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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
SCHEDULE 14A INFORMATION
Proxy Statement
(Pursuant to Section 14(a) of the Securities Exchange Act of 1934)
---------------
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement
|_| Confidential, for Use of the Commission Only
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PolyVision Corporation
Name of Registrant as Specified in Its Charter)
PolyVision Corporation
(Name of Persons(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions apply:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date Filed:
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<PAGE>
POLYVISION CORPORATION
866 North Main Street Extension
Wallingford, Connecticut 06492
February 21, 1997
Dear Shareholder:
You are cordially invited to attend the 1996 Annual Meeting of
Shareholders of PolyVision Corporation (the "Company") to be held on Tuesday,
March 25, 1997, 10:00 a.m., local time, at The Mayflower Hotel - The
Conservatory, 15 Central Park West, New York, New York 10023. Enclosed are the
Notice of Annual Meeting, Proxy Statement and a Proxy Card relating to the
Annual Meeting which we urge you to read carefully. Also enclosed is the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1996.
Whether or not you expect to attend the Annual Meeting, please sign and date the
enclosed Proxy Card and return it as promptly as possible to ensure that your
shares will be voted. Because mail delays occur frequently, it is important that
the enclosed Proxy Card be returned well in advance of the meeting.
On Behalf of Your Board of Directors
STEVEN S. ELBAUM
Chairman of the Board
<PAGE>
POLYVISION CORPORATION
866 North Main Street Extension
Wallingford, Connecticut 06492
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held March 25, 1997
-----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of PolyVision Corporation, a New York corporation (the
"Company"), will be held at 10:00 a.m., local time, on Tuesday, March 25, 1997,
at The Mayflower Hotel - The Conservatory, 15 Central Park West, New York, New
York 10023, for the following purposes:
1. to elect three Class I directors to the Board of Directors, each to
hold office until the 1998 Annual Meeting and until his successor is
elected and qualified;
2. to approve the reincorporation of the Company in Delaware;
3. to ratify the adoption of the 1995 Directors Stock Option Plan and
the 1995 Directors Stock Grant Plan; and
4. to consider and transact such other business as may properly be
brought before the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed February 20, 1997, as the record date for
the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and any postponements or adjournments thereof, and only
shareholders of record at the close of business on that date are entitled to
such notice and to vote at the Annual Meeting. A list of shareholders entitled
to vote at the Annual Meeting will be available at the Annual Meeting and at the
offices of the Company for ten days prior to the Annual Meeting.
We hope that you will use this opportunity to take an active part in the
affairs of the Company by voting on the business to come before the Annual
Meeting, either by executing and returning the enclosed Proxy Card or by casting
your vote in person at the Annual Meeting.
<PAGE>
SHAREHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE REQUESTED
TO DATE AND SIGN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. A STAMPED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. IF A SHAREHOLDER RECEIVES MORE THAN
ONE PROXY CARD BECAUSE HE OR SHE OWNS SHARES REGISTERED IN DIFFERENT NAMES OR
ADDRESSES, EACH PROXY CARD SHOULD BE COMPLETED AND RETURNED.
By Order of the Board of Directors
LAWRENCE W. HAY
Vice President of Finance and Secretary
Wallingford, Connecticut
February 21, 1997
<PAGE>
POLYVISION CORPORATION
866 North Main Street Extension
Wallingford, Connecticut 06492
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held March 25, 1997
-----------------
This Proxy Statement is being furnished to the shareholders of PolyVision
Corporation, a New York corporation (the "Company"), in connection with the
solicitation of proxies by the Company's Board of Directors from holders of
outstanding shares of common stock, par value $.001 per share, of the Company
(the "Common Stock"), for use at the Annual Meeting of Shareholders to be held
on Tuesday, March 25, 1997, and any adjournment or postponement thereof.
The expense of this solicitation of proxies will be borne by the Company.
Solicitations will be made only by use of the mail except that, if deemed
desirable, officers and regular employees of the Company may solicit proxies by
telephone, telegraph and personal calls. Brokerage houses, custodians, nominees
and fiduciaries will be requested to forward the proxy soliciting material to
the beneficial owners of the stock held of record by such persons and the
Company will reimburse them for their reasonable expenses incurred in this
connection.
The Company's Annual Report on Form 10-K, including financial statements
for the fiscal year ended April 30, 1996, accompanies but does not constitute
part of this proxy statement.
The purpose of the meeting and the matters to be acted upon are set forth
in the attached Notice of Annual Meeting. As of the date of this proxy
statement, the Board of Directors knows of no other business which will be
presented for consideration at the meeting. A shareholder giving a proxy
pursuant to the present solicitation may revoke it at any time before it is
exercised by submitting a duly executed proxy bearing a later date or by
delivering to the Secretary of the Company a written notice of revocation prior
to the Annual Meeting. No proxy will be used if the shareholder is personally
present at the meeting and informs the Company that such shareholder wishes to
vote the shares in person. Subject to such revocation, all shares represented by
a properly executed proxy received prior to or at the meeting will be voted by
the proxy holder whose names are set forth in the accompanying proxy in
accordance with the instructions on the proxy. If no instruction is specified
with respect to a matter to be acted upon, the shares represented by the proxy
will be voted "FOR" the election of the nominees for director set forth herein,
"FOR" the reincorporation of the Company in Delaware, and "FOR" the proposal to
ratify the adoption of the Directors Stock Grant Plan and the Directors Stock
Option Plan. If any other business shall properly come before the meeting, votes
will be cast pursuant to said proxies in respect of any such other business in
accordance with the judgment of the persons acting under said proxies.
<PAGE>
It is anticipated that the mailing to shareholders of this proxy statement
and the enclosed proxy will commence on or about February 21, 1997.
OUTSTANDING SECURITIES AND VOTING RIGHTS
Only shareholders of record at the close of business on February 20, 1997
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting
of Shareholders and any adjournments thereof. At that date there were 8,530,073
outstanding shares of Common Stock. There was no beneficial owner (as defined
under the rules of the Securities and Exchange Commission) of more than 5% of
the Common Stock known to the Company at November 15, 1996, other than as set
forth under the caption "Security Ownership of Certain Beneficial Owners and
Management" below.
A quorum at the meeting is a majority of the outstanding shares of Common
Stock, and each shareholder shall have one vote for each share registered in
such shareholder's name on the books of the Company. The affirmative vote of a
majority of all shares represented and voting at the meeting is required for
approval of Proposal No. 1 and Proposal No. 3. In accordance with New York law
and the Company's certificate of incorporation and by-laws, abstentions and
broker non-votes will not be counted in determining the number of votes cast on
these proposals, and consequently will not affect the outcome. In accordance
with New York law, approval of Proposal No. 2 will require the affirmative vote
of the shareholders of two-thirds of all of the Company's outstanding shares
entitled to vote thereon. Consequently, abstentions and broker non-votes will
count as votes against this proposal.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as to the shares of Common
Stock owned as of November 15, 1996, by (i) each person known to the Company to
be the beneficial owner of more than 5% of the Common Stock; (ii) each director
and executive officer of the Company who owns shares of Company Common Stock;
and (iii) all directors and executive officers of the Company as a group. Unless
otherwise indicated in the table or footnotes following the table, (a) the
persons as to whom the information is given had sole voting and investment power
over the shares of Common Stock shown as beneficially owned by them, and (b) the
business address of each such person is c/o PolyVision Corporation, 866 North
Main Street Extension, Wallingford, Connecticut 06492.
Number of Percent of
Shares Common Stock
Name and Address of Beneficially Beneficially
Beneficial Owner Owned(1) Owned(1)
- ----------------------- ------------ ------------
The Alpine Group, Inc. 1,576,345 18.5%
1790 Broadway
New York, NY 10017
Steven S. Elbaum 428,957(2)(3) 5.0%
c/o The Alpine Group, Inc.
