As filed with the Securities and Exchange Commission on July 16, 1996
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
PRESIDENTIAL LIFE CORPORATION
(Exact name of registrant as specified in charter)
Delaware 13-2652144
(State of Incorporation) (I.R.S. Employer Identification No.)
HERBERT KURZ
Presidential Life Corporation
69 Lydecker Street
Nyack, NY 10960
(914) 358-2300
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices and agent for service)
1996 Stock Incentive Plan
(Full title of the plan)
Copy To:
Samuel Goldfarb, Esq.
Morgenthau, Greenes, Goldfarb & Aronauer, P.C.
575 Lexington Avenue, 31st Floor
New York, NY 10022
(212) 888-2005
____________________
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Proposed Amount of
securities to be maximum offering maximum registra-
to be registered price per share aggregate tion fee
registered offering price
Common Stock,
$.01 par value 1,000,000 $9.9375 <1> $9,937,500 $3,426.72
<1> Calculated pursuant to Rule 457(h) under the Securities Act of 1933,
based on the average of the high and low prices for the Common Stock, as
reported on the Nasdaq National Market for July 15, 1996.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan information*
Item 2. Registrant information and Employee Plan Annual Information*
*Information required by Part 1 to be contained in the Section 10(a) prospectus
is omitted from the registration statement in accordance with Rule 428 under
the Securities Act of 1933, as amended (the "Securities Act") and the Note
to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in
this registration statement:
(1) Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(2) Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, and Registrant's Current Reports on Form 8-K, dated
January 16, 1996 and June 3, 1996; and
(3) Registrant's proxy statement, dated April 29, 1996, filed
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act") in connection with its Annual Meeting of Stockholders held on
May 29, 1996.
In addition, all documents subsequently filed by Registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of
such documents.
Item 4. Description of Securities
The Registrant has 100,000,000 shares of authorized capital stock,
consisting of 100,000,000 shares of Common Stock. As of July 15, 1996, there
were 33,201,797 shares of Common Stock issued and outstanding and held by 1,095
holders of record. All outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and nonassessable. The following summary
description of the capital stock of the Registrant is qualified in its
entirety by reference to the Certificate of Incorporation (the
"Certificate") and the Bylaws of the Registrant.
Dividends The holders of Common Stock will be entitled to receive such
dividends, if any, as may be declared from time to time by the Board of
Directors on the Common Stock, which dividends will be paid out of assets
legally available therefor and will be distributed pro rata in accordance with
the number of shares of Common Stock held by each such holder.
Voting Rights Each holder of Common Stock is entitled to one vote per
share.
Liquidation Rights In the event of the voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or winding up of the
Registrant, the holders of Common Stock will be entitled to receive and share
ratably in all net assets available for distribution to stockholders.
Other Terms There is no cumulative voting of shares. Accordingly, the
holders of a majority of the voting power of the shares voting for the
election of directors can elect all of the directors if they choose to do
so. The Common Stock carries no preemptive rights and is not convertible,
redeemable or assessable, or entitled to the benefit of any sinking fund.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation, including Registrant, to indemnify its directors, officers,
employees and agents under certain circumstances. The Certificate provides
that the Registrant shall, to the fullest extent permitted under the Delaware
General Corporate Law, as now or hereafter in effect, indemnify all persons whom
it may indemnify thereunder. In addition, the Certificate, Bylaws and certain
resolutions of the Board of Directors of Registrant provide that Registrant
shall indemnify such persons to the fullest extent permitted by law.
Registrant has entered into indemnification agreements with each of the
members of its Board of Directors and certain of its officers (collectively, the
"Indemnification Agreements"). Each of the Indemnification Agreements provides
the indemnified party with a contractual right to indemnification to the fullest
extent provided by law and, without limiting the generality of the foregoing, to
the fullest extent permitted by the Certificate and Bylaws.
Registrant maintains a directors' and officers' liability insurance policy
insuring Registrant's officers and directors against certain liabilities and
expenses incurred by them in their capacities as such, and insuring Registrant,
under certain circumstances, in the event that indemnification payments are made
by Registrant to such officers and directors.
Item 8. Exhibits
See Index to Exhibits on page S-6.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this Section do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and each filing of the annual report of the Plan pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Nyack, State of New York, on the 15th day of July, 1996.
PRESIDENTIAL LIFE CORPORATION
(Registrant)
By /s/ Herbert Kurz
Herbert Kurz, President
INDEX TO EXHIBITS
Exhibit
Number Description of Documents
5.1 Opinion of Morgenthau, Greenes, Goldfarb & Aronauer,
P.C., with respect to the legality of the shares
being registered
23.1 Consent of Deloitte & Touche LLP,
independent accountants
23.2 Consent of Morgenthau, Greenes, Goldfarb &
Aronauer, P.C., (included in Exhibit 5.1)
24.1 Powers of attorney (included at page S-4)
28.1 1996 Stock Incentive Plan
28.2 Rules Relating to Stock Options and Stock
Appreciation Rights under the 1996 Stock
Incentive Plan
PRESIDENTIAL LIFE CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
For valuable consideration, receipt whereof is hereby acknowledged,
PRESIDENTIAL LIFE CORPORATION, a Delaware corporation (hereinafter called the
"Company"), hereby grants to
whose address is
(hereinafter called the "Optionee"), an Incentive Stock Option as defined by
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
subject to terms and conditions hereof, to purchase from the Company an
aggregate of shares of the common stock of the Company, $.01 par
value per share (hereinafter called the "Option"), at a price of $ per
share (hereinafter called the "Option Price").
The within option shall be exercisable in installments as follows prior
to the close of business five (5) years from the date hereof (hereinafter
referred to as the "Termination Date"):
Optionee may purchase from the Company on and after:
1 year from grant date, 25% of shares granted;
2 years from grant date, 25% of shares granted;
3 years from grant date, 25% of shares granted;
4 years from grant date, 25% of shares granted.
Unless the Optionee ceases to be employed by the Company, the right of
the Optionee to purchase shares subject to any installment may be exercised in
whole at any time or in part from time to time prior to the Termination Date.
The Option Price is acknowledged by the Company and the Optionee to be
not less than 100% of the fair market value of the common stock of the Company,
$.01 par value per share (hereinafter called the "Common Stock"), on the date
hereof.
The Option may be exercised only after the Optionee shall have been in
the employ of the Company or an Affiliate for a minimum period of two (2)
years. Thereafter, the Option may be exercised at any time or from time to
time, in whole or in part, as to all shares which have become purchasable
hereunder. For purposes of this Agreement, "Affiliate" shall mean any
entity, as may from time to time be designated by the Compensation
Committee of the Board of Directors of the Company (hereinafter called
the "Committee"), that is a subsidiary corporation of the Company (within
the meaning of Section 424 of the Code) and each other entity directly or
indirectly controlling or controlled by or under common control with the
Company.
Subject to the provisions of this Agreement, the Option shall be
exercised by written notice to the Company stating the number of shares of
Common Stock with respect to which it is being exercised and the desired time of
the delivery thereof, which time shall be no less than fifteen (15) nor more
than thirty (30) days after the giving of such notice, unless otherwise mutually
agreed upon. At the time specified in such notice, the Company shall, without
transfer or issue tax or other incidental expense to the Optionee, deliver to
the Optionee at the office of the transfer agent of the Company or such other
place as may be mutually acceptable, a certificate or certificates for such
shares out of theretofore unissued shares or reacquired shares of Common Stock,
as the Company may elect, against payment of the Option Price for all of the
shares being exercised in New York Clearing House funds by certified or bank
cashier's check or the equivalent thereof acceptable to the Company.
