NOTICE AND PROXY COVER PAGE
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 14, 1996
To the Shareholders of Ryan, Beck & Co., Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Ryan, Beck & Co., Inc. (the "Company") will be held at Mayfair Farms,
481 Eagle Rock Avenue, West Orange, New Jersey on Tuesday, May 14,
1996 at 10:00 a.m., Eastern Time, for the following purposes:
1. To elect two directors for terms expiring in 1999;
2. To consider and vote upon the adoption of the Company's 1996 Stock
Option Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Pursuant to the By-laws of the Company, the Board of Directors has
fixed March 21, 1996 as the record date for the determination of
shareholders entitled to notice of, to vote at and to attend the
Annual Meeting and any adjournments thereof. Only record holders of
the Common and Preferred Stock of the Company as of the close of
business on that date will be entitled to notice of, to vote at and to
attend the Annual Meeting or any adjournments thereof.
By order of the Board of Directors
Mildred Santillo
Secretary
April 12, 1996
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, THE BOARD OF
DIRECTORS URGES YOU TO SIGN, DATE, AND MAIL THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED ENVELOPE. AT ANY TIME
PRIOR TO ITS BEING VOTED, PROXIES ARE REVOCABLE BY WRITTEN NOTICE TO
THE COMPANY IN ACCORDANCE WITH INSTRUCTIONS SET FORTH IN THE ENCLOSED
PROXY STATEMENT OR BY VOTING IN PERSON AT THE ANNUAL MEETING. IF YOU
ATTEND THE MEETING, YOU MAY VOTE IN PERSON. HOWEVER, IF YOU ARE A
SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL
NEED ADDITIONAL DOCUMENTATION FROM THE RECORD HOLDER OF THE SHARES TO
VOTE PERSONALLY AT THE ANNUAL MEETING.
PROXY STATEMENT
The following statement is furnished in connection with the
solicitation by the Board of Directors of Ryan, Beck & Co., Inc., a
New Jersey corporation (the "Company"), of proxies to be voted at the
Annual Meeting of Shareholders of the Company to be held at Mayfair
Farms, 481 Eagle Rock Avenue, West Orange, New Jersey on Tuesday, May
14, 1996 at 10:00 a.m., Eastern Time, and at any and all adjournments
thereof (the "Annual Meeting"). This proxy statement and the
enclosed form of proxy are first being sent to shareholders on or
about April 12, 1996.
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no business that will be presented for consideration
at the Annual Meeting other than that referred to in the Notice of
Annual Meeting of Shareholders attached hereto. As to other business,
if any, that may properly come before the Annual Meeting, the proxy in
the enclosed form will be voted in accordance with the judgment of the
person or persons voting the proxy, unless otherwise directed by the
Board of Directors.
DATE, TIME AND PLACE OF ANNUAL MEETING
The Annual Meeting will be held on Tuesday, May 14, 1996 at 10:00 a.m.
at Mayfair Farms, 481 Eagle Rock Avenue, West Orange, New Jersey.
VOTING; REVOCATION OF PROXIES
If the enclosed proxy is properly executed and returned prior to the
Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. Each proxy may be
revoked at any time before it is exercised by giving written notice to
the Secretary of the Company. A subsequently dated proxy will, if
properly presented, revoke a prior proxy. However, if you are a
shareholder whose shares are not registered in your own name, you will
need additional documentation from the record holder of the shares to
vote personally at the Annual Meeting. Any shareholder may attend the
Annual Meeting and vote in person whether or not they have previously
given a proxy.
PROXY SOLICITATION
The entire cost of soliciting these proxies will be borne by the
Company. Following the mailing of these proxy soliciting materials,
directors, officers and employees of the Company may solicit proxies
by mail, telephone, telegraph and personal interviews. Arrangements
will be made with brokerage houses and other custodians, nominees and
fiduciaries to forward proxy soliciting material to the beneficial
owners of stock held of record by such persons, and the Company will
reimburse them for reasonable out-of-pocket expenses incurred by them
in so doing.
VOTE REQUIRED; SHARES ENTITLED TO VOTE
Holders of record of the Company's Common Stock, par value $.10 per
share ("Common Stock"), and Voting Cumulative Convertible Preferred
Stock, Series A, par value $.10 per share (the "Series A Preferred
Stock"), herein after collectively referred to as the "Voting Stock",
as of the close of business on March 21, 1996 are entitled to notice
of, and to vote at, the Company's Annual Meeting. At the close of
business on the record date, there were 3,231,302 shares of Common
Stock outstanding and 408,180 shares of Series A Preferred Stock
outstanding. All holders of Voting Stock will vote together as a
class and each share of Voting Stock is entitled to one vote on all
matters to come before the Annual Meeting. The total number of votes
entitled to be cast at the Annual Meeting is 3,639,482.
The presence, in person or by proxy, of holders of a majority of the
outstanding shares of the Company's Voting Stock will constitute a
quorum for the transaction of business at the Company's Annual
Meeting.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as of March 21,
1996 with respect to the holdings of (i) each director and executive
officer of the Company, and by all of such executive officers and
directors as a group, and (ii) any other 5.00% or more holder of the
Company. The Company's management is not aware of any other
individual or entity that owned of record or beneficially owned more
than 5.00% of the Common Stock and/or Series A Preferred Stock as of
March 21, 1996. To the Company's knowledge, except as otherwise
indicated in the footnotes to this table, each of the persons named in
the table has sole voting and/or investment power with respect to all
shares of Common Stock and/or Series A Preferred Stock reported as
beneficially owned by such persons.
<TABLE>
<CAPTION>
Common Stock and Series A
Common Stock Equivalents <F1>Preferred Stock <F2>
Directors and Number of Number of
Executive Officers Shares Percent Shares Percent
<S> <C> <C> <C> <C>
Fenwick H. Garvey134,651<F3,F4,F5>3.68% 101,811 24.94%
80 Main Street
West Orange, N.J.
Allen S. Greene 93,816<F6> 2.56% - -
80 Main Street
West Orange, N.J.
Bruce M. Chodash 429,387<F4,F5> 11.73% 1,811 *
80 Main Street
West Orange, N.J.
Matthew R. Naula 83,801<F4,F5> 2.29% 1,811 *
80 Main Street
West Orange, N.J.
Ben A. Plotkin 100,078<F4,F7> 2.73% 1,811 *
80 Main Street
West Orange, N.J.
Jack R. Rosenthal 3,860<F4 > * 1,811 *
80 Main Street
West Orange, N.J.
Michael M. Horn 18,868<F8> * - -
McCarter & English
100 Mulberry Street
Newark, N.J.
Richard B. Neff 26,707<F9> * - -
DiGiorgio Corporation
Two Executive Drive
Somerset, N.J.
David Tendler<F10> 2,100 * - -
Tendler Beretz
Associates, Ltd.
101 East 52nd Street
New York, N.Y.
Peter W. Rodino, Jr.
Rodino & Rodino
11 Eagle Rock Avenue
East Hanover, NJ 07936- - - -
All Directors and
Officers as a Group
(10 persons) 893,268<F11> 24.41 109,055 26.72
Other Beneficial Owners
Harry C. Oefinger 185,062<F12> 5.06 17,000 4.16
80 Main Street
West Orange, N.J.
Ryan, Beck & Co., Inc.104,227<F13>2.85 99,264 24.31
ESOP, Summit Bank TTEE
UAD 10/04/95
40 Beechwood Road
Summit, NJ
* Less than one percent.
<FN>
<F1> Includes total common and preferred shares owned. The preferred
shares included in the common stock equivalent calculation have been
adjusted to reflect the 5% common stock dividend declared on January
26, 1996.
<F2> Each share of Series A Preferred Stock is immediately convertible
into 1.05 shares (as adjusted for the 5% common stock dividend
declared on January 26, 1996) of Common Stock.
<F3> Includes 100,000 shares of Series A Preferred Stock, each of
which is immediately convertible into 1.05 shares (as adjusted for the
5% common stock dividend declared on January 26, 1996) of Common
Stock.
<F4> Includes 1,811 shares of Series A Preferred Stock, each of which
is immediately convertible into 1.05 shares (as adjusted for the 5%
common stock dividend declared on January 26, 1996) of Common Stock,
held in a Ryan Beck ESOP account for the benefit of such person, as to
which such person may direct voting.
<F5> On March 15, 1994, Messrs. Garvey, Naula and Chodash entered into
an Amended and Restated Stock Pooling Agreement (the "Agreement") with
respect to all shares of Common Stock and Series A Preferred Stock
then owned, or subsequently acquired by the parties, which amended and
restated a prior agreement which had previously given Mr. Garvey the
right to vote all of the Company's Common Stock owned by Messrs. Naula
and Chodash solely in connection with the election of directors,
through the Company's 1994 Annual Meeting. As a result of Mr.
Garvey's relinquishment of his position as Chief Executive Officer of
the Company on October 11, 1994, the Agreement requires that Mr.
Garvey, as voting trustee under the Agreement, vote all such shares of
Common Stock and Series A Preferred Stock in connection with the
election of directors of the Company as directed by the holders of a
majority of such shares subject to the Agreement. In the event that
holders of Common Stock and the Series A Preferred Stock vote
separately as a class on any matter brought before the shareholders
for consideration, Mr. Garvey will be required to vote the shares of
Common Stock as directed but each of the parties to the Agreement will
individually vote the shares of Series A Preferred Stock, if any, held
by them. Unless amended, the Agreement will terminate following the
1999 Annual Meeting. As of the date hereof, Mr. Chodash is the holder
of a majority of such shares. Pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, Mr. Chodash may be deemed to
beneficially own all shares subject to the Agreement.
