<PAGE> 1
As filed with the Securities and Exchange Commission on February 19, 1997
Registration No. 333-14271
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Visitors Services International Corp.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2773602
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
100 Second Avenue South, Suite 1000, St. Petersburg, Florida 33701
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Employee Benefit and Consulting Services Compensation Plan
- -------------------------------------------------------------------------------
(Full title of the plan)
Robert P. Gordon, 100 Second Avenue South, Suite 1000,
St. Petersburg, Florida 33701
- -------------------------------------------------------------------------------
(Name and address of agent for service)
(813) 895-4410
- -------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed maxim
Title of securities Amount to be offering price aggregate offering Amount of
to be registered registered per share price registration fee
<S> <C> <C> <C> <C>
</TABLE>
Not Applicable
The Exhibit Index begins on page 18 of the sequentially numbered copy
of this Registration Statement that has 30 total pages.
<PAGE> 2
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated into this post-effective
amendment by reference and made a part hereof:
(i) Contents of the Company's Initial Registration Statement
on Form S-8, SEC File No. 333-14271, filed with the Securities and
Exchange Commission on October 16, 1996; (ii) the Company's Annual
Report on Form 10-KSB for the fiscal year ended September 30,
1996, and the consolidated financial statements and schedules of the
Company included therein, audited by Schumacher & Associates, Inc.,
Certified Public Accountants, as set forth in their report with
respect thereto; and (iii) the Company's Quarterly Report on Form
10-QSB for the quarter ended December 31, 1996.
All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this post-effective amendment and prior to the filing of any other post-
effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated in this post-effective amendment by reference and to
be a part hereof from the date of filing of such documents.
Any statement contained in the Initial Registration Statement, in a
supplement to the Initial Registration Statement or in a document incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of the Initial Registration Statement and this post-effective amendment to the
extent that a statement contained herein or in any subsequently filed
supplement to the Initial Registration Statement or in any document that is
subsequently incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of the Initial Registration
Statement and this post-effective amendment.
EXHIBITS
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Reorganization between
Dynasty Capital Corporation and Visitors Services,
Inc., dated September 26, 1996. (2)
4.1 The Company's Articles of Incorporation and Bylaws
define the rights of holders of the equity
securities being registered. (3)
5.1 Opinion of Counsel, Futro & Associates, P.C. (not
required with respect to reoffered securities).
10.1 Visitors Services International Corp. Employee
Benefit and Consulting Services Compensation Plan,
effective October 3, 1996.(1)
23.2 Consent of Counsel, Futro & Associates, P.C. (1)
23.3 Consent of Schumacher & Associates, Inc.,
Certified Public Accountants. (1)
23.4 Consent of Joseph F. Morgan, Certified Public
Accountant. (1)
- --------------------------
(1) Filed herewith.
(2) Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K
filed on September 30, 1996.
(3) Incorporated by reference to Exhibits 3, 3.1 and 3.2 to the Company's
Form 8-K dated and filed on October 15, 1996, and Exhibit 3.3 to Form
8-K dated October 17, 1996 and filed on October 23, 1996.
(ii)
<PAGE> 3
REOFFER PROSPECTUS PREPARED IN ACCORDANCE WITH THE
REQUIREMENTS OF PART I OF FORM S-3
(BEGINS NEXT PAGE)
<PAGE> 4
VISITORS SERVICES INTERNATIONAL CORP.
UP TO 2,490,000 SHARES
COMMON STOCK, $.0001 PAR VALUE
All of the shares of Common Stock offered hereby are being sold by the
Selling Security Holders, each of whom are deemed to be affiliates of
the Company. The shares of Common Stock being registered hereunder
for reoffer and resale are defined as control securities and may be
reoffered and resold on a continuous or delayed basis in the future.
See "Selling Security Holders." The Company will not receive any of
the proceeds from the sale of shares by the Selling Security Holders.
The Company is required to file reports pursuant to Section 15(d) of
the Securities Exchange Act of 1934. The Company's Common Stock is
traded on the Electronic Bulletin Board of the National Association of
Securities Dealers, Inc. under the trading symbol "VSIC." On February
18, 1997, the closing bid and asked price was $2.50 and $3.375 per
share.
See "Risk Factors" for a discussion of certain factors that should be
considered by prospective purchasers of the securities offered
hereby.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 18, 1997.
1
<PAGE> 5
AVAILABLE INFORMATION AND CERTAIN DEFINITIONS
The Company is a reporting company subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and,
in accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
and information statements and other information filed by the Company can be
inspected and copied at the public reference facilities, maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
materials can be obtained from the Public Reference Section of the Commission
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
The Company has filed with the Securities and Exchange Commission, 450
5th Street, N.W., Washington, D.C. 20549, a registration statement on Form
S-8, Registration No. 333-14271 (herein, together with all amendments and
exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended, regarding the shares of the Company offered. This
Prospectus, filed as part of the Registration Statement, omits certain
information regarding the Company and the securities offered. Reference is
made to the Registration Statement and the Exhibits filed therewith, which may
be obtained from the principal office of the Securities and Exchange Commission
at 450 Fifth Street N.W., Judiciary Plaza, Washington, D.C. 20549 upon request
and payment of the prescribed fee.
All references herein to the "Company" include Visitors Services
International Corp. and its subsidiaries, Visitors Services, Inc. and American
International Travel Agency, Inc.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in
the opinion of the Securities and Exchange 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 small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
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 small business issuer will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will governed by
the final adjudication of such issue.
2
<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated into this prospectus by
reference and made a part hereof:
(i) Contents of the Company's Initial Registration Statement
on Form S-8, SEC File No. 333- 14271, filed with the Securities and
Exchange Commission on October 16, 1996; (ii) the Company's Annual
Report on Form 10-KSB for the fiscal year ended September 30, 1996,
and the consolidated financial statements and schedules of the Company
included therein, audited by Schumacher & Associates, Inc., Certified
Public Accountants, as set forth in their report with respect thereto;
and (iv) the Company's Quarterly Report on Form 10-QSB for the quarter
ended December 31, 1996.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering shall be deemed
to be incorporate by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained herein or
in a document incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the documents
incorporated by reference herein (other than exhibits and schedules to such
documents, unless such exhibits or schedules are specifically incorporated by
reference in such documents). Requests should be directed to Visitors Services
International Corp., Shareholder Relations Department, 100 Second Avenue South,
Suite 1000, St. Petersburg, Florida 33701, and at (813) 895-4410.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
AVAILABLE INFORMATION AND CERTAIN DEFINITIONS . . . . . . . . . 2
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . 3
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . 4
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SELLING SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . 11
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . 12
INTERESTS OF NAMED EXPERTS AND COUNSEL . . . . . . . . . . . . . 12
</TABLE>
3
<PAGE> 7
PROSPECTUS SUMMARY
The following summary information should be read in conjunction with,
and is qualified in its entirety by, the detailed information and financial
statements and related notes thereto appearing either elsewhere in this
Prospectus or included in the Annual Report on Form 10-KSB and subsequent
Quarterly Reports on Form 10-QSB, which are incorporated herein by reference.
Unless otherwise indicated, all references in this Prospectus to the "Company"
refer to Visitors Services International Corp. and its subsidiaries, Visitors
Services, Inc. and American International Travel Agency, Inc.
THE COMPANY
History of the Company
Visitors Services International Corp., formerly Dynasty Capital
Corporation (the "Registrant", the "Company" or "VSIC") was a development stage
enterprise formed under the laws of the State of Florida to evaluate, structure
and complete a business combination in the form of a merger with, or
acquisition of, prospects consisting of private companies, partnerships or sole
proprietorships. The Registrant had no business operations and no intention of
engaging in an active business prior to a business combination with another
enterprise.