Unless there is an effective registration statement covering the shares
of Common Stock to be acquired by the Optionee upon exercise of the Option,
Optionee warrants and represents to the Company that any such shares will be
acquired by him for his own account for investment and not with a view to the
distribution or resale of any such shares, and agrees that upon any such
exercise he will reconfirm in writing to the Company such warranty and
representation with respect to any shares then being purchased hereunder. The
obligation of the Company to issue and sell or transfer and sell shares of
Common Stock hereunder is expressly conditioned upon such representation and
warranty by Optionee.
Notwithstanding the foregoing, the Company may postpone the time of
delivery of the certificates for shares of Common Stock for such additional
time as the Company shall deem necessary or desirable to enable it to comply
with listing requirements of any securities exchange upon which the Common Stock
may be listed, the requirements of the Securities Act of 1933 or the Securities
Exchange Act of 1934 or any Rules or Regulations of the Securities and Exchange
Commission promulgated thereunder, or the requirements of applicable state laws
relating to authorization, issuance or sale of securities.
If the Optionee fails to accept delivery of and pay the Option Price for
all or any part of the number of shares specified in such notice upon tender of
delivery thereof, his right to exercise the Option with respect to such
undelivered shares may be terminated. The Option can be exercised only with
respect to full shares.
During the Optionee's lifetime, the Option shall be exercisable only by
him, and neither it nor any right hereunder shall be transferable or shall be
subject in any manner to alienation, sale, transfer, assignment, pledge,
encumbrance or charge (other than by or to the Company), except (i) by will or
the laws of descent and distribution; or (ii) subject to the prior approval of
the Committee, for transfers to members of the Optionee's immediate family,
charitable institutions, trusts whose beneficiaries are members of the
Optionee's immediate family and/or charitable institutions, or to such other
persons or entities as may be approved by the Committee, in each case subject to
the condition that the Committee be satisfied that such transfer is being made
for estate and/or tax planning purposes on a gratuitous or donative basis and
without consideration (other than nominal consideration) being received
therefor. In the event of any attempt by the Optionee to alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of the Option or
any right thereunder, except as provided for herein, or in the event of any levy
or any attachment, execution or similar process upon the rights or interests
hereby conferred, the Company may terminate the Option by notice to the Optionee
and it shall thereupon become null and void.
If, prior to the Termination Date, the Optionee shall cease to be
employed by the Company or an Affiliate (otherwise than by reason of the death
of the Optionee), the Option, and all rights hereunder to the extent that such
rights shall not have been exercised, shall terminate on the earlier of: (a)
the date the Option expires in accordance with the terms hereof or the
requirements of Section 422 of the Code or (b) the expiration of the following
period: (i) twelve (12) months, if employment ceased due to permanent and total
disability; (ii) eighteen (18) months, if employment ceased at a time when the
Optionee was eligible to elect immediate commencement of retirement benefits
under a pension plan to which the Company has made contributions; (iii) eighteen
(18) months if the Optionee died while employed by the Company; or (iv) three
(3) months if employment ceased for any other reason, provided, however, that if
his employment shall have been terminated for cause, the Option shall terminate
immediately.
If the Optionee dies while he is employed by the Company or an Affiliate
or within three (3) months after cessation of his employment (unless such
termination was for cause ), the Option may be exercised, to the extent
exercisable on the date of his death, by a legatee or legatees of the Option
under the Optionee's last will, or by Optionee's executors, personal
representatives or distributees, at any time permissible under the terms of the
previous paragraph.
If the Company shall declare a stock dividend or subdivide or combine
its Common Stock, or any other event shall occur which in the judgment of the
Committee necessitates action by way of adjusting the terms of the Option, the
Committee shall forthwith take any such action as in its judgment shall be
necessary to preserve to the Optionee rights substantially proportionate to
the Optionee's rights existing prior to such event. It is expressly
understood that to the extent that, in the judgment of the Committee, the
application of the preceding sentence would prevent the Option from
qualifying as an incentive stock option as that term is defined in
Section 422 of the Code, such provision shall be of no force or effect.
It is further understood that no action shall be taken by the Committee
under such sentence which, in its judgment, would constitute a modification,
as that term is defined in Section 422 of the Code.
The judgment of the Committee with respect to any matter referred to in this
paragraph shall be conclusive and binding upon the Optionee.
In the event the Optionee disposes of any shares of Common Stock
acquired pursuant to the exercise of the Option within three (3) years
from the date hereof or within six (6) months after the transfer of such
shares to him upon his exercise of the Option (whether by sale, exchange,
gift or otherwise), he will notify the Company in writing within thirty
(30) days after such disposition.
The Optionee agrees that he will remain in the employ of the Company or
an Affiliate for a period of at least one (1) year after the date hereof and
will perform such duties and receive such compensation as the Board of Directors
of the Company or the Committee shall reasonably determine from time to time;
provided, however, that neither the granting of the Option nor the exercise
thereof shall be construed as granting to the Optionee any right with respect to
continuance of employment by the Company or an Affiliate. The right of the
Company or an Affiliate to terminate (whether by dismissal, discharge,
retirement or otherwise) the Optionee's employment with it at any time, at will,
or as otherwise provided by any agreement between the Company and the Optionee,
is specifically reserved. Neither the Optionee nor any person entitled to
exercise his rights in the event of his death shall have any of the rights of a
stockholder with respect to the shares subject to the Option, except to the
extent that certificates for such shares shall have been issued upon the
exercise of the Option as provided for herein.
The Option shall be wholly void and of no effect after the close of
business on a date five (5) years from the date hereof, or, if such date is a
Saturday, Sunday or legal holiday, after the close of business on the next
ensuing business day.
For purposes of this Agreement, whenever necessary or appropriate, the
neuter gender shall be deemed to include the masculine and the feminine, the
masculine to include the feminine and the feminine to include the masculine.
IN WITNESS WHEREOF, PRESIDENTIAL LIFE CORPORATION, has caused this
Agreement to be executed by its officers, thereunto duly authorized, as of
the day of , .
PRESIDENTIAL LIFE CORPORATION
By: /s/ Herbert Kurz
Herbert Kurz, President
ATTEST:
/s/ Michael V. Oporto
Michael V. Oporto, Treasurer
ACCEPTED:
/s/ Optionee
Optionee
Date:
MORGENTHAU, GREENES, GOLDFARB & ARONAUER, P.C.
ATTORNEYS AT LAW
575 LEXINGTON AVENUE
NEW YORK, N.Y. 10022
(212) 888-2005
Fax (212) 486-4035
July 15, 1996
Presidential Life Corporation
69 Lydecker Street
Nyack, New York 10960
Gentlemen:
We have acted as counsel to Presidential Life Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-8
(the "Registration Statement"), relating to the offering (the "Offering") by the
Company of 1,000,000 shares of its Common Stock, par value $.01 per share (the
"Common Stock"), issuable to selected employees of the Company pursuant to the
Company's 1996 Stock Incentive Plan (the "Plan").
As such counsel, we have examined copies of the Amended and Restated
Certificate of Incorporation and By-Laws of the Company, each as amended to the
date hereof, the Registration Statement, the Prospectus which forms a part of
the Registration Statement, and originals or copies of such corporate minutes,
records, agreements and other instruments of the Company, certificates of public
officials and other documents, and have made such examinations of law, as we
have deemed necessary to form the basis for the opinion hereinafter expressed.
In our examination of such materials, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all copies submitted to us. As to
various questions of fact material to such opinion, we have relied, to the
extent we deemed appropriate, upon representations, statements and certificates
of officers and representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that
the shares of Common Stock to which the Registration Statement relates, when and
if issued as contemplated under the Plan, will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit hereby that we
come within the category of persons whose consent is required under Section 7 of
the Act or the Rules and Regulations of the Commission thereunder.
Sincerely,
Morgenthau, Greenes, Goldfarb &
Aronauer, P.C.
By: /s/ Samuel Goldfarb
Samuel Goldfarb
A member of the firm
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Presidential Life Corporation on Form S-8 of our report dated
February 28, 1996, appearing in the Annual Report on Form 10-K of
Presidential Life Corporation for the year ended December 31, 1995.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
July 15, 1996
MORGENTHAU, GREENES, GOLDFARB & ARONAUER, P.C.