1790 Broadway
New York, NY 10019
Ivan Berkowitz 104,181(4) 1.2%
Lyman C. Hamilton, Jr 45,264(2)(3) *
69 Byron Drive
Avon, CT 06001
Stephen C. Knup 19,166(2)(3) *
c/o MetallGesellschaft Corp.
520 Madison Avenue
New York, NY 10022
Thomas M. Ramseur 19,166(2)(3) *
584 West Road
New Canaan, CT 06840
3
<PAGE>
Number of Percent of
Shares Common Stock
Name and Address of Beneficially Beneficially
Beneficial Owner Owned(1) Owned(1)
- ----------------------- ------------ ------------
Bragi F. Schut 128,219(2)(3) 1.5%
c/o The Alpine Group, Inc.
1790 Broadway
New York, NY 10019
Joseph A. Menniti 25,179(5) *
All executive officers and 770,132(2)-(6) .0%
directors as a group
(7 persons)
- ----------
* Percentage ownership is less than 1%.
(1) Includes, in accordance with Rule 13d-3(d)(1)(i) of the Securities and
Exchange Act of 1934, as amended ("Exchange Act"), 8,530,073 shares of
Common Stock outstanding as of November 1, 1996, and to the extent set
forth in the next sentence only, includes shares issuable upon the
exercise of options within 60 days of such date under the Company's stock
option plans held by the persons included in the table. For the purpose of
computing the percentage of outstanding shares beneficially owned by a
particular person, any securities not outstanding which are subject to
options, warrants, rights or conversion privileges exercisable by that
person within 60 days of November 1, 1996, have been deemed to be
outstanding, but have not been deemed outstanding for the purpose of
computing the percentage of the class beneficially owned by any other
person.
(2) Pursuant to the Company's 1995 Directors Stock Grant Plan, each of Messrs.
Elbaum, Hamilton, Knup, Ramseur and Schut were granted 10,000 shares of
Common Stock on October 2, 1995, subject to the approval of such plan by
the Company's shareholders at the Annual Meeting. Under the terms of the
1995 Directors Stock Grant Plan, one-third of such shares vested on the
date of the 1995 Annual Meeting of Shareholders, one-third of such shares
vest on the date of the Annual Meeting and one-third of such shares will
vest on the date of the 1997 Annual Meeting of Shareholders, so long as
such director remains a director of the Company following the respective
dates.
(3) Pursuant to the Company's 1995 Directors Stock Option Plan, each of
Messrs. Elbaum, Hamilton, Knup, Ramseur and Schut were granted stock
options to purchase 25,000 shares of Common Stock on October 2, 1995 at an
exercise price of $3.86 per share, subject to the approval of such plan by
the Company's shareholders at the Annual Meeting. Under the terms of the
1995 Directors Stock Option Plan, one-fourth of such
4
<PAGE>
shares were exercisable on the date of the 1995 Annual Meeting of
Shareholders, one-fourth of such shares are exercisable on the date of the
Annual Meeting and one-fourth of such shares will be exercisable on the
date of each of the 1997 and 1998 Annual Meetings of Shareholders, so long
as such director remains a director of the Company following the
respective dates.
(4) Includes (i) 15,000 of the 25,000 "restricted" shares of Common Stock
granted to Mr. Berkowitz under the terms of his employment agreement with
the Company, with the remaining shares to be earned in equal 5,000 share
installments on May 1, 1997 and 1998, subject to certain conditions in the
event of Mr. Berkowitz's earlier termination of employment, and (ii) stock
options to purchase 43,750 of the 175,000 shares of Common Stock granted
to Mr. Berkowitz under the terms of the Company's 1994 Stock Option Plan
at an exercise price of $3.86, with the remaining options to be
exercisable in equal 43,750 share installments on May 1, 1997, 1998 and
1999, subject to certain conditions in the event of Mr. Berkowitz's
earlier termination of employment.
(5) Includes (i) 3,000 of the 15,000 "restricted" shares of Common Stock
granted to Mr. Menniti under the terms of his employment agreement with
the Company, with the remaining shares to be earned in equal 3,000 share
installments on May 1, 1997, 1998, 1999 and 2000, subject to certain
conditions in the event of Mr. Menniti's earlier termination of
employment, and (ii) stock options to purchase 18,750 of the 75,000 shares
of Common Stock granted to Mr. Menniti under the terms of the Company's
1994 Stock Option Plan at an exercise price of $3.86, with the remaining
options to be exercisable in equal 18,750 share installments on May 1,
1997, 1998 and 1999, subject to certain conditions in the event of Mr.
Menniti's earlier termination of employment.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides that the
Board of Directors of the Company shall consist of three to nine directors.
Presently, the Board of Directors of the Company is comprised of seven directors
and is divided into two classes, with staggered two-year terms, and one class of
directors is elected at each Annual Meeting of Shareholders. Section 704 of the
New York Business Corporation Law provides that where a Board of Directors is
classified, no class shall include less than three directors. On May 24, 1995,
three persons were elected to the Company's Board of Directors as Class I
directors to hold office until the 1996 Annual Meeting of Shareholders and until
their successors are elected and qualified and four persons were elected as
Class II directors to hold office until the 1997 Annual Meeting of Shareholders
and until their successors are elected and qualified.
In the event that Proposal 2 ("REINCORPORATION IN DELAWARE") is approved
at the Annual Meeting, the Company will be governed by Delaware law, upon the
effective date
5
<PAGE>
of the reincorporation. Section 141 of the General Corporation Law of the State
of Delaware provides for the adoption of a classified board of directors
pursuant to which the directors can be divided into as many as three classes
with staggered terms of office with only one class of directors coming up for
election each year, and does not prohibit fewer than three directors in any
class. See "PROPOSAL NO. 2 - REINCORPORATION IN DELAWARE - Certain Differences
Between the Corporation Laws of New York and Delaware." As a result, under
Delaware law, the Company's Board of Directors may be divided into three
separate classes, even though consisting of only seven directors in total.
Therefore, if Proposal No. 2 is approved, at the next succeeding Annual Meeting
of Shareholders, the Board of Directors may be divided into three classes, as
equal in number as possible with the following staggered terms: the class of
directors whose term under the two-class Board was not to expire until the
Annual Meeting of Shareholders next succeeding the creation of the three-class
Board shall complete the term for which such class of directors was originally
elected; one class of directors shall be elected to serve a two-year term; and
one class of directors shall be elected to serve a three-year term.
At the Annual Meeting, in accordance with the Company's Restated
Certificate of Incorporation and By-laws which relate to corporate governance,
three persons are to be elected to the Board of Directors of the Company as
Class I directors to hold office until the 1998 Annual Meeting of Shareholders
and until their successors are elected and qualified, and it is intended that
shares represented by properly executed proxies will be voted, in the absence of
contrary instructions, in favor of the election of the following named nominees:
Class I directors: Ivan Berkowitz, Stephen C. Knup and Bragi F. Schut. The
directors unanimously approved the nominations. The affirmative vote of the
holders of a majority of the shares of the Common Stock of the Company present
or represented at the meeting is required to elect the foregoing nominees to the
Board of Directors.
The persons named in the enclosed proxy intend to vote the shares
represented by proxies for the Board of Directors nominees unless the vote for
such persons is withheld. If any of those nominated should not continue to be
available for election, it is intended that the shares represented by the
proxies will be voted for such other person or persons as the Board shall
designate. No circumstances are presently known which would render any nominee
named herein unavailable for election.
NOMINEES FOR DIRECTORS
DIRECTORS TO HOLD OFFICE UNTIL 1998 (CLASS I)
Ivan Berkowitz - 50
Mr. Berkowitz was elected the Chief Executive Officer and a director of
the Company on May 24, 1995. From September 1993 to March 1995, he was the
Managing General Partner of Steib & Company, a private investment partnership.