The Registrant's past activities were limited to organizational
matters and the Registrant entered into letters of intent with two private
business entities, neither of which resulted in the completion of a business
combination. The Registrant sold 2,500,000 shares of $.0001 par value Common
Stock ("Common Stock") at $.02 per share, for total proceeds of $50,000 in a
public offering which closed on June 8, 1987. The Company was formed for the
purpose of seeking potential business opportunities in the form of the
acquisition of an existing business that has profit potential.
Acquisition of Visitors Services, Inc.
On September 26, 1996, Registrant executed an Agreement and Plan of
Reorganization ("Agreement") with Visitors Services, Inc. ("VSI"), and certain
Stockholders of VSI, pursuant to which a minimum of 80% of the issued and
outstanding shares of VSI were to be exchanged on a one share for one share
basis for shares of restricted stock of the Registrant, after the Registrant
effect a 14.4 to 1 reverse stock split of the shares outstanding before the
date of the Agreement from 10,801,000 shares down to 750,093 shares (in lieu of
any fractional shares created as a result of the reverse stock split, each
holder of a fractional share was issued one additional whole share). The
Closing Date of the Agreement was September 27, 1996, when the Registrant's
reverse stock split was effected and certain Stockholders of VSI holding at
least 80% of the outstanding shares of VSI executed the Agreement. The
"Exchange Offer" has been extended to the remaining shareholders of VSI, who
have, as extended, until January 20, 1997, to accept the offer. The offering
is being made in accordance with Rule 506 of Regulation D of the Securities Act
of 1933, as amended, or such other appropriate and available exemption(s). By
virtue of the reorganization, VSI becomes a subsidiary of the Registrant.
Pursuant to the Agreement and Plan of Reorganization, on the Closing
Date the Registrant's Officers and Directors resigned and designees of VSI were
appointed to the vacated positions. Earnest Mathis resigned as President,
Treasurer and a Director; and Gary J. McAdam resigned as Vice President,
Secretary and a Director. Robert P. Gordon, Paul W. Henry and Steve McLean
were appointed Officers and Directors. Mr. Gordon, by virtue of the
transaction, became a controlling shareholder of the Registrant.
Acquisition of American International Travel Agency, Inc.
On December 6, 1996, VSI entered into a Stock Purchase Agreement (the
"SPA") with Phoenix Information Systems Corp. ("Phoenix") to acquire all the
capital stock of American International Travel Agency, Inc. ("American") from
Phoenix in exchange for 31,579 shares of Common Stock of Phoenix owned by VSI.
This transaction was closed on December 6, 1996, subject to certain rescission
rights described below. The consideration paid was based upon arms-length
negotiations between VSI and Phoenix and a fair market evaluation. Management
4
<PAGE> 8
believes entering into this SPA will provide the following benefits to VSI:
(i) access to the major travel agency computerized reservation systems
world-wide, and (ii) the ability to issue airline tickets.
The assets of American both before and after the signed SPA will
continue to be used as a retail travel agency located in Clearwater, Florida.
American was incorporated in 1977 in the State of Florida to provide
retail leisure travel services. Since that time and have expanded the customer
base to include commercial travel services. American represents all airlines,
tour operators and cruise and rail lines on a commission basis.
During the three fiscal years ending June 30, 1994, March 31, 1995 and
March 31, 1996, American had total revenues of $314,573, $142,753 and $405,662,
respectively and net loss of $7,886 in 1994, net loss of $71,972 in 1995, and
net income of $31,076 in 1996.
The SPA states that the transaction is conditioned upon the subsequent
consent of the Airlines Reporting Corporation ("ARC"). VSI and Phoenix have
agreed that if the ARC does not consent to the change in ownership contemplated
in the SPA, the SPA will unwind and terminate as if the transaction was never
entered into by either party.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The Company's Articles of Incorporation and Bylaws define the rights
of holders of the Common Stock being registered, which are included in Exhibits
3, 3.1, 3.2 and to the Company's Form 8-K dated and filed on October 15, 1996,
and Exhibit 3.3 to Form 8-K dated October 17, 1996 and filed on October 23,
1996. The securities to be registered hereunder for reoffer and resale by the
Selling Security Holders are of the same class. The Selling Security Holders
have or will acquire the shares of Common Stock pursuant to Registrant's
employee's and consultant's benefit plan, entitled "Employee Benefit and
Consulting Services Compensation Plan," as may be amended from time to time
(the "Plan"). The shares to be issued pursuant to the Plan and the shares
underlying any grant of option thereunder have been registered with the
Securities and Exchange Commission under its initial registration statement on
Form S-8, SEC File No. 333-14271, of which this prospectus is a part.
<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
Common Stock offered by the Selling Security Holders 2,490,000
Shares of Common Stock Outstanding
Before the Offering 21,668,330
After the Offering 24,158,330
Use of Proceeds The Company will not receive any proceeds from the
sale of shares by the Selling Security Holders
Electronic Bulletin Board Symbol VSIC
</TABLE>
5
<PAGE> 9
RISK FACTORS
The Company's securities involves a high degree of risk, including,
but not limited to, the factors described below. An investment in the
Company's securities should be made only by persons who can afford a loss of
their entire investment. Investors should consider carefully the following
risk factors inherent in and affecting the business of the Company.
1. New Business - No Assurance of Profitability. The Company and
its subsidiary, Visitors Services, Inc. ("VSI") have limited operating
histories in the business of providing automated reservations and information
services specifically designed to support the special needs of one or more
"Convention & Visitors Bureaus" ("CVB's"). Potential investors should be aware
of the difficulties encountered by a new enterprise, especially in view of the
intense competition from existing and more established businesses which are
also seeking to create profitable business opportunities. Since the business
of the Company is new, there is little upon which to base an assumption that
the Company's plans will either materialize or prove successful, and,
accordingly, there can be no assurance of whether or when operations will
become profitable.
2. Limited Working Capital; Financial Instability. For the
fiscal years ended September 30, 1996, and 1995, the Company sustained a net
loss of approximately $3,859,117 and $1,301,293, respectively. These losses
may continue for a presently undetermined time. As of September 30, 1996, the
Company had stockholders' equity (deficit) of $(184,079), losses that have
accumulated through September 30, 1996 of $5,861,742 and working capital
(deficit) of $(1,406,262).
Various factors affecting the Company's operations may raise
substantial doubt as to the Company's ability to continue as a going concern.
There can be no assurance that the Company will be able to continue as a going
concern or achieve sustainable revenues or profitable operations.
3. Additional Funding Required - Need for Subsequent Private
Placements. The Company's business will require substantial investment on a
continuing basis to finance capital expenditures and related expenses in
pursuit of its business plan. Furthermore, there is no assurance that the
Company will be able to generate additional capital on a timely basis and on
satisfactory terms and conditions to meet its future financing needs or to
expand into additional markets. In connection with the further development of
the Company's business, the Company anticipates that it will need to raise
additional funds through subsequent private placements which will be exempt
from registration. Any such additional private placements will not require
prior shareholder approval, and may be equity offerings of common stock or
preferred stock convertible into common stock, or debt offerings of notes or
debentures convertible into common stock. Any subsequent private placement of
equity securities (i.e., stock) or debt securities convertible into common
stock would have the effect of immediately diluting the interest of the then
existing shareholders of the Company. Furthermore, the Company may also grant
registration rights to investors in subsequent private placements, if any.
4. Dependence Upon CVB's Under Contract. No assurances can be
given that the Company and the CVB's under contract will each fulfill its
commitments under the Reservation and Services Agreements and, if not
fulfilled, such failure may be expected to have a material adverse effect on
the Company's operations. No assurances can be given that the Company will be
successful in obtaining contracts with other CVB's and/or similar tourist
development organizations, or that its operations will be profitable.
Once a contract with a CVB (or similar tourist development
organization) is obtained, the Company then will attempt to sign up the
attractions and events as well as the hotels, inns, condominiums and apartments
within the area covered by the CVB to participate in the reservation system,
and further to obtain a sufficient inventory of rooms to meet the needs of
prospective visitors who call the 800 number in search of accommodations. While
the Company will attempt to obtain sufficient inventories of rooms in the
larger CVB's, the Company can offer no assurance that new CVB's will be able to
provide sufficient inventories to enable VSI to operate profitably.