ATTORNEYS AT LAW
575 LEXINGTON AVENUE
NEW YORK, N.Y. 10022
(212) 888-2005
Fax (212) 486-4035
July 15, 1996
Presidential Life Corporation
69 Lydecker Street
Nyack, New York 10960
Gentlemen:
We have acted as counsel to Presidential Life Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-8
(the "Registration Statement"), relating to the offering (the "Offering") by the
Company of 1,000,000 shares of its Common Stock, par value $.01 per share (the
"Common Stock"), issuable to selected employees of the Company pursuant to the
Company's 1996 Stock Incentive Plan (the "Plan").
As such counsel, we have examined copies of the Amended and Restated
Certificate of Incorporation and By-Laws of the Company, each as amended to the
date hereof, the Registration Statement, the Prospectus which forms a part of
the Registration Statement, and originals or copies of such corporate minutes,
records, agreements and other instruments of the Company, certificates of public
officials and other documents, and have made such examinations of law, as we
have deemed necessary to form the basis for the opinion hereinafter expressed.
In our examination of such materials, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all copies submitted to us. As to
various questions of fact material to such opinion, we have relied, to the
extent we deemed appropriate, upon representations, statements and certificates
of officers and representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that
the shares of Common Stock to which the Registration Statement relates, when and
if issued as contemplated under the Plan, will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit hereby that we
come within the category of persons whose consent is required under Section 7 of
the Act or the Rules and Regulations of the Commission thereunder.
Sincerely,
Morgenthau, Greenes, Goldfarb &
Aronauer, P.C.
By: /s/ Samuel Goldfarb
Samuel Goldfarb
A member of the firm
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
HERBERT KURZ and MICHAEL V. OPORTO, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign and to file with the Securities and Exchange
Commission and the securities regulatory authorities of the several states
registration statements, amendments or post-effective amendments or any and all
other documents in connection therewith, in connection with the registration
under the Securities Act of 1933, as amended, or the registration or
qualification under any applicable state securities laws or regulations, of
shares of common stock, $.01 par value, of the Registrant issuable pursuant to
the Registrant's 1996 Stock Incentive Plan, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Herbert Kurz President and Director July 15, 1996
Herbert Kurz (Principal Executive
Officer)
/s/ Michael V. Oporto Treasurer and Chief July 15, 1996
Michael V. Oporto Financial Officer
(Principal Financial
Accounting Officer)
/s/ Peter A. Cohen Director July 15, 1996
Peter A. Cohen
/s/ Jules Kroll Director July 15, 1996
Jules Kroll
/s/ Lawrence Rivkin Director July 15, 1996
Lawrence Rivkin
/s/ Morton B. Silberman Director July 15, 1996
Morton B. Silberman
This document constitutes part of a This document is dated
Prospectus covering securities that July 15, 1996
have been registered under the
Securities Act of 1933.
1996 STOCK INCENTIVE PLAN
OF
PRESIDENTIAL LIFE CORPORATION
PLAN DESCRIPTION
This document constitutes part of a prospectus (the "Prospectus")
relating to shares of common stock of Presidential Life Corporation (the
"Company") to be offered pursuant to awards and the exercise of certain rights
thereunder granted or to be granted under the 1996 Stock Incentive Plan of the
Company (the "1996 Plan"). The 1996 Plan was adopted by the Board of Directors
of the Company (the "Board of Directors") on February 28, 1996 and approved by
the stockholders of the Company at the Annual Meeting on May 29, 1996. The
principal provisions of the 1996 Plan are summarized herein. This summary does
not purport to be complete and is subject in all respects to the provisions of
the 1996 Plan.
Purpose
The purpose of the 1996 Plan is to (i) provide long-term
incentives and rewards to employees of the Company and its subsidiaries; (ii)
assist the Company in attracting and retaining employees with experience and/or
ability on a basis competitive with industry practices; and (iii) associate the
interest of such employees with those of the Company's stockholders.
Shares Available Under the 1996 Plan
The aggregate number of shares of the Company's common stock, par
value $0.01 per share ("Common Stock"), that may be the subject of Awards (as
defined in "Types of Awards to be Granted" below), is 1,000,000. If any Award
shall expire or terminate without having been exercised in full, the unpurchased
shares or unexercised rights subject thereto may again be made subject to an
Award under the 1996 Plan. Such number of shares is subject to further
adjustments resulting from any split, stock dividend, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares or
other similar corporate change. See "Adjustment of Number of Shares" below.
During the term of the 1996 Plan and the term of any Awards
granted thereunder, the Company will at all times reserve and keep available
such number of shares as may be issuable under the 1996 Plan, either from
authorized but unissued shares or from previously issued shares of Common Stock
reacquired by the Company, including shares purchased on the open market.
Administration
The 1996 Plan shall be administered by the Compensation Committee
of the Board of Directors, or such other committee of the Board of Directors as
may be directed by the Board of Directors (any such committee shall hereinafter
be referred to as the "Committee"), and the Committee shall be so constituted as
to permit the 1996 Plan to comply with the disinterested administration
requirement under Rule 16b-3 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the "outside director" requirement of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"). Members of the
Committee shall serve at the pleasure of the Board of Directors.
The Committee shall have all the powers vested in it by the terms
of the 1996 Plan, such powers to include exclusive authority (within the
limitations described therein) to select the employees to be granted Awards
under the 1996 Plan, to determine the type, size and terms of Awards to be made
to each employee selected, to determine the time when Awards will be granted,
when they will vest, when they may be exercised and when they will be paid, to
amend Awards previously granted and to establish objectives and conditions, if
any, for earning Awards. The Committee shall have full power and authority to
administer and interpret the 1996 Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the 1996 Plan
and for the conduct of its business as the Committee deems necessary or
advisable and to interpret same. The Committee has adopted Rules Relating to
Stock Options and Stock Appreciation Rights (the "Rules") for the administration
of any such Awards.
Any member of the Committee may resign by giving written notice
thereof to the Board of Directors, and any member of the Committee may be
removed at any time, with or without cause, by the Board of Directors. If, for
any reason, a member of the Committee shall cease to serve, the vacancy shall be
filled by the Board of Directors. The members of the Committee will be
appointed at the next meeting of the Board of Directors. Any inquiry regarding
the 1996 Plan should be addressed to the Company, 69 Lydecker Street, Nyack, NY
10960, Attention: Michael V. Oporto, Chief Financial Officer; telephone number
(914) 358-2300.
Types of Awards to be Granted
Awards under the 1996 Plan shall be made with reference to shares
of Common Stock and may include, but need not be limited to, stock options
(including non-qualified stock options and incentive stock options qualifying
under Section 422 of the Code, herein referred to as "Options"), stock
appreciation rights (including free-standing, tandem and limited stock
appreciation rights), warrants, dividend equivalents, stock awards, restricted
stock, phantom stock, performance shares or other securities or rights that the
Committee determines to be consistent with the objectives and limitations of the
1996 Plan (collectively, "Awards"). The Committee may provide for the issuance
of shares of Common Stock as a stock award for no consideration other than
services rendered or, to the extent permitted by applicable state law, to be
rendered. In the event of an Award under which shares of Common Stock are or
may in the future be issued for any other type of consideration, the amount of
such consideration shall (i) be equal to or greater than the amount (such as the
par value of such shares) required to be received by the Company in order to
assure compliance with applicable state law and (ii) to the extent necessary to
comply with Rule 16b-3 of the Exchange Act, be equal to or greater than 50% of
the fair market value of such shares on the date of grant of such Award. The
Committee may make any other type of Award which it shall determine is
consistent with the objectives and limitations of the 1996 Plan.
