
(g) OTHER PROVISIONS. The option agreements authorized under
the Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the option, as the Board of
Directors or the Committee shall deem advisable, and which are not
inconsistent with other provisions contained in the Plan, nor with the
treatment of any options granted under the Plan as "incentive stock
options" under the provisions of Section 422A of the Code.
6. TERM OF PLAN. Options may be granted pursuant to the Plan at any
time, and f rom time to time, within a period of ten (10) years from the
effective date of the Plan as set forth below, at which time the Plan will
expire, except as to options then outstanding under the Plan. Such options
shall remain in effect and subject to the terms of the Plan until they have
been exercised or have expired. No options may be granted under the Plan
after the expiration of ten (10) years from the effective date of the Plan.
7. AMENDMENT OF THE PLAN. The Board of Directors of the Company
may, insofar as permitted by law, from time to time, with respect to any
shares at the time not subject to options, suspend or discontinue the Plan
or revise or amend it in any respect whatsoever. No such action may
prejudice the right of any employee who has prior thereto been granted an
option or options under this Plan. Further, no amendment to this Plan
which has the effect of:
(a) increasing the number of shares of the Company's common
stock subject to this Plan, or
(b) changing the designation of the class of employees eligible
to receive options under this Plan, may be effective unless and until
approval of the stockholders of the Company is obtained in the same manner
as approval of this Plan is required.
8. APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of common stock pursuant to options will be used for general
corporate purposes.
9. NO OBLIGATION TO EXERCISE OPTION. The granting of an option
shall impose no obligation upon the optionee to exercise such option.
10. APPROVAL OF SHAREHOLDERS. The Plan shall be subject to the
approval by the holders of a majority of all of the outstanding shares of
stock of the company entitled to vote thereon, which approval must occur
within twelve (12) months after the date of adoption of the Plan by the
Board of Directors of the Company.
11. EFFECTIVE DATE. The Plan shall become effective upon its
adoption by the Board of Directors of the Company, subject, however, to
approval by the Company's shareholders within twelve (12) months after the
date of such adoption as provided above.
- 1 -
G:\UKIJK\JAM\GENCORP\JAMISO.PLN
<PAGE>
[FORM OF OPTION GRANT CONTRACT]
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made this ____ day of _______________, 198_, by and between
J.A.M., INC., a New York corporation (the "corporation"), and
_________________ (the "Employee").
WHEREAS, Employee is a key, full-time employee of the Corporation, and
the Corporation considers it desirable and in its best interest that
Employee be given an inducement to acquire a further proprietary interest
in the Corporation, and an added incentive to advance the interests of the
Corporation by possessing an option to purchase common voting shares of the
Corporation in accordance with the Incentive Stock Option Plan adopted by
the Directors of the Corporation on May 1, 1986, and approved by the
shareholders on May 9, 1986.
NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:
1. GRANT OF OPTION. The Corporation hereby grants to the Employee,
the right, privilege and option to purchase _____ shares of its common
stock at a purchase price of $_______ per share, in the manner and subject
to the conditions hereinafter provided.
2. TIME OF EXERCISE OF OPTION. This option may not be exercised in
whole or in part for one (1) year from the date hereof. The option shall
be exercisable as to not more than _____ shares during each twelve (12)
month period commencing twelve (12) months from the date hereof until all
shares covered by the option shall have been purchased. No option shall be
exercisable after the expiration of ten (10) years from the date hereof.
To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, in any subsequent period, but, in no
event, later than ten (10) years from the date hereof.
3. METHOD OF EXERCISE. The option shall be exercised by written
notice directed to the Corporation, at the Corporation's principal place of
business, accompanied by cash or check payment of the option price for the
number of shares specified and paid for. The Corporation shall make
immediate delivery of such shares, provided that if any law or regulation
requires the Corporation to take any action with respect to the shares
specified in such notice before the issuance thereof, then the date of
delivery of such shares shall be extended for the period necessary to take
such action.
4. TERMINATION OF OPTION. Except as herein otherwise stated, the
option to the extent not theretofore exercised shall terminate upon the
first to occur of the following dates:
(a) The expiration of three (3) months after the date on which
the Employee's employment by the Corporation is terminated (except if such
termination be by reason of death or permanent and total disability).
(b) The expiration of twelve (12) months after the date on which
the Employee's employment by the Corporation is terminated, if such
termination be by reason of the Employee's permanent and total disability.
(c) In the event of the Employee's death while in the employ of
the Corporation, his executors or administrators may exercise, within sixty
(60) days following the date of death, the option as to any of the shares
not theretofore exercised during the Employee's lifetime.
(d) The expiration of ten (10) years from the date of grant.
5. RIGHTS PRIOR TO EXERCISE OF OPTION. This option is not
transferable by the Employee, except in the event of death as provided
above, and during the Employee's lifetime is exercisable only by the
Employee. The Employee shall have no rights as a stockholder with respect
to the optioned shares until payment of the option price and delivery to
the Employee of such shares as herein provided.
6. RESTRICTION ON TRANSFER. By the act of accepting an option, the
Employee shall agree that, in the event the Employee or the Employee's
successors exercise such option, the Employee or said successors will
purchase the shares which are subject thereof for investment and not with
any present intention to resell the same, and shall further agree that the
Employee or said successors will confirm such intention by an appropriate
certificate at the time of exercising the option and an appropriate legend
relating to restrictions on resale shall be included on any certificates
representing shares purchased hereunder.
7. BINDING EFFECT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
J.A.M., INC.
By:_________________________
President
___________________________
EMPLOYEE
- 1 -
G:\UKIJK\JAM\GENCORP\JAMISO.PLN
J.A.M., INC.
1987 STOCK OPTION PLAN
1. INTRODUCTION AND STATEMENT OF PURPOSE This Stock Option Plan (the
"Plan") is intended to encourage stock ownership by selected officers and
employees of J.A.M., Inc. (the "Company") , a New York State Corporation,
in order to increase their proprietary interest in the success of the
Company and to encourage them to remain in the employ of the Company.
Options granted under this Plan may be either Incentive Stock Options (as
defined and provided for in Section 5(a) of this Plan) or Nonstatutory
Stock Options (as defined and provided for in Section 5(b) of this Plan),
as shall be determined in each specific case by a duly appointed committee
of the Board of Directors of the Company (the "Committee") as hereinafter
provided. As used in this Plan, the term motion" shall refer to either
Incentive Stock Options or Nonstatutory Stock Options, or both.
2. ADMINISTRATION
(a) Subject to the express provisions of this Plan, the
Committee shall have plenary authority, in its sole discretion: (i) To
determine the time or times at which, and the officers and employees of the
Company to whom, options shall be granted under this Plan;
(ii) To determine, as the case may be, the Incentive Stock
option Price or Nonstatutory Stock Option Price (both as defined herein)
of, and the number of shares of Stock (as defined herein) to be covered by,
options granted under this Plan;
(iii) To determine the time or times at which each option
granted under this Plan may be exercised, including whether an option may
be exercised in whole or in installments;
(iv) To interpret this Plan and to prescribe, amend and
rescind rules and regulations relating to it; and
(v) To make all other determinations which the Committee
shall deem necessary or advisable for the administration of this Plan.