Since March 1995, Mr. Berkowitz has also been a director of Propierre I, a
public French real estate mutual fund, and, since March
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<PAGE>
1995, a director of Harmony Holdings, Inc., a television commercial production
company. From 1978 through December 1994, Mr. Berkowitz was a Managing Director
of Chestnut Hill Securities, Inc., a registered broker-dealer in Los Angeles,
California.
Stephen C. Knup - 54
Mr. Knup was elected a director of the Company on May 24, 1995. Mr. Knup
has been the Executive Vice President and Chief Financial Officer of
MetallGesellschaft Corp., a raw materials company, from November 1994 to the
present. Mr. Knup formerly served as Chief Operating Officer of Frankel & Co.,
an insurance brokerage company, from May 1994 to November 1994, and as the
Senior Vice President and Chief Financial Officer of AMAX Inc., a natural
resource and a natural gas producer, from February 1988 to December 1993 and as
a consultant to Cyprus Amax Minerals Company, its successor by merger, from
January 1994 to March 1994.
Bragi F. Schut - 55
Mr. Schut was elected a director of the Company on December 21, 1994. Mr.
Schut has been a director of The Alpine Group, Inc., a diversified industrial
company ("Alpine"), since 1983 and has been Alpine's Executive Vice President
since 1986. Mr. Schut is also a director of Superior TeleCom Inc., a
manufacturer of copper telecommunications wire and cable ("Superior TeleCom"),
since October 1996.
DIRECTORS CONTINUING IN OFFICE UNTIL 1997 (CLASS II)
Steven S. Elbaum - 48
Mr. Elbaum was elected Chairman of the Board and a director of the Company
on December 21, 1994. Mr. Elbaum has been a director of Alpine since 1980 and
has served as its Chairman of the Board and Chief Executive Officer since June
1984. He is also the Chairman of the Board, President and Chief Executive
Officer of Superior TeleCom since October 1996. Mr. Elbaum serves on the Board
of Directors of Interim Services, Inc., a provider of value-added staffing and
healthcare services, and HumaScan, Inc., a developer of medical monitoring
devices.
Lyman C. Hamilton, Jr. - 70
Mr. Hamilton was elected a director of the Company on May 24, 1995. Mr.
Hamilton is currently a private investor and served as President and Chief
Executive Officer of APV, Inc., a wholly-owned subsidiary of the Company engaged
in the research, development, licensing and initial testing of a proprietary
technology known as PolyVision, from March 1991 to December 1992. From December
1989 to September 1990, Mr. Hamilton served as Chairman and Chief Executive
Officer of Imperial Corporation of America, a public bank holding company
(Imperial
7
<PAGE>
Corporation of America filed a petition under Chapter 11 of the U.S. Bankruptcy
Code on February 28, 1990); and from 1980 to December 1989, he served as
Chairman and President of Tamco Enterprises, Inc., a private investment company.
From 1962 to 1979, Mr. Hamilton served in various senior executive officer
positions with ITT Corp. and was its Chief Executive Officer in 1978 and 1979
and a director of ITT Corp. from 1974 to 1979. Mr. Hamilton currently serves on
the Board of Director of Scan-Optics, Inc., a manufacturer of optical character
recognition equipment, and is a member of the Advisory Boards of Desai Capital
Management and UBS Asset Management. Mr. Hamilton served on Alpine's Board of
Directors from 1991 to November 1993.
THE BOARD OF DIRECTORS RECOMMENDS AN AFFIRMATIVE VOTE FOR EACH OF THE PERSONS
NOMINATED AS DIRECTORS OF THE COMPANY.
INFORMATION ABOUT BOARD
MEETINGS AND COMMITTEES, AND MANAGEMENT
There were three meetings of the Board of Directors during the fiscal year
ended April 30, 1996. Each incumbent director attended all of the Board of
Directors meetings and the meetings of Board Committees on which he served.
Committees of the Board
Audit Committee - During the fiscal year ended April 30, 1996, the Audit
Committee of the Company's Board of Directors consisted of Lyman C. Hamilton,
Jr., Stephen C. Knup and Steven S. Elbaum. The Audit Committee met once during
the fiscal year ended April 30, 1996 on April 17, 1996, at which it reviewed the
financial results of the Company and discussed the prospective audit for the
fiscal year ended April 30, 1995 with the Company's independent auditors. The
Audit Committee is primarily responsible for reviewing the services performed by
the Company's independent auditors and evaluating the Company's accounting
policies and its system of internal control.
Compensation Committee - During the fiscal year ended April 30, 1996, the
Compensation Committee of the Company's Board of Directors consisted of Robert
J. Levenson, Thomas M. Ramseur and Bragi F. Schut. Mr. Levenson resigned as a
director of the Company effective September 3, 1996, and was replaced by Stephen
C. Knup. The Compensation Committee did not meet during the fiscal year ended
April 30, 1996, as there were no material compensation matters to be considered.
The Compensation Committee is primarily responsible for reviewing and approving
the salary and benefits policies of the Company, including compensation of
executive officers.
Stock Option Committee - During the fiscal year ended April 30, 1996, the
Stock Option Committee of the Company's Board of Directors consisted of Robert
J. Levenson, Thomas M.
8
<PAGE>
Ramseur and Bragi F. Schut. Mr. Levenson resigned as a director of the Company
effective September 3, 1996, and was replaced by Stephen C. Knup. The Stock
Option Committee administers the 1994 Stock Option Plan, and recommends and
approves grants of stock options under such plans. During the fiscal year ended
April 30, 1996, the Stock Option Committee did not meet. Options granted to
Messrs. Berkowitz, Menniti and Schrieberg pursuant to their respective
employment agreements were approved by the entire Board of Directors as a whole.
Directors Stock Grant and Stock Option Committees - The Company's Board of
Directors does not have a separate Directors Stock Grant or Stock Option
Committee, but rather administers such plans as a whole.
Nominating Committee - The Company's Board of Directors does not have a
Nominating Committee, but rather performs these functions as a whole.
Directors' Compensation
Standard Compensation - In addition to grants made pursuant to the
Company's 1995 Directors Stock Option and Stock Grant Plans, non-employee
directors receive $500 for each board or committee meeting attended. All
expenses in connection with attendance at such meetings are paid by the Company.
No family relationship exists among any of the directors or executive
officers of the Company. No arrangement or understanding exists between any
director or executive officer and any other person pursuant to which any
director or executive officer was selected as a director or executive officer of
the Company. All executive officers are appointed annually by the Board of
Directors.
9
<PAGE>
Management
The names and ages of the executive officers of the Company, and their
positions with the Company, are as follows:
Name Age Position
- ---- --- --------
Ivan Berkowitz........... 50 Chief Executive Officer
Joseph A. Menniti........ 58 President and Chief Operating Officer
Lawrence W. Hay.......... 52 Vice President of Finance and
Secretary
See "Nominees for Directors" above for certain biographical information
concerning Ivan Berkowitz.
JOSEPH A. MENNITI was elected President and Chief Operating Officer of the
Company on May 24, 1995. From 1989 to May 1995, Mr. Menniti was the President of
DNE Technologies, Inc., a wholly-owned subsidiary of Alpine which designs,
manufactures, tests and markets electronic and communications products and
systems for the military, government and commercial sectors. Mr. Menniti held
various positions at Grumman Aerospace Corporation prior thereto.
LAWRENCE W. HAY was appointed Vice President of Finance of the Company
effective August 7, 1996. From 1985 to January 1996, Mr. Hay served as Vice
President of Finance and Administration of Ceramicus, Inc., a manufacturer of
ceramic tile located in East Sparta, Ohio. From February to July 1996, Mr. Hay
acted as a freelance business consultant.
EXECUTIVE COMPENSATION AND RELATED MATTERS
The following table sets forth the cash compensation (including cash
bonuses) paid or accrued by the Company for its fiscal year ended April 30, 1996
and the two prior fiscal years to its Chief Executive Officer and to the three
other executive officers of the Company whose compensation exceeded $100,000 at
April 30, 1996 (the "Named Executive Officers").