<F6> Includes 30,817 shares of Common Stock held in a retirement plan
for Mr. Greene's benefit. Also includes 749 shares of Common Stock in
the name of his wife and 105 shares of Common Stock held by his wife
as custodian for his minor son, as to which Mr. Greene expressly
disclaims beneficial ownership.
<F7> Includes 26,136 shares of Common Stock held in a retirement plan
for Mr. Plotkin's benefit and 6,541 shares of common stock held in a
joint account with his wife.
<F8> Includes 5,418 shares of Common Stock held in a retirement plan
for Mr. Horn's benefit and 2,819 shares of Common Stock held in a
retirement plan for his wife. Also includes 8,347 shares of Common
Stock held in a joint account with his wife.
<F9> Includes 18,900 shares of Common Stock held in a retirement plan
for Mr. Neff's benefit and 3,150 shares of Common Stock held by his
wife as custodian for his three minor children. Also includes 3,150
shares owned by Mr. Neff's mother, with respect to which she has sole
voting and investment power and as to which he disclaims beneficial
ownership.
<F10> Mr. Tendler is not seeking re-election to the Board.
<F11> Includes 114,508 shares of Series A Preferred Stock, which
have been adjusted to reflect the 5% common stock dividend declared on
January 26, 1996.
<F12> Includes 17,850 shares of Series A Preferred Stock, which
have been adjusted to reflect the 5% common stock dividend declared on
January 26, 1996.
<F13> Consists solely of Series A Preferred Stock, which have been
adjusted to reflect the 5% common stock dividend declared on January
26, 1996.
</FN>
</TABLE>
PROPOSAL I
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS
The Company's directors are elected on a staggered term basis, with
each class of directors consisting of approximately one-third of the
Board and standing for re-election once in each three year period.
Accordingly, at the Annual Meeting, the Company's shareholders will be
asked to elect two directors in Class III for terms expiring in 1999.
Class I consists of three directors whose terms expire in 1997; Class
II consists of four directors whose terms expire in 1998; and Class
III consists of two directors whose terms expire at the Annual
Meeting.
Unless a shareholder either indicates "withhold authority" on his
proxy or indicates on his proxy that his shares should not be voted
for certain nominees, it is intended that the persons named in the
proxy will vote for the election as directors of the two persons named
in Table I below to serve until the expiration of their respective
terms and thereafter until their successors shall have been duly
qualified and elected. Discretionary authority is solicited to vote
for the election of a substitute for any of said nominees who, for any
reason presently unknown, cannot be a candidate for election.
Table I sets forth the names and ages of the nominees to the Board of
Directors, the other positions and offices held by each such person
within the Company, the period during which each such person has
served on the Company's Board of Directors, the expiration of their
respective terms and the principal occupations and employment of each
such person during the past five years. Table II sets forth
comparable information with respect to those directors whose terms of
office will continue beyond the date of the Annual Meeting. Unless
otherwise indicated, the principal occupations and employment listed
for each person has been his principal occupation and employment for
at least the past five years.
<TABLE>
<CAPTION>
TABLE I
NOMINEES FOR ELECTION AS DIRECTORS
CLASS III
DirectorExpiration of
Name and Age Since Term Business Experience for Past Five
Years
<S> <C> <C> <C>
Fenwick H. Garvey, 51 1970 1999 Chairman of the Board (July
1989 - Present); President
and Chief Executive Officer (July
1987 - October 1994);
President and Chief Operating
Officer (January 1987
- June 1987).
Jack R. Rosenthal, 71 1965 1999 Vice Chairman of the Board
(January
1987 - Present); Executive Vice
President
(1972 -1986).
<CAPTION>
TABLE II
CONTINUING DIRECTORS
CLASS I
DirectorExpiration of
Name and Age Since Term Business Experience for Past Five
Years
<S> <C> <C> <C>
Michael M. Horn, 56 1986 1997 Partner of McCarter & English
(Attorneys at Law) (May 1990 -
Present);
Executive Vice President of Ryan,
Beck
& Co., (December 1988 - April 1990).
Matthew R. Naula, 54 1981 1997 Executive Vice President
(December
1990 - Present); Senior Vice
President
(1981 - December 1990).
Ben A. Plotkin, 40 1993 1997 Senior Executive Vice
President (January
1996 - Present); Executive Vice
President
(December 1990 - January 1996);
Senior
Vice President (December 1989 -
December 1990).
<CAPTION>
CLASS II
DirectorExpiration of
Name and Age Since Term Business Experience for Past Five
Years
<S> <C> <C> <C>
Bruce M. Chodash, 47 1981 1998 Executive Vice President
(January 1986 - Present).
Allen S. Greene, 49 1994 1998 President and Chief Executive
Officer
(October 1994 - Present); Chairman,
President and Chief Executive
Officer of
VSB Bancorp/Valley Savings Bank
(October 1990 - October 1994);
President
of Allen S. Greene and Company, Inc.
(June 1977 - October 1990).
Richard B. Neff, 47 1994 1998 President and Chief Executive
Officer of
Las Plumas Lumber Corp. (April
1991 - Present); Executive Vice
President, Chief Financial Officer
and
Director of DiGiorgio Corp.
(February 1990 - Present); Business
Consultant (April 1986 - February
1990).
Peter W. Rodino, Jr., 861989 1998 Partner of Rodino & Rodino,
P.C.
(Attorneys at Law) (1989 - Present);
U.S.
Congressman (January 1949 -
January 1989).
</TABLE>
Certain of the Company's executive officers also serve as officers and
directors of the Company's wholly-owned subsidiaries.
VOTE REQUIRED FOR APPROVAL
The two directors are required to be elected by the affirmative vote
of a plurality of the shares of Voting Stock represented, in person or
by proxy, and entitled to vote at the Annual Meeting. Votes may be
cast in favor or withheld for any or all of the appropriate nominees.
Abstentions and broker non-votes on returned proxies shall be counted
as neither for nor against a nominee, but the shares represented by
such an abstention or broker non-vote shall be considered present at
the Annual Meeting for quorum purposes.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE AFOREMENTIONED NOMINEES TO THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS; COMMITTEES OF THE BOARD
The Board of Directors holds regularly scheduled meetings and meets on
other occasions when required by special circumstances. In addition
to meeting as a group to review the Company's business, certain
members of the Board also devote their time and talents to one or more
committees of the Board, described herein. The Executive Committee of
the Board of Directors (members: Messrs. Chodash, Garvey, Greene,
Naula, Neff, Plotkin and Tendler) was established in September of 1994
and exercises the authority of the Board when the Board is not in
session, subject to applicable laws and the Company's By-Laws. The
Audit Committee of the Board of Directors (members: Messrs. Horn,
Neff and Tendler) provides general oversight in financial reporting
and the adequacy of the Company's internal controls. The Audit
Committee also recommends to the Board of Directors the appointment of
the Company's independent public accountants. The Nominating
Committee of the Board of Directors (members: Messrs. Chodash, Garvey,
Naula and Rodino) recommends to the Board of Directors those persons
to be appointed or nominated for election to the Board of Directors.
The Compensation Committee of the Board of Directors (members:
Messrs. Garvey, Neff and Tendler) reviews the Company's executive
compensation levels. See "Executive Compensation Committee Report."
In 1995 the Board of Directors held eight meetings; the Executive
Committee of the Board of Directors held four meetings; the Audit
Committee of the Board of Directors held two meetings; the Nominating
Committee of the Board of Directors held one meeting and the
Compensation Committee of the Board of Directors held three meetings.
During 1995, each director attended at least 75% of the aggregate of
(i) the total number of meetings of the Board of Directors (held
during the period for which he has been a director) and (ii) the total
number of meetings held by all committees of the Board on which he
served (during the period that he served).
REMUNERATION OF DIRECTORS
Each of the Company's directors who is not also an officer of the
Company and not receiving contractual payments from the Company
receives a quarterly retainer of $5,000 plus $500 for each Board of
Directors meeting attended. In addition, each director receives $500
for each individual committee meeting attended but not held on the
same day as a Board of Directors meeting, the chairman of each
committee receives $1,000 per meeting.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation for
each of the last three fiscal years awarded to or earned by the Chief
Executive Officer of the Company and the four most highly compensated
executive officers of the Company.
<TABLE>
<CAPTION>
Long Term Compensation
RestrictedSecurities
Name & Principal Annual CompensationStock Underlying
All other
Position Year Salary Bonus Awards Options (#) Compensation
<S> <C> <C> <C> <C> <C> <C>
Allen S. Greene<F1> 1995 $200,000 $300,000$50,005<F2> 31,500
$ -<F3>
President and 1994 46,154 75,000250,000<F2> 0 -<F3>
Chief Executive Officer
Fenwick H. Garvey<F4> 1995 $168,750 $180,000 0 0
- -<F3>
Chairman of the 1994 231,564 352,400 0 0
- -<F3>
Board 1993 200,000 387,500 0 0
- -<F3>
Ben A. Plotkin1995 $187,500$490,000 0 31,500 -<F3>
Senior Executive 1994 187,500 803,000 150,000<F5> 0
- -<F3>
Vice President1993 150,000 332,500 50,000<F5>0 80,000<F6>
Matthew R. Naula 1995 $187,500 $62,500 0 0
- -<F3>
Executive Vice 1994 187,500 136,000 0 0 -<F3>
President 1993 150,000 170,000 0 0 -<F3>
Bruce M. Chodash 1995 $187,500 $162,500 0 0
- -<F3>
Executive Vice 1994 187,500 166,000 0 0 -<F3>
President 1993 150,000 170,000 0 0 -<F3>
<FN>
<F1> Mr. Greene was appointed President and Chief Executive Officer
and a Director of the Company on
October 11, 1994.