(b) The membership of the Committee shall at all times consist
of not less than 3 members of the Board of Directors of the Bank (the
"Board of Directors"), each of whom shall be a "Disinterested Person" as
defined in Section 2(d) hereinafter. The Committee shall have all of the
powers and duties set forth herein, as well as such additional powers and
duties as the Board of Directors may delegate to it; provided, however,
that the Board of Directors expressly retains the right (i) to appoint the
members of the Committee, and (ii) to terminate or amend this Plan
consistent with provisions of applicable law. The Board of Directors may
from time to time appoint members of the Committee in substitution for or
in addition to members previously appointed, may fill vacancies in the
Committee, however caused, and may discharge the Committee. Duly
authorized actions of the Committee shall constitute actions of the Board
of Directors for the purposes of this Plan and the administration thereof.
(c) Notwithstanding anything herein to the contrary, no
employee, officer or director of the Company shall, as a member of the
Committee or otherwise , have any vote with regard to the grant of any
option to himself, including, but not limited to:
(i) The time at which any such option shall be granted;
(ii) The number of shares of Stock covered by any such
option;
(iii) The time or times at which, or the period during
which, any such option may be exercised or whether it may be exercised in
whole or in installments;
(iv) The provisions of the agreement relating to any such
option; and
(v) The Incentive Stock Option Price of Stock subject to an
Incentive Stock Option granted to him, or the Nonstatutory Stock Option
Price of Stock subject to a Nonstatutory Stock Option granted to him.
(d) The term "Disinterested Person" as used in Section 2 (b) of
this Plan shall mean a person who, at the time he exercises discretion with
respect to the administration of this Plan, is not then and has not at any
time during the preceding year been eligible for selection as a person to
whom options may be granted under this Plan or to whom stock may be
allocated or options granted under the provisions of any other plan of the
Company which entitles the participants therein to acquire stock or stock
options of the Company.
3. STOCK
Except as provided in Section 10 of this Plan, the number of shares
which may be made subject to options, or which may be issued upon the
exercise of options granted under this Plan, shall be limited to an
aggregate of 500,000 shares of the common stock of the Company (the
"Stock") The shares reserved for issuance pursuant to this Plan shall
consist of authorized but previously unissued shares of Stock.
Except as otherwise provided in Section 10 of this Plan, if an option
granted under this Plan expires, terminates or is cancelled for any reason
without having been exercised in full, the shares of Stock allocable to the
unexercised portion of such option may again be made subject to an option
or options granted under this Plan.
4. ELIGIBILITY
Options may be granted under this Plan to such officers and regular
full-time employees of the Company as may be selected in the manner
provided in Section 2 of this Plan. A director of the Company who is not
also a regular full-time employee of the Company shall not be eligible to
receive any options under this Plan. A person granted an option under this
Plan shall nevertheless remain eligible to receive one or more additional
options thereafter, notwithstanding that options previously granted to such
person remain unexercised in whole or in part.
5. TERMS OF OPTIONS
This Plan is intended to authorize the Committee to grant, in its
discretion, options that qualify as incentive stock options pursuant to
Section 422A(b) of the Internal Revenue Code of 1954, as amended AND/OR THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AS THE CASE MAY BE, (the "Code")
(such qualifying options being referred to herein as "Incentive Stock
Options") or options that do not so qualify (such nonqualifying options
being referred to herein as "Nonstatutory Stock Options"). Each option
granted under this Plan shall be evidenced by a written option agreement
which shall be executed and delivered as provided in Section 12 of this
Plan and which shall specify whether the option granted therein is an
Incentive Stock Option or a Nonstatutory Stock Option.
(a) TERMS OF INCENTIVE STOCK OPTIONS. Each stock option
agreement covering an Incentive Stock Option granted under this Plan and
any amendment thereof shall conform to the provisions of Section
5(a)(i)(iii) below, and may contain such other terms and provisions
consistent with the requirements of this Plan as the Committee shall deem
appropriate:
(i) INCENTIVE STOCK OPTION PRICE. Except as otherwise
specifically provided in Section 8, the purchase price of each share of
Stock subject to an Incentive Stock Option (the "Incentive Stock Option
Price") shall be a stated price which is not less than the fair market
value of such share of Stock, determined in accordance with Section 8 of
this Plan, as of the date such Incentive Stock Option is granted; provided,
however, that if an employee, at the time an Incentive Stock Option is
granted to him, owns stock representing more than 10% of the total combined
voting power of all classes of stock of the Company (or, under Section
425(d) of the Code, is deemed to own stock representing more than 10% of
the total combined voting power of all such classes of stock, directly or
indirectly, by or for any brother, sister, spouse, ancestor, or lineal
descendant of such employee, or by or for any corporation, partnership,
estate or trust of which such employee is a shareholder, partner or
beneficiary) , then the Incentive Stock Option Price of each share of Stock
subject to such Incentive Stock Option shall be at least equal to 110% of
the fair market value of such share of Stock, as determined in the manner
stated above.
(ii) TERM OF INCENTIVE STOCK OPTIONS. Incentive Stock
Options granted under this Plan shall be exercisable for such periods as
shall be determined by the Committee at the time of grant of each such
Incentive Stock Option, but in no event shall an Incentive Stock option be
exercisable after the expiration of 10 years from the date of grant;
provided, however, that an Incentive Stock Option granted to any employee
as to whom the Incentive Stock Option Price of each share of Stock subject
thereto is required to be at least equal to the greater of the book value
or 110% of the f air market value of such share of Stock pursuant to
Section 5(a)(i) above, shall not be exercisable after the expiration of 5
years from the date of grant. Each Incentive Stock Option granted under
this Plan shall also be subject to earlier termination as provided in this
Plan.
(iii) EXERCISE OF INCENTIVE STOCK OPTIONS.
(A) Subject to the provisions of sections 5(a)(iii)(F)
and 10 of this Plan, Incentive Stock Options granted under this Plan may be
exercised in whole or in installments, to such extent, and at such time or
times during the terms thereof, as shall be determined by the Committee at
the time of grant of each such option.
(B) Incentive Stock Options granted under this Plan
shall be exercisable only by delivery to the Company of written notice of
exercise, which notice shall state the number of shares with respect to
which such Incentive Stock Option is exercised, the date of grant of the
Incentive Stock Option, the aggregate purchase price for the shares with
respect to which the Incentive Stock Option is exercised and the effective
date of such exercise, which date shall not be earlier than the date the
notice is received by the Company nor later than the date upon which such
Incentive Stock Option expires. The written notice of exercise shall be
sent together with the full Incentive Stock Option Price of the shares
purchased, which must be paid in full in United States dollars by cash,
certified check, bank draft or money order payable to the order of the
Company.
(C) Except as expressly provided to the contrary in
section 9 of this Plan, an Incentive Stock Option granted hereunder shall
remain outstanding and shall be exercisable only so long as the person to
whom such Incentive Stock Option was granted remains an officer or employee
of the Company.
(D) All Incentive Stock Options granted under this
Plan shall be nontransferable, except by will or the laws of descent and
distribution, and shall be exercisable during the lifetime of the person to
whom granted only by such person (or such person's duly appointed,
qualified, and acting personal representative).
(E) No Incentive Stock Option may be exercised as to
fewer than 100 shares of Stock at any one time without the consent of the
Committee, unless the number of shares to be purchased upon such exercise
is the total number of shares at the time available for purchase under such
Incentive Stock Option.