The Company is heavily dependent on CVB advertising of its 800
reservations and information number. Without an adequate advertising budget
and an effective advertising campaign, there will not be enough calls to the
6
<PAGE> 10
800 number to cover both the cost of the incoming telephone calls and the
overhead required to operate the VSI centralized service center.
The Company's objective is not to book all (or even most of) the
available hotel or other rooms in the area served by the CVB, but rather to act
as a centralized reservations service for excess room inventory that might not
otherwise be booked. For the Company to succeed, it must book a sufficient
number of these rooms to cover its cost of operations. No assurances can be
given that the Company's operations will be profitable and that the Company
will be able to successfully compete in its operations.
5. Risks of Business Acquisitions. Should the Company choose to
develop or expand its business through one or more business acquisitions, any
such acquisitions would be expected to be made generally in development stage
operations. Such businesses may have little or no operating history, may be at
an early stage of business development, may have a history of operating losses
(or show substantial variations in operating results from period to period) or
may otherwise be experiencing operating, managerial or financial difficulties.
Although such investments may offer the opportunity for significant gains, such
investments involve a significantly higher degree of business and financial
risk than established businesses and could result in substantial losses.
Development stage businesses may require infusions of capital or intensive
management oversight beyond the financial and/or managerial resources of the
Company to support expansion, achieve or maintain a competitive position or
otherwise attain a stage of maturity at which the Company could consider their
profitable disposition. As a result, the Company might experience a prolonged
period of operating losses with respect to certain businesses or be forced to
dispose of such businesses at a loss. Alternatively, the Company might have to
divert funds or managerial resources which would otherwise be devoted to
successful operations to mitigate losses in unprofitable ventures. The timing
and the availability of such resources might be critical to the survival of
such enterprises and any delay could substantially increase the potential for
loss. In addition, such businesses may face intense competition, including
competition from companies with greater financial and other resources.
Additionally, acquisitions involve a number of special risks, including the
diversion of the Management's attention, assimilation of the operations and
personnel of the acquired companies, operating in new geographic markets, loss
of key employees, the difficulty of presenting a unified image, assimilation of
the operations and/or companies of acquired companies that take longer than
initially anticipated, failure to realize certain economies of scale that might
otherwise have been anticipated or achieved, difficulty in consolidating
operating facilities, interruption of business and revenues and possible
significant expenses incurred resulting from the acquisition, all of which may
adversely affect financial results. There can be no assurance that these same
problems will not confront the Company in connection with any future
acquisitions or expansion undertaken by it.
6. Dependence Upon Software License and Software Maintenance
Agreement with Phoenix Information Systems Corp. ("Phoenix"). Pursuant to a
Software License and Software Maintenance Agreement between Phoenix and VSI
(the "Software Licensing Agreement"), VSI has obtained licensing rights from
Phoenix, an affiliated entity controlled by Robert P. Gordon, Chairman of VSIC,
to use Phoenix's recently developed hotel reservation system to support the
automated information and reservations needs of the CVB's under contract.
VSI is dependent upon the Software Licensing Agreement for its
operations. In the event Phoenix would be unable to fulfill its obligations
under such agreement, which obligations include without limitation, certain
maintenance requirements, VSI's operations would likely be materially adversely
affected. Similarly, in the event VSI would be unable to fulfill its
obligations under such agreement, this may lead to the termination of the
Software Licensing Agreement and would likely materially adversely affect VSI's
operations.
7. Technological Obsolescence. The computer software field is
characterized by rapid technological developments and advances, particularly in
the travel industry. Although the Company believes that its hotel reservation
system is expected to be technically and economically competitive and it is
anticipated that it will not become obsolete for the foreseeable future, it is
possible that intervening development of new technology and/or new systems
could render all or part of the Company's Phoenix-Hotel System virtually
obsolete at any time.
8. Conflicts of Interest. Robert P. Gordon and Paul W. Henry are
full-time employees, executive officers and/or directors of Phoenix and its
subsidiaries. In addition, Robert P. Gordon is the owner of Harvest
7
<PAGE> 11
International of America, Inc. Robert P. Gordon has represented to Phoenix and
its shareholders that he will not directly or indirectly enter into other
travel business activities in competition with Phoenix unless first presenting
the corporate opportunity to Phoenix to avoid possible conflicts of interest.
In June 1993, Mr. Gordon presented Phoenix's then disinterested Board of
Directors consisting of Robert Baranek and Paul Henry the opportunity for
Phoenix to acquire VSI and such proposal was rejected by such disinterested
directors. Possible conflicts of interest may arise in the future in
connection with the performance of the duties of the Company's officers and/or
directors. Such potential conflicts of interest may include, among other
things, time, effort and corporate opportunity. As no policy has been
established by the Company for the resolution of any such conflicts, the
Company may be adversely affected should such persons choose to place their
other business interests before that of the Company.
9. Non-Exclusivity of Officers and Directors. Several of the
Company's Officers and Directors are engaged in other activities and endeavors,
and thus devote less than full time to the Company's activities. Furthermore,
the Officers and Directors reserve the right to engage in other activities that
may compete with the Company, including investing in or serving as officers or
directors of other entities having similar objectives. Because the Directors
may engage in operations independent of the Company, their activities may
conflict with those of the Company. In dealing with any potential conflicts
which may arise as a result of their outside activities, the Officers and
Directors will attempt to conduct themselves in accordance with their fiduciary
obligations to the Company.
10. Competition. Companies with greater financial resources and
experience could acquire or develop the necessary reservations software and
then obtain contracts with one or more CVB's and enter into competition with
the Company. Furthermore, the Company faces competition from those that are
now booking accommodations, including, but not limited to: the hotels, inns,
and condominium and apartment owners themselves and their appointed sales
agents; as well as travel agents and tour operators who book accommodations
directly and not through the CVB's 800 number. In fact, the Company's
objective is not to book all (or even most of) the available hotel or other
rooms in the area served by the CVB, but rather to act as a centralized
reservations service for excess room inventory that might not otherwise be
booked. For the Company to succeed, it must book a sufficient number of these
rooms to cover its cost of operations. No assurances can be given that the
Company's operations will be profitable and that the Company will be able to
successfully compete in its operations.
11. Control by Officers, Directors and Principal Stockholders. The
Company's current officers and directors beneficially own a majority of the
outstanding Common Stock. Since the Company's Certificate of Incorporation
does not provide for cumulative voting, the holders of more than 50% of the
outstanding shares can elect all of the directors if they choose to do so, in
which event the holders of the remaining shares cannot elect any directors.
Accordingly, these persons, individually and as a group, will be able to
effectively control the Company and direct its affairs and business, including
any determination with respect to the acquisition or disposition of assets by
the Company, future issuances of Common Stock or other securities by the
Company, declaration of dividends on the Common Stock, and the election of
directors. Such concentration of ownership may also have the effect of
delaying, deferring, or preventing a change in control of the Company.
12. Copyrights and Trademarks. Phoenix applied for federal
registration of the trademark "Phoenix-Hotel", which is the hotel reservation
system licensed to VSI with the United States Patent and Trademark office.
Although such trademark has been granted, no assurances can be given that such
trademark for Phoenix-Hotel will enhance VSI's rights to use such trademark and
stop others from infringing upon such trademark.
Phoenix does have registered copyright protection for its hotel
software programs. However, copyright protection affords only limited
practical protection against duplication of the media embodying the programs.
Although such copyright has been granted by the United States Copyright Office,
no assurances can be given that such copyright will afford Phoenix or VSI as
licensee any practical protection.