<F2> The following table details Mr. Greene's Restricted Stock Awards:
<CAPTION>
Award Number of Value at Date of
Date Shares Grant Date Vesting
<S> <C> <C> <C>
Oct. 1994 7,737$ 50,000 Jan. 1996
Oct. 1994 7,735 50,000 Jan. 1997
Oct. 1994 7,735 50,000 Jan. 1998
Oct. 1994 7,735 50,000 Jan. 1999
Oct. 1994 7,735 50,000 Jan. 2000
Sept. 1995 7,193 50,005 Sept. 1998
Total Grants: 45,870$300,005
All shares have been adjusted for the 5% stock dividend
declared on January 26, 1996.
These awards were made pursuant to the terms of an employment
agreement between Mr. Greene and the Company. Mr. Greene was
required to purchase an equal number of shares in order to
receive the Company's grants. Vesting dates on all 1994 grants
were accelerated in September, 1995.
<F3> The dollar value of all other compensation paid to executive
officers did not exceed the lesser of $50,000 or 10% of the total
of annual base salary and bonus.
<F4> On October 11, 1994, Fenwick H. Garvey relinquished the offices
of President and Chief Executive Officer of the Company. Mr.
Garvey has continued to serve as Chairman of the Board, focusing
on revenue production and new business opportunities for the
Company.
<F5> The following table details Mr. Plotkin's Restricted Stock
Awards:
<CAPTION>
Award Number of Value at Date of
Date Shares Grant Date Vesting
<S> <C> <C> <C>
Jan. 1993 8,936 $ 50,000 Dec. 1996
Jan. 1994 7,635 50,000 Dec. 1997
Oct. 1994 7,736 50,000 Dec. 1998
Oct. 1994 7,735 50,000 Dec. 1999
Total Grants
Since 1993: 32,042$ 200,000
All shares have been adjusted for the 5% stock dividend declared
on January 26, 1996.
<F6> Includes contributions by the Company to its Employees' Profit
Sharing Plan of $30,000 for the benefit of Mr. Plotkin and
reimbursement to Mr. Plotkin of $50,000 for certain relocation
expenses.
[/FN]
</TABLE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Percent of Potential Realizable
Total Value at Assumed
Number of Options Annual Rates of Stock
Securities Granted to Exercise Price Appreciation For
Underlying Employees of Base Option Term
Options Granted in Fiscal Price Expiration
Name(#)<F1> Year ($/Sh)<F1> Date 5%($)<F2>10%($)<F2>
<S> <C> <C> <C> <C> <C> <C>
Allen S. Greene 31,500 24.7% $7.38 9/2005$146,199
$370,497
Ben A. Plotkin 31,500 24.7% $7.38 9/2005$146,199
$370,497
<FN>
<F1> Adjusted for a 5% stock dividend declared on January 26, 1996.
<F2> Potential Realizable Values are based on an assumption that the
stock price of the Common Stock starts equal to the exercise
price shown for each particular option grant and appreciates at
the annual rate shown (compounded annually) from the date of
grant until the end of the term of the option. These amounts are
reported net of the option exercise price, but before any taxes
associated with exercise of the subsequent sale of the underlying
stock. The actual value, if any, an optionholder may realize
will be a function of the extent to which the stock price exceeds
the exercise price on the date the option is exercised and also
will depend on the optionholder's continued employment through
the vesting period. The actual value to be realized by the
optionholder may be greater or less than the values estimated in
this table.
</FN>
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/VALUES
Number of Securities
Underlying Value of Unexercised
Unexercised Optionsin-the-Money Options
Shares Valueat Fiscal Year-End (#)at Fiscal Year-End
($)
Acquired on Realized Exercisable/ Exercisable/
NameExercise (#) ($) Unexercisable<F1>
Unexercisable<F2>
<S> <C> <C> <C> <C>
Allen S. Greene 0 0 0/31,500 0/0
Ben A. Plotkin0 0 0/31,500 0/0
<FN>
<F1> Adjusted for a 5% stock dividend declared on January 26, 1996
<F2> Based on the closing price of $7.38 (as adjusted for the 5% stock
dividend) Common Stock on December 29, 1995
</FN>
</TABLE>
EXECUTIVE COMPENSATION COMMITTEE REPORT
General. Under rules established by the Securities and Exchange
Commission, Ryan, Beck is required to provide certain data and
information in regard to the compensation and benefits provided to
Ryan, Beck's Chief Executive Officer and other executive officers of
the Company. The disclosure requirements for the Chief Executive
Officer and other executive officers include the use of tables and a
report explaining the rationale and considerations that led to
fundamental executive compensation decisions affecting those
individuals. In fulfillment of this requirement, the following report
has been prepared for inclusion in this proxy statement.
Compensation Policies. The compensation program is structured to
recognize each executive's level of responsibility and to reward
exceptional individual and corporate performance. The Committee takes
into account both annual operating results and the desirability of
providing incentives for future improvement. This includes the ability
to implement the Company's business plans, as well as to react to
unanticipated external factors which could have a significant impact
on corporate performance. Compensation decisions for all executives
including the Chief Executive Officer are based on the same criteria.
The Compensation Committee establishes base salaries for the Company's
executive officers at the beginning of each year upon the subjective
recommendation of the Chief Executive Officer. Salary levels are
intended to reflect responsibilities in one or more of the Company's
operating units and to be competitive with positions of similar
responsibility in other comparable investment banking and broker
dealer organizations, whether publicly owned or privately held, some
of which may be included in the Peer Group Index. Compensation
surveys by independent third parties, industry associations and
industry conference groups, as well as published proxy data for firms
of comparable size and scope, all serve as resources to the chief
executive and to this Committee in its deliberations.
Incentive Bonus Awards. The Company's bonus pools are based either
upon the Company's earnings performance for the year, or upon business
unit revenue and earnings performance. The Company's Chief Executive
Officer, certain other executive officers, as well as non-commissioned
eligible employees of the Company are paid bonuses semi-annually from
a bonus pool based upon the performance of the individual and the
total results of the department and the Company. The structure and
accrual rates for the corporate and various business unit bonus pools
are reviewed annually by the Committee. Performance bonus awards for
the executive officers are initially determined by the Chief Executive
Officer and are submitted to the Committee for discussion and
approval. An executive officer's individual share of his or her
respective bonus pool is based upon the officer's duties and
responsibilities, individual performance and future potential. Many
of these assessments are subjective in nature and are made semi-
annually on a case-by-case basis.
Long Term Incentive Compensation. Stock-based incentive awards are a
fundamental component of total compensation awarded each year to
selected officers of the company. These awards, which include
restricted stock grants and stock options, are designed to reinforce
the importance of building long-term value for the Company's
stockholders. Restricted stock grants provide an immediate ownership
interest and reinforces a long term orientation in decision making.
Restricted stocks are shares of common stock that convey to their
holder all the rights of a stockholder, including receipt of
dividends. The shares are restricted from being sold, transferred, or
assigned for at least 3 years. In most cases, the award recipient is
required to purchase and hold an equal number of shares in order to
receive the Company's grants. The awards granted in 1995 have a
restriction period of 3 years. The number of restricted stock grants
awarded by the Compensation Committee is based on individual
performance and level of responsibility.
Stock options directly align the financial interest of management with
those of stockholders by rewarding management only if, and to the
extent that the price of common stock appreciates in the future. Stock
options have a term of 10 years and vest over a 4 or 5 year period.
The number of options that the Compensation Committee grants to
officers is based on individual performance and level of
responsibility. Award levels must be sufficient in size so that the
recipient develops strong incentives to achieve long-term corporate
goals.
Compensation of the Chief Executive Officer. In keeping with the
general compensation policy outlined above and pursuant to the terms
of an employment agreement between Mr. Greene and the Company, Mr.
Greene's annual base salary was set at $250,000 for 3 years beginning
calendar 1996. Under the employment agreement between Ryan, Beck and
Mr. Greene, the base salary may not be decreased. In addition, during
1995 the Committee provided stock-based compensation awards to Mr.
Greene totaling 7,193 shares (as adjusted for the 5% stock dividend)
with a market value at the time of grant of $50,005. These shares will
vest 3 years from the date of grant. In the event of Mr. Greene being
involuntarily terminated without cause, a change in control, or the
liquidation of the company all of the unvested shares would
immediately vest. The Committee also awarded Mr. Greene 31,500 stock
options (as adjusted for the 5% stock dividend). These options will
vest over a 5 year period.
Compensation Committee: Fenwick H. Garvey
Richard B. Neff
David Tendler
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Fenwick H.
Garvey, Chairman of the Board and former President and Chief Executive
Officer, Richard B. Neff and David Tendler.
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return
on the common stock of the Company for the last five fiscal years with
the cumulative total return of the NASDAQ National Market (the "NASDAQ
Market Index") and the Media General Peer Group (a peer group
consisting of 64 investment banks and broker dealers) over the same
period (assuming the investment of $100 in each on January 1, 1991,
and the reinvestment of all dividends).