(b) TERMS OF NONSTATUTORY STOCK OPTIONS. Each Stock option
agreement covering a Nonstatutory Stock Option granted under this Plan and
any amendment thereof shall conform to the provisions of section 5 (b) (i)
- - (iii) , below, and may contain such other terms and provisions consistent
with the requirements of this Plan as the Committee shall deem appropriate:
(i) NONSTATUTORY STOCK OPTION PRICE. Except as otherwise
specifically provided in Section 8, the purchase price of each share of
Stock subject to a Nonstatutory Stock Option (the "Nonstatutory Stock
Option Price") shall be a stated price which is not less than the par value
of such share of Stock.
(ii) TERM OF NONSTATUTORY STOCK OPTIONS. Nonstatutory Stock
Options granted under this Plan shall be exercisable for such periods as
shall be determined by the Committee at the time of grant of each such
Nonstatutory Stock Option, but in no event shall a Nonstatutory Stock
Option be exercisable after the expiration of 10 years from the date of
grant. Each Nonstatutory Stock Option granted under this Plan shall also
be subject to earlier termination as provided in this Plan.
(iii) EXERCISE OF NONSTATUTORY STOCK OPTIONS.
(A) Subject to the provisions of Sections 5(b)(iii)(E)
and 10 of this Plan, Nonstatutory Stock options granted under this Plan may
be exercised in whole or in installments, to such extent, and at such time
or times during the terms thereof, as shall be determined by the Committee
at the time of grant of each such option.
(B) Nonstatutory Stock Options granted under this Plan
shall be exercisable only by delivery to the Company of written notice of
exercise, which notice shall state the number of shares with respect to
which such Nonstatutory Stock Option is exercised, the date of grant of the
Nonstatutory Stock option, the aggregate purchase price for the shares with
respect to which the Nonstatutory Stock Option is exercised and the
effective date of such exercise, which date shall not be earlier than the
date the notice is received by the Company nor later than the date upon
which such Nonstatutory Stock Option expires. The written notice of
exercise shall be sent together with the full Nonstatutory Stock Option
Price of the shares purchased, which must be paid in full in United States
dollars by cash, certified check, bank draft or money order payable to the
order of the Company..
(C) Except as expressly provided to the contrary in
section 9 of this Plan, a Nonstatutory Stock Option granted hereunder shall
remain outstanding and shall be exercisable only so long as the person to
whom such Nonstatutory Stock Option. was granted remains an officer or
employee of the Company.
(D) All Nonstatutory Stock Options granted under this
Plan shall be nontransferable, except by will or the laws of descent and
distribution, and shall be exercisable during the lifetime of the person to
whom granted only by such person (or such person's duly appointed,
qualified, and acting personal representative).
(E) No Nonstatutory Stock Option may be exercised as
to fewer than 100 shares at any one time without the consent of the
Committee, unless the number of shares to be purchased upon such exercise
is the total number of shares at the time available for purchase under such
Nonstatutory Stock Option.
6. LIMITATION ON GRANT OF INCENTIVE STOCK OPTIONS.
The aggregate fair market value of the Company's Stock (determined
under Section 8 hereof at the time of the grant of any option) with respect
to which Incentive Stock Options are first exercisable by any Optionee
during any calendar year (under all stock option plans of the Company)
shall not exceed $100,000,00.
7. RIGHTS OF OPTIONEES
No holder of an option shall be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares of Stock subject
to such option unless and until his option shall have been exercised
pursuant to the terms thereof, the Company shall have issued and delivered
to the holder of the option certificates representing the shares of Stock
as to which he has exercised his option, and his name shall have been
entered as a stockholder of record on the books of the Company, or its
trans f er agent. Thereupon, such person shall have full voting and other
ownership rights with respect to such shares of Stock.
8. DETERMINATION OF FAIR MARKET VALUE
For the purposes of this Plan, the Committee shall determine the fair
market value of a share of stock of the Company. The determination of fair
market value shall be made on the basis of such factors as it shall deem
appropriate but specifically including the difference between the market
value and the book value of comparable companies and the trend of the
Company's earnings and of its book capital account, provided that (i) if on
the date as of which such determination is made quotations for the class of
stock being valued are regularly quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or another
comparable system, the fair market value of a share of such stock shall be
deemed to be equal to the mean of the average of the closing sales prices,
if available, or the closing bid and asked prices for such stock quoted on
such system on each of the 5 trading days immediately preceding the date as
of which such determination is made, and (ii) if on the date as of which
such determination is made the class of stock being valued is admitted to
trading on a national securities exchange or exchanges for which actual
sale prices are regularly reported, or actual sales prices are otherwise
regularly published f or such stock, the f air market value of a share of
such stock shall be deemed to be equal to the mean of the closing sale
prices reported for such stock on each of the 5 trading days immediately
preceding the date as of which such determination is made.
9. RETIREMENT, TERMINATION OF EMPLOYMENT OR DEATH OF HOLDERS OF
OPTIONS
(a) RETIREMENT. If a person to whom an option has been granted
under this Plan retires from employment with the Company as a result of
"Normal Retirement" or as a result of "Disability" (both as defined for
purposes of any retirement plan in effect for the Company from time to
time) such option shall continue to be exercisable in whole or in part to
the extent exercisable on the date of retirement, and, to the extent not
theretofore exercised, by the person to whom granted (or such person's duly
appointed, qualified, and acting personal representative) in the manner set
forth in Section 5 of this Plan, at any time within the remaining term of
such option unless otherwise determined by the Committee at the time of
grant, provided, however, that any Incentive Stock Option must be exercised
within 3 months of the Normal Retirement Date, or within one year from the
Termination date of employment caused by Disability.
(b) TERMINATION OF EMPLOYMENT. Except as otherwise provided in
this Section 9, if the employment of a person to whom an option has been
granted under this Plan is terminated for any reason, such option shall, to
the extent not theretofore exercised, continue to be exercisable to the
same extent that it was exercisable for a period of 30 days from the date
of such termination of employment, or for such other period as may be
determined by the Committee at the time of grant, whereupon it shall
terminate and shall not thereafter be exercisable; provided, however, that
in the event of termination of employment for cause involving dishonesty,
malfeasance, misfeasance or the commission of a criminal offense (with
respect to which determination of the Committee shall be final and
conclusive), any such option shall terminate immediately upon such
termination of employment. No option granted under this Plan shall be
affected by any change of duties or position of the person to whom such
option was granted or by any temporary leave of absence granted to such
person by the Company.
(c) DEATH. Unless otherwise determined by the Committee at the
time of grant, if a person to whom an Option has been granted under this
Plan (the "Grantee") dies prior to the expiration of the term of such
option, such option shall be exercisable by the estate of the Grantee, or
by a person who acquired the right to exercise such option by bequest or
inheritance from the Grantee, at any time within two years after the death
of such person and prior to the date upon which the term of such option
expires, to the extent and in the manner exercisable by the Grantee as of
the date of his death.
10. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; CHANGES IN CONTROL.
(a) If the outstanding shares of Stock of the Company as a whole
are increased, decreased, changed into, or exchanged for, a different
number or kind of shares or securities of the Company, whether through
merger, consolidation, reorganization, recapitalization, reclassification,
stock dividend, stock split, combination of shares, exchange of shares,
change in corporate structure, or amendment to the certificate of
incorporation of the Company or otherwise, an appropriate and proportionate
adjustment, as determined by the Committee, shall be made to the number and
kind of shares subject to this Plan, and to the number, kind, and per share
Incentive Stock Option Price or Nonstatutory Stock Option Price (as the
case may be) of shares subject to unexercised options granted prior to any
such change. Any such adjustment shall be made without a change in the
aggregate purchase price of the shares of Stock subject to the unexercised
portion of any option.