13. Indemnification and Limitation of Directors' Liability. The
Company's By-Laws provide that the Company shall indemnify in the manner and to
the extent permitted by law, any person (or that person's testator or intestate
successor) made or threatened to be made a party to any action or proceeding,
whether domestic or foreign, civil or criminal, judicial or administrative, or
federal or state, by reason of the fact that the person was a director or
8
<PAGE> 12
officer of the Corporation or served any other corporation in any capacity at
the request of the Corporation, in the manner and to the extent permitted by
law. Further, the Company has entered into an agreement with three of its
executive officers and may enter into agreements with its other officers and
directors to indemnify and hold such persons harmless, to the maximum extent
permitted by law, if it all, in the event any claims or legal actions are
brought against such person arising out of his acts or decisions done or made
in the authorized scope of such person's employment or position with the
Company.
The Company currently does not have officer and director liability
insurance and no assurances can be given that such insurance will be obtained
by the Company due to the expensive cost of such coverage or, if applied for,
that the Company will qualify for such insurance.
The General Corporation Law of Florida eliminates the personal
liability of its directors to the corporation or its stockholders for monetary
damages for breach of fiduciary duty of loyalty and care as a director, unless:
(a) the director breached or failed to perform his duties as a director; and
(b) the directors breach of, or failure to perform, those duties constitutes:
(i) a violation of the criminal law, unless the director had reasonable cause
to believe his conduct was lawful or had no reasonable cause to believe his
conduct was unlawful; (ii) a transaction from which the director derived an
improper person benefit, either directly or indirectly; (iii) a circumstance
under which a director votes for or assents to an unlawful distribution; (iv)
in a proceeding by or in the right of the corporation to procure a judgment in
its favor or in the right of a shareholder, conscious disregard for the best
interests of the Company, or willful misconduct; or (v) in a proceeding by or
in the right of someone other than the Company or a shareholder with,
recklessness or an act of omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety or property.
The Company has been advised that it is the position of the Securities
and Exchange Commission that insofar as the foregoing provisions may be invoked
to disclaim liability for damages arising under the Securities Laws, that such
provisions are against public policy as expressed in the Securities Laws and
are therefore unenforceable.
14. Preferred Stock. The Company's Articles of Incorporation
authorize 10,000,000 shares of Preferred Stock, $.001 par value. None are
issued to date. The Preferred Stock may be issued in a series from time to
time with such designation, rights, preferences and limitations as the Board of
Directors of the Company may determine by resolution. In addition, such
Preferred Stock could have other rights, including voting and economic rights
senior to the Common Stock so that the issuance of such stock could adversely
affect the market value of the Common Stock. The creation of one or more
series of Preferred Stock also may have the effect of delaying, deferring or
preventing a change in control of the Company without any action by
shareholders.
15. Limited Public Market. Management believes there has been
only limited trading in the Company's Common Stock. There is no assurance that
the Common shares will continue to be listed or that any liquidity exists for
the Company's shareholders.
16. No Dividends on Common Stock and None Anticipated. The
payment by the Company of cash dividends, if any, in the future rests within
the discretion of its Board of Directors and will depend, among other things,
upon the Company's earnings, its capital requirements and its financial
condition, as well as other relevant factors. The Company has not paid or
declared any cash dividends upon its Common Stock since its inception and by
reason of its present financial status and its contemplated future financial
requirements does not contemplate or anticipate making any cash distributions
upon its Common Stock in the foreseeable future.
17. Future Issuances of Common Stock Pursuant to Non-Statutory
Stock Option Plan. The Company has reserved for issuance up to 7,945,000
shares of the Company's Common Stock, to be issued to officers, directors,
employees and consultants pursuant to a non-statutory stock option plans. The
issuance of such shares will have the effect of diluting the percentage
ownership of the then existing shareholders.
18. Future Sales of Common Stock by Management and Others. Future
sales of Common Stock by management and others may be made pursuant to and in
compliance with the provisions of Rule 144 of the 1933
9
<PAGE> 13
Act. In general, under Rule 144, a person who has satisfied a two-year holding
period may, under certain circumstances, sell within any three-month period a
number of shares which does not exceed the greater of one percent of the then
outstanding shares of Common Stock or the average weekly trading volume in
shares during the four calendar weeks immediately prior to such sale. Rule 144
also permits under certain circumstances, the sale of shares without any
quantity or other limitation by a person who is not an affiliate of the Company
and who has satisfied a three-year holding period. Future sales of such shares
made under Rule 144 may have an adverse effect on the then prevailing market
price, if any, of the Common Stock and adversely affect the Company's ability
to obtain future financing in the capital markets as well as create a potential
market overhang.
19. Business Risks in General. The principal risk associated with
an investment in the Company as with an investment in any business, is the
possible inability of the Company to generate revenues which are sufficient to
pay its operating expenses and debt service, and of the remaining portion, if
any, of such revenues, together with proceeds from the sale, if any, of Company
operations, to provide an acceptable rate of return to investors. The Company
will derive a large portion of its revenues from customer payments. Therefore,
investments in the Company, are affected by the state of the economy and
business conditions in general. Among the factors which can affect the
Company's business are (i) general economic conditions, including recession,
inflation, fluctuations in general or local business conditions and unstable or
adverse credit markets; (ii) increases in operating expenses, including
expenses related to the construction, operation and maintenance of capital
systems and programming, as well as the cost of marketing the services of the
Company; (iii) changes in governmental regulation affecting the Company,
including increased taxation and increased regulation which could increase
operating costs and reduce revenues of the Company; (iv) work stoppages or
other labor difficulties; and (v) property and casualty losses which insurance
does not adequately cover.
10
<PAGE> 14
SELLING SECURITY HOLDERS
The following table sets forth all persons eligible to resell and the
amounts of securities available to be resold, if known at the date of this
Prospectus, whether or not they have a present intent to do so. Reoffer and
resales of the following securities may be made on a continuous or delayed
basis in the future. The shares of Common Stock being registered hereunder for
reoffer and resale are defined as control securities and have been or will be
acquired by the Selling Security Holders, each of whom are deemed to be
affiliates of the Company, pursuant to the Registrant's Consulting and Services
Compensation Agreement.
<TABLE>
<CAPTION>
Relationship with Number of Shares Number of Shares Percentage of Shares
Name and address of Registrant within beneficially owned which may be offered beneficially owned
Selling Stockholder past three years before the offering for resale after offering
- ------------------- ---------------- ------------------- ---------- --------------
<S> <C> <C> <C> <C>
Robert P. Gordon (1) 11,496,042 (2) 2,220,000 (2) 47.6
Suite 1000
100 Second Ave. South
St. Petersburg, FL 33701
Stephen G. McLean (3) 33,333 (4) 225,000 (4) 1.0
Suite 1000
100 Second Ave. South
St. Petersburg, FL 33701
Paul W. Henry (5) 35,000 (6) 45,000 (6) *
Suite 1000
100 Second Ave. South
St. Petersburg, FL 33701
</TABLE>
__________________________
* Indicates less than 1%.
(1) Mr. Gordon is Chairman and a Director and has been affiliated with the
Registrant since September 26, 1996. Mr. Gordon also founded the
Registrant's subsidiary, Visitors Services, Inc., in 1992. As founder
and chairman of Phoenix Information Systems Corporation, a firm that
invested ten years and several million dollars to develop an airline
and hotel reservation system for international markets, Mr. Gordon
recognized that Phoenix's sophisticated automated destination system
software could be programmed to exceed the specifications of any
domestic or international hospitality and tourism marketing program.
Mr. Gordon's extensive tourism background encompasses chairman and
director positions within major international corporations, including
Harvest International of America, Inc., a company engaged in global
tourism and trade development in Southeast Asia. Mr. Gordon has a BA
in Philosophy and Biology from New York University, where he also did
his graduate studies.