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG
RYAN, BECK & CO., INC., NASDAQ MARKET INDEX AND MEDIA GENERAL
INVESTMENT
BANKERS AND BROKER DEALERS PEER GROUP INDEX (MG INDEX)
(GRAPH APPEARS HERE)
<TABLE>
<CAPTION>
Fiscal Year Ending December 31, 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
RYAN, BECK & CO. 100.00 225.00 1347.981855.462134.232602.81
NASDAQ MARKET INDEX 100.00 166.30 183.94237.11 211.96 295.19
MG INDEX 100.00 128.38 129.64155.50 163.26 211.77
</TABLE>
AGREEMENTS WITH EMPLOYEE-DIRECTORS AND OTHER KEY EXECUTIVES
Allen S. Greene. As of December 14, 1996, the Company entered into an
amended and restated employment agreement with Mr. Greene. Pursuant
to the agreement, Mr. Greene is employed as President and Chief
Executive Officer of the Company for a three (3) year term at an
annual base salary of $250,000. Mr. Greene is also entitled to receive
a bonus in the discretion of the Company and to reimbursement of
certain expenses. Pursuant to the agreement, Mr. Greene was granted
options to purchase up to 31,500 shares (as adjusted for the 5% stock
dividend declared on January 26, 1996) of the Company's Common Stock
("Options") under the Company's 1986 Stock Option Plan, at an exercise
price of $7.38 per share (as adjusted for the 5% stock dividend
declared on January 26, 1996), the market price of the Common Stock on
the date of grant. One-fifth of such Options vest on each anniversary
of the agreement, provided Mr. Greene is then employed by the Company.
The term of the agreement will be automatically extended for
successive one (1) year terms after the expiration of the initial term
provided that Mr. Greene is actively employed by the Company on the
renewal date.
The agreement provides that either party may terminate the agreement
at any time upon thirty (30) days written notice. In the event that
the Company terminates the agreement with Cause (as defined in the
agreement), Mr. Greene will be entitled to a lump sum payment of
$100,000 and to the continuation of certain benefits. Any unvested
shares of Restricted Stock and any unvested Options granted to Mr.
Greene will be forfeited. In the event that the Company terminates
the agreement without Cause, Mr. Greene will be entitled to receive a
lump sum payment equal to $200,000 times the number of years remaining
in the term of the agreement, prorated for any partial years, to the
continuation of certain benefits and the payment of a bonus (provided
that bonuses are paid to other salaried officers and directors of the
Company). In addition, all unvested shares of Restricted Stock and
all unvested Options granted to Mr. Greene will immediately vest.
The Agreement also provides for payments to Mr. Greene in the event
that he is unable to perform his duties due to illness or incapacity,
in the event of his death during the term of the agreement or in the
event the Board decides to liquidate the Company. In the event Mr.
Greene is disabled or dies during the term of the agreement, all
shares of Restricted Stock granted to Mr. Greene which have begun to
vest, but which have not fully vested, will vest on a pro rata basis
based on the number of months elapsed since vesting began. In the
event the Board determines to liquidate the Company, all unvested
shares of Restricted Stock and all unvested Options will immediately
vest.
In the event there is a "Change of Control" of the Company, and Mr.
Greene's employment with the Company is terminated or there is a
reduction in his authority, responsibilities or compensation, Mr.
Greene will be entitled to receive an amount equal to his annual
salary for the remaining term of the agreement. Mr. Greene is
entitled to elect, on an annual basis, to receive any amounts so
payable in a lump sum or monthly installments. Such election is
irrevocable for the year in which it is made and once payment
commences. In the event that no election is made payments to Mr.
Greene would be on a monthly basis. In addition, all unvested shares
of Restricted Stock and all unvested Options granted to Mr. Greene
will immediately vest and, under certain conditions, Mr. Greene and/or
his spouse will be entitled to the continuation of certain health and
medical benefits. For the purposes of Mr. Greene's agreement (and
the agreements of each of the Company's officers set forth below) a
"Change of Control" is deemed to have taken place generally (i) upon
the acquisition of 20% or more of the Company's Common Stock by a
person or entity (whether or not such acquisition is approved by the
Company's Board of Directors), with certain exceptions for parties
related to the Company, and the persons serving as directors of the
Company prior to such acquisition cease to constitute a majority of
the Board for any reason; or (ii) a proxy solicitation is made in
connection with the election of directors of the Company by a person
or entity other than parties related to the Company and the current
employee directors stand for reelection to the Board and each of them
are not reelected; or (iii) following an unsolicited public tender
offer for all or substantially all of the Company's outstanding Common
Stock all, or substantially all, of the assets of the Company are
sold. In the event that a Change of Control were deemed to have
occurred on the date hereof, Mr. Greene would be entitled to receive
the sum of approximately $667,750.
Fenwick Garvey. On December 14, 1996, the Company and Mr. Garvey
entered into an amended employment agreement. Pursuant to the
agreement, Mr. Garvey is employed as the Chairman of the Board and a
Senior Advisor to the Company for a three (3) year term which began on
October 1, 1994, at an annual base salary of $168,750. Mr. Garvey is
entitled to receive a bonus at the discretion of the Company and to
receive all employee benefits (including health benefits and
contributions to profit sharing plans) offered by the Company to its
employees and to reimbursement for certain expenses. In addition to
providing such health benefits to Mr. Garvey, under certain specified
conditions, the Company is obligated to provide such health benefits
to his spouse and/or his children.
The agreement provides that either party may terminate the agreement
any time upon thirty (30) days written notice. In the event that Mr.
Garvey voluntarily terminates the agreement Mr. Garvey will be
entitled to receive a lump sum payment of $200,000. In the event that
the Company terminates the agreement without Cause (as defined in the
agreement), Mr. Garvey will be entitled to receive the above described
payment and a bonus (provided that bonuses are paid to other salaried
officers and directors of the Company). In the event that the Company
terminates the agreement with Cause, Mr. Garvey will be entitled to
receive a lump sum payment in the amount of $100,000.
The Agreement also provides for payments to Mr. Garvey in the event
that he is unable to perform his duties due to disability or
incapacity, in the event of his death during the term of the agreement
or in the event the Board decides to liquidate the Company. In the
event of a Change of control of the Company, and Mr. Garvey's
employment with the Company is terminated or his authority,
responsibilities or compensation is reduced, Mr. Garvey is entitled to
receive the greater of his annual salary or $200,000 times the number
of years remaining in the term of the agreement, pro rated for any
partial year. If a Change of Control were deemed to have occurred on
the date hereof, Mr. Garvey would be entitled to receive a lump sum
payment in the amount of approximately $450,725. In the event that
Mr. Garvey dies during the term of the agreement, the Company will pay
to his beneficiary the amount of $200,000 and a bonus (less any bonus
paid during such calendar year and provided that bonuses are paid to
other salaried officers and directors of the Company).
Bruce M. Chodash. On December 14, 1996, the Company and Mr. Chodash
entered into an amended employment agreement. Pursuant to the
agreement, Mr. Chodash is employed as an Executive Vice President of
the Company for a three (3) year term which began on September 26,
1994, at an annual base salary of $187,500. Mr. Chodash is also
entitled to receive a bonus in the discretion of the Company and to
reimbursement for certain expenses. The term of the agreement will
be automatically extended for successive one (1) year terms after the
expiration of the initial term provided that Mr. Chodash is actively
employed by the Company on the renewal date.
The agreement provides that either party may terminate the agreement
at any time upon thirty (30) days written notice. In the event that
the Company terminates the agreement with Cause (as defined in the
agreement), Mr. Chodash will be entitled to a lump sum payment of
$75,000 and to the continuation of certain benefits. In the event
that the Company terminates the agreement without Cause, Mr. Chodash
will be entitled to receive a lump sum payment of $150,000, to the
continuation of certain benefits and the payment of a bonus (provided
that bonuses are paid to other salaried officers and directors of the
Company).
The Agreement also provides for payments to Mr. Chodash in the event
that he is unable to perform his duties due to illness or incapacity,
in the event of his death during the term of the agreement or in the
event the Board decided to liquidate the company. In the event of a
Change of Control of the Company, and Mr. Chodash's employment with
the Company is terminated or there is a reduction in his authority,
responsibilities or compensation, Mr. Chodash will be entitled to
receive a lump sum payment equal to his annual salary for the
remaining term of the agreement, pro rated for any partial year. In
addition, under certain conditions, Mr. Chodash and/or his spouse will
be entitled to the continuation of certain health and medical
benefits. In the event that a Change of Control were deemed to have
occurred on the date hereof, Mr. Chodash would be entitled to receive
the sum of approximately $500,750.
Matthew R. Naula. On December 14, 1996, the Company and Mr. Naula
entered into an amended employment agreement. Pursuant to the
agreement, Mr. Naula is employed as an Executive Vice President of the
Company for a three (3) year term which began on September 26, 1994,
at an annual base salary of $187,500. Mr. Naula is also entitled to
receive a bonus in the discretion of the Company and to receive
reimbursement for ordinary and necessary expenses incurred in the
performance of his duties. The term of the agreement will be
automatically extended for successive one (1) year terms after the
expiration of the initial term provided that Mr. Naula is actively
employed by the Company on the renewal date.
The agreement provides that either party may terminate the agreement
at any time upon thirty (30) days written notice. In the event that
the Company terminates the agreement with Cause (as defined in the
agreement), Mr. Naula will be entitled to receive a lump sum payment
of $150,000, to the continuation of certain benefits and the payment
of a bonus (provided that bonuses are paid to other salaried officers
and directors of the Company).
The Agreement also provides for payments to Mr. Naula in the event
that he is unable to perform his duties due to illness or incapacity,
in the event of his death during the term of the agreement or the
Board decides to liquidate the Company. In the event of a Change of
Control of the Company, and Mr. Naula's employment with the Company is
terminated or there is a reduction in his authority, responsibilities
or compensation, Mr. Naula will be entitled to receive a lump sum
payment equal to his annual salary for the remaining term of the
agreement, pro rated for any partial year. In addition, under certain
conditions, Mr. Naula and/or his spouse will be entitled to the
continuation of certain health and medical benefits. In the event
that a Change of Control were deemed to have occurred on the date
hereof, Mr. Naula would be entitled to receive a payment of
approximately $500,750.