(b) Upon the effective date of the dissolution or liquidation of
the Company, or of a reorganization, merger or consolidation of the Company
with one or more other corporations in which the Company is not the
surviving corporation, or of the transfer of substantially all of the
assets or the transfer of all of the shares of the Company to another
corporation (any such transaction being referred to herein as a Terminating
Event"), this Plan and any option theretofore granted hereunder shall
terminate unless provision is made in writing in connection with such
Terminating Event for the continuance of this Plan and for the assumption
of options theretofore granted hereunder, or the substitution for such
options of new options covering the shares of the successor corporation, or
a parent or subsidiary thereof, with such appropriate adjustments as may be
determined or approved by the Committee (or the successor to the Company)
to the number and kind of shares subject to such substituted options and to
the Incentive Stock option Price or Nonstatutory Stock option Price (as the
case may be), in which event this Plan and the options theretofore granted
or the new options substituted therefor, shall continue in the manner and
under the terms so provided. Upon the occurrence of a Terminating Event in
which provision is not made for the continuance of this Plan and for the
assumption of options theretofore granted or the substitution for such
options of new options covering the shares of a successor corporation or a
parent or subsidiary thereof, each officer or employee to whom an option
has been granted under this Plan (or such person's personal representative,
estate or any person who acquired the right to exercise the option from
such person by bequest or inheritance) shall be entitled, prior to the
effective date of any such Terminating Event, (i) to exercise, in whole or
in part, such person's rights under any option granted to him or her
without regard to any restrictions on exercise that would otherwise apply,
or (ii) to surrender any such option to the company in exchange for receipt
of cash equal to the difference between the aggregate fair market value of
the shares of Stock such person would have received had he exercised his
option in full immediately prior to consummation of such Terminating Event
(determined as of the date of the Terminating Event as provided in Section
8 hereof) and the applicable aggregate Incentive Stock Option Price or
Nonstatutory Stock Option Price, as the case may be. To the extent that a
person, pursuant to this Section 10(b), has a right to exercise or
surrender any option on account of a Terminating Event which such person
otherwise would not have had at that time, such person's exercise or
surrender of such option shall be contingent upon the consummation of such
Terminating Event.
(c) In connection with the grant of any option hereunder the
Committee may, in its sole discretion, provide the holder thereof with the
right, following a "change in control-' of the Company (as such term is
defined in section 10(d) hereinafter), and without regard to any
restrictions on exercise that would otherwise apply, to exercise such
option or to surrender such option for a cash payment equal to the
difference between the aggregate fair market value of the number of shares
of Stock then subject to the option, as determined in accordance with
Section 8 of this Plan as of the date of such surrender, and the aggregate
Incentive Stock Option Price or Nonstatutory Stock Option Price therefor,
as the case may be. Any right granted hereunder shall expire one year
after receipt by the option holder of written notice from the Company that
a change in control has occurred.
(d) For the purposes of this Plan, a "change in control" of the
Company shall mean a change in control of a nature that would be required
to be reported in a proxy statement with respect to the Company (even if
the Company is not actually subject to said reporting requirements) in
response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
except that any merger, consolidation or corporate reorganization in which
the owners of the Company's capital stock entitled to vote in the election
of directors ("Voting Stock") prior to said combination receive 75% or more
of the resulting entity's Voting Stock shall not be considered a change in
control for the purposes of this Plan; and provided that, without
limitation of the foregoing, such change in control shall be deemed to have
occurred if (i) any "person" (as that term is used in Sections 13 (d) and
14 (d) (2) of the Exchange Act) is or becomes the "beneficial owner" (as
that term is defined by the Securities and Exchange Commission for purposes
of Section 13 (d) of the Exchange Act), directly or indirectly, of more
than 20% of the outstanding Voting Stock of the Company or its successors;
or (ii) during any period of two consecutive years a majority of the Board
of Directors no longer consists of individuals who were members of the
Board of Directors at the beginning of such period, unless the election of
each director who was not a director at the beginning of the period was
approved by a vote of at least 75% of the directors still in office who
were directors at the beginning of the period.
11. EFFECTIVENESS OF THE PLAN
This Plan shall become effective upon its adoption by the Board of
Directors; provided, however, that (i) the effectiveness of this Plan shall
be subject to approval by the affirmative votes of a majority of the
outstanding shares of capital stock of the Company at a stockholder's
meeting duly called and held under the provisions of New York Law within 12
months after the adoption of this Plan by the Board of Directors; and (ii)
the effectiveness of options granted under this Plan prior to the date that
such approval by the stockholders is obtained shall also be subject to such
approvals.
12. MANNER OF GRANT OF OPTIONS
Nothing contained in this Plan or in any resolution heretofore or
hereafter adopted by the Board of Directors or any committee thereof or by
the stockholders of the Company with respect to this Plan shall constitute
the granting of an option under this Plan. The granting of an option under
this Plan shall be deemed to occur only upon the date on which the
Committee shall approve the grant of such option. All options granted
under this Plan shall be evidenced by a written agreement, in such form
shall be determined by the Committee, signed by a representative of the
Committee and the recipient thereof.
13. COMPLIANCE WITH LAW AND REGULATIONS The obligation of the Company
to sell and deliver any shares of Stock under this Plan shall be subject to
all applicable laws, rules and regulations, and the obtaining of all
approvals by governmental agencies deemed necessary or appropriate by the
Committee, and should the grant or exercise of any particular option or
options hereunder be found to be in contravention of any such laws, rules
or regulations, said options shall be void or voidable without affecting
any other options granted (or to be granted) hereunder. Except as
otherwise provided in Section 2 and Section 16 herein, the Committee may
make such changes in this Plan and include such terms in any option
agreement as may be necessary or appropriate, in the opinion of counsel to
the Company, to comply with the rules and regulations of any governmental
authority or to obtain, for officers and employees granted Incentive Stock
options, the tax benefits under the applicable provisions of the Code and
the regulations thereunder.
14. TAX WITHHOLDING
The employer of an officer or employee granted an
option under this Plan shall have the right to deduct or otherwise effect a
withholding of any amount required by federal or state laws to be withheld
with respect to the grant, exercise or surrender of any option or the sale
of stock acquired upon the exercise of an Incentive Stock Option in order
for the employer to obtain a tax deduction otherwise available as a
consequence of such grant, exercise, surrender or sale, as the case may be.
15. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of this Plan by the Board of Directors nor the
submission of this Plan to the stockholders of the Company for approval
shall be construed as having any impact on existing qualified or
nonqualified retirement, bonus or similar plans of the Company, or as
creating any limitations on the power of the Board of Directors to adopt
such - other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options or stock appreciation
rights otherwise than under this Plan, and such arrangements may be either
applicable generally or only in specific cases.
16. AMENDMENT
The Board of Directors at any time, and f rom time to time, may amend
this Plan, subject to any required regulatory approval and subject to the
limitation that, except as provided in Sections 10 or 11 hereof, no
amendment shall be effective unless approved by the affirmative votes of
the holders of a majority of the outstanding shares of the Company's Voting
Stock within 12 months after the date of the adoption of such amendment, if
such amendment would:
(a) Increase the number of shares of Stock which may be made
subject to options, or which may be issued upon the exercise of options
granted under this Plan;
(b) Change in substance the provisions of Section 2 hereof
relating to administration of this Plan, or of Section 4 hereof relating to
eligibility to participate in this Plan;
(c) Change the method of computing the Incentive Stock option
Price for shares of Stock subject to Incentive Stock Options or the
Nonstatutory Stock Option Price for shares of Stock subject to Nonstatutory
Stock Options or decrease any option price, or
(d) Increase the maximum term of any options provided for
herein, or the term of the Plan, or
(e) Materially increase the benefits accruing to participants
under the Plan.