(2) Mr. Gordon individually owns 9,675,425 shares of the Registrant's
common stock, Elizabeth K. Gordon, his wife, individually owns
1,409,857, and they jointly own 698,750 shares. Also included are
362,010 shares owned by Harvest International of America, Inc., which
is controlled by Robert P. Gordon. Additionally, on October 4, 1996,
Mr. Gordon was granted a total of 2,220,000 options to purchase common
stock under the Registrant's Employee Benefit and Consulting Services
Compensation Plan. The options are exercisable until October 3, 1999.
The shares underlying the options are being registered hereunder for
possible reoffer and resale, which may be made on a continuing or
delayed basis in the future. At the date of this prospectus, Mr.
Gordon has not exercised any of those options.
(3) Mr. McLean is Chief Executive Officer and a Director and has been
affiliated with the Registrant since September 26, 1996. Mr. McLean
joined the Registrant's subsidiary, Visitors Services, Inc., in early
1996 as Chief Executive Officer. Previously, he was Corporate Vice
President-Worldwide Marketing for Indigo NV,
11
<PAGE> 15
an innovative, high-technology printing and marketing communications
company. At Indigo, Mr. McLean was responsible for the domestic and
foreign marketing strategy of one of the fastest growing publicly
traded companies in the United States. Mr. McLean was also
instrumental in formulating the successful launch strategy for the
E-Print 1000, the world's first digital offset printing press. Prior
to joining Indigo, Mr. McLean held various executive positions at
Scitex America Corporation, including Vice President-Strategic
Planning, Vice President-Marketing and Vice President-National
Division. Under Mr. McLean's direction, Scitex's National Division
grew from start-up to $80 million in revenues in two years through
developing previously unpenetrated markets in the printing and
publishing industry. Mr. McLean holds B.S. and J.D. degrees from
Suffolk University in Boston as well as an MBA from Northeastern
University.
(4) Mr. McLean individually owns 33,333 shares of the Registrant's common
stock. On October 4, 1996, Mr. McLean was granted 225,000 options to
purchase the Registrant's common stock under the Registrant's Employee
Benefit and Consulting Services Compensation Plan. The options are
exercisable until October 3, 1999. The shares underlying the options
are being registered hereunder for possible reoffer and resale, which
may be made on a continuing or delayed basis in the future. At the
date of this prospectus, Mr. McLean has not exercised any of those
options.
(5) Mr. Henry is Secretary, Treasurer and a Director and has been
affiliated with the Registrant since September 26, 1996. Mr. Henry
joined the Registrant's subsidiary, Visitors Services, Inc., as a
Director on March 1, 1996. Mr. Henry has been Secretary and a
Director of Phoenix Information Systems Corp. and Phoenix Systems
Group, Inc. since April 1992. During the past ten years, Mr. Henry
has been an independent financial consultant. From 1991 to 1992, he
was retained by Essex Investment Management Company, an institutional
money management firm. From 1988 to 1991, Mr. Henry was retained by
the Caithness Corporation, a natural resources development company.
From 1988 to 1989 he was an advisor to Veronex Resources, an
international oil and gas exploration company. From 1987 to 1989, Mr.
Henry served as a consultant to Harvest International of America, Inc.
(6) Mr. Henry individually owns 35,000 shares of the Registrant's common
stock. On October 4, 1996, Mr. Henry was granted 45,000 options to
purchase the Registrant's common stock under the Registrant's Employee
Benefit and Consulting Services Compensation Plan. The options are
exercisable until October 3, 1999. The shares underlying the options
are being registered hereunder for possible reoffer and resale, which
may be made on a continuing or delayed basis in the future. At the
date of this prospectus, Mr. Henry has not exercised any of those
options.
PLAN OF DISTRIBUTION
All of the shares of Common Stock offered hereby are being sold or
will be sold by the Selling Security Holders and may be offered through the
selling efforts of brokers or dealers unknown to the Registrant. Each of the
Selling Security Holders are deemed affiliates of the Company and are thereby
subject to the volume limitations imposed on affiliates and control securities
by Rule 144 of the Securities Act of 1933, as amended, and may further be
subject to internal restrictions or volume limitations on resale imposed on
them by the Board of Directors of the Registrant.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The law firm of Futro & Associates, P.C. (the "Firm"), has acted as
special securities counsel to the Registrant and certain of the Selling
Security Holders, and has given its opinion as to the validity of the original
issuance of the securities registered with the Initial Registration Statement
hereunder, filed with the Securities and Exchange Commission on October 16,
1996, which opinion appears at Exhibit 5.1 thereto. The Firm, or certain of
its employees, was granted stock options under the Visitors Services
International Corp. Employee Benefit and Consulting Services Compensation Plan,
effective as of October 3, 1996, and, upon exercise received shares of Common
Stock of the Registrant in lieu of payment for past legal services. The shares
underlying the grant of option issuable thereto were registered with the
Registrant's Initial Registration Statement hereunder. In addition, the Firm
was granted stock options under the Registrant's subsidiary, Visitors Services,
Inc., Employee Benefit and
12
<PAGE> 16
Consulting Services Compensation Plan, adopted and assumed by the Registrant on
November 18, 1996. The shares underlying such grant of option may, in the
future, be registered with the Securities and Exchange Commission pursuant to a
Registration Statement on Form S-8. As of the date of this Prospectus, the
Firm has not exercised any of those options. The Firm, or certain of its
employees, may, in the future, receive shares of Common Stock in lieu of
payment for legal services. The Firm, or certain of its employees, would
therefor be deemed to have a "substantial interest" in excess of $50,000 in the
Registrant as of the date of the opinion through the date of effectiveness of
the registration statement within the meaning of Rule 509 of Regulation S-K of
the Securities Act of 1933, as amended.
____________________________
NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OFFERED BY
THIS PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
SHARES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
13
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of St. Petersburg, State of Florida, on February
17, 1997.
VISITORS SERVICES INTERNATIONAL CORP.
By: /s/ Robert P. Gordon
------------------------------------------------------
Robert P. Gordon, Chairman, Chief Financial and
Accounting Officer, Director
Date: February 17, 1997
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 date indicated.
By: /s/ Robert P. Gordon
---------------------------------------------------------
Robert P. Gordon, Chairman, Chief Financial and
Accounting Officer, Director
Date: February 17, 1997
By: /s/ Stephen G. McLean
---------------------------------------------------------
Stephen G. McLean, Chief Executive Officer, Director
Date: February 17, 1997
By: /s/ Paul W. Henry
---------------------------------------------------------
Paul W. Henry, Secretary, Treasurer, Director
Date: February 17, 1997
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.1 Agreement and Plan of Reorganization between
Dynasty Capital Corporation and Visitors Services,
Inc., dated September 26, 1996. (2)
4.1 The Company's Articles of Incorporation and Bylaws
define the rights of holders of the equity
securities being registered. (3)
5.1 Opinion of Counsel, Futro & Associates, P.C. (not
required with respect to reoffered securities).
10.1 Visitors Services International Corp. Employee
Benefit and Consulting Services Compensation
Plan, effective October 3, 1996. (1)
23.2 Consent of Counsel, Futro & Associates, P.C. (1)
23.3 Consent of Schumacher & Associates, Inc.,
Certified Public Accountants. (1)
23.4 Consent of Joseph F. Morgan, Certified Public
Accountant. (1)
</TABLE>
__________________________
(1) Filed herewith.
(2) Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K
filed on September 30, 1996.
(3) Incorporated by reference to Exhibits 3, 3.1, 3.2 and to the Company's
Form 8-K dated and filed on October 15, 1996, and Exhibit 3.3 to Form
8-K dated October 17, 1996 and filed on October 23, 1996.
<PAGE> 1
VISITORS SERVICES INTERNATIONAL CORP.
EMPLOYEE BENEFIT AND CONSULTING SERVICES
COMPENSATION PLAN
SECTION 1. INTRODUCTION
1.1 Establishment. Effective as provided in Section 17, Visitors
Services International Corp., a Florida corporation (the "Company"), hereby
establishes a plan of long-term stock-based compensation incentives for
selected Eligible Participants of the Company and its affiliated corporations.