Ben Plotkin. As of December 14, 1996, the Company entered into an
amended and restated employment agreement with Mr. Plotkin. Pursuant
to the agreement, Mr. Plotkin is employed as a Senior Executive Vice
President of the Company for a three (3) year term at an annual base
salary of $187,500. Mr. Plotkin is also entitled to receive a bonus in
the discretion of the Company and to reimbursement for certain
expenses. Pursuant to the agreement, Mr. Plotkin was granted options
to purchase up to 31,500 shares (as adjusted for the 5% stock dividend
declared on January 26, 1996) of the Company's Common Stock
("Options") under the Company's 1986 Stock Option Plan, at an exercise
price of $7.38 per share (as adjusted for the 5% stock dividend
declared on January 26, 1996), the market price of the Common Stock on
the date of grant. One-fifth of such Options vest on each anniversary
of the agreement, provided Mr. Plotkin is then employed by the
Company. The term of the agreement will be automatically extended for
successive one (1) year terms after the expiration of the initial term
provided that Mr. Plotkin is actively employed by the Company on the
renewal date. Effective January 1, 1996, Mr. Plotkin was promoted to
Senior Executive Vice President and his annual base salary was
increased to $200,000.
The agreement provides that either party may terminate the agreement
at any time upon thirty (30) days written notice. In the event that
the Company terminates the agreement with Cause (as defined in the
agreement), Mr. Plotkin will be entitled to a payment of $75,000 and
to the continuation of certain benefits. Any unvested shares of
Restricted Stock and any unvested Options granted to Mr. Plotkin will
be forfeited. In the event that the Company terminates the agreement
without Cause, Mr. Plotkin will be entitled to receive a lump sum
payment equal to $150,000 times the number of years remaining in the
term of the agreement, prorated for any partial years, to the
continuation of certain benefits and the payment of a bonus (provided
that bonuses are paid to other salaried officers and directors of the
Company). In addition, all unvested shares of Restricted Stock and
all unvested Options granted to Mr. Plotkin will immediately vest.
The Agreement also provides for payments to Mr. Plotkin in the event
that he is unable to perform his duties due to illness or incapacity,
in the event of his death during the term of the agreement or in the
event the Board decides to liquidate the Company. In the event Mr.
Plotkin is disabled or dies during the term of the agreement, all
shares of Restricted Stock granted to Mr. Plotkin which have begun to
vest, but which have not fully vested, will vest on a pro rata basis
based on the number of months elapsed since vesting began. In the
event that Mr. Plotkin dies during the term of the agreement, all
shares of Restricted Stock which have begun to vest but which have not
fully vested will immediately vest. In the event the Board determines
to liquidate the Company, all unvested shares of Restricted Stock and
all unvested Options will immediately vest.
In the event of a Change of Control of the Company, and Mr. Plotkin's
employment with the Company is terminated or there is a reduction in
his authority, responsibilities or compensation, Mr. Plotkin will be
entitled to receive a lump sum payment equal to his annual base salary
for the remaining term of the agreement and all unvested shares of
Restricted Stock and all unvested Options granted to Mr. Plotkin will
immediately vest. In addition, under certain conditions, Mr. Plotkin
and/or his spouse will be entitled to the continuation of certain
health and medical benefits. In the event that a Change of Control
were deemed to have occurred on the date hereof, Mr. Plotkin would be
entitled to receive a payment of approximately $534,200.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company presently does not maintain director's and officer's
liability insurance. The Company's restated Certificate of
Incorporation, as amended ("Certificate of Incorporation") authorizes
the Company to enter into agreements pursuant to which the Company
would be required to indemnify and hold harmless its directors and
officers against expenses and liabilities incurred by or imposed upon
them in connection with any proceedings to which they may be made, or
threatened to be made, a party, or in which they may become involved,
by reason of their having been a director or officer, to the same
extent as they would be indemnified and held harmless under a standard
directors' and officers' liability insurance policy selection by the
Board of Directors. The Certificate of Incorporation also requires
the Company to provide its directors and executive officers with
indemnification to the fullest extent permitted by law. Such
provisions have the effect of exposing the Company to greater risk
than would otherwise apply if the Company maintained directors' and
officers' liability insurance.
The Company has entered into indemnification agreements with each of
its directors and certain senior officers. These contracts confirm
the indemnity provided to such persons by the Company's Certificate of
Incorporation. The agreements provide that the directors and certain
senior officers will be indemnified to the fullest extent permitted by
law against all expenses (including attorney's fees), judgments (other
than in proceedings by, or in the right of, the Company), fines and
settlement amounts, paid or incurred by them and may have
indemnification expenses advanced to them in any action or proceeding,
including any action by, or in the right of, the Company, on account
of their service as a director or officer of the Company or any
subsidiary of the Company or as a director or officer of any other
entity when they served in such capacities at the request of the
Company.
PROPOSAL II
STOCK OPTION PLAN
The Board of Directors of the Company has approved, and proposed for
submission for shareholder approval, the Ryan, Beck & Co. 1996 Stock
Option Plan (the "Plan"). The Plan is intended to replace a
substantially similar plan, the Ryan, Beck & Co. 1986 Stock Option
Plan (the "1986 Plan"), which was approved by the shareholders on
April 28, 1986 and which will terminate by its terms on April 28,
1996. The Plan is intended to provide an incentive to employees
(including employee directors) and non-employee directors through the
issuance of options to purchase shares of Common Stock. THE APPROVAL
OF THIS PROPOSAL II IS A CONDITION PRECEDENT TO THE IMPLEMENTATION OF
THE PLAN.
The Board of Directors believes that the Company's ability to grant
awards under the Plan is a valuable and necessary compensation tool
that aligns the long-term financial interests of employees and
directors with the financial interests of the Company's shareholders.
The Board of Directors also believes that the Plan will contribute to
the success of the Company by improving its ability to attract,
motivate and retain key employees and directors.
Description of the Plan
The Plan as proposed is set forth as Exhibit "A" to this Proxy
Statement, and the description of the Plan contained herein is
qualified in its entirety by reference to Exhibit "A".
General. The Plan, as proposed, provides for the issuance of options
to purchase up to 200,000 shares of Common Stock. Persons eligible
for participation in the Plan include key employees (including
employees who also serve as directors) and non-employee directors
(collectively, "Participants"). As of March 21, 1996, all of the
Company's full-time employees and non-employee directors, or a total
of approximately 176 people, would have been eligible to participate
in the Plan. The Plan provides for the granting of options intended
to qualify as "incentive stock options" ("ISOs") as defined in Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") and
nonqualified stock options ("NQSOs") (ISOs and NQSOs are collectively
referred to as the "Stock Options").
Administration. The Plan would be administered and interpreted by a
committee of the Board (the "Committee") consisting of not less than
two persons, each of whom shall be a "disinterested person" as defined
under Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Committee has the full
power to administer and interpret the Plan. Messrs. Garvey, Chodash
and Naula have been appointed to serve as the members of the
Committee.
Stock Options. Only officers and employees of the Company would be
eligible to receive ISOs. All Participants may receive NQSOs. The
exercise price of all Stock Options granted would be not less than the
Fair Market Value (as such term is defined in the Plan) of the Common
Stock at the time the Stock Options is granted or such higher price as
the Committee may determine. On March 21, 1996, the Fair Market
Value of the Common Stock outstanding was $23,427,000. Stock Options
may be granted for a term of up to ten years from the date of grant,
subject to earlier termination on the optionee's death, disability or
termination of employment or relationship with the Company. In the
event that the Company adopts a plan of reorganization pursuant to
which it would merge into, consolidate with or sell its assets to any
other corporation or entity, an optionee would (i) be required to
exercise all such Stock Options or (ii) consent to the conversion of
such Stock Options into options to purchase shares of the acquiring
entity's shares or (iii) receive the same consideration as received by
other holders of the Company's Common Stock reduced by an amount equal
to the exercise price of such Stock Options. Stock Options would not
be assignable or otherwise transferable except by will or the laws of
descent and distribution, and, in the case of NQSOs, if permitted
under Rule 16b-3 of the Exchange Act and by the Committee, pursuant to
a qualified domestic relations order as defined under the Code or
Title I of the Employee Retirement Income Security Act of 1974
("ERISA"). The exercise price of an option would be payable in cash,
or, with the consent of the Committee, by delivering shares of Common
Stock already owned by the optionee, or by a combination of cash and
shares. Shares subject to Stock Options granted under the Plan which
have lapsed or terminated may be re-granted under the Plan. The
Committee may offer to exchange new options for existing options, with
the shares subject to the existing options being again available for
grant under the Plan. The Committee may also determine circumstances
upon which Stock Options would become immediately exercisable and to
accelerate the exercisability of any Stock Options.
No Stock Options have been granted under the Plan pending shareholder
approval, and the Company does not currently plan to grant any such
Stock Options until and unless the Plan is approved by the
shareholders.
Amendments. The Committee has the full authority to amend the Plan,
except that (i) stockholder approval would be required (a) to increase
the number of shares available for the Plan, (b) to materially
increase the benefits accruing to optionees, (c) to materially modify
the eligibility requirements for options granted under the Plan, or
(d) to modify the provisions for determining fair market value under
the Plan and (ii) those provisions of the Plan relating to grants to
non-employee directors who serve on the Committee may not be amended
more than once every six months, except for amendments necessary to
conform the plan to changes in the provisions of the Code or ERISA, or
the rules promulgated thereunder.