The Rules provide that the aggregate fair market value of the
shares of Common Stock with respect to which incentive stock options granted to
an individual are exercisable for the first time by such individual during any
calendar year shall not exceed $100,000; to the extent such limitation is
exceeded, the Options shall be treated as non-qualified stock options.
Incentive stock options may be granted only to those persons who
are employees of the Company or an Affiliate (as defined in "Eligibility"
below). Notwithstanding the foregoing, an incentive stock option shall not be
granted to any person if immediately after such grant he is the owner, or would
be deemed in accordance with Section 424 of the Code to be the owner, of more
than 10% of the total combined voting power or value of all classes of stock of
the Company.
Eligibility
All employees of the Company and all employees of Affiliates
shall be eligible to participate in the 1996 Plan. The Committee, in its sole
discretion, shall from time to time designate from among the eligible employees
those individuals who are to receive Awards under and thereby become
participants in the 1996 Plan. For purposes of the 1996 Plan, "Affiliate" shall
mean any entity, as may from time to time be designated by the Committee, that
is a subsidiary corporation of the Company (within the meaning of Section 424 of
the Code), and each other entity directly or indirectly controlling or
controlled by or under common control with the Company. For purposes of this
definition, "control" means the power to direct the management and policies of
such entity, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meaning correlative
to the foregoing.
Number of Shares to be Granted and Duration
The number of shares to be awarded to any employee under the 1996
Plan is determined by the Committee in its sole discretion. An employee may be
granted multiple Awards under the 1996 Plan. The maximum number of shares of
Common Stock subject to awards of Options, warrants and stock appreciation
rights under the 1996 Plan, in the aggregate with respect to all such types of
Awards, that may be granted during any period of five (5) consecutive calendar
years to any one (1) individual shall be limited to 100,000. To the extent
required by Section 162(m) of the Code, Awards subject to the foregoing limit
that are cancelled or repriced shall not again be available for award under this
limit. With respect to awards of stock, restricted stock, phantom stock,
performance shares or other forms of Award conveying a similar economic benefit
(but excluding options, warrants and stock appreciation rights), the maximum
number of shares of Common Stock that may be awarded during any period of five
(5) consecutive years to any one individual shall be 100,000. The maximum
number of shares that may be awarded to all participants under the 1996 Plan
with respect to all types of Awards shall be 1,000,000.
The duration of any Option granted under the 1996 Plan shall be
for a period which is not greater than ten (10) years from the date upon which
the Option is granted.
Options
Option Price. The option price shall be determined by the
Committee at the time any Option is awarded and shall not be less than 100% of
the fair market value of the Common Stock on the date on which the Option is
granted. Subject to certain limitations that may be imposed by the Committee
to comply with the requirements for exemption under Rule 16b-3 of the
Exchange Act or any other applicable rule, regulation or guideline, the
option price shall be paid in cash or by the surrender, at the fair market
value on the date on which the Option is exercised, of shares of Common
Stock, or by any combination of cash and such shares. The purchase price
for shares being purchased upon exercise of non-qualified Options may also
be paid in any other manner approved by the Committee, including, without
limitation, by delivery to the Company of (a) a cash amount which shall
not be less than the par value of the Common Stock multiplied by the number
of shares being purchased and (b) a binding, joint and
several obligation of the participant and a financial institution or broker
approved by the Committee, to pay the balance of the purchase price upon such
terms and conditions as may be specified from time to time by the Committee.
The "fair market value" of a share of Common Stock for purposes of calculating
the Option price shall be the average of the highest and lowest bid quotations
on the NASDAQ Stock Market at which the stock shall have been sold regular way
on the date as of which fair market value is to be determined or, if there shall
be no such sale on such date, the next preceding day on which such a sale shall
have occurred.
Exercise of Options. Except as otherwise provided in the 1996
Plan or the Rules, an Option shall be exercisable at such rate and times as may
be fixed by the Committee. No Option may be exercised until the first
anniversary of the date of grant. Up to 25% of the shares subject to an Option
may be purchased on or after the first anniversary of its date of grant, and an
additional 25% of the shares subject to the Option may be purchased on or after
each of the second, third and fourth anniversaries, respectively, of the
Option's date of grant; provided that the participant is employed with the
Company on each such vesting date or on a date no more than three (3) months
prior to such vesting date, unless participant's employment was terminated for
cause. (See "Termination of Employment of Services" below.)
Exercise of Options; Payment for the Issuance of Shares. Any
Option may be exercised by the participant, by a legatee or legatees of such
Option under such participant's last will, or by such participant's executors,
personal representatives, distributees or such other persons as may be approved
by the Committee, by delivering to the Company at its main office (attention of
its Secretary) written notice of the number of shares with respect to which the
Option is being exercised accompanied by full payment to the Company of the
purchase price of the shares being purchased in accordance with the 1996 Plan.
(See Options -- "Option Price" above.) Notwithstanding anything to the contrary
contained in the 1996 Plan, until the expiration of the phase-in period under
new Rule 16b-3 under the Exchange Act (as generally effective May 1, 1991, and
amendments thereto), any Option may be exercised during the participant's
lifetime only by the participant or by such participant's guardian or legal
representative.
No Option may be granted pursuant to the 1996 Plan or
exercised at any time when such Option, or the granting, exercise or payment
thereof, may result in the violation of any law or governmental order or
regulation. The 1996 Plan is intended to comply with Rule 16b-3 under the
Exchange Act. Any provision inconsistent with such Rule shall be inoperative
and shall not affect the validity of the 1996 Plan.
Within a reasonable time after the exercise of an Option,
the Company shall cause to be delivered to the person entitled thereto a
certificate for the shares purchased pursuant to the exercise of the Option.
The Company may postpone the issuance and delivery of shares upon any exercise
of an Option until (a) the admission of such shares to listing on any stock
exchange on which shares of the Company of the same class are then listed, and
(b) the completion of any such registration or other qualification of such
shares under any State of Federal law, rule or regulation as the Company shall
determine to be necessary or advisable. Any person exercising an Option shall
make such representations and furnish such information as may, in the opinion of
counsel for the Company, be appropriate to permit the Company, in the light of
the then existence or non-existence with respect to such shares of an effective
registration statement under the Securities Act of 1933, as from time to time
amended, to issue the shares in compliance with the provisions of that or any
comparable act. The Company shall have the right, in its sole discretion, to
legend any shares which may be issued pursuant to the exercise of any Option, or
may issue stop transfer orders in respect thereof.
Termination of Employment or Services. The Option of any
participant whose employment by the Company or an Affiliate is terminated for
any reason, shall terminate on the earlier of (a) the date that the Option
expires in accordance with its terms (including any terms required under Section
422 of the Code if the Option is an incentive stock option) or (b) the
expiration of such period after termination of employment as the Committee shall
specify in a stock option agreement with such participant, provided that such
period shall not be less than: (i) twelve (12) months if employment ceased due
to permanent and total disability, (ii) eighteen (18) months if employment
ceased at a time when the optionee is eligible to elect immediate commencement
of retirement benefits under a pension plan to which the Company had made
contributions, (iii) eighteen (18) months if the participant died while employed
by the Company, or (iv) three (3) months if employment ceased for any other
reason, except termination for cause (as described below). During such period
as described above, except as otherwise specified in a stock option agreement or
in the event employment was terminated by the death of the participant, the
Option may be exercised by such participant in respect of the same number of
shares, in the same manner, and to the same extent as if he had continued as an
employee during the first three months of such period; but no additional rights
shall vest after such three months. Notwithstanding the preceding two
sentences, in the event of termination of employment or discharge of a
participant for cause, as determined by the Committee in its sole discretion,
then, subject to the terms of a stock option agreement, any Option or Options
held by such participant under the 1996 Plan not theretofore exercised shall
terminate immediately upon such termination or discharge and may not be
exercised thereafter. The Committee shall have authority to determine in each
case whether an authorized leave of absence shall be deemed a termination of
employment.