The plan shall be known as the Employee Benefit and Consulting Services
Compensation Plan (the "Plan").
1.2 Purpose. The purpose of the Plan is to promote the best
interest of the Company, and its stockholders by providing a means of non-cash
remuneration to selected Eligible Participants who contribute most to the
operating progress and earning power of the Company.
SECTION 2. DEFINITIONS
The following definitions shall be applicable to the terms used in the
Plan:
2.1 "Affiliated Corporation" means any corporation that is either
a parent corporation with respect to the Company or a subsidiary corporation
with respect to the Company (within the meaning of Sections 424(e) and (f),
respectively, of the Internal Revenue Code).
2.2 "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
2.3 "Committee" means a committee designated by the Board of
Directors to administer the Plan or, if no committee is so designated, the
Board of Directors. Any Committee Member who is also an Eligible Participant
may receive a grant only if he abstains from voting in favor of a grant to
himself, and the grant is determined and approved by the remaining Committee
Members. The Board of Directors, in its sole discretion, may at any time remove
any member of the Committee and appoint another Director to fill any vacancy on
the Committee.
2.4 "Common Stock" means the Company's $.0001 par value voting
common stock.
2.5 "Company" means Visitors Services International Corp., a
Florida corporation and its subsidiaries.
2.6 "Effective Date" means the effective date of the Plan, as set
forth in Section 17 hereof.
2.7 "Eligible Participant" or "Participant" means any employee,
director, officer, consultant, or advisor of the Company who is determined (in
accordance with the provisions of Section 4 hereof) to be eligible to receive
stock and exercise stock options hereunder.
2.8 "Fair Market Value" means with respect to Common Stock, as of
any date, the closing price of a share of Common Stock as reported on such
exchange on which the Company's Common Stock may be listed.
2.9 "Option" means the grant to an Eligible Participant of a right
to acquire shares of Restricted Stock of the Company, unless said shares are
duly registered, and thus freely tradeable, pursuant to a Grant of Option
approved by the Committee and executed and delivered by the Company.
VISITORS SERVICES INTERNATIONAL CORP. Page 1 of 6
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 2
2.10 "Plan" means this Visitors Services International Corp.
Employee Benefit and Consulting Services Compensation Plan dated October 3,
1996.
2.11 "Registered Stock" means shares of common stock, $.0001 par
value, of the Company underlying an Option which, if specified in the written
Option are, upon issuance, freely tradeable by virtue of having been registered
with the Securities and Exchange Commission under cover of Form S-8, or another
appropriate registration statement, and which shares have been issued subject
to the "blue sky" provisions of any appropriate state jurisdiction. Special
resale restrictions may, however, apply to officers, directors, control
shareholders and affiliates of the Company and such individuals or entities
will be required to obtain an opinion of counsel as regards their ability to
resell shares received pursuant to this Plan.
2.12 "Stock" or "Restricted Stock" means shares of common stock,
$.0001 par value, of the Company issuable directly under the Plan or underlying
the grant of the Option, which are, upon issuance, subject to the restrictions
set forth in Section 11 hereof.
Wherever appropriate, words used in the Plan in the singular may mean
the plural, the plural may mean the singular, and the masculine may mean the
feminine.
SECTION 3. ADOPTION AND ADMINISTRATION OF THE PLAN
Upon adoption by the Company's Board of Directors, the Plan became
effective as of October 3, 1996. In the absence of contrary action by the
Board of Directors, and except for action taken by the Committee pursuant to
Section 4 in connection with the determination of Eligible Participants, any
action taken by the Committee or by the Board of Directors with respect to the
implementation, interpretation or administration of the Plan shall be final,
conclusive and binding.
SECTION 4. ELIGIBILITY AND AWARDS
The Committee shall determine at any time and from time to time after
the effective date of the Plan: (i) the Eligible Participants; (ii) the number
of shares of Common Stock issuable directly or to be granted pursuant to the
Option which an Eligible Participant may exercise; (iii) the price per share at
which each option may be exercised, in cash or cancellation of fees for
services for which the Company is liable, if applicable, or the value per share
if a direct issue of stock; and (iv) the terms on which each option may be
granted. Such determination, as may from time to time be amended or altered at
the sole discretion of the Committee. Notwithstanding the provisions of
Section 3 hereof, no such determination by the Committee shall be final,
conclusive and binding upon the Company unless and until the Board of Directors
has approved the same; provided, however, that if the Committee is composed of
a majority of the persons then comprising the Board of Directors of the
Company, such approval by the Board of Directors shall not be necessary.
SECTION 5. GRANT OF OPTION
Subject to the terms and provisions of this Plan, the terms and
conditions under which the Option may be granted to an Eligible Participant
shall be set forth in a written agreement (i.e., a Consulting Agreement,
Services Agreement, Fee Agreement, or Employment Agreement) and the grant of an
Option hereunder shall be in the form attached hereto as Exhibit A and made a
part hereof and containing such modifications thereto and such other provisions
as the Committee, in its sole discretion, may determine. Notwithstanding the
foregoing provisions of this Section 5, each Grant of Option shall incorporate
the provisions of this Plan by reference.
VISITORS SERVICES INTERNATIONAL CORP. Page 2 of 6
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 3
SECTION 6. TOTAL NUMBER OF SHARES OF COMMON STOCK
The total number of shares of Common Stock reserved for issuance by
the Company either directly or underlying Options granted under this Plan shall
not, initially, be more than 3,600,000. The total number of shares of Common
Stock reserved for such issuance may be increased only by a resolution adopted
by the Board of Directors and amendment of the Plan. Such Common Stock may be
authorized and unissued or reacquired common stock of the Company.
SECTION 7. PURCHASE OF SHARES OF COMMON STOCK
7.1 As soon as practicable after the determination by the
Committee and approval by the Board of Directors (if necessary, pursuant to
Section 4 hereof) of the Eligible Participants and the number of shares an
Eligible Participant may be issued directly or granted pursuant to an Option,
the Committee shall give notice (written or oral) thereof to each Eligible
Participant, which notice may be accompanied by the Grant of Option, if
appropriate, to be executed by such Eligible Participant. Upon receipt, an
Eligible Participant may exercise his right to an Option to purchase Common
Stock by providing written notice as specified in the Grant of Option.
7.2 The negotiated cost basis of stock issued directly or the
exercise price for each option to purchase shares of Common Stock pursuant to
paragraph 7.1 shall be as determined by the Committee, it being understood that
the price so determined by the Committee may vary from one Eligible Participant
to another. In computing the negotiated direct issue price or the Option
exercise price of a share of Common Stock, the Committee shall take into
consideration, among other factors, the restrictions set forth in Section 11
hereof.
SECTION 8. PAYMENT UPON EXERCISE OF OPTION OR DIRECT ISSUANCE
The Committee shall determine the terms of the Grant of Option and the
exercise price or direct issue price for payment by each Participant for his
shares of Common Stock granted thereunder. Such terms shall be set forth or
referred to in the Grant of Option or Board Resolution authorizing the share
issuance. The terms and/or exercise price so set by the Committee may vary
from one Participant to another. In the event that all the Committee approves
an Option grant permitting deferred payments, the Participant's obligation to
pay for such Common Stock shall be evidenced by a Promissory Note executed by
such Participant and containing such modifications thereto and such other
provisions as the Committee, in its sole discretion, may determine.