Federal Income Tax Consequences. The federal income tax consequences
of an employee's participation in the Plan are complex and subject to
change. The following discussion is only a summary of the general
rules and participants in the Plan should consult their own tax
advisors regarding their particular situation.
There are no federal income tax consequences to the optionee or the
Company upon the grant of ISOs or NQSOs. Upon the exercise of NQSOs,
the optionee will realize ordinary income in the amount by which the
fair market value of the option stock exceeds the exercise price of
the option. The Company is allowed a deduction for federal income tax
purposes equal to the amount of ordinary income recognized by the
optionee at the time of exercise of NQSOs. The optionee's holding
period for purposes of determining whether any subsequently realized
gain or loss will be long-term or short-term will begin just after the
transfer of the shares that were subject to the NQSOs. If, at the
time of issuance of the shares, the optionee is subject to the
restrictions of Section 16(b) of the Exchange Act, then the optionee
generally will recognize ordinary income as of the later of (i) the
date of exercise, or (ii) the expiration of six months from the date
of option grant, based upon the difference between the fair market
value of the option shares at such time and the exercise price.
Except as provided below with respect to "disqualifying dispositions",
there generally is no regular federal income tax consequences upon the
exercise of an ISO. However, for purposes of computing any
alternative minimum tax liability, the amount by which the fair market
value of the shares at the time of exercise exceeds the option price
(or other tax basis in the shares) is an item of tax preference
subject to the alternative minimum tax applicable to the person
exercising the option. The Company is not entitled to a deduction
upon the exercise of an ISO. A sale of shares acquired by exercise of
an ISO that does not occur within one year after the exercise, or
within two years after the grant of the option, generally will result
in the recognition of long-term capital gain or loss in an amount
equal to the difference between the amount realized from the sale and
the participant's tax basis in the shares, assuming that the shares
were held as capital assets. The Company is not entitled to any tax
deduction in such event. However, if the sale occurs within one year
from the date of exercise or within two years from the date of grant
(a "disqualifying disposition"), the optionee will recognize ordinary
income equal to the lesser of (i) the excess of the fair market value
of the shares on the date of exercise of the options over the option
price (or the optionee's other tax basis in the shares), or (ii) the
excess of the amount realized on the sale of the shares over the
option price (or the optionee's other tax basis in the shares). Any
amount realized on a disqualifying disposition in excess of the amount
treated as ordinary income (or any loss realized) will be a long-term
or short-term capital gain (or loss), depending upon the length of
time the shares were held and assuming that the shares were held as
capital assets. If, at the time of issuance of the option shares, the
optionee is subject to the restrictions of Section 16(b) of the
Exchange Act, then the fair market value of shares acquired upon
exercise of an ISO generally will be determined as of the later of (i)
the time of exercise, or (ii) the expiration of six months from the
date of option grant. The Company generally will be entitled to a tax
deduction on a disqualifying disposition in the amount and at the time
the ordinary income is recognized by the optionee assuming that such
amount constitutes an ordinary and necessary business expense to the
employer corporation.
Section 162(m). Under Section 162(m) of the Code, the Company may be
precluded from claiming a federal income tax deduction for total
remuneration in excess of $1,000,000 paid to the chief executive
officer or to any of the other four most highly compensated officers
in any one taxable year. Total remuneration would include amounts
required to be included in ordinary income to the optionee as
discussed above.
The table below summarizes the number of shares of Common Stock
issuable upon exercise of Stock Options that would have been awarded
under the Plan if it had been in effect during the 1995 fiscal year.
The table sets forth such information with respect to each of the
Company's current executive officers, all current executive officers
as a group, all current directors who are not executive officers as a
group and all employees or consultant other than executive officers as
a group. Future benefits under the Plan are not determinable since
grants of Stock Options are at the discretion of the Committee.
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
Name and Position Number of Shares<F1> Option
Exercise Price<F1, F2>
<S> <C> <C>
Allen S. Greene 31,500 $7.38
President and Chief
Executive Officer
Fenwick H. Garvey 0 -
Chairman of the Board
Matthew R. Naula 0 -
Executive Vice President
Bruce M. Chodash 0 -
Executive Vice President
Ben A. Plotkin
Senior Executive Vice President 31,500 $7.38
All current executive 63,000 $7.38
officers as a group
(5 persons)
All directors who 0
are not executive officers
as a group (4 persons)
All employees 64,575 $7.20
who are not executive
officers as a group (7 persons)
<FN>
<F1> As adjusted for the 5% common stock dividend declared on January
26, 1996.
<F2> Based on the Fair Market Value of Common Stock on the date of
grant.
</FN>
</TABLE>
VOTE REQUIRED FOR APPROVAL
Approval of this Proposal requires the affirmative vote of a plurality
of the shares of the Company's Voting Stock, in person or by proxy, at
the Annual Meeting. Abstentions and broker non-votes shall be counted
as voting neither for nor against this Proposal, but the shares
represented by such abstention or broker non-votes shall be considered
present at the Annual Meeting for purposes of determining whether a
quorum is present.
RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS
THE PROPOSED PLAN IS INTENDED TO REPLACE THE COMPANY'S 1986 PLAN WHICH
EXPIRES BY ITS TERMS PRIOR TO THE ANNUAL MEETING. THE PROPOSED PLAN
AND THE 1986 PLAN ARE SUBSTANTIALLY SIMILAR IN THEIR TERMS EXCEPT
THAT, AMONG OTHER THINGS, THE AGGREGATE NUMBER OF SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE OF OPTIONS TO BE GRANTED UNDER THE
PROPOSED PLAN HAS BEEN REDUCED TO 200,000 FROM THE 369,865 SHARES
WHICH REMAIN ISSUABLE UNDER THE 1986 PLAN PRIOR TO ITS TERMINATION.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THIS PROPOSAL.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Trien, Rosenberg, Felix, Rosenberg, Barr & Weinberg, independent
certified public accountants, have made an annual audit of the
Company's financial statements for the year ended December 31, 1995.
A representative of Trien, Rosenberg, Felix, Rosenberg, Barr &
Weinberg will not be present at the Annual Meeting. The Company has
selected Deloitte & Touche LLP as its independent auditors for the
1996 fiscal year.
1997 ANNUAL MEETING; NOMINATIONS
Shareholders intending to present proposals at the 1997 Annual Meeting
of Shareholders must deliver their written proposals to the Company no
later than December 14, 1996 and notify the Company of their intention
to appear personally at the 1997 Annual Meeting to present such
proposals in order for such proposals to be eligible for inclusion in
the Company's proxy statement and proxy card relating to next year's
meeting. Reference is made to Rule 14a-8 of the Securities Exchange
Act of 1934, as amended, for information concerning the content and
form of such proposals and the manner in which such proposals must be
made. Pursuant to the Company's By-Laws, all nominations for election
to the Board of Directors in 1997 must be submitted in writing to the
Board of Directors not later than December 14, 1996. Such nominations
must be addressed to the Secretary, Ryan, Beck & Co., Inc., 80 Main
Street, West Orange, New Jersey 07052. Nominations must be
accompanied by the written consent of the nominee. Nominations should
also be accompanied by a description of the nominee's business or
professional background and otherwise contain the information required
by Schedule 14A of the Securities Exchange Act of 1934, as amended.
OTHER MATTERS
At the time that this Proxy Statement was mailed to shareholders,
management was not aware that any matter other than those referred to
in this proxy Statement would be presented for action at the Annual
Meeting. If any other matter properly comes before the Meeting, it is
intended that the shares represented by the proxies will be voted with
respect to those matters in accordance with the best judgment of the
person voting them.
By Order of the Board of Directors,
Mildred Santillo
Secretary
April 12, 1996
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31,
1995, INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY
STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY
SOLICITING MATERIAL OR AS A COMMUNICATION BY MEANS OF WHICH ANY
SOLICITATION IS TO BE MADE.
RYAN, BECK & CO., INC. PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS, MAY 14, 1996
The undersigned hereby appoints Mildred Santillo and Leonard J.
Stanley, and each of them, attorneys and proxies, with power of
substitution in each of them, to vote for and on behalf of the
undersigned at the Annual Meeting of Shareholders of the Company to be
held on May 14, 1996 and at any adjournment thereof, upon matters
properly coming before the meeting, as set forth in the related Notice
of Meeting and Proxy Statement, both of which have been received by
the undersigned. Without otherwise limiting the general authorization
given hereby, said attorneys and proxies are instructed to vote as
follows:
UNLESS OTHERWISE SPECIFIED IN THE SQUARES OR SPACE PROVIDED IN THIS
PROXY, THIS PROXY WILL BE VOTED FOR ALL OF THE BOARD'S NOMINEES AND
FOR THE PROPOSAL TO ADOPT THE COMPANY'S 1996 STOCK OPTION PLAN.
Please mark boxes /X/ in blue or black ink
1. Election of the Board's nominees for Directors. Nominees: Fenwick
H. Garvey and Jack R. Rosenthal
FOR [___] AGAINST [___] ABSTAIN [___]
Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name
in the space provided below:
______________________________________________________________________
________
2. To consider and vote upon a proposal to adopt the Company's New
Stock Option Plan.
FOR [___] AGAINST [___] ABSTAIN [___]
3. Upon such other matters as may properly come before the meeting
and/or any adjournment thereof, as they in their discretion may
determine. The Board of Directors is not aware of any such
matters.
Please sign this proxy and return it promptly whether or not you
expect to attend the meeting. You may nevertheless vote in person if
you attend. Please sign exactly as your name appears hereon. Give
full title if an Attorney, Executor, Administrator, Trustee, Guardian,
etc. For an account in the name of two or more persons, each should
sign or if one signs, he should attach such evidence of his authority.