Stock Appreciation Rights ("SARs")
Award of SARs. The Committee may grant SARs to such optionees as
the Committee may select from time to time, either on a free-standing basis
(without regard to the grant of an Option) or on a tandem basis (related to the
grant of an underlying Option). SARs granted on a free-standing basis may be
awarded by the Committee for a number of shares, at a base price, upon terms for
vesting and exercise and upon such other terms and conditions as are consistent
with such comparable terms applicable to the grant of Options under the Plan
(including terms described in the Rules). SARs granted on a tandem basis in
connection with any Option granted under the Plan (either at the time such
Option is granted or thereafter at any time prior to the exercise, termination
or expiration of such Option) shall be subject to the same terms and conditions
as the related Option and shall be exercisable only to the extent such Option is
exercisable.
Amount of Payment Upon Exercise of SARs. An SAR shall entitle
the recipient thereof to receive, subject to the provisions of the Plan and such
rules and regulations as may be established by the Committee, a payment having
an aggregate value equal to the product of (i) the excess of (A) the fair market
value on the exercise date of one share of Common Stock over (B) the base price
per share, times (ii) the number of shares called for by the SAR, or portion
thereof, which is exercised. In the case of exercise of a tandem SAR, such
payment shall be made in exchange for the surrender of the unexercised related
Option (or any portion or portions thereof which the recipient from time to time
determines to surrender for this purpose).
The Committee shall, in its sole discretion, determine whether
the payment upon exercise of an SAR shall be made in the form of all cash, all
shares, or any combination thereof. The Committee may impose such restrictions
on the forms of payment upon exercise of an SAR as it may deem necessary or
appropriate to comply with the requirements for exemption under Rule 16b-3 of
the Exchange Act. If upon settlement of the exercise of an SAR, a participant
is to receive a portion of such payment in shares of Common Stock, the number of
shares shall be determined by dividing such portion by the fair market value of
a share of Common Stock on the exercise date. No fractional shares shall be
issued and the Committee shall determine whether cash shall be given in lieu of
such fractional shares or whether such fractional shares shall be eliminated.
With respect to tandem SARs granted in connection with previously
granted Options, the Committee shall provide that such SARs shall not be
exercisable until the recipient completes six (6) months (or such longer period
as the Committee shall determine) of service with the Company or an Affiliate
immediately following the date of the SAR grant, except in the case of the death
or disability of the recipient.
Assignability of Awards
No Award under the 1996 Plan shall be transferrable by the
participant or shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, encumbrance or charge (other than by or to the Company),
except (i) by will or the laws of descent and distribution; or (ii) subject to
the prior approval of the Committee, for transfers to members of the
participant's immediate family, charitable institutions, trusts whose
beneficiaries are members of the participant's immediate family and/or
charitable institutions, or to such other persons or entities as may be approved
by the Committee, in each case subject to the condition that the Committee be
satisfied that such transfer is being made for estate and/or tax planning
purposes on a gratuitous or donative basis and without consideration (other than
nominal consideration) being received therefor. Except as provided above,
during the lifetime of a participant, Awards hereunder are exercisable only by,
and payable only to, the participant. Notwithstanding anything to the contrary
contained in the 1996 Plan, until the expiration of the phase-in period under
current Rule 16b-3 under the Exchange Act (as generally effective May 1, 1991,
and amendments thereto), any derivative security the grant of which is intended
to be exempt from Section 16(b) under the Exchange Act shall not be transferable
or exercisable other than as permitted by former Rule 16b-3(d)(1)(ii) under the
Exchange Act.
Adjustment of Number of Shares
In the event of any change in the outstanding shares of Common
Stock by reason of any split, stock dividend, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares or
other similar corporate change, such equitable adjustments shall be made in the
1996 Plan and the Awards thereunder as the Committee determines are necessary or
appropriate, including, if necessary, any adjustments in the number, kind or
character of shares that may be subject to existing or future Awards under the
1996 Plan (including by substitution of shares of another corporation including,
without limitation, any successor of the Company), adjustments in the exercise,
purchase or base price of an outstanding Award, where appropriate, and any
adjustments in the maximum numbers of shares referred to in the 1996 Plan. All
such adjustments shall be conclusive and binding for all purposes of the 1996
Plan.
Amendment and Termination of the 1996 Plan
The Committee may at any time terminate or from time to time
amend the 1996 Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any Awards theretofore made
under the 1996 Plan.
Unless the holders of at least a majority of the outstanding
shares of Common Stock present, or represented, and entitled to vote at a
meeting of stockholders shall have first approved thereof, no amendment of the
1996 Plan shall be effective which would (i) increase the maximum number of
shares subject to the 1996 Plan or the maximum Awards that may be granted
pursuant to the 1996 Plan to any one individual or (ii) extend the maximum
period during which Awards may be granted under the 1996 Plan. However, any
cancellation and reissuance or repricing of any Awards made under the 1996 Plan
at a new option price as provided in the Rules shall not constitute an amendment
of the 1996 Plan.
With consent of the employee adversely affected, the Committee
may amend outstanding agreements evidencing Awards under the 1996 Plan in a
manner not inconsistent with the terms of the 1996 Plan.
Unless the 1996 Plan shall theretofore have been terminated as
above provided, the 1996 Plan (but not the Awards theretofore granted under the
1996 Plan) shall terminate on, and no Awards shall be granted after, June 1,
2006.
Interpretation
The Committee's interpretation of the 1996 Plan, and all actions
taken and determinations made by the Committee pursuant to the powers vested in
it thereunder, shall be conclusive and binding on all parties concerned,
including the Company, stockholders, any participants in the 1996 Plan and any
other employee of the Company.
Rules and Regulations
The Committee may authorize and establish such rules and policies
and revisions thereof not inconsistent with the provisions of the 1996 Plan as
it may deem advisable to make the 1996 Plan and Awards effective or provide for
their administration, and may take such other action with regard to the 1996
Plan and Awards as it shall deem desirable to effectuate their purpose.
Employee Retirement Income Security Act of 1974
The 1996 Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended, and is not qualified under
Section 401(a) of the Code.
Federal Income Tax Consequences
The following is a summary of the federal income tax consequences
of participation in the 1996 Plan:
Incentive Stock Options. Under current law, an employee will
not realize any taxable income upon the grant or exercise of incentive stock
options. If the employee disposes of the Common Stock acquired upon the
exercise of an incentive stock option at least two (2) years after the date the
Option was granted and at least one (1) year after the date the shares are
transferred to him upon the exercise of an Option, the employee will realize
long-term capital gain in an amount equal to the excess, if any, of his selling
price for the Common Stock over the Option exercise price, and the Company will
not be entitled to any tax deduction resulting from the issuance or sale of the
shares. If an employee disposes of the Common Stock acquired upon the exercise
of an incentive stock option prior to the expiration of two (2) years from the
date the Option was granted, or prior to the expiration of one (1) year from the
date the Common Stock was transferred to him, any gain realized will be taxable
at such time as follows: (1) as ordinary income to the extent of the difference
between the Option exercise price and the lesser of (a) the fair market value of
the Common Stock on the date the Option was exercised or (b) the amount realized
on such disposition, and (2) as capital gain to the extent of any excess, which
gain shall be treated as short-term or long-term capital gain depending upon the
employee's holding period for the Common Stock at the time of disposition. In
such case, the Company may claim an income tax deduction (as compensation) for
the amount taxable to the employee as ordinary income.
In general, the amount by which the fair market value of the
Common Stock acquired upon the exercise of an incentive stock option exceeds the
exercise price will constitute an item of adjustment for purposes of determining
alternative minimum taxable income and under certain circumstances may be
subject, in the year in which the Option is exercised, to the alternative
minimum tax.