Except as provided in Sections 11 and 13 hereof, rights and
obligations under any option granted before amendment of this Plan shall
not be altered or impaired by amendment of this Plan, except with the
consent of the person to whom the option was granted.
17. TERMINATION OR SUSPENSION
The Board of Directors at any time may suspend or terminate this Plan.
This Plan, unless sooner terminated, shall terminate on the loth
anniversary of its adoption by the Board of Directors or its approval by
the stockholders of the Company, Q(T whichever is earlier, but such
termination shall not affect any option theretofore granted. No option may
be granted under this Plan while this Plan is suspended or after it is
terminated.
No rights or obligations under any option granted while this Plan is
in effect shall be altered or impaired by suspension or termination of this
Plan, except with the consent of the person to whom the option was granted.
Any option granted under this Plan may be terminated by agreement between
the holder thereof and the Company and, in lieu of the terminated option, a
new option may be granted with an Incentive Stock Option Price or a
Nonstatutory Stock Option Price, as the case may be, which may be higher or
lower than the Incentive Stock Option Price or Nonstatutory Stock Option
Price, as the case may be, of the terminated option.
18. CONTINUATION OF EMPLOYMENT
Nothing contained in this Plan (or in any written option agreement)
shall obligate the Company to continue for any period to employ an officer
or employee to whom an option has been granted, or interfere with the right
of the Company to vary the terms of such person's employment or reduce such
person's compensation.
19. EXCULPATION AND INDEMNIFICATION
The Company shall indemnify and hold harmless the members of the Board
of Directors and the members of the Committee from and against any and all
liabilities, costs, and expense incurred by such persons as a result of any
act, or omission to act, in connection with the performance of such
persons' duties, responsibilities, and obligations under this Plan, other
than such liabilities, costs and expenses as may result from the
negligence, gross negligence, bad faith, willful misconduct, or criminal
acts of such persons.
20. TITLES
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Plan.
- 1 -
G:\UKIJK\JAM\GENCORP\1987OPT.PLN
<PAGE>
[FORM OPTION GRANT CONTRACT]
STOCK OPTION AGREEMENT
AGREEMENT made this ___ day of ______________,198_, by and between
J.A.M., INC., a New York corporation (the "Corporation"), and (the
'Employee").
WHEREAS, Employee is a key, full-time employee of the Corporation, and
the Corporation considers it desirable and in its best interest that
Employee be given an inducement to acquire a further proprietary interest
in the Corporation, and an added incentive to advance the interests of the
Corporation by possessing an option to purchase common voting shares of the
Corporation in accordance with the 1987 Stock Option Plan adopted by the
Directors of the Corporation on July 17, 1987, and approved by the
shareholders on May 5, 1988.
NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:
1. GRANT OF OPTION. The Corporation hereby grants to the Employee,
the right, privilege and option to purchase ______ shares of its common
stock at a purchase price of $__________ per share, in the manner and
subject to the conditions hereinafter provided. This option [IS] [IS NOT]
an Incentive Stock Option (as defined in Section 5(a) of the Plan).
2. TIME OF EXERCISE OF OPTION. This option may not be exercised in
whole or in part for one (1) year from the date hereof. The option shall
be exercisable as to not more than shares during each twelve (12) month
period commencing twelve (12) months from the date hereof until all shares
covered by the option shall have been purchased. No option shall be
exercisable after the expiration of ten (10) years from the date hereof.
To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, in any subsequent period, but, in no
event, later than ten (10) years from the date hereof.
3. METHOD OF EXERCISE. The option shall be exercised by written
notice described to the Corporation, at the Corporation's principal place
of business, accompanied by cash or check payment of the option price for
the number of shares specified and paid for. The Corporation shall make
immediate delivery of such shares, provided that if any law or regulation
requires the Corporation to take any action with respect to the shares
specified in such notice before the issuance thereof, then the date of
delivery of such shares shall be extended for the period necessary to take
such notice.
4. TERMINATION OF OPTION. Except as herein otherwise stated, the
option to the extent not theretofore exercised shall terminate upon the
first to occur of the following dates:
(a) The expiration of thirty (30) days after the date on which
the Employee's employment by the Corporation is terminated (except if such
termination be for cause or by reason of death, retirement or disability).
(b) In the case of Incentive Stock Options, the expiration of
one (1) year after the date on which the Employee's employment by the
Corporation is terminated, if such termination be by reason of the
Employee's permanent and total disability. In the case of Nonstatutory
Stock Options, such options may be exercised at any time during the
remaining term in the event of termination by reason of the Employee's
permanent and total disability.
(c) In the event of the Employee's death while in the employ of
the Corporation, his executors or administrators may exercise, within two
(2) years following the date of death, the option as to any of the shares
not theretofore exercised during the Employee's lifetime.
(d) In the event of termination of employment for cause (as
defined in the Plan), immediately upon such termination of employment.
(e) The expiration of three (3) months after the date which the
Employee's employment with the Corporation is terminated, if such
termination be by reason of the Employee's Normal Retirement, in the case
of Incentive Stock options. In the case of Nonstatutory Stock Options,
such options, may be exercised during the remaining term in the event of
termination of employment by Normal Retirement.
(f) The expiration of ten (10) years from the date of grant.
5. RIGHTS PRIOR TO EXERCISE OF OPTION. This option is not
transferable by the Employee, except in the event of death as provided
above, and during the Employee's lifetime is exercisable only by the
Employee. The Employee shall have no rights as a stockholder with respect
to the optioned shares until payment of the option price and delivery to
the Employee of such shares as herein provided.
6. THE PLAN. This option is subject to and the Corporation and the
Employee agree to be bound by all of the provisions and terms and
conditions of the Plan.
7. BINDING EFFECT. This Agreement shall insure to the benefit of
and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
J.A.M., INC.
By:________________________
President
___________________________
EMPLOYEE
- 1 -
G:\UKIJK\JAM\GENCORP\1987OPT.PLN
Exhibit 10-4 EMPLOYEES' AGREEMENT REGARDING
PROPRIETARY INFORMATION AND INVENTIONS
In consideration of the employment and continued employment of the
undersigned ("Employee") by JAM Productions, Inc. ("Corporation"),
Employee agrees:
1. While Employee is an employee of Corporation, and
after his employment has been terminated for any reason,
Employee will not use for his own benefit or the benefit of any
other person or entity, nor will Employee disclose to any other
person or entity, any Confidential Information, except to the
extent required in the course of his employment by Corporation.
2. Employee will not remove from Corporation's premises
nor make copies of any Confidential Information, in any form,
except as required by his duties of employment by Corporation.
Upon termination of his employment, or at any such time as
Corporation may request, Employee will deliver to Corporation
all copies in his possession of any Confidential Information,
in any form. Employee will not assert any rights in or with
respect to any Confidential Information.
3. "Confidential Information" means any secret or
confidential information, knowledge or data of Corporation or
of any vendor or supplier to or distributor or customer of
Corporation, regardless of how acquired or developed by
Corporation or by any such vendor, supplier, distributor or
customer, concerning any of their businesses, policies,
research, processes, inventions, products and trade secrets,
including specifically all computer software developed, owned
or licensed by them. Confidential Information does not include
information, knowledge, or data in Employee's possession prior
to the commencement of his employment with Corporation or
information, knowledge or data in the public domain other than
by reason of the wrongful acts of Employee.