Date:________________________________________
______, 1996
Signed:______________________________________
___________
_______________________________________________________
ANNEX A
RYAN, BECK & CO., INC.
STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of this Stock Option Plan
("Plan") of Ryan, Beck & Co., Inc. (the "Company"), is to promote the
interests of the Company by providing incentives to (i) designated
officers and other key employees of the Company or a Subsidiary
Corporation (as such term is defined under Section 424(f) of the
Internal Revenue Code of 1986 as amended (the "Code")) and (ii) non-
employee members of the Company's Board of Directors to attract and
retain such persons and to encourage them to acquire or increase their
proprietary interest in the Company and to maximize the Company's
performance during the term of their employment or period of service
with the Company.
2. Definitions. As used in the Plan, unless the context requires
otherwise, the following terms shall have the following meanings:
a: "Board" shall mean the Board of Directors of the Company.
b: The "Committee" shall mean a committee composed of two or more
members of the Board each of whom shall be a "Disinterested Person"
(as such term is defined in Rule 16-3 under the Exchange Act of 1934,
as amended (the "Exchange Act")).
c: "Common Stock" shall mean the common stock, par value $.10 per
share of the Company, or if, pursuant to the adjustment provisions set
forth in Section 12 hereof, another security is substituted for the
Common Stock, such other security.
d: "Fair Market Value" shall mean the fair market value of the
Common Stock on the Grant Date (as hereinafter defined) or other
relevant date. If on such date the Common Stock is listed on a stock
exchange or is quoted on the National Market segment of the NASDAQ
Stock Market (the "National Market"), the Fair Market Value shall be
the closing sale price (or if such price is unavailable, the average
of the high bid price and the low asked price) on such date. If on
such date the Common Stock is traded in the over-the counter market
(but not on the National Market), the Fair Market Value shall be the
average of the high bid and the low asked price on such date (or if
there are no reported bid and asked prices on the Grant Date, then the
average between the high bid price and the low asked price on the next
preceding day for which such quotations exist). If the Common Stock
is neither listed or admitted to trading on any stock exchange, quoted
on the National Market or traded in the over-the -counter market, the
Fair Market Value shall be determined in good faith by the Committee
in accordance with generally accepted valuation principles and such
other factors as the Committee reasonably deems relevant.
e: "Grant Date" shall mean the date on which an Option is granted.
f: "Option" shall mean the right, granted pursuant to the Plan, to
purchase one or more shares of Common Stock. "Incentive Stock Option"
shall mean an Option granted pursuant to Section 6 hereof.
"Nonqualified Stock Option" shall mean an Option granted pursuant to
Section 7 hereof.
g: "Optionee" shall mean a person to whom an Option has been granted
under the Plan.
3. Stock Subject to the Plan. There will be reserved for issuance
upon the exercise of Options granted from time to time under the Plan
an aggregate of 200,000 shares of Common Stock (subject to adjustment
as set forth in Section 11 hereof.) The Board shall determine from
time to time whether all or part of such 200,000 shares shall be
authorized but unissued shares of Common Stock or issued shares of
Common Stock which shall have been re-acquired by the Company and
which are held in its treasury. If any Option granted under the Plan
should expire or terminate for any reason without having been
exercised in full, the shares subject to such Option shall again
become available for the grant of Options under the Plan.
4. Administration of the Plan. The Plan shall be administered by
the Committee.
a: Subject to the provisions of the Plan, the Committee shall have
full discretion and sole authority:
(i) To designate the employees of the Company to whom Options shall
be granted, to determine whether individual Optionees shall be granted
Incentive Stock Options or Nonqualified Stock Options, to designate
the number of shares to be covered by each of the Options, and to
determine the time or times at which Options shall be granted;
(ii) To determine the exercise price of Options granted hereunder,
subject to Sections 6(a) and 7(a) hereof;
(iii) To interpret the Plan;
(iv) To promulgate, amend and rescind rules, regulations, agreements
and instruments relating to the Plan, provided, however, that no such
rules or regulations shall be inconsistent with any of the terms of
the Plan;
(v) To subject any Option to such additional terms and conditions
(not inconsistent with the Plan) as may be specified when granting the
Option, including without limitation additional restrictions or
conditions on the exercise of an Option;
(vi) To determine circumstances upon which Options shall become
immediately exercisable and to accelerate the exercisability of any
Option; and
(vii) To make all other determinations in connection with the
administration of the Plan.
b: The Committee's interpretations of the Plan and all
determinations made by the Committee pursuant to the powers vested in
it hereunder shall be conclusive and binding on all persons having
interests in the Plan or in any Option granted under the Plan.
c: Each member of the Committee shall be indemnified and held
harmless by the Company against any cost or expense (including counsel
fees) reasonably incurred by him or her, or liability (including any
sum paid in settlement of a claim with the approval of the Company)
arising out of any act or omission to act in connection with the Plan,
unless arising out of such member's own fraud or bad faith, to the
extent permitted by applicable law. Such indemnification shall be in
addition to any rights of indemnification the members may have as
directors or otherwise under the Certificate of Incorporation or By-
Laws of the Company, any agreement of shareholders or disinterested
directors or otherwise.
5. Eligibility. Optionees shall be selected by the Committee from
among the officers and key full-time employees of the Company or a
Subsidiary Corporation.
6. Incentive Stock Options. The following provisions shall apply
solely with respect to Options which are designated by the Committee
as "Incentive Stock Options" at the time of grant:
a: Option Exercise Price. The price at which shares of Common Stock
shall be purchased upon exercise of any Incentive Stock Option shall
be not less than the Fair Market Value of such shares on the Grant
Date, except that if on the Grant Date an Optionee owns Common Stock
(as determined under section 424(d) of the Code) possessing more than
10% of the total combined voting power of all classes of stock of the
Company or of the Company's Parent Corporation (as such term is
defined under Section 424(e) of the Code), if any, or any Subsidiary
Corporations, then the price at which shares of Common Stock shall be
purchased upon exercise of an Incentive Stock Option granted to such
Optionee shall not be less than 110% of the Fair Market Value of such
shares on the Grant Date and, notwithstanding Section 6(b) hereof,
such Incentive Stock Option shall cease to be exercisable five (5)
years after the Grant Date.
b: Expiration. Except as otherwise provided in Sections 6(a) and 11
hereof, each Incentive Stock Option granted hereunder shall cease to
be exercisable ten years after the date on which it is granted.
c: Restriction on Exercise. The Fair Market Value (as determined on
the Grant Date) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any person during any
calendar year (under this Plan and all other plans of the Company and
its Parent Corporation, if any, and its Subsidiary Corporations)
cannot be greater than $100,000.
7. Nonqualified Stock Options. The following provision shall apply
with respect to Options which are designated by the Committee as
"Nonqualified Stock Options" at the time of grant:
a: Option Exercise Price. The price at which shares of Common Stock
shall be purchased upon exercise of a Nonqualified Stock Option shall
be not less than the Fair Market Value of such shares on the Grant
Date.
b: Expiration. Except as otherwise provided in Section 11 hereof,
each Nonqualified Stock Option granted hereunder shall cease to be
exercisable ten years after the Grant Date.
c: Designation. Any Option which is not designated by the Committee
as an Incentive Stock Option shall automatically be deemed to be a
Nonqualified Stock Option.
8. Vesting of Option. The vesting period, if any, for all Options
granted hereunder shall commence on the Grant Date and shall end on
the date or dates, determined by the Committee.
9. Method of Exercise. Optionees may exercise their Options from
time to time by giving written notice to the Company. The date of
exercise shall be the date on which the Company receives such notice.
Such notice shall be on a form furnished by the Company and shall
state the number of shares to be purchased and the desired closing
date, which date shall be at least fifteen days after the giving of
such notice, unless an earlier date shall have been mutually agreed
upon. At the closing, the Company shall deliver to the Optionee (or
other person entitled to exercise the Option) at the principal office
of the Company, or such other place as shall be mutually acceptable, a
certificate or certificates for such shares against payment in full of
the Option price for the number of shares to be delivered, such
payment to be by a certified or bank cashier's check and/or, if
permitted by the Committee in its discretion, by transfer to the
Company of capital stock of the Company having a Fair Market Value on
the date of exercise equal to the excess of the purchase price for the
shares purchased over the amount of any such certified or bank
cashier's check. If the Optionee (or other person entitled to
exercise the Option) shall fail to accept delivery of and pay for all
or any part of the shares specified in his notice when the Company
shall tender such shares to him, his right to exercise the Option with
respect to such unpurchased shares may be terminated.
10. Termination of Employment. Except as set forth below, in the
event that an Optionee's employment terminates for any reason, any
Options then exercisable shall automatically terminate sixty days
after the date on which such employment terminates.
a: In the event that an Optionee's employment terminates by reason
of retirement, the Committee shall have the right to extend such
Optionee's Options until the earlier of (x) three months after the
date of retirement or (y) the date on which such Options would
terminate pursuant to Sections 6(a), 6(b) and 7(b) hereof.
b: In the event that an Optionee's employment terminates by reason
of disability, an Option exercisable by him shall terminate one year
after the date of disability of the Optionee, but in any event not
later than the date on which such Options would terminate pursuant to
Sections 6(a), 6(b) and 7(d) hereof.
c: In the event that an Optionee's employment terminates by reason
of death, an Option exercisable by him shall terminate one year after
the date of death, but in any event not later than the date on which
such Options would terminate pursuant to Sections 6(a), 6(b) and 7(b)
hereof. During such time after death, an Option may only be exercised
by the Optionee's personal representative, executor or administrator,
as the case may be. No exercise permitted by this Section 11 shall
entitle an Optionee or his personal representative, executor or
administrator to exercise any Option which is not (on the date of
exercise) then exercisable.