If an employee uses shares of Common Stock which he owns to
pay, in whole or in part, the exercise price for optioned shares, (a) the
employee's holding period for the newly issued shares of Common Stock equal in
number to the shares of old Common Stock (the "exchanged" shares) which were
surrendered upon the exercise shall include the period during which the
surrendered shares were held, (b) the employee's basis in such exchanged shares
will be the same as his basis in the surrendered shares, and (c) no gain or loss
will be recognized by the employee on the exchange of the surrendered shares for
the exchanged shares. Further, the employee will have a zero basis in the
additional shares received over and above the exchanged shares. However, if an
employee tenders Common Stock acquired pursuant to the exercise of an incentive
stock option to pay all or part of the exercise price under an incentive stock
option, such tender will constitute a disposition of such previously held Common
Stock for purposes of the one-year (or two-year) holding period requirement
applicable to such incentive stock option and such tender may be treated as a
taxable exchange.
Non-Qualified Stock Options. An employee will not recognize any
income at the time a non-qualified stock option is granted. If the employee is
not a director, officer, or principal shareholder (i.e., an owner of more than
ten percent (10%) of the Common Stock), he will recognize ordinary income at the
time he exercises a non-qualified stock option in a total amount equal to: (1)
in the case of Options which the employee exercises with cash, the excess of the
then fair market value of the shares acquired over the exercise price; and (2)
in the case of Options which an employee exercises by tendering previously owned
shares, the then fair market value of the number of shares issued in excess of
the number of shares surrendered upon such exercise. If a director, officer, or
principal shareholder receives shares pursuant to the exercise of a
non-qualified stock option, he is not required to recognize any income until
the date on which he can sell such shares at a profit without being subject
to liability under section 16(b) of the Exchange Act. Alternatively, a
director, officer or principal shareholder who would not otherwise be subject
to tax on the value of his shares as of the date they are acquired can file
a written election, within thirty (30) days after the shares are transferred
to him, pursuant to Section 83(b) of the Code, to be taxed as of the date of
transfer. In either case, the director, officer, or principal shareholder
would realize income equal to the amount by which the fair market value, at
the time the income is recognized, of the shares acquired pursuant to the
exercise of such Option exceeds the price paid for such shares.
All income realized upon the exercise of any non-qualified
stock option will be taxed as ordinary income. The Company may claim an income
tax deduction for the amount taxable to an employee in the same year as those
amounts are taxable to the employee. Shares issued upon the exercise of a
non-qualified stock option are generally eligible for capital gain or loss
treatment upon any subsequent disposition. Generally, an employee's holding
period will commence from the date such shares are issued to him, and his
basis in such shares will equal their fair market value as of that date, but
the holding period of a director, officer, or principal shareholder begins
on the date he recognizes income with respect to such shares, and his basis
in the shares will be equal to the greater of the then fair market value of
the shares or the amount paid for such shares. If an employee uses shares
of Common Stock that he owns to exercise a non-qualified stock option,
(a) the employee's holding period for the newly-issued shares equal in
number to the surrendered shares shall include the period during which the
surrendered shares were held, (b) the employee's basis in such exchanged
shares will be the same as his basis in he surrendered shares, and (c) no
gain or loss will be recognized by the employee
on the exchange of the surrendered shares for the exchanged shares.
Section 162(m) of the Code. Notwithstanding any of the foregoing
discussion with respect to the deductibility of compensation under the 1996
Plan, Section 162(m) of the Code generally would render non-deductible to the
Company taxable compensation in excess of $1,000,000 paid in any calendar year
to certain executive officers of the Company unless such excess compensation is
considered "performance-based" under Section 162(m). The applicable conditions
for a performance-based compensation plan include, among others, a requirement
that the stockholders approve the material terms of the plan. Options, SARs and
warrants that may be granted to executive officers as contemplated by the 1996
Plan are intended to qualify for the exemption for performance-based
compensation under Section 162(m). Other types of awards are not intended to be
so qualified. In light of the ambiguities in Section 162(m) and uncertainties
regarding its ultimate interpretation and application, no assurances can be
given that compensation awarded under the 1996 Plan, intended to be exempt under
Section 162(m), paid to any covered executive officer will in fact be deductible
if it should, together with other non-exempt compensation paid to such executive
officer, exceed $1,000,000.
Section 280G of the Code. Section 280G of the Code provides that
if an officer, stockholder or highly compensated individual receives a payment
which is in the nature of compensation and which is contingent upon a change in
control of the employer, and such payment equals or exceeds three (3) times his
"base salary" (as hereinafter defined), then any amount received in excess of
base salary shall be considered an "excess parachute payment." An individual's
"base salary" is equal to his average annual compensation over the five-year
period (or period of employment, if shorter) ending with the close of the
individual's taxable year immediately preceding the taxable year in which the
change in control occurs. In addition to any income tax which would otherwise
be owed on such payment, the individual will be subject to an excise tax equal
to 20% of such excess payment. If the taxpayer establishes, by clear and
convincing evidence, that an amount received is reasonable compensation for past
or future services, all or a portion of such amount may be deemed not to be an
excess parachute payment.
Section 280G provides that payments made pursuant to a
contract entered into within one (1) year before the change in control are
presumed to be parachute payments unless the individual establishes, by clear
and convincing evidence, that such contract was not entered into in
contemplation of a change in control. In addition, the General Explanation of
the Tax Reform Act of 1984 prepared by the Staff of the Joint Committee on
Taxation indicates that the grant of an Option within one (1) year before the
change in control or the acceleration of an Option because of a change in
control may be considered a parachute payment, in an amount equal to the value
of the Option or the value of the accelerated portion of the Option, as the case
may be. Pursuant to proposed regulations issued by the Treasury Department
under Section 280G, the acceleration of a non-qualified stock option because of
a change in control is considered a parachute payment in an amount equal to the
value of the accelerated portion of the Option. Even if the grant of an Option
within one (1) year of the change in control or the acceleration of an Option is
not a parachute payment for purposes of Section 280G, the exercise of an Option
granted within one (1) year of the change in control or the exercise of the
accelerated portion of an Option may result in a parachute payment, in an amount
equal to the excess of the fair market value of the shares received upon
exercise of the Option over the exercise price. Payments received for the
cancellation of an Option because of a change in control may also result in
parachute payments.
Withholding. The Company shall have the right to deduct from all
Awards paid in cash any federal, state, local or foreign taxes required by law
to be withheld with respect to such Awards and, with respect to Awards paid in
stock, to require the payment (through withholding from the participant's salary
or otherwise) of any such taxes. The obligation of the Company to make delivery
of Awards in cash or Common Stock shall be subject to currency or other
restrictions imposed by any government.
The foregoing summary with respect to federal income taxation
upon the holders of Awards under the 1996 Plan does not purport to be complete,
and reference is made to the applicable provisions of the Code. Each
participant may wish to discuss specific questions with his own tax advisor or
attorney. In addition, there may be tax considerations under state and local
laws applicable to participants.
Information About the Company
This Prospectus incorporates by reference all documents
incorporated by reference in Item 3 of Part II of Registration Statement No.
33-________ filed with the Securities and Exchange Commission on July 16,
1996. Such documents consist of:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, and The Company's Current Reports on Form 8-K, dated January 16,
1996 and June 3, 1996; and
(3) The Company's proxy statement, dated April 29, 1996, filed
pursuant to the Exchange Act in connection with its Annual Meeting of
Stockholders held on May 29, 1996.
In addition, all documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing of such documents. Copies of all such
documents will be provided to all participants in the 1996 Plan without charge,
upon written or oral request, made to the Company at 69 Lydecker Street, Nyack,
NY 10960; telephone number (914) 358-2300.