10
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
----------------------------- ------------------------
Common
Other Annual Restricted Stock
Name and Principal Fiscal Salary Bonus Compensation Stock Underlying
Position Year ($) ($) ($)(5) Awards ($) Options (#)
- ------------------ ------ ------ ----- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Ivan Berkowitz(1) 1996 $200,000 -- -- 25,000 175,000
Chief Executive Officer 1995 -- -- -- --
and Director 1994 -- -- -- --
Joseph A. Menniti(2) 1996 $185,000 -- 32,000(3) 15,000 75,000
President and Chief 1995 -- -- -- -- --
Operating Officer 1994 -- -- -- -- --
N. Roy Anderson(4) 1996 $150,000 -- -- -- --
President of Greensteel 1995 150,000 -- -- -- --
subsidiary 1994 150,000 -- -- -- --
Alan J. Nickerson(5) 1996 $151,000 -- -- -- --
Chief Financial Officer 1995 -- -- -- -- --
and Secretary 1994 -- -- -- -- --
</TABLE>
- ----------
1) Mr. Berkowitz was elected the Chief Executive Officer of the Company
effective May 1, 1995.
(2) Mr. Menniti was elected the President and Chief Operating Officer of the
Company effective May 1, 1995.
(3) This amount was received as a signing bonus under Mr. Menniti's employment
agreement. See "Employment Agreements" below.
(4) Mr. Anderson resigned as President of the Company's Greensteel subsidiary
effective May 1, 1996.
(5) Mr. Nickerson was elected the Chief Financial Officer and Secretary of the
Company effective December 21, 1994. Mr. Nickerson resigned from such
positions effective August 7, 1996.
(6) The aggregate value of benefits to be reported under the "Other Annual
Compensation" column did not exceed the lesser of $50,000 or 10% of the
total of annual salary and bonus reported for the Named Executive Officer.
11
<PAGE>
Employment Agreements
Pursuant to Employment Agreements, dated as of May 1, 1995, between the
Company and each of Ivan Berkowitz and Joseph A. Menniti, Messrs. Berkowitz and
Menniti have agreed to serve as the Chief Executive Officer and the President
and Chief Operating Officer, respectively, of the Company until either the
respective executive or the Company elects to terminate such employment upon
prior written notice. Under the terms of the Employment Agreements, Messrs.
Berkowitz and Menniti are entitled to an annual base salary, subject to annual
reviews, of $200,000 and $185,000, respectively, for services rendered in such
positions, plus an annual bonus of not less than 35% and 30%, respectively, of
such base salary in the event the Company achieves annual targeted performance
objectives set by the Company's Board of Directors.
The Company agreed to grant to Messrs. Berkowitz and Menniti stock options
to purchase 175,000 and 75,000 shares of the Company's Common Stock at an
exercise price of $3.82 and vesting in five equal annual installments. The
Company also agreed to make restricted stock grants to Messrs. Berkowitz and
Menniti in amounts of 25,000 and 15,000 shares of the Company's Common Stock,
respectively, to be held by the Company and released at a rate of 5,000 and
3,000 shares per year, respectively. In addition, if Mr. Berkowitz's or Mr.
Menniti's employment is terminated by the Company for any reason other than for
"Cause" (as defined) or by Mr. Berkowitz or Mr. Menniti, respectively, for "Good
Reason" (as defined), each such executive is entitled to payment of one times
his base salary if his termination occurs on or before May 1, 1999 and one and
one-half his salary if his termination occurs thereafter, in each case together
with the annual bonus that he would have been entitled to had his employment not
been so terminated. Messrs. Berkowitz and Menniti have each agreed not to
compete with the Company during their term of employment and for two years
thereafter and not to disclose any part of the Company's proprietary technology
in perpetuity.
On September 30, 1996, Mel Schrieberg resigned as Executive Vice President
of the Company and his Employment Agreement was terminated.
Stock Options
The following table sets forth information with respect to grants of
options ("Options") to purchase Common Stock under the Company's 1994 Stock
Option Plan to the Named Executive Officers during the fiscal year ended April
30, 1996.
12
<PAGE>
Option Grants in Fiscal Year Ended April 30, 1996
<TABLE>
<CAPTION>
Potential Realized
Value at Assumed
% of Total Annual Rate of Stock
Options Appreciation for
Granted to Exercise Option Term(2)
Options Employees Price Expiration --------------------
Name Granted(1) In Fiscal Year ($/sh)(1) Date 5% 10%
- ----------------- ---------- -------------- --------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Ivan Berkowitz 175,000 64.8% $3.86 May 2005 $0 $0
Joseph A. Menniti 75,000 27.8% $3.86 May 2005 $0 $0
</TABLE>
- ----------
(1) All options were granted at market value on the date of grant.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on option exercises are dependent upon other factors,
including the future performance of the Common Stock and overall stock
market conditions.
Aggregated Option Exercises During Fiscal 1996 and Fiscal Year-End Option Values
The following table sets forth with respect to the Named Executive
Officers information with respect to options exercised, unexercised options and
year-end option values in each case with respect to options to purchase shares
of the Company's Common Stock.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options at in the Money Options
Shares Value April 30, 1996(#) at April 30, 1996(1)
Acquired on Realized -------------------------- --------------------------
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ivan Berkowitz -0- -0- 43,750 131,250 $0 $0
Joseph A. Menniti -0- -0- 18,750 56,250 $0 $0
</TABLE>
- ----------
(1) Represents the difference between the last sale price of the Common Stock
on April 30, 1996, and the exercise price of the option multiplied by the
applicable number of options.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors were
Robert J. Levenson, Thomas M. Ramseur and Bragi F. Schut during the fiscal year
ended April 30, 1996. Stephen C. Knup replaced Mr. Levenson on the Compensation
Committee effective September 3, 1996. No member of the Board of Directors or
the Compensation Committee has any interlocking relationship with any other
corporation that requires disclosure under this heading.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors of
the Company was established in 1990 and did not hold any meetings during the
fiscal year ended April 30, 1996. The duties and responsibilities of the
Committee include the following:
(a) approval of annual salaries and other benefits provided for
executive officers of the Company;
(b) approval of the adoption of compensation plans in which the
executive officers of the Company may be participants and awarding
of benefits under such plans; and
(c) undertaking studies and making recommendations with respect to the
Company's compensation structure and policies and the development of
management personnel.
The Committee's policies with respect to executive compensation are
intended to achieve the following goals. First, they are intended to create base
compensation levels sufficient to attract and retain talented and dedicated
executive officers. Second, the compensation policies are intended to provide a
direct link between performance during the year (both the performance of the
Company as a whole and the performance of the individual officer) as a part of
the officer's compensation. Third, the compensation policies are intended to
provide executive officers with the opportunity to acquire an equity stake in
the Company through the grant of options pursuant to the Company's stock-based
incentive plan.
During the fiscal year ended April 30, 1996, the full Board approved
bonuses and granted options to certain of its executive officers and certain
employees. In each case, the Board's decision was based upon the principles and
procedures outlined above.
COMPENSATION COMMITTEE
Robert J. Levenson
Thomas M. Ramseur
Bragi F. Schut
14
<PAGE>
The Report of the Compensation Committee on Executive Compensation shall
not be deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the Securities Act of
1933, as amended, or under the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such acts.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following chart compares the value of $100 invested in the Company's
Common Stock from July 1990, the first full month during which the Company's
stock was listed on the AMEX, through April 30, 1996, with a similar investment
in the Dow Jones Equity Market Index and the Dow Jones Heavy Construction Index.