SECTION 9. DELIVERY OF SHARES OF COMMON STOCK UPON EXERCISE
The Company shall deliver to or on behalf of each Participant such
number of shares of Common Stock as such Participant elects to purchase upon
direct issuance or upon exercise of the Option. Such shares, which shall be
fully paid and nonassessable upon the issuance thereof (unless a portion or all
of the purchase price shall be paid on a deferred basis) shall be represented
by a certificate or certificates registered in the name of the Participant and
stamped with an appropriate legend referring to the restrictions thereon, if
any, as may be set forth in the Grant of Option. Subject to the terms and
provisions of the Florida Business Corporation Act and the Grant of Option to
which he is a party, a Participant shall have all the rights of a stockholder
with respect to such shares, including the right to vote the shares and to
receive all dividends or other distributions paid or made with respect thereto
(except to the extent such Participant defaults under the promissory note, if
any, evidencing the deferred purchase price for such shares), provided that
such shares shall be subject to the restrictions hereinafter set forth. In the
event of a merger or consolidation to which the Company is a party, or of any
other acquisition of a majority of the issued and outstanding shares of common
stock of the Company involving an exchange or a substitution of stock of an
acquiring corporation for common stock of the Company, or of any transfer of
all or substantially all of the assets of the Company in exchange for stock of
an acquiring corporation, a
VISITORS SERVICES INTERNATIONAL CORP. Page 3 of 6
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 4
determination as to whether the stock of the acquiring corporation so received
shall be subject to the restrictions set forth in Section 11 shall be made
solely by the acquiring corporation.
SECTION 10. RIGHTS OF EMPLOYEES; PARTICIPANTS
10.1 Employment. Nothing contained in the Plan or in any Stock
Option, Restricted Stock award or other Common Stock award granted under the
Plan shall confer upon any Participant any right with respect to the
continuation of his or her employment by the Company or any Affiliated
Corporation, or interfere in any way with the right of the Company or any
Affiliated Corporation, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of a Stock Option or other Common Stock
award. Whether an authorized leave of absence, or absence in military or
government service, shall constitute termination of employment shall be
determined by the Committee at the time.
10.2 Non-transferability. No right or interest of any Participant
in a Stock Option award shall be assignable or transferable during the lifetime
of the Participant, either voluntarily or involuntarily, or subjected to any
lien, directly or indirectly, by operation of law, or otherwise, including
execution, levy, garnishment, attachment, pledge or bankruptcy. In the event
of a Participant's death, a Participant's rights and interest in Stock Option
awards shall be transferable by testamentary will or the laws of descent and
distribution, and payment of any amounts due under the Plan shall be made to,
and exercise of any Stock Options may be made by, the Participant's legal
representatives, heirs or legatees. If in the opinion of the Committee a
person entitled to payments or to exercise rights with respect to the Plan is
unable to care for his or her affairs because of mental condition, physical
condition, or age, payment due such person may be made to, and such rights
shall be exercised by, such person's guardian, conservator or other legal
personal representative upon furnishing the Committee with evidence
satisfactory to the Committee of such status.
SECTION 11. GENERAL RESTRICTIONS
11.1 Investment Representations. The Company may require any
person to whom a Stock Option, Restricted Stock award, or other Common Stock
award is granted, as a condition of exercising such Stock Option, or receiving
such Restricted Stock award, or other Common Stock award, to give written
assurances in substance and form satisfactory to the Company and its counsel to
the effect that such person is acquiring the Common Stock subject to the Stock
Option, Restricted Stock award, or other Common Stock award for his or her own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.
11.2 Compliance with Securities Laws. Each Stock Option shall be
subject to the requirement that if at any time counsel to the Company shall
determine that the listing, registration or qualification of the shares subject
to such Stock Option upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, is
necessary as a condition of, or in connection with, the issuance or purchase of
shares thereunder, such Stock Option may not be accepted or exercised in whole
or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained on conditions acceptable to the
Committee. Nothing herein shall be deemed to require the Company to apply for
or to obtain such listing, registration or qualification.
11.3 Changes in Accounting Rules. Notwithstanding any other
provision of the Plan to the contrary, if, during the term of the Plan, any
changes in the financial or tax accounting rules applicable to Stock Options,
Restricted Stock awards or other Common Stock awards shall occur that, in the
sole judgment of the Committee, may have a material adverse effect on the
reported earnings, assets or liabilities of the Company, the Committee shall
have the right and power to modify as necessary, or cancel, any then
outstanding and unexercised Stock Options, any then outstanding Restricted
Stock
VISITORS SERVICES INTERNATIONAL CORP. Page 4 of 6
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 5
awards as to which the applicable employment restriction has not been satisfied
and any other Common Stock awards.
SECTION 12. WITHHOLDING REQUIREMENT
The Company's obligations to deliver shares of Common Stock upon the
exercise of any Stock Option granted under the Plan or pursuant to any other
Common Stock award, shall be subject to the Participant's satisfaction of all
applicable federal, state and local income and other tax withholding
requirements. The Company may, in its sole discretion, withhold the
appropriate number of shares of Common Stock from Participant's option exercise
to satisfy such tax requirements.
SECTION 13. PLAN BINDING UPON ASSIGNS OR TRANSFEREES
In the event that, at any time or from time to time, any shares of
Common Stock are sold, exchanged, assigned or transferred to any party (other
than the Company) pursuant to the provisions of Section 10.2 hereof, such party
shall take such shares of Common Stock pursuant to all provisions and
conditions of this Plan, and, as a condition precedent to the transfer of such
shares of Common Stock, such party shall agree (for and on behalf of himself or
itself, his or its legal representatives and his or its transferees and
assigns) in writing to be bound by all provisions of this Plan.
SECTION 14. COSTS AND EXPENSES
All costs and expenses with respect to the adoption, implementation,
interpretation and administration of the Plan shall be borne by the Company.
SECTION 15. CHANGES IN CAPITAL STRUCTURE OF THE COMPANY
Unless otherwise consented to by the Company in writing or unless
otherwise required by law, the shares of Restricted Stock issuable upon
exercise of the Option which are held by a Participant shall not be adjusted in
any manner for: (i) a subdivision or combination of any of the shares of
capital stock of the Company; (ii) a dividend payable in shares of capital
stock of the Company; (iii) a reclassification of any shares of capital stock
of the Company; or (iv) any other change in the capital structure of the
Company.
SECTION 16. PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board, upon recommendation of the Committee or at its own
initiative, at any time may terminate and at any time and from time to time and
in any respect, may amend or modify the Plan, including:
(a) Increase the total amount of Common Stock that may be
awarded under the Plan, except as provided in Section 15 of the Plan;
(b) Change the classes of Eligible Employees from which
Participants may be selected or materially modify the requirements as
to eligibility for participation in the Plan;
(c) Increase the benefits accruing to Participants; or
(d) Extend the duration of the Plan.
Any Stock Option or other Common Stock award granted to a Participant
prior to the date the Plan is amended, modified or terminated will remain in
effect according to its terms unless otherwise agreed upon by the Participant;
provided, however, that this sentence shall not impair the right of the
Committee to take whatever action it deems appropriate under Section 11 or
Section 15. The termination or any modification or amendment of the Plan shall
not, without the consent of a Participant, affect his rights
VISITORS SERVICES INTERNATIONAL CORP. Page 5 of 6
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 6
under a Stock Option, Restricted Stock Award or other Common Stock award
previously granted to him. With the consent of the Participant, the Committee
may amend outstanding option agreements in a manner not inconsistent with the
Plan. The Board shall have the right to amend or modify the terms and
provisions of the Plan and of any outstanding Stock Options granted under the
Plan.
SECTION 17. EFFECTIVE DATE OF THE PLAN
17.1 Effective Date. The Plan is effective as of October 3, 1996,
the date it was adopted by the Board of Directors of the Company.
17.2 Duration of the Plan. The Plan shall terminate at midnight on
October 3, 2001, which is the day before the fifth anniversary of the Effective
Date, and may be terminated prior thereto by action of the Board of Directors;
and no Stock Option, Restricted Stock Award or other Common Stock award shall
be granted after such termination. Stock Options, Restricted Stock Awards and
other Common Stock awards outstanding at the time of the Plan termination may
continue to be exercised, or become free of restrictions, in accordance with
their terms.