4. Employee agrees that all products, processes,
inventions or devices, including computer software, or any
improvements to any of the foregoing ("Inventions"), discovered
or developed during the course of his employment by Corporation
which are (a) related to Corporation's business, or (b) in the
course of development by Corporation, or (c) made with the use
of Corporation's time, materials or facilities shall belong to
Corporation. Employee hereby assigns and transfers to
Corporation all right, title and interest in and to any and all
such Inventories. Employee agrees promptly to disclose to
Corporation all such Inventions, whether patentable or
unpatentable. Employee agrees to execute such instruments
(including patent and copyright applications and assignments)
and take all such, action at Corporation's expense, as may be
necessary or desirable to vest title in such Inventions to
Corporation or to obtain letters patent and copyrights for the
benefit of Corporation.
5. There is ( ) is not ( X ) attached a list
(including a brief description) of inventions, patented or
unpatented, and of computer software in which Employee has an
interest, which were made, conceived or developed by Employee
prior to his employment by Corporation and which are not
inventions for purposes of Paragraph 4 of this Agreement.
6. During the continuance of Employee's employment with
Corporation, Employee will devote his whole time and attention
to the business and affairs of Corporation, and will not,
either individually or together with any person or firm,
directly or indirectly, be engaged in any activity similar to
those engaged in by Corporation without its prior written
consent.
7. Employee represents and warrants that he is not
prevented or restricted from entering into an employment
relationship with Corporation, or from performing any duties
for Corporation, by any agreement with or obligation to any
person or entity or by any other disability or restraint.
8. This Agreement shall be binding upon and inure to the
benefit of Corporation and its successors and assigns, and
shall be construed in accordance with the laws of the State of
New York. Employee's obligations contained in this Agreement
shall survive the termination of his employment, regardless of
the reason for such termination. If any provision of this
Agreement shall be declared void, such provision shall be
deemed severed from this Agreement, and the remainder of this
Agreement shall otherwise remain in full force and effect.
Date this 30th day of October, 1985.
EMPLOYEE:
/s/ John A. Marszalek
____________________
____________________
(Print Name)
Signed in the present of:
/s/ Kathryn A. Jernan
______________________
Exhibit 13
1995
ANNUAL REPORT
FINANCIAL HIGHLIGHTS
______________________________________________________________________________
For the Year 1995 1994
______________________________________________________________________________
Net sales $1,567,748 $537,696
Earnings (loss) before income taxes
and extraordinary credit 45,532 (185,747)
Net earnings (loss) 45,183
Net earnings (loss) per share $.003 $(0.02)
______________________________________________________________________________
At Year End
Total assets $482,227 $293,749
Total liabilities 663,034 699,189
______________________________________________________________________________
Total stockholders' equity (180,807) (405,440)
_______________________________________________________________________________
Working Capital (360,835) (523,639)
_______________________________________________________________________________
Current ratio 0 0
_______________________________________________________________________________
MARKET FOR THE COMPANY'S COMMON
STOCK AND RELATED MATTERS
______________________________________________________________________________
The number of stockholders on January 31, 1996 was approximately 5,000.
The Company was delisted by NASDAQ in 1992. To the best knowledge of the
Company, management
does not have any market makers. In 1995, it was impossible to establish any
quotes for the JAM Company stock. The Company still believes that its JAMY
common stock is traded in the over-the-counter market. The following table
summarizes by quarter the high and low bid prices for the Company's common
stock during 1995 and 1994.
1995 1994
HIGH LOW HIGH LOW
First Quarter No quotables No quotables
Second Quarter No quotables No quotables
Third Quarter No quotables No quotables
Fourth Quarter No quotables No quotables
-5-
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
______________________________________________________________________________
1995 COMPARED TO 1994
Net sales for 1995 totaled $1,568,748, an increase of $1,031,052, or 150% from
sales of $537,696 in 1994.
This increase was due to receiving several contracts from new and previous
client base.
Cost of sales in 1995 totaled $924,011, an increase of $578,559, or 297% from
1994. This increase was due to payroll and outside vendor activity for multi-
media projects.
Gross profits increased $401,811 in 1995 from $242,926 to $644,737, due to
managing cost controls and project management systems.
1994 COMPARED TO 1993
Net sales for 1994 totaled $537,696, a decrease of $288,641, or 35% from sales
of $826,337 in 1993. This decrease was due to the Company spending much of its
time on research and development.
Cost of sales in 1994 totaled $294,770, a decrease of $124,752, or 30% from
1993. This decrease in cost of sales was due to the decrease in sales and the
need for outside services.
Gross profits decreased $163,889 in 1994 from $406,815 to $242,926, due largely
to the concentration on research and develop which caused the drop in gross
sales.
Liquidity and Capital Resources
At December 31, 1995, the Company had negative working capital of $360,835 and
total stockholders' equity (deficit) of $(180,807). This compares to the
negative working capital of $523,639 and total stockholders' equity (deficit)
of $(405,440) in 1994. Liquidity and capital resources increased in 1995 as a
result of the operating profit.
The Company acknowledges that additional resources may be needed to continue
growth in 1996 as well as additional sources of capital may be necessary.
Inflation
During 1995, 1994 and 1993, inflation had no material effect on the costs
incurred by the Company or the demand for the Company's services.
Status of Certified Public Accountants
In December, 1995, the Company retained the accounting firm of Bonn &
Shortsleeve, CPA's to audit the 1995 and 1994 Financial Statements.
FIVE YEAR SUMMARY OF SELECTED
FINANCIAL INFORMATION
______________________________________________________________________________
The table below represents a summary of selected components of the Company's
balance sheets and
statements of operations of the five years ended December 31, 1995. All
information concerning the
Company should be read in conjunction with the other financial statements and
related notes included elsewhere herein.
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets $ 302,199 $ 175,550 $ 61,998 $ 60,388 $ 43,939
Current liabilities 663034 699189 414,023 415,984 368,689
Working capital $ (360,835) $ (523,639) $ (352,025) $ (355,596) $ (324,750)
Total assets $ 482,227 $ 293,749 $ 247,333 $ 232,392 $ 821,690
Long-term obligations $ - $ - $ - $ 10,671 $ 269,842
- - -
Stockholders' equity $ (180,807) $ (405,440) $ (166,890) $ (187,212) $ 362,859
OPERATING DATA:
Net sales $ 1,568,748 $ 537,696 $ 826,337 $ 651,876 $ 1,021,451
Cost of sales 924,011 294,770 419,522 415,351 832,379
Gross profit $ 644,737 $ 242,926 $ 406,815 $ 236,525 $ 189,072
Selling, general and
administrative expenses 556,481 394,109 374,593 785,039 781,605
Operating profit (loss) $ 88,256 $ (151,183) $ 32,222 $ (548,514) $ (592,533)
Other income
(deductions), net $ (43,073) $ (34,563) $ (13,101) $ (1,557) $ 7,958
Net earnings (loss) $ 45,183 $ (185,746) $ 19,121 $ (550,071) $ (584,575)
Net earnings (loss) per
share $0.00 ($0.01) $0.00 ($0.04) $0.05
</TABLE>
See accompanying notes to financial statements.