THE PRESIDENTIAL LIFE CORPORATION
1996 STOCK INCENTIVE PLAN
RULES RELATING TO STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
Pursuant to section 3 of the Plan and authority granted by the Board
of Directors as of May 29, 1996, and a majority of the outstanding shares of
Presidential common stock present, or represented, and entitled to vote at the
1996 Annual Meeting of Stockholders, the Committee herein sets forth the rules
under which stock options and stock appreciation rights may be granted to
employees of Presidential under the Plan (the "Rules"). All such grants are
subject to the terms and provisions of the Plan. Defined terms used herein and
not otherwise defined shall have the meanings set forth in the Plan.
1. Award of Options.
Subject to the provisions of the Plan, the Committee may from time to
time, in its sole discretion, award to participants in the Plan stock options to
purchase shares of common stock of Presidential. In connection therewith, the
Committee shall have full and final authority, inter alia, in its discretion,
subject to the provisions of the Plan, (a) to determine the participants to whom
options are to be awarded, (b) in the case of each option awarded, to determine
whether the same shall be an incentive stock option pursuant to Section 422 of
the Code (an "incentive stock option"), or an option which does not qualify
under such Section 422 (a "non-qualified option"), (c) to determine the number
of shares subject to each option, (d) to determine the time or times at which
options will be awarded, (e) to determine the option price of the shares subject
to each option, which price shall not be less than the minimum specified in
section 2 hereof, (f) to determine the time or times when each option becomes
exercisable and to determine the duration of the exercise period, and (g) to
prescribe the form or forms of the instruments evidencing any options awarded
under the Plan and the manner in which, and the form of consideration for which,
the option price should be paid.
2. Option Price.
The option price shall be determined by the Committee at the time any
option is awarded and shall not be less than 100% of the fair market value of
the common stock of Presidential on the date on which the option is granted or
the Stock Option Agreement (as described in section 9 hereof) is amended
pursuant to section 10 hereof. Subject to certain limitations that may be
imposed by the Committee to comply with the requirements for exemption under
Rule 16b-3 of the Exchange Act or any other applicable rule, regulation or
guideline, the option price shall be paid in certified or bank cashier's check
or the equivalent thereof acceptable to the Company or by the surrender, at the
fair market value on the date on which the option is exercised, of shares of
common stock of Presidential, or by any combination of certified or bank
cashier's check or the equivalent thereof acceptable to the Company and such
shares. The purchase price for shares being purchased upon exercise of
non-qualified options may also be paid in any other manner approved by the
Committee, including, without limitation, by delivery to Presidential of
(a) a cash amount which shall not be less than the par value of the common
stock of Presidential multiplied by the number of shares being purchased
and (b) a binding, joint and several obligation of the participant and a
financial institution or broker approved by the Committee, to pay the
balance of the purchase price upon such terms and conditions as may be
specified from time to time by the Committee. The "fair market value" of
a share of Presidential common stock shall be the average of the highest
and lowest bid quotations on the NASDAQ Stock Market at which the stock
shall have been sold regular way on the date as of which fair market value
is to be determined or, if there shall be no such sale on such date, the
next preceding day on which such a sale shall have occurred.
3. Duration and Period for Exercise of Options.
Subject to earlier termination as provided in section 4 hereof, an
option granted under the Plan shall expire ten (10) years after the date the
option is granted, unless otherwise provided by the Committee. The Committee
shall specify at the time each option is granted, and shall state in the Stock
Option Agreement, the time or times at which, and in what proportions, that
option may be exercised prior to its expiration or earlier termination. Except
as otherwise provided (a) by the Committee in the Stock Option Agreement or any
amendment thereto or (b) in section 4 hereof: (i) no option may be exercised
during the first year from the date it is granted; (ii) after one year from the
date an option is granted, it may be exercised as to not more than 25% of the
shares optioned; and (iii) after the expiration of the second, third and fourth
years from the date the option is granted, it may be exercised as to no more
than an additional 25% of such shares plus any shares as to which the option
might theretofore have been exercised but shall not have been exercised;
provided that the participant is employed with Presidential on each such vesting
date or on a date no more than three (3) months prior to such vesting date. The
Committee shall also determine at the time each option is granted, and shall
state in the Stock Option Agreement, whether that option is to be treated as an
incentive stock option.
4. Conditions to Exercise of Options.
Except as provided in section 3 and this section 4 or as otherwise may
be provided by the Committee, no option may be exercised at any time unless the
participant is then an employee of Presidential or an Affiliate.
The option of any participant whose employment by Presidential or an
Affiliate is terminated for any reason, shall terminate on the earlier of (a)
the date that the option expires in accordance with its terms (including any
terms required under Section 422 of the Code if the option is an incentive stock
option) or (b) the expiration of such period after termination of employment as
the Committee shall specify in the Stock Option Agreement, provided that such
period shall not be less than: (i) twelve (12) months if employment ceased due
to permanent and total disability, (ii) eighteen (18) months if employment
ceased at a time when the optionee is eligible to elect immediate commencement
of retirement benefits under a pension plan to which Presidential had made
contributions, (iii) eighteen (18) months if the participant died while employed
by Presidential, or (iv) three (3) months if employment ceased for any other
reason, except termination for cause (as described below). During such period
as described above, except as otherwise specified in the Stock Option Agreement
or in the event employment was terminated by the death of the participant, the
option may be exercised by such participant in respect of the same number of
shares, in the same manner, and to the same extent as if he had continued as an
employee during the first three months of such period; but no additional rights
shall vest after such three months. Notwithstanding the preceding two sentences
and the second to last sentence of section 3 hereof, in the event of termination
of employment or discharge of a participant for cause, as determined by the
Committee in its sole discretion, the basis for which may, but need not be,
specified in the Stock Option Agreement, then, subject to the terms of the Stock
Option Agreement, any option or options held by such participant under the Plan
not theretofore exercised shall terminate immediately upon such termination or
discharge and may not be exercised thereafter. The Committee shall have
authority to determine in each case whether an authorized leave of absence shall
be deemed a termination of employment.
Except as otherwise provided by the Committee, the option of any
participant who died while employed by Presidential or an Affiliate may be
exercised by a legatee or legatees of that option under the participant's last
will, or by such participant's executors, personal representatives or
distributees, in respect of all or any part of the total number of shares under
option to such participant under the Plan at
the time of such participant's death (whether or not, at the time of death, the
deceased participant would have been entitled, pursuant to the provisions of
section 3 hereof, to exercise such option to the extent of all or any of the
shares covered thereby). However, in the event of the death of the participant
after the date of termination of employment with Presidential or an Affiliate,
then such deceased participant's option shall expire in accordance with its
terms, the same as if such participant had not died. Except as otherwise
provided by the Committee, prior to its expiration, the option of a participant
who died after he severed employment with Presidential or an Affiliate may be
exercised by a legatee or legatees of that option under the participant's last
will, or by such participant's executors, personal representatives, or
distributees in respect to the same number of shares, in the same manner and to
the same extent as if such participant were then living. The Committee may
accelerate vesting and exercisability or waive exercisability or vesting
conditions in such other circumstances as it deems appropriate.
For purposes hereof, the Committee shall have the sole power to make
all determinations regarding the termination of any participant's employment,
including, but not limited to, the effective time thereof for the purposes of
this Plan, the cause(s) therefor and the consequences thereof. Unless otherwise
provided by the Committee, if an entity ceases to be an Affiliate of
Presidential or otherwise ceases to be qualified under the Plan, or if all or
substantially all of the assets of an Affiliate are conveyed (other than by
encumbrance), such cessation or action, as the case may be, shall be deemed for
purposes hereof to be a termination of the employment of each employee of that
entity.
5. Method of Exercising Options.
Any option granted under the Plan may be exercised by the participant,
by a legatee or legatees of such option under such participant's last will, or
by such participant's executors, personal representatives, distributees or such
other persons as may be approved by the Committee, by delivering to Presidential
at its main office (attention of its Secretary) written notice of the number of
shares with respect to which the option is being exercised accompanied by full
payment to Presidential of the purchase price of the shares being purchased in
accordance with section 2 hereof. Notwithstanding anything to the contrary
contained herein, until the expiration of the phase-in period under new Rule
16b-3 under the Exchange Act (as generally effective May 1, 1991, and amendments
thereto) any option granted under the Plan may be exercised during the
participant's lifetime only by the participant or by such participant's guardian
or legal representative.