SECTION 18. BURDEN AND BENEFIT
The terms and provisions of this Plan shall be binding upon, and shall
inure to the benefit of, each Participant, his executives or administrators,
heirs, and personal and legal representatives.
Executed as a sealed instrument as of the 3rd day of October, 1996.
VISITORS SERVICES INTERNATIONAL CORP.
By: /s/ Robert P. Gordon
------------------------------
Robert P. Gordon, Chairman
ATTEST:
/s/ Paul W. Henry
- --------------------------------
Paul W. Henry, Secretary
VISITORS SERVICES INTERNATIONAL CORP. Page 6 of 6
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 7
EXHIBIT A
FORM OF
GRANT OF OPTION PURSUANT TO THE
VISITORS SERVICES INTERNATIONAL CORP.
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
Visitors Services International Corp., a Florida corporation (the
"Company"), hereby grants to ________________________________ ("Optionee") an
option to purchase the number of common shares, $.0001 par value (the "Shares")
of the Company at the purchase price of $______ per share (the "Purchase
Price"). This option is exercisable in whole or in part, and upon payment in
cash or cancellation of fees, or other form of payment acceptable to the
Company, to the offices of the Company at _____________________.
This Option must be exercised by Optionee on or before
____________________________ (the "Exercise Date") by (i) notice in writing,
sent by facsimile copy to the Company at its address set forth above; and (ii)
payment of the Purchase Price pursuant to the terms of this Grant of Option and
the Company's Employee Benefit and Consulting Services Compensation Plan. The
notice must refer to this Grant of Option, and it must specify the number of
shares being purchased, and recite the consideration being paid therefor.
Notice shall be deemed given on the date on which the notice is delivered to
the Company by facsimile transmission bearing an authorized signature of
Optionee.
This Option shall be considered validly exercised once payment
therefor has cleared the banking system or the Company has issued a credit memo
for services in the appropriate amount, or receives a duly executed acceptable
promissory note, if the Option is granted with deferred payment, and the
Company has received written notice of such exercise.
If Optionee fails to exercise this Option in accordance with this
Agreement, then this Agreement shall terminate and have no force and effect, in
which event Optionor and Optionee shall have no liability to each other with
respect to this Grant of Option.
This Option may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Execution and delivery
of this Grant of Option by exchange of facsimile copies bearing the facsimile
signature of a party hereto shall constitute a valid and binding execution and
delivery of this Grant of Option by such party. Such facsimile copies shall
constitute enforceable original documents.
The validity, construction and enforceability of this Grant of Option
shall be construed under and governed by the laws of the State of Florida,
without regard to its rules concerning conflicts of laws, and any action
brought to enforce this Grant of Option or resolve any controversy, breach or
disagreement relative hereto shall be brought only in a court of competent
jurisdiction within the county of Pinellas, Florida.
The shares of stock issued upon exercise of the Option (the
"Underlying Shares") are not subject to adjustment due to any changes in the
capital structure of the Company as set forth in Section 15 of the Plan.
Further, the Underlying Shares may not be sold, exchanged, assigned,
transferred or permitted to be transferred, whether voluntarily, involuntarily
or by operation of law, delivered, encumbered, discounted, pledged,
hypothecated or otherwise disposed of until (i) the Underlying Shares have been
registered with the Securities and Exchange Commission pursuant to an effective
registration statement on Form S-8, or such other form as may be appropriate,
in the discretion of the Company; or (ii) an Opinion of Counsel, satisfactory
to the Company, has been received, which opinion sets forth the basis
VISITORS SERVICES INTERNATIONAL CORP. Page A-1
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 8
and availability of any exemption for resale or transfer from federal or state
securities registration requirements.
The Underlying Shares ___________________ [insert appropriate
language: "have" or "have not"] been registered with the Securities and
Exchange Commission pursuant to a registration statement on Form S-8.
IN WITNESS WHEREOF, this Grant of Option has been executed effective
as of ____________________, 19___.
VISITORS SERVICES INTERNATIONAL CORP.
BY THE BOARD OF DIRECTORS
OR A SPECIAL COMMITTEE THEREOF
By: NOT FOR EXECUTION
------------------
By: NOT FOR EXECUTION
------------------
By: NOT FOR EXECUTION
------------------
OPTIONEE:
NOT FOR EXECUTION
- -----------------------
VISITORS SERVICES INTERNATIONAL CORP. Page A-2
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 9
Grant of Option pursuant to the Visitors Services International Corp. Employee
Benefit and Consulting Services Compensation Plan, dated October 3, 1996
Optionee: ___________________
Options Granted: ___________________
Purchase Price: $____ per Share
Date of Grant: ___________________
Excercise Period: ________ to ________
Exercised to Date: _________ including this exercise
Balance to be Exercised: _________
FORM OF SUBSCRIPTION
(TO BE SIGNED ONLY UPON EXERCISE OF THE OPTION)
TO: Visitors Services International Corp. ("Optionor")
The undersigned, the holder of the Option described above, hereby
irrevocably elects to exercise the purchase rights represented by such Option
for, and to purchase thereunder, _________ shares of the Common Stock of
Visitors Services International Corp., and herewith makes payment of
_______________________ therefor. Optionee requests that the certificates for
such shares be issued in the name of Optionee and be delivered to Optionee at
the address of __________________________________________________, and if such
shares shall not be all of the shares purchasable hereunder, represents that a
new Subscription of like tenor for the appropriate balance of the shares, or a
portion thereof, purchasable under the Grant of Option pursuant to the Visitors
Services International Corp. Employee Benefit and Consulting Services
Compensation Plan dated October 3, 1996, be delivered to Optionor when and as
appropriate.
OPTIONEE:
Dated: ---------------------------------------
---------------
VISITORS SERVICES INTERNATIONAL CORP. Page A-3
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLAN
<PAGE> 1
FUTRO & ASSOCIATES, P.C.
Attorneys and Counselors at Law
MCI TOWER
707 SEVENTEENTH STREET - 29TH FLOOR
DENVER, COLORADO 80202
PETER G. FUTRO TELEPHONE (303) 295-3360
JEFFREY A. BARTHOLOMEW FACSIMILE (303) 295-1563
TROY A. YOUNG E-MAIL [email protected]
CONSENT OF COUNSEL
We hereby consent to the incorporation by reference in the
Post-Effective Amendment No. 1 to the Registration Statement of Visitors
Services International Corp. on Form S-8 of our opinion dated October 15, 1996,
which opinion is included in the Company's initial registration statement, SEC
File No. 333-14271, filed with the Securities and Exchange Commission on
October 16, 1996.
FUTRO & ASSOCIATES, P.C.
By: /s/ Peter G. Futro
------------------------
Peter G. Futro
Denver, Colorado
February 17, 1997
<PAGE> 1
SCHUMACHER & ASSOCIATES, INC.
Certified Public Accountants
12835 East Arapahoe Road, T-11, #110
Englewood, Colorado 80112
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No. 1
to the Registration Statement of Visitors Services International Corp. on Form
S-8 (File No. 333-14271) of our report dated December 16, 1996, on our audits
of the consolidated balance sheet of Visitors Services International Corp. as
of September 30, 1996, and the related statements of operations, changes in
stockholders' equity (deficit), and cash flows for the year then ended, which
report is included in the Annual Report on Form 10-KSB.
/s/ Schumacher & Associates, Inc.
Englewood, Colorado
February 17, 1997
<PAGE> 1
JOSEPH F. MORGAN
Certified Public Accountant
118 S. Westshore Blvd., #333
Tampa, Florida 33629
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No. 1
to the Registration Statement of Visitors Services International Corp. on Form
S-8 (File No. 333-14271) of our report dated January 24, 1996, on our audits of
the statements of operations, changes in stockholders' equity, and cash flows
of Visitors Services International Corp. for the year ended September 30, 1995,
which report is included in the Annual Report on Form 10-KSB.
/s/ Joseph F. Morgan
Tampa, Florida
February 17, 1997