-8-
BALANCE SHEETS
December 31, 1995 and 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
AUDITED Unaudited
CURRENT ASSETS:
Cash $ 4,705 $ -
Accounts receivable, less allowance for
doubtful accounts of $1,747 in 1995
and $3,600 in 1994 (Note 5) 288,126 200,557
Inventories (Note 2) 2,988 2,814
Prepaid expenses 6,380 6,549
302,199 209,920
PROPERTY AND EQUIPMENT (NOTES 2 AND 3):
Leasehold improvements 27,949 13,183
Production equipment 501,372 258,732
Office furniture and equipment 200,119 288,655
729,440 560,570
Less: Accumulated depreciation 560,631 442,371
168,809 118,199
Other Assets:
Deposits 11,219
-
$ 482,227 $ 328,119
</TABLE>
See accompanying notes to financial statements.
-9-
BALANCE SHEETS (CONT'D)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
AUDITED Unaudited
CURRENT LIABILITIES:
Checks drawn in excess of deposits $ - $ 34,370
Payroll taxes payable - 53,075
Accrued Income Tax 349
-
Accounts payable 87,535 155,564
Accrued expenses 138,975 12,784
Billings in excess of costs and
estimated earnings (Notes 2 and 4) - 19,262
Loan - Officer 146,175 323,504
Loans - Miscellaneous 290,000 135,000
$ 663,034 $ 733,559
STOCKHOLDERS' EQUITY (NOTE 7):
Common stock - $.01 par value, authorized 16,000,000
shares; issued and outstanding 15,274,447 and
12,274,447 at December 31, 1995 and 1994
respectively 152,745 122,744
Additional paid-in capital 3,147,227 3,027,227
Accumulated deficit (3,480,779) (3,555,411)
(180,807) (405,440)
$ 482,227 $ 328,119
</TABLE>
See accompanying notes to financial statements.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1995, 1994, and 1993
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
AUDITED Unaudited Unaudited
Net sales (Notes 2 and 5) $ 1,568,748 $ 537,696 $ 826,337
Cost of sales 924,011 294,770 419,522
Gross profit 644,737 242,926 406,815
Selling, general and administrative
expenses 556,481 394,109 374,593
Operating income (loss) 88,256 (151,183) 32,222
Other income (expense):
Interest income
- - 15
Interest expense (47,724) (25,163) (22,216)
Gain on sale of asset 5,000 10,500
(9,400)
(42,724) (34,563) (11,701)
Income (loss) before income taxes and
extraordinary items 45,532 (185,746) 20,521
Provision for income taxes
(Notes 2 and 7) 1,400
349 366
Income (loss) for the year $ 45,183 $ (186,112) $ 19,121
Earnings per share of common stock
(Note 2)
Net income (loss) per share $0.00 ($0.01) $0.00
</TABLE>
See accompanying notes to financial statements.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1995, 1994, and 1993
COMMON STOCK
<TABLE>
<CAPTION>
Paid In
<S> <C> <C> <C> <C> <C>
Number Capital In Total
Of Excess of Stockholder's Accumulated
SHARES Amount Par Value Equity Deficit
Balance December 31, 1992 12,274,447 122,744 3,027,227 $ (187,212) $ (3,337,183)
Net income for the year 19,121 19,121
- - -
Balance December 31, 1993 12,274,447 122,744 3,027,227 $ (168,091) $ (3,318,062)
Net loss for the year
- - - (160,028) (195,513)
Balance December 31, 1994 12,274,447 122,744 3,027,227 $ (328,119) $ (3,513,575)
Net income for the year 3,000,000 30,000 120,000 $ 45,183 $ 195,183
Balance December 31, 1995 15,274,447 152,744 3,147,227 $ (282,936) $ (3,318,392)
</TABLE>
See accompanying notes to financial statements.
STATEMENTS OF CASH FLOWS
For The Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
AUDITED Unaudited Unaudited
Cash flows from operation activities:
Income (loss) before extraordinary
item $ 45,183 $ (154,362) $ 19,121
Adjustments to reconcile net income
(loss) to net cash provided
(used) by operating activities:
Write off of capitalized software - 6,212 -
Depreciation and amortization 42,057 (14,666) 55,000
Provision for doubtful accounts - - -
(Increase) decrease in:
Accounts receivable (103,532) (148,503) (3,393)
Inventories (174) 358 274
Prepaid expenses (6,380) - 1,275
Costs and estimated earning in
excess - - -
Other assets (4,755) - -
Increase (decrease) in:
Checks drawn in excess of deposits 34,148 (18,059)
Accounts payable (69,975) (4,484) (63,561)
Accrued expenses 55,658 33,678 (9,416)
Billings in excess of costs
and estimated earnings - (19,262) (65,861)
(87,101) (112,519) (103,741)
Cash flows from investing activities:
Capital expenditures (65,739) (62,819) (67,291)
(65,739) (62,819) (67,291)
</TABLE>
See accompanying notes to financial statements.
STATEMENTS OF CASH FLOWS, (CONT'D)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
AUDITED Unaudited Unaudited
Cash flows from financing activities:
Loans from shareholders $ (8,268) $ 295,107 $ 163,398
Proceeds from demand loan 55,000 - -
Proceeds from line of credit 100,000 - -
Payments of long-term debt - - (10,671)
Payments of capital lease obligations - - (1,050)
146,732 295,107 151,677
Net increase (decrease) in cash and cash
equivalents $ 39,075 $ (34,593) $ 189
Cash and cash equivalents at beginning of year (34,370) 223 34
Cash and cash equivalents at end of year $ 4,705 $ (34,370) $ 223
Supplemental disclosure of cash flow
information:
Cash paid during the year for $ 34,730 $ 25,163 $ 22,216
interest
Cash paid during the year for income
taxes $ 366 $ 748 $ 1,400
</TABLE>
See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
The Company provides training and information communication services, including
instructional design
and training program development; video production and post production;
graphics and animation; and
software design and programming for computer based training and interactive
simulations.
As shown in the financial statements as of December 31, 1995, the Company's
accumulated deficit was
$3,480,779 including total net losses for the three-year period ended December
31, 1995 of $121,818. During 1995, there was an increase in working capital of
$162,804 and as of the date of this financial statement, the Company had
borrowed $146,175 from a shareholder at prime plus 2%.
The financial statements have been prepared in accordance with generally
accepted accounting principles.
Management of the Company has a plan to improve liquidity and attain future
profitable operations. The plan includes aggressive marketing of company
capabilities and services to interactive multi-media markets.
Management believes that the operations of the Company will provide sufficient
cash flow to fund its on-going operations, if the objectives of their plan are
attained. The continued support and forbearance of the Company's creditors
will also be required.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) INVENTORY
Inventories are stated at the lower of cost, using the first-
in, first-out (FIFO) method, or market.
b) PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Property and
equipment under capital leases are stated at the lower of the present value
of minimum lease payments at the beginning of the lease term or fair market
value at the inception of the lease. Normal repairs and maintenance are
charged to operations as incurred.
Depreciation is calculated using straight-line and declining-
balance methods over the estimated useful lives of the assets. Equipment
held under capital leases is amortized using the straight-line method over
the shorter of the lease term or estimated useful life of the asset.