COMPARISON OF 64 MONTH CUMULATIVE TOTAL RETURN*
AMONG POLYVISION CORPORATION, THE DOW JONES EQUITY MARKET INDEX
AND THE DOW JONES HEAVY CONSTRUCTION INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
---------------------------------------------------------------
12/90 12/91 12/92 12/93 12/94 4/95 12/95 4/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PolyVision Corporation PLI 100 111 67 61 56 50 12 12
Dow Jones Equity
Market Index IDOW 100 132 144 158 159 180 221 236
Dow Jones Heavy
Construction Index ICON 100 119 115 121 116 133 162 166
</TABLE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers, directors and
holders of more than ten percent of the Company's Common Stock to file with the
Securities and Exchange Commission ("SEC") and the American Stock Exchange
("AMEX") initial reports of ownership and reports of changes in ownership of the
Company's Common Stock. Such persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely upon its review of the copies of such forms received by the
Company, or representations from certain reporting persons that no year-end
Forms 5 were required for those persons, the Company believes that, during the
year ended April 30, 1996, all filing requirements applicable to its executive
officers, directors and greater than ten percent beneficial owners were complied
with, except that, due to administrative oversight, one report on Form 4 for
Steven S. Elbaum was inadvertently filed later than ten days after the close of
the month in which he had a reportable event.
15
<PAGE>
PROPOSAL 2
REINCORPORATION IN DELAWARE
General
The Board of Directors has approved, and recommends for shareholder
approval, the change of the Company's state of incorporation from New York to
Delaware (the "Reincorporation"). The Reincorporation will not result in any
change in the capitalization, business management, assets, liabilities or net
worth of the Company. Reincorporation in Delaware will, however, allow the
Company to take advantage of the modern and flexible provisions of the corporate
laws of Delaware which are periodically updated and revised to meet changing
business needs. The purpose and effects of the proposed transaction are
summarized below.
Following the consummation of the Reincorporation, the separate corporate
existence of PolyVision Corporation, a New York corporation, shall cease.
PolyVision Corporation, a Delaware corporation ("PolyVision Delaware"),
currently a wholly-owned subsidiary of the Company, will succeed by operation of
law to all of the business, assets and liabilities of the Company. The mailing
address of its principal executive offices and its telephone number are the same
as those of the Company. In the following discussion of the proposed
Reincorporation, the term "PolyVision New York" refers to the Company as
currently organized as a New York corporation.
AT THE EFFECTIVE TIME OF THE REINCORPORATION THE COMPANY WILL BE GOVERNED BY
DELAWARE LAW, BY A NEW CERTIFICATE OF INCORPORATION AND NEW BY-LAWS, EACH OF
WHICH WILL RESULT IN CHANGES IN THE RIGHTS OF THE SHAREHOLDERS.
The Reincorporation requires the approval of the Company's shareholders by
the affirmative vote of the holders of two-thirds of all outstanding shares of
the Company's Common Stock.
Upon shareholder approval of the Reincorporation, PolyVision New York will
be merged with and into PolyVision Delaware pursuant to the Agreement and Plan
of Merger (the "Merger Agreement"), resulting in a change in the Company's state
of incorporation. The Company will then be subject to the Delaware General
Corporation Law and the Certificate of Incorporation and By-laws of PolyVision
Delaware. These differ in certain respects from the Company's Restated
Certificate of Incorporation and By-laws and the New York Business Corporation
Law ("NYBCL") which currently govern the material affairs of the Company. See
"Changes in the Certificate of Incorporation and By-laws" on page 18 hereof.
Upon the effective date of the Reincorporation (the "Effective Date"), each
outstanding share of Common Stock of PolyVision New York and each share of
Common Stock held in the Company's treasury automatically will be converted into
one share of Common Stock of PolyVision Delaware.
16
<PAGE>
Outstanding options to purchase shares of Common Stock of the Company will
be converted into options to purchase the same number of shares of common stock
of PolyVision Delaware. Each employee stock plan and any other employee benefit
plan to which the Company is a party, whether or not such plan relates to the
Company's Common Stock will be assumed by PolyVision Delaware and, to the extent
any such plan provides for the issuance or purchase of the Company's Common
Stock, will be deemed to provide for the issuance or purchase of shares of
common stuck of PolyVision Delaware.
The Common Stock of PolyVision Delaware will be listed on the AMEX.
Delivery of certificates for the Company's Common Stock issued prior to the
effectiveness of the Reincorporation will constitute "good delivery" of shares
in transactions subsequent to Reincorporation. Certificates representing shares
of PolyVision Delaware Common Stock will be issued with respect to transfers
consummated after the Reincorporation. New certificates will also be issued upon
the request of any shareholder, subject to normal requirements as to proper
endorsement, signature guarantee, if required, and payment of applicable taxes.
IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF THE COMPANY TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF POLYVISION DELAWARE. OUTSTANDING
STOCK CERTIFICATES OF POLYVISION NEW YORK SHOULD NOT BE DESTROYED OR SENT TO THE
COMPANY.
As part of its approval and recommendation of the Company's
reincorporation in Delaware, the Board has approved, and recommends to the
shareholders for their approval, the Merger Agreement pursuant to which the
Company will be merged into PolyVision Delaware. The full text of the Merger
Agreement is set forth as Exhibit A hereto. The discussion contained in this
Proxy Statement is qualified in its entirety by reference to such Exhibit. For
additional information and details relating to these and other changes reference
is made to the Certificate of Incorporation of PolyVision Delaware attached to
this Proxy Statement as Annex I to Exhibit A, the By-laws of PolyVision Delaware
attached to this Proxy Statement as Exhibit B and the discussions in this Proxy
Statement under "Principal Reasons for Changing the Company's State of
Incorporation," "Changes in the Certificate of Incorporation and By-laws" and
"Certain Differences Between the Corporation Laws of New York and Delaware." The
discussion herein of the provisions of the Certificate of Incorporation of
PolyVision Delaware is qualified in its entirety by Annex I to Exhibit A. Copies
of the Certificate of Incorporation and By-laws of the Company are available for
inspection at the principal office of the Company and copies will be sent to
shareholders upon request.
Principal Reasons for Changing the Company's State of Incorporation
The Company's Board of Directors believes that the Reincorporation will
provide flexibility for both the management and business of the Company.
17
<PAGE>
Delaware is a favorable legal and regulatory environment in which to
operate and where a substantial number of Fortune 500 companies and New York and
American Stock Exchange listed firms are incorporated today. For many years,
Delaware has followed a policy of encouraging incorporation in that state and,
in furtherance of that policy, has adopted comprehensive, modern and flexible
corporate laws which are periodically updated and revised to meet changing
business needs. As a result, many major corporations have initially chosen
Delaware for their domicile or have subsequently reincorporated in Delaware in a
manner similar to that proposed by the Company. Because of Delaware's
long-standing policy of encouraging incorporation in that state, and
consequently its preeminence as the state of incorporation for many major
corporations, the Delaware courts have developed a considerable expertise in
dealing with corporate issues and a substantial body of case law has developed
construing Delaware law and establishing public policies with respect to
Delaware corporations. It is anticipated that Delaware corporate law will
continue to be interpreted and explained in a number of significant court
decisions which may provide greater predictability with respect to the Company's
corporate legal affairs. Certain aspects of Delaware corporate law have,
however, been criticized on the ground that they do not afford minority
shareholders the same substantive rights and protection as are available in a
number of other states. For a discussion of certain differences in shareholders'
rights and the powers of management under the Delaware General Corporation law
and the NYBCL, see "Certain Differences Between the Corporation Laws of New York
and Delaware" on page 19.
No Change in Business and Capitalization
The Reincorporation will not result in any change in the capitalization,
business, management, assets, liabilities or net worth of the Company. The
Company's stock certificates will automatically be deemed to represent the same
number of PolyVision Delaware shares as represented by the Company's
certificates prior to the Reincorporation. Upon consummation of the
Reincorporation, the authorized number of shares of capital stock of PolyVision
Delaware will be the same as that of the Company, and will consist of 25,000,000
shares of Common Stock, with a par value of one tenth of one cent ($.001) per
share and 1,500,000 shares of PolyVision Preferred Stock, with a par value of
one cent ($.01) per share.