6. Incentive Stock Options.
(a) Award of ISOs. Incentive stock options may be granted only to
those persons who are employees of Presidential or an Affiliate.
Notwithstanding the foregoing, an incentive stock option shall not be granted to
any such person if immediately after such grant he is the owner, or would be
deemed in accordance with Section 424 of the Code to be the owner, of more than
10% of the total combined voting power or value of all classes of stock of
Presidential.
(b) Annual Limits. No incentive stock option shall be granted to a
participant if as a result of such grant the aggregate fair market value
(determined as of the date of grant) of the stock with respect to which
incentive stock options are exercisable for the first time in any calendar year
under the Plan by such participant, and any other stock option plans of
Presidential by such participant, would exceed $100,000, determined in
accordance with Section 422 of the Code. This limitation shall be applied by
taking options into account in the order in which granted.
(c) Terms and Conditions; Nontransferability. Any incentive stock
option granted under the Plan shall contain such terms and conditions, not
inconsistent with the terms of the Plan, as are deemed necessary or desirable by
the Committee. Such terms, together with the terms of this Plan, shall be
intended and interpreted to cause such incentive stock option to qualify as an
"incentive stock option" under Section 422 of the Code. Such terms shall
include a term of exercise of the option which is not greater than ten (10)
years from the date of grant, and additional limitations on the period of
exercise of the option following termination of employment. An incentive stock
option shall by its terms be nontransferable otherwise than by will or by the
laws of descent and distribution, and shall be exercisable, during the lifetime
of a participant, only by such participant.
(d) Disqualifying Dispositions. If shares of Presidential common
stock acquired by exercise of an incentive stock option are disposed of within
two (2) years following the date of grant or one (1) year following the transfer
of such shares to the participant upon exercise, the participant shall be
required, within 30 days after such disposition, to notify Presidential in
writing of the date and terms of such disposition and provide such other
information regarding the disposition as the Committee may reasonably require.
7. Grant and Exercise of Stock Appreciation Rights ("SARs").
(a) Award of SARs. The Committee may grant SARs to such optionees as
the Committee may select from time to time, either on a free-standing basis
(without regard to the grant of a stock option) or on a tandem basis (related to
the grant of an underlying stock option). SARs granted on a free-standing basis
may be awarded by the Committee for a number of shares, at a base price, upon
terms for vesting and exercise and upon such other terms and conditions as are
consistent with such comparable terms applicable to the grant of stock options
under the Plan (including terms described in the Rules), except to the extent
specifically provided herein with respect to SARs. SARs granted on a tandem
basis in connection with any stock option granted under the Plan (either at the
time such option is granted or thereafter at any time prior to the exercise,
termination or expiration of such option) shall be subject to the same terms and
conditions as the related stock option and shall be exercisable only to the
extent such option is exercisable. Upon exercise of a tandem SAR and surrender
of a related stock option, the number of shares to be charged against the number
of shares referred to in section 5 of the Plan shall be the number of shares
subject to the surrendered stock options, and the number of shares shall be
reduced accordingly. Upon exercise of a free-standing SAR, the number of shares
to be charged against the number of shares referred to in section 5 of the Plan
shall be the number of shares subject to the free-standing SARs so exercised,
and the number of shares shall be reduced accordingly.
(b) Amount of Payment Upon Exercise of SARs. An SAR shall entitle
the recipient thereof to receive, subject to the provisions of the Plan and such
rules and regulations as may be established by the Committee, a payment having
an aggregate value equal to the product of (i) the excess of (A) the fair market
value on the exercise date of one share of Presidential common stock over (B)
the base price per share, times (ii) the number of shares called for by the SAR,
or portion thereof, which is exercised. In the case of exercise of a tandem
SAR, such payment shall be made in exchange for the surrender of the unexercised
related stock option (or any portion or portions thereof which the recipient
from time to time determines to surrender for this purpose).
(c) Form of Payment Upon Exercise of SARs. The Committee shall, in
its sole discretion, determine whether the payment upon exercise of an SAR shall
be made in the form of all cash, all shares, or any combination thereof. The
Committee may impose such restrictions on the forms of payment upon exercise of
an SAR as it may deem necessary or appropriate to comply with the requirements
for exemption under Rule 16b-3 of the Exchange Act. If upon settlement of the
exercise of an SAR, a participant is to receive a portion of such payment in
shares of Presidential common stock, the number of shares shall be determined by
dividing such portion by the fair market value of a share of Presidential common
stock on the exercise date. No fractional shares shall be issued and the
Committee shall determine whether cash shall be given in lieu of such fractional
shares or whether such fractional shares shall be eliminated.
With respect to tandem SARs granted in connection with previously
granted stock options, the Committee shall provide that such SARs shall not be
exercisable until the recipient completes six (6) months (or such longer period
as the Committee shall determine) of service with Presidential or an Affiliate
immediately following the date of the SAR grant, except in the case of the death
or disability of the recipient.
8. Transferability of Options and SARs.
The Committee may provide, in any agreement evidencing the award of a
stock option or SAR , or any amendment thereto, the extent to which a stock
option or SAR granted under the Plan shall be transferable by the participant
during his lifetime or upon his death. The terms and conditions of any such
transferability shall be established by the Committee in accordance with the
requirements of section 9(b) of the Plan. Incentive stock options shall not be
transferable except as provided in section 6 hereof.
9. Stock Option and SAR Agreements.
Each option or SAR awarded under the Plan shall be evidenced by a
Stock Option Agreement or SAR Agreement (which need not be identical with other
Stock Option or SAR Agreements) executed on behalf of Presidential by a member
of the Committee or by an officer designated by the Committee and by the
optionee which shall set forth the terms and conditions of the option and SAR,
if any (including, in the case of incentive stock options, such terms as shall
be requisite in the judgment of the Committee pursuant to Section 422 of the
Code), either expressly or by reference to the Plan and which may contain other
provisions provided they are neither inconsistent with nor prohibited by the
Plan. No modification of any Stock Option or SAR Agreement shall be effective
unless explicitly set forth in a written instrument executed on behalf of
Presidential by a member of the Committee or by an officer designated by the
Committee and, if adverse to the optionee, by the optionee. Except as provided
in the immediately preceding sentence, no statement, undertaking or
representation purporting to confer or affect any rights under the Plan, whether
oral or written, made by any director, officer or employee of Presidential shall
modify the terms of any Stock Option or SAR Agreement or constitute a grant of
additional options or rights under the Plan.
10. Grant of Options in Substitution for Previously Granted Options;
Repricing of Previously Granted Options.
(a) Substitution of Options. Options may be granted in the discretion
of the Committee in substitution for options previously granted pursuant to the
Plan or any other stock option, stock incentive or incentive compensation plan
of Presidential, provided that any option so granted shall be exercisable at a
new price which is not less than 100% of the fair market value of the common
stock of Presidential on the date on which the replacement options are granted.
The Stock Option Agreement evidencing the replacement options may, in the
discretion of the Committee, contain the same terms and conditions, including,
without limitation, the same vesting schedule as the agreement evidencing the
original award.
(b) Repricing of Options. The Committee may, in its discretion,
amend the terms of any Stock Option Agreement, with the consent of the affected
participant, to provide that the option price of the shares remaining subject to
the original award shall be reestablished at a price not less than 100% of the
fair market value of the common stock of Presidential on the effective date of
the amendment. No modification of any other term or provision of any Stock
Option Agreement which is amended in accordance with the foregoing shall be
required, although the Committee may, in its discretion, make such further
modifications of any such Stock Option Agreement as are not inconsistent with or
prohibited by the Plan.