The estimated useful lives are as follows:
Leasehold improvements 5-10 years
Production equipment 5-7 years
Office furniture and equipment 5-8 years
c) REVENUE RECOGNITION
Revenue is recognized upon the completion and delivery to the
customer of products and services except for long-term contracts (usually
three to sixteen months in duration), for which revenue is recognized on
the percentage-of-completion method as the contracts progress.
d) INCOME TAXES
Certain income and expense items are accounted for in different
periods for financial and tax reporting purposes. These timing differences
consist primarily of different methods of accounting for depreciation and
any unrealized gain or loss on the U.S. Government Mutual Fund.
e) EARNINGS PER COMMON SHARE
Net income per share is based on the weighted average number of
common shares and common share equivalents (stock operation and warrants
with a dilutive effect) outstanding during each period. The weighted average
number of common and common equivalent shares outstanding during 1995 was
15,274,447 and during 1994 and 1993 was 12,274,447 each year.
f) Reclassifications
Certain items in the 1995 and 1994 financial statements were
reclassified for comparative purposes and do not affect the 1995 and 1994
net income (loss) as originally reported.
3. LEASES AND LEASE COMMITMENTS
At December 31, 1995, there was no equipment under capital lease
agreements.
At December 31, 1994, there was no equipment under capital lease
agreements.
At December 31, 1993, there was no equipment under capital lease
agreements
The company leases office space under a non-cancelable lease which
required minimum monthly payments of approximately $6,288 through July, 1997.
In December, 1995, the Company signed for additional office space of
approximately 2300 square feet at $3,000/mo. with a one (1) year commitment
beginning January 1, 1996.
Total rental expense under noncancellable operating leases for
office facilities and equipment amounted to $78,736 in 1995, $74,485 in
1994, and $76,348 in 1993.
4. CONTRACTS IN PROGRESS
As of December 31, 1995, the company had a signed backlog of
$350,000. Accumulated costs and estimated earnings and billings on
contracts in progress at December 31, 1994 and 1993 are as follows:
1995 1994
Accumulated costs and estimated
earnings $N/A $ 0
Less: Billings N/A 19,262
$N/A $19,262
Contracts in progress are included in the accompanying balance
sheets under the following captions:
1995 1994
Costs and estimated earnings in
excess of billings $0 $0
Billings in excess of costs and
estimated earnings 0 19,262
$0 $19,262
5. SIGNIFICANT CUSTOMERS AND ACCOUNTS RECEIVABLE
The Company has received approximately 30% of its revenue from a
Fortune 50 company. The Company by the end of 1995 was in the process of
negotiating a contract with some of the same customers for 1996. There were
four (4) significant customers in accounts receivable as of December 31, 1995.
6. STOCK OPTIONS AND WARRANTS
A summary of stock option and warrant transactions during 1995 and
1994 is as follows:
WARRANTS OPTIONS
$.72 $.375 $.25 $.04 $1.00 $.01
Outstanding
December 31, 1994
Outstanding
December 31, 1995 470,000
Options to purchase a total of 105,000 shares were issued under the
Company's 1986 Incentive Stock Option Plan for officers and key employees.
These options are exercisable at $.04 per share. This plan authorized
the issuance of options to purchase up to 200,000 shares of the Company's
common stock.
Options under the 1986 Incentive Stock Option Plan are granted at
the discretion of the Board of Directors. The exercise price of the options
is the fair market value of the Company's common stock at the date of grant,
or 110 percent of fair market value for grants to employees with
stockholdings greater than 10 percent. Options can be exercised in
installments over a three-year period beginning one year from the date of
grant. The options expire 10 years from the date of grant with the exception
of options issued to more than 10 percent stockholders, which expire five
years from the date of grant.
Options to purchase a total of 365,000 shares were issued under
the 1987 Stock Option Plan to two members of the Board of Directors, two
individuals who loaned the Company money in the past three years, and one other
individual, who is a partner of the Corporation's general counsel. Those
options are exercisable at $.04 per share.
In December, 1995, $150,000 of the Officer Loan was converted to
3,000,000 shares of stock.
Total shares of common stock reserved for issuance under warrants
and options plans at December 31, 1991 amounted to 725,000 shares.
7. INCOME TAXES
For the year ended December 31, 1990, the Company recognized a
federal income tax benefit of $4,700, from the
utilization of net operating loss carryforwards. No federal income tax benefit
was derived from the net operating losses in
current in 1991 and 1989 as taxable income within the carryback period had
previously been offset by net operating loss carryforwards. The actual federal
income tax expense (benefit), before consideration of the effect of the loss
carryforwards, differs from the expense (benefit) computed by applying the
federal corporate tax rate of 34 percent to earnings (loss) before
income taxes and extraordinary credit in 1995, 1994 and 1993 as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1995 1994 1993
Expected federal income tax expense
(benefit) at statutory rate $ 20,321 $ $ 0
0
Current year operating loss 0
0 0
Effect of graduated tax rates 366 1,400
0
$ $ 366 $ 1,400
0
</TABLE>
The components of current income tax expense are as follows:
1995 1994 1993
Federal $ 0 $ 0 $ 0
State 349 366 1,400
$ 34 $366 $1,400
At December 31, 1995, the Company had net operating loss
carryforwards for tax purposes of $3,436,120, which
expire in 1999 through 2009 and investment credit carryforwards of $46,660
which expire in 1997 through 2009. Net operating loss carryforwards for
financial statement purposes do not differ significantly from those for tax
purposes.
BONN, SHORTSLEEVE & CO.
CERTIFIED PUBLIC ACCOUNTANTS
80 LINDEN OAKS OFFICE PARK
ROCHESTER, NEW YORK 14625
_______________
(716) 381-9660
FAX: (716) 248-0603
To the Board of Directors
J.A.M., Inc.
Fairport, New York
We have audited the accompanying balance sheets of J.A.M., Inc. (a C-
corporation) as of December 31, 1995 and 1994, and the related statements of
income (loss) and deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsbility is to express an opinion on these financial statements based on
our audits.
Except as explained in the following paragraph, we conducted our audits in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
We did not substantiate the December 31, 1993 accounts receivable and accounts
payable balances since that date was prior to our appointment as auditors for
the Company. The accounts receivable and accounts payable balances as of
December 31, 1993, enter into the determination of net income and cash flows
for the year ended December 31, 1994.
Because of the matter discussed in the preceding paragraph, the scope of our
audit was not sufficient to enable us to express, and we do not express, an
opinion on the results of operations and cash flows for the year ended December
31, 1994.
In our opinion, the balance sheets of J.A.M., Inc. as of December 31, 1995 and
1994, and the related statements of income, deficit, and cash flows for the
year ended December 31, 1995, present fairly, in all materials respects, the
financial position of J.A.M., Inc. as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
/s/ Bonn, Shortsleeve & Co.
March 5, 1996
-21-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE DATA IN THIS SCHEDULE ARE EXTRACTED FROM THE COMPANY'S AUDITED 1995
FINANCIAL STATEMENTS AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000765449
<NAME> J.A.M., INC.
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<CASH> 4,705
<SECURITIES> 0
<RECEIVABLES> 289,873
<ALLOWANCES> 1,747
<INVENTORY> 2,988
<CURRENT-ASSETS> 302,199
<PP&E> 729,440
<DEPRECIATION> 560,631
<TOTAL-ASSETS> 482,227
<CURRENT-LIABILITIES> 663,034
<BONDS> 0
0
0
<COMMON> (180,807)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 482,227
<SALES> 1,568,748
<TOTAL-REVENUES> 1,568,748
<CGS> 924,011
<TOTAL-COSTS> 1,480,492
<OTHER-EXPENSES> 42,724
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 47,724
<INCOME-PRETAX> 45,532
<INCOME-TAX> 349
<INCOME-CONTINUING> 45,183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,183
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