Changes in the Certificate of Incorporation and By-laws
Upon the Reincorporation, the Certificate of Incorporation and By-laws of
PolyVision Delaware will become the Company's Certificate of Incorporation and
By-laws. The Certificate of Incorporation and By-Laws of PolyVision Delaware
will be substantially similar to those of PolyVision New York except for certain
provisions specified under the General Corporation Law of Delaware (the "DGCL").
The principal difference between the provisions of the Certificate of
Incorporation of PolyVision Delaware and that of the Certificate of
Incorporation of PolyVision New York relates to preemptive rights. Under the
NYBCL, unless a corporation's certificate of incorporation provides otherwise,
shareholders generally have preemptive rights to acquire unissued securities or
rights to purchase securities of a New York corporation before a corporation may
offer them to other persons. The Certificate of Incorporation of PolyVision
18
<PAGE>
New York expressly disclaims preemptive rights. Accordingly, shareholders of
PolyVision New York currently do not have preemptive rights, and the
Reincorporation will not change the current rights of the Company's shareholders
in this regard. In addition, the By-laws of PolyVision Delaware provide for the
corporation to indemnify a director or officer against certain claims, and the
By-laws of PolyVision New York provide for similar obligations.
Certain Differences Between the Corporation Laws of New York and Delaware
Although it is impractical to compare all of the differences between the
laws of New York and the laws of Delaware, among the differences are the right
to merge or dissolve the Company with the approval of the holders of only a
majority of, rather than two-thirds of, the Company's shares, the right to take
corporate action without a shareholders' meeting upon the written consent of
less than all shareholders, the minimum size of the Board of Directors and
committees of the Board of Directors, the right of a Board of Directors of a
Delaware corporation to authorize loans to corporate directors who are officers
or employees and to issue stock options without seeking shareholder approval. In
addition, Delaware's appraisal rights provisions are more limited. This summary
does not purport to be a complete statement of the differences between the NYBCL
and the DGCL and related laws affecting shareholders' rights, and the summary is
qualified in its entirety by reference to the provisions of these laws.
Vote Required for Certain Extraordinary Corporate Transactions. New York
law requires the affirmative vote of the holders of two-thirds of all of a
corporation's outstanding shares entitled to vote thereon to authorize a merger,
consolidation, share exchange, dissolution or disposition of substantially all
of its assets. The DGCL requires the affirmative vote of only a majority of the
outstanding stock entitled to vote thereon to authorize any such action, unless
otherwise expressly provided in the certificate of incorporation. In addition,
Delaware law permits a merger without approval of the shareholders of the
surviving corporation if, among other things, no charter amendment is involved,
each outstanding share of common stock is to be an identical share of the
surviving corporation after the merger, and the merger results in no more than a
20% increase in outstanding shares of common stock of such corporation.
Corporate Action without a Shareholders Meeting. A shareholders meeting to
authorize corporate action may be dispensed with by a New York corporation only
upon the written consent of the holders of all of a corporation's outstanding
shares entitled to vote thereon. Delaware law permits corporate action without a
meeting of shareholders upon the written consent of the holders of that number
of shares necessary to authorize the proposed corporate action being taken,
unless the certificate of incorporation expressly provides otherwise.
Thereafter, under Delaware law, prompt notice of such action must be sent to all
shareholders of the Company who did not consent to such action.
Dissenters' Rights. New York law provides that, upon compliance with the
applicable requirements and procedures, a dissenting shareholder has the right
to receive the fair value of his or her shares if he is entitled to vote and
objects to (i) certain mergers, (ii) certain share exchanges, (iii) a
consolidation, (iv) a disposition of assets requiring shareholder approval and
19
<PAGE>
(v) certain amendments to the certificate of incorporation which adversely
affect the rights of such shareholder. Delaware law provides such appraisal
rights only in the case of a shareholder objecting to certain mergers or
consolidations, and such appraisal rights do not apply (i) to shareholders of
the surviving corporation in a merger if shareholder approval of the merger is
not required or (ii) to any class of stock which is either listed on a national
securities exchange or held of record by more than 2,000 holders unless
shareholders are required to accept for their shares in the merger or
consolidation anything other than common stock of the surviving or resulting
corporation or common stock of another corporation that is so listed or held
(and cash in lieu of fractional shares).
Dividends. Under both New York and Delaware law, a corporation may
generally pay dividends out of surplus. In addition, Delaware law permits a
corporation, under certain circumstances, to pay dividends, if there is no
surplus, out of its net profits for the fiscal year in which the dividend is
declared and/or the preceding fiscal year. The Company currently has no plans to
pay dividends on its Common Stock.
Number of Directors; Size of Committees. Under New York law, the board of
directors and each committee of the board of directors of corporations such as
the Company must consist of three or more directors. The number of directors may
be increased or decreased by amendment of the by-laws or by action of the
shareholders or of the board under the specific limitation of a by-law adopted
by the shareholders, subject to certain limitations. Under Delaware law, a board
of directors or a committee of the board of directors may consist of a single
director. If the certificate of incorporation does not specify the number of
directors, the board of directors may fix or change the authorized number of
directors pursuant to a provision of the by-laws.
Classification of the Board of Directors. New York law permits a
classified board with as many as four classes but forbids fewer than three
directors in any class. Delaware law permits but does not require the adoption
of a classified board of directors pursuant to which the directors can be
divided into as many as three classes with staggered terms of office with only
one class of directors coming up for election each year, and does not forbid
fewer than three directors in any class.
Loans to Directors. New York law prohibits loans to directors unless
authorized by a vote of shareholders other than the borrower. Delaware law
permits the Board of Directors, without shareholder approval, to authorize loans
to officers and employees, including officers who are also corporate directors,
whenever the directors reasonably expect such loan to benefit the corporation.
Rights and Options. New York law requires shareholder approval of the
issuance of any rights or options to directors, officers or employees. Delaware
law does not require shareholder approval of such issuances.
20
<PAGE>
Consideration for Shares. New York law provides that neither obligations
of the subscriber for future payments nor obligations of the subscriber for
future services shall constitute payment or part payment for the issuance of
shares by a corporation. Furthermore, certificates for shares may not be issued
until the full amount of the consideration therefor has been paid (except in the
case of shares purchased pursuant to stock options under a plan permitting
installment payments). Delaware law provides that shares of stock may be issued,
and deemed to be fully paid and nonassessable, if the corporation receives
consideration (in the form of cash, services rendered, personal property, real
property, leases of real property, or a combination thereof) having a value not
less than the par value of such shares and the corporation receives a binding
obligation of the subscriber to pay the balance of the subscription price.
Inspection of Shareholder's List. New York law with respect to the
inspection of shareholders' lists provides a right of inspection on at least 5
days' written demand to (i) any person who shall have been a shareholder for at
least 6 months immediately preceding his demand or (ii) any person holding or
thereunto authorized in writing by at least 5% of any class of outstanding
shares. The corporation has certain rights calculated to assure itself that the
demand for inspection is not for a purpose or interest other than that of the
corporation. Delaware law permits any shareholder to inspect the shareholder's
list for a purpose reasonably related to such person's interest as a shareholder
and, during the 10 days preceding a shareholders' meeting, for any purpose
germane to that meeting.
Business Combination Statutes. New York law restricts certain business
combinations between a "resident domestic corporation" and an interested
shareholder. However, the NYBCL defines "resident domestic corporation" as any
corporation that, among other things, has its principal executive offices and
significant business operations in New York or has at least 250 or 25% of its
employees in New York. As a result, these provisions currently would not apply
to the Company. Delaware prohibits any "business combination" between a Delaware
corporation and an "interested shareholder" for three years following the date
that the interested shareholder became an interested shareholder unless (i)
prior to that date the Board approved the business combination or the
transaction that resulted in the interested shareholder becoming an interested
shareholder, (ii) upon consummation of the transaction that resulted in the
interested shareholder becoming an interested shareholder the interested
shareholder held at least 85% of the outstanding voting stock of the corporation
(not counting shares owned by officers and directors and certain shares in
employee stock plans), or (iii) on or subsequent to such date the business
combination is approved by the board and at least two-thirds of the outstanding
shares of voting stock not owned by the interested shareholder. The Delaware
statute defines "interested shareholder" as any person who beneficially owns,
directly or indirectly, 15% or more of the outstanding voting stock of the
corporation. Unlike New York, Delaware does not require that the corporation's
principal executive office or significant operations be located within the state
in order to be covered by this law.