11. Changes in Capital Structure. In the event that, by reason of a
stock dividend, recapitalization, reorganization, merger,
consolidation, reclassification, stock split-up, combination of
shares, exchange of shares, or the like, the outstanding shares of
Common Stock of the Company are hereafter increased or decreased, or
changed into or exchanged for a different number or kind of shares or
other securities of the Company or of any other corporation, then
appropriate adjustments shall be made by the Board to the number and
kind of shares reserved for issuance under the Plan upon the grant and
exercise of Options. In addition, the Board shall make appropriate
adjustments to the number and kind of shares subject to outstanding
Options, and the purchase price per share thereunder shall be
appropriately adjusted consistent with such change. In no event shall
fractional shares be issued or issuable pursuant to any adjustment
made under this Section 11. The determination of the Board as to any
adjustment shall be final and conclusive.
12. Mandatory Exercise. Notwithstanding anything to the contrary set
forth in the Plan, in the event that:
a: the Company should adopt a plan of reorganization pursuant to
which it shall merge into, consolidate with, or sell its assets to,
any other corporation or entity (an "Acquiring Entity"), the Company
may give an Optionee written notice thereof :
(i) requiring such Optionee to exercise his or her Options within
thirty days after receipt of such notice, (including any unvested
Options which would, except for this Section 12, otherwise be
unexercisable at that date); or
(ii) requiring such Optionee to consent to the conversion of such
Options into an option to purchase the same number of shares of the
Acquiring Entity's common stock as would have been received by the
Optionee if the Optionee had exercised such Option; or
(iii) deeming such Options to have been exercised, in which case
the Optionee shall be entitled to receive the same consideration per
share as received by other holders of the Company's stock but reduced
by an amount equal to the Fair Market Value on the Grant Date.
b: the Company should adopt a plan of complete liquidation, the
Company shall give an Optionee written notice thereof requiring such
Optionee to exercise his or her Options within thirty days after
receipt of such notice, (including any unvested Options which would,
except for this Section 12, otherwise be unexercisable at that date).
Those Options which the Company requests to be exercised and which
shall not have been exercised in accordance with the provisions of the
Plan by the end of such 30 day period shall automatically lapse
irrevocably and the Optionee shall have no further rights with respect
to such Options.
13. Option Grant. Each grant of an Option under the Plan will be
evidenced by a document in such form as the Committee may from time to
time approve. Such document will contain such provisions as the
Committee may in its discretion deem advisable, including without
limitation additional restrictions or conditions upon the exercise of
an Option. The Committee may require an Optionee, as a condition to
the grant or exercise of an Option or the issuance or delivery of
shares upon the exercise of an Option or the payment therefor, to make
such representations and warranties and to execute and deliver such
notices of exercise and other documents as the Committee may deem
consistent with the Plan or the terms and conditions of the Option
Agreement. Not in limitation of any of the foregoing, in any such
case referred to in the preceding sentence the Committee may also
require the Optionee to execute and deliver documents (including the
investment letter described in Section 14), containing such
representations, warranties and agreements as the Committee or counsel
to the Company shall deem necessary or advisable to comply with any
exemption from registration under the Securities Act of 1933, as
amended, (the "Securities Act") any applicable State securities laws,
and any other applicable law, regulation or rule.
14. Investment Letter. If required by the Committee, each Optionee
shall agree to execute a statement directed to the Company, upon each
and every exercise by such Optionee of any Options, that shares issued
thereby are being acquired for investment purposes only and not with a
view to the redistribution thereof, and containing an agreement that
such shares will not be sold or transferred unless either (1)
registered under the Securities Act, or (2) exempt from such
registration in the opinion of Company counsel. If required by the
Committee, certificates representing shares of Common Stock issued
upon exercise of Options shall bear a restrictive legend summarizing
the restrictions on transferability applicable thereof.
15. Requirement of Law. The granting of Options, the issuance of
shares upon the exercise of an Option, and the delivery of shares upon
the payment therefore shall be subject to compliance with all
applicable laws, rules, and regulations. Without limiting the
generality of the foregoing, the Company shall not be obligated to
sell, issue or deliver any shares unless all required approvals from
governmental authorities and stock exchanges shall have been obtained
and all applicable requirements of governmental authorities and stock
exchanges shall have been complied with.
16. Tax Withholding. The Company, as and when appropriate, shall
have the right to require each Optionee purchasing or receiving shares
of Common Stock under the Plan to pay any federal, state, or local
taxes required by law to be withheld or to take whatever action it
deems necessary to protect the interests of the Company in respect to
such tax obligations.
17. Nonassignability. Only an Optionee (or his or her authorized
legal representative) may exercise the rights granted hereunder. No
Optionee may transfer those rights except by will or by the laws of
descent and distribution or, if permitted under Rule 16b-3 of the
Exchange Act and by the Committee in its sole discretion, pursuant to
a qualified domestic relations order as defined under the Code or
Title I of ERISA or the rules thereunder. Upon the death of an
Optionee, the personal representative or other person entitled to
succeed to the rights of the Optionee ("Successor Optionee") may
exercise such rights. A Successor Optionee shall furnish proof
satisfactory to the Company of such person's right to receive the
Option under the Optionee's will or under the applicable laws of
descent and distribution.
18. Optionee's Rights as Shareholder and Employee. An Optionee shall
have no rights as a shareholder of the Company with respect to any
shares subject to an Option until the Option has been exercised and
the certificate with respect to the shares purchased upon exercise of
the Option has been duly issued and registered in the name of the
Optionee. Nothing in the Plan shall be deemed to give an employee any
right to continued employment nor shall it be deemed to give any
employee any other right not specifically and expressly provided in
the Plan.
19. Termination and Amendment.
a: Amendment. The Board may amend or terminate the Plan at any
time, subject to the following limitations:
(1) the approval by the shareholders of the Company shall be required
in respect of any amendment that (A) materially increases the benefits
accruing to participants under the Plan, (B) increases the aggregate
number of shares of Common Stock that may be issued or transferred
under the Plan (other than by operation of Section 11 above), (C)
increases the maximum number of shares of Common Stock for which any
Optionee may be granted options under this Plan or (D) materially
modifies the requirements as to eligibility for participation in the
Plan; (E) modifies the provisions for determining the Fair Market
Value; and
(2) the Board shall not amend the Plan if such amendment would cause
the Plan, any Option or the exercise of any right under the Plan to
fail to comply with the requirements of Rule 16b-3 under the Exchange
Act, or if such amendment would cause the Plan or an Incentive Stock
Option or exercise of an Incentive Stock Option to fail to comply with
the requirements of Section 422 of the Code including, without
limitation, a reduction of the option price or an extension of the
period during which an Incentive Stock Option may be exercised.
b: Termination of Plan. The Plan shall terminate on the tenth
anniversary of its effective date (as set forth in Section 20 below)
unless earlier terminated by the Board or unless extended by the Board
with approval of the stockholders.
c: Termination and Amendment of Outstanding Grants. Except as
otherwise provided in Section 12 hereof or in any document evidencing
the grant of an Option hereunder, a termination or amendment of the
Plan that occurs after an Option has been granted shall not result in
the termination or amendment of the Option unless the Optionee
consents or unless the Committee acts under Section 21(b) below. The
termination of the Plan shall not impair the power and authority of
the Committee with respect to an outstanding Option. Whether or not
the Plan has terminated, an outstanding Option may be terminated or
amended under Section 21(b) below or may be amended by agreement of
the Company and the Optionee which is consistent with the Plan.
20. Shareholder Approval. This Plan is subject to and no Options
granted hereunder shall be exercisable until the approval of this Plan
by the holders of a majority of the shares of stock of the Company
present or represented in proxy in a vote at a duly held meeting of
the shareholders of the Company within twelve months after the date of
the adoption of the Plan by the Board. If the Plan is not so approved
by shareholders, the Plan and all Options granted hereunder shall
automatically terminate and be of no force and effect. Subject to
such approval, the effective date of the Plan shall be January 26,
1996.
21. Miscellaneous.
a: Substitute Grants. The Committee may grant an Option to an
employee or a non-employee director of another corporation, if such
person shall become an employee or non-employee director of the
Company, or a Subsidiary Corporation, by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company or a Subsidiary Corporation and such
other corporation. Any Option so granted shall be made in
substitution for a stock option granted by the other corporation, but
the terms and conditions of the Option so granted may vary from the
terms and conditions required by the Plan and from those of the Option
granted by the other corporation. The Committee shall prescribe the
provisions of the Option so granted.
b: Compliance with Law. The Plan, the exercise of Option and the
obligations of the Company to issue shares of Common Stock upon
exercise of Options shall be subject to all applicable laws and
required approvals by any governmental or regulatory agencies. With
respect to persons subject to Section 16 of the Exchange Act, it is
the intent of the Company that the Plan and all transactions under the
Plan shall comply with all applicable conditions of Rule 16b-3 or any
successor provisions under the Exchange Act. The Committee may revoke
the grant of any Option if it is contrary to law or modify any Option
to bring it into compliance with any valid and mandatory government
regulations. The Committee may also adopt rules regarding the
withholding of taxes on payments to Optionees. The Committee may, in
its sole discretion, agree to limit its authority under this section.
c: Sunday or Holiday. In the event, that the time for the
performance of any action or the giving of any notice is called for
under the Plan within a period of time which ends or falls on a Sunday
or legal holiday, such period shall be deemed to end or fall on the
next date following such Sunday or legal holiday which is not a Sunday
or legal holiday.