21
<PAGE>
Termination
The Board of Directors of the Company may terminate the Reincorporation at
any time prior to the Effective Date, whether before or after approval by the
shareholders of the Company, if (i) the Reincorporation shall not have received
the requisite approval of the shareholders of the Company; or (ii) the Board of
Directors of the Company determines, in its sole discretion, that the
Reincorporation would be inadvisable or not in the best interests of the Company
and its shareholders.
Federal Income Tax Consequences
Under current law the Reincorporation will constitute a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the principal Federal income tax consequences of the
Reincorporation will be as set forth below. No ruling has been requested from
the Internal Revenue Service confirming the Federal income tax consequences of
the Reincorporation.
Assuming the Reincorporation qualifies as a reorganization under Section
368 of the Code, no gain or loss will be recognized to holders of PolyVision New
York shares who exchange their PolyVision New York shares solely for PolyVision
Delaware shares. Current holders of PolyVision New York shares will have the
same tax basis in the shares of PolyVision Delaware received in the
Reincorporation as the basis in the shares of PolyVision New York exchanged
therefor, and their holding period for the shares of PolyVision Delaware will
include the period during which the shares of PolyVision New York were held,
provided such shares of PolyVision New York were held as capital assets on the
Effective Date.
THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS A VOTE FOR THE
REINCORPORATION FROM NEW YORK TO DELAWARE (PROPOSAL 2).
22
<PAGE>
PROPOSAL 3
RATIFICATION OF ADOPTION OF 1995 DIRECTORS STOCK
OPTION PLAN AND 1995 DIRECTORS STOCK GRANT PLAN
1995 Directors Stock Option Plan
On October 2, 1995, the Company's Board of Directors adopted the 1995
Director Stock Option Plan (the "Option Plan"), providing for the grant of stock
options to purchase 25,000 shares of the Company's Common Stock at an exercise
price of $3.86 per share to each non-management director vesting equally over
four years. An aggregate of 300,000 authorized, unissued shares of Company
Common Stock are to be reserved for issuance upon exercise of stock options
pursuant to the Option Plan. The Board of Directors directed that a proposal
approving the adoption of the Option Plan be submitted to a vote of the
shareholders of the Company at the Annual Meeting. Accordingly, the Company has
included in this Proposal No. 3 a description of the Option Plan, pursuant to
Rule 16b-3 promulgated by the Securities and Exchange Commission that provides
an exemption from the operation of the "short-swing" profit recovery provisions
of Section 16(b) of the Securities Exchange Act of 1934, as amended, with
respect to the acquisition of options and shares. The material features of the
Option Plan are discussed below, but the description is subject to, and is
qualified in its entirety by, the full text of the Option Plan which is attached
as Exhibit B. To date, 150,000 options have been granted under the Option Plan,
subject to the approval of this Proposal No. 3 by the shareholders of the
Company.
The purpose of the Option Plan is to provide additional incentives to
attract and retain qualified and competent persons as directors upon whose
efforts and judgment the success of the Company and its subsidiaries is largely
dependent, through the encouragement of stock ownership in the Company by such
persons. In furtherance of this purpose, the Option Plan authorizes the granting
of stock options to purchase Company Common Stock to directors.
The Option Plan is administered by the Stock Option Committee, a committee
consisting of two or more directors designated by the Company's Board of
Directors. The Stock Option Committee, in its sole discretion, determines the
persons to be awarded options, the number of shares subject thereto and the
exercise price and other terms thereof. In addition, the Stock Option Committee
has full power and authority to construe and interpret the Option Plan, and the
acts of the Stock Option Committee are final, conclusive and binding upon all
interested parties, including the Company, its shareholders, its officers and
employees, recipients of grants under the Option Plan and all persons or
entities claiming by or through such persons.
The persons who are eligible to be awarded grants of options under the
Option Plan are the outside (non-employee) directors, duly elected to the Board
by the Company's shareholders or otherwise in accordance with the Company's
Bylaws, and all outside (non-employee) directors appointed to fill a vacancy or
a newly-created directorship position on the Board. The Company
23
<PAGE>
currently has six outside (non-employee) directors who are presently eligible to
participate in the Plan.
The shares acquired upon exercise of options granted under the Option Plan
will be authorized and unissued shares of Company Common Stock. The Company's
shareholders will not have any preemptive rights to purchase or subscribe for
the shares reserved for issuance under the Option Plan. If any option granted
under the Option Plan should expire or terminate for any reason other than
having been exercised in full, the unpurchased shares subject to that option
will again be available for purposes of the Option Plan. The aggregate number of
shares of Common Stock which may be issued upon exercise of options granted
under the Option Plan will not exceed 300,000 shares.
Terms and Conditions
All options granted under the Plan will be evidenced by a written
agreement between the Company and the grantee. Such agreements shall contain
such terms and conditions, consistent with the Option Plan, relating to the
grant, the time or times of exercise and other terms of the options as the Stock
Option Committee prescribes.
Under the Option Plan, the option price per share for stock options may
not be less than the fair market value of the underlying shares on the date of
grant. For purposes of the Option Plan, the term "fair market value" shall mean
the exercise price per share of an Option equal to $3.86, which is 110% of the
average trading price of a share of Common Stock over a 30-day period following
the June 14, 1995 "spin-off" of the Company. The exercise price of an option may
be paid in cash, or at the sole discretion of the Stock Option Committee, by
delivery of already owned shares of Company Common Stock having a fair market
value equal to the exercise price, or by a combination of the foregoing. Cash
payments will be used by the Company for general corporate purposes. Payments
made in Company Common Stock must be made by delivery of stock certificates in
negotiable form.
The use of already-owned shares of Company Common Stock applies to payment
for the exercise of any option in a single transaction and to the "pyramiding"
of already owned shares in successive, simultaneous option exercises. In
general, pyramiding permits an option holder to start with as little as one
share of Company Common Stock and exercise an entire option to the extent then
exercisable (no matter what the number of shares subject thereto). By utilizing
already owned shares of Company Common Stock, no cash (except for fractional
share adjustments) is needed to exercise an option. Consequently, the optionee
would receive Company Common Stock equal in value to the spread between the fair
market value of the shares subject to the option and the exercise price of the
option.
No option granted under the Option Plan is assignable or transferable,
other than by will or by the laws of descent and distribution. During the
lifetime of an optionee, an option is exercisable only by such optionee. The
expiration date of an option will be determined by the Stock Option Committee at
the time of grant, but in no event will an option be exercisable after
24
<PAGE>
the expiration of ten years from the date of grant. An option may be exercised
at any time or from time to time only after a period of time or in installments,
as the Stock Option Committee determines. The Stock Option Committee may in its
sole discretion accelerate the date on which any option may be exercised.
The unexercised portion of any option granted to a director under the
Option Plan shall automatically be terminated (a) three months after the date on
which the optionee ceases to be a director for any reason other than (i) Cause
(as defined in the Option Plan); or (ii) death; (b) immediately upon the removal
of the optionee as a director for Cause; or (c) one year after the date on which
the optionee ceases to be a director of the Company by reason of death of the of
the optionee.
To prevent dilution of the rights of a holder of an option, the Option
Plan provides for adjustment of the number of shares for which options may be
granted, the number of shares subject to outstanding options and the exercise
price of outstanding options in the event of any subdivision or consolidation of
shares, or any stock dividend, recapitalization or other capital adjustment of
the Company. Provisions governing the effect upon options of a merger,
consolidation or other reorganization of the Company are also included in the
Option Plan.
Amendments
The Option Plan will expire on October 2, 2005, and any option outstanding
on such date will remain outstanding until it has either expired or has been
exercised. The Stock Option Committee may amend, suspend or terminate the Option
Plan at any time, provided that such amendment may not adversely affect the
rights of any optionee under an outstanding option without the affected
optionee's written consent. In addition, the Stock Option Committee may not
amend the Option Plan without first obtaining shareholder approval, to (a)
materially increase the number of shares of Company Common Stock reserved for
issuance or change the class of persons eligible to receive options, (b)
materially modify the requirements as to eligibility for participation, or (c)
otherwise involve any change or modification requiring Shareholder approval
under Rule 16b-3 of the Securities Exchange Act.
Federal Income Tax Consequences
The Option Plan is not qualified under the provisions of Section 401(a) of
the Code, nor is it subject to any of the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
Nonqualified Stock Options. An optionee granted a nonqualified stock
option under the Option Plan will generally recognize, at the date of exercise
of such option, ordinary income equal to the difference between the exercise
price and fair market value of the shares of Company Common Stock subject to the
nonqualified stock option. This taxable ordinary income will be subject to
Federal income tax withholding and the Company will be entitled to a deduction
for Federal income tax purposes equal to the amount of ordinary income
recognized
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by the optionee provided that such amount constitutes an ordinary and necessary
business expense to the Company and is reasonable, and the Company satisfies its
withholding obligation with respect to such income. If the Stock Option
Committee permits an optionee to exercise a nonqualified stock option under the
Option Plan by delivering shares of Company Common Stock, the optionee will not
recognize gain or loss with respect to the exchange of such shares, even if
their then fair market value is different from the optionee's tax basis. The
optionee, however, will be taxed as described above with respect to the exercise
of the nonqualified stock option as if he had paid the exercise price in cash,
and the Company likewise will be entitled to an equivalent tax deduction.
Provided a separate identifiable stock certificate is issued therefor, the
optionee's tax basis in that number of shares received on such exercise which is
equal to the number of shares surrendered on such exercise will be equal to his
tax basis in the shares surrendered and his holding period for such number of
shares received will include his holding period for the shares surrendered. The
optionee's tax basis and holding period for the additional shares received on
exercise of a nonqualified stock option paid for, in whole or in part, with
shares will be the same as if the optionee had exercised the nonqualified stock
option solely for cash.
Incentive Stock Options. Incentive stock options are "incentive stock
options" as defined in Section 422 of the Code. Under the Code, an optionee
generally is not subject to ordinary income tax upon the grant or exercise of an
incentive stock option. However, an employee who exercises an incentive stock
option by delivering shares of Company Common Stock previously acquired pursuant
to the exercise of an incentive stock option is treated as making a
Disqualifying Disposition (defined below) of such shares if the employee
delivers such shares before the expiration of the holding period applicable to
such shares. The applicable holding period is the longer of two years from the
date of grant or one year from the date of exercise. The effect of this
provision is to prevent "pyramiding" the exercise of an incentive stock option
(i.e., the exercise of the incentive stock option for one share and the use of
that share to make successive exercises of the incentive stock option until it
is completely exercised) without the imposition of current income tax.
The amount by which the fair market value of the shares acquired at the
time of exercise of an incentive stock option exceeds the exercise price of the
shares under such option generally will be treated as an item of adjustment
included in the optionee's alternative minimum taxable income for purposes of
the alternative minimum tax for the year in which the option is exercised. If,
however, there is a Disqualifying Disposition of the shares in the year in which
the option is exercised, the maximum amount of the item of adjustment for such
year is the gain on the disposition of the Company Common Stock. If there is a
Disqualifying Disposition in a year other than the year of exercise, the
dispositions will not result in an item of adjustment of such other year.
If, subsequent to the exercise of an incentive stock option (whether paid
for in cash or in shares), the optionee holds the shares received upon exercise
for a period that exceeds (a) two years from the date such incentive stock
option was granted or, if later, (b) one year from the date of exercise (the
"Required Holding Period"), the difference (if any) between the amount
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realized from the sale of such shares and their tax basis to the holder will be
taxed as long-term capital gain or loss. If the holder is subject to the
alternative minimum tax in the year of disposition, such holder's tax basis in
his shares will be increased for purposes of determining his alternative minimum
tax for such year, by the amount of the item of adjustment recognized with
respect to such shares in the year the option was exercised.
In general, if, after exercising an incentive stock option, an employee
disposes of the shares so acquired before the end of the Required Holding Period
(a "Disqualifying Disposition"), such optionee would be deemed in receipt of
ordinary income in the year of the Disqualifying Disposition, in an amount equal
to the excess of the fair market value of the shares at the date the incentive
stock option was exercised over the exercise price. If the Disqualifying
Disposition is a sale or exchange that would permit a loss to be recognized
under the Code (were a loss in fact to be sustained), and the sales proceeds are
less than the fair market value of the shares on the date of exercise, the
optionee's ordinary income would be limited to the gain (if any) from the sale.
If the amount realized upon disposition exceeds the fair market value of the
shares on the date of exercise, the excess would be treated as short-term or
long-term capital gain, depending on whether the holding period for such shares
exceeded one year.
An income tax deduction is not allowed to the Company with respect to the
grant or exercise of an incentive stock option or the disposition, after the
Required Holding Period, of shares acquired upon exercise. In the event of a
Disqualifying Disposition, a federal income tax deduction will be allowed to the
Company in an amount equal to the ordinary income to be recognized by the
optionee, provided that such amount constitutes an ordinary and necessary
business expense to the Company and is reasonable, and the Company satisfies its
withholding obligation with respect to such income.
1995 Directors Stock Grant Plan
On October 2, 1995, the Company's Board of Directors adopted the 1995
Director Stock Grant Plan (the "Grant Plan"), providing for the grant of 10,000
shares of the Company's Common Stock to each non-management director vesting
equally over three years. An aggregate of 200,000 authorized, unissued shares of
Company Common Stock are to be reserved to satisfy the requirements of the Grant
Plan. The Board of Directors directed that a proposal approving the adoption of
the Grant Plan be submitted to a vote of the shareholders of the Company at the
Annual Meeting. Accordingly, the Company has included in this Proposal No. 3 a
description of the Grant Plan, pursuant to Rule 16b-3 of the Securities Exchange
Act of 1934, as amended. The material features of the Grant Plan are discussed
below, but the description is subject to, and is qualified in its entirety by,
the full text of the Grant Plan which is attached as Exhibit C. To date, 60,000
shares of Company Common Stock have been granted under the Grant Plan, subject
to the approval of this Proposal No. 3 by the shareholders of the Company.
The purpose of the Grant Plan is to provide additional incentives to
attract and retain qualified and competent persons as directors upon whose
efforts and judgment the success of the
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Company and its subsidiaries is largely dependent, through the grant of shares
of Company Common Stock to such persons.
The Grant Plan is administered by the Company's Board of Directors. The
Board of Directors in its sole discretion, determines the persons to be granted
Company Common Stock, the number of shares subject thereto and the other terms
thereof. In addition, the Board of Directors has full power and authority to
construe and interpret the Grant Plan, and the acts of the Board of Directors
are final, conclusive and binding upon all interested parties, including the
Company, its shareholders, its officers and employees, recipients of grants
under the Grant Plan and all persons or entities claiming by or through such
persons.
The persons who are eligible to be awarded grants under the Grant Plan are
the outside (non-employee) directors, duly elected to the Board by the Company's
stockholders or otherwise in accordance with the Company's Bylaws, and all
outside (non-employee) directors appointed to fill a vacancy or a newly-created
directorship position on the Board. The Company currently has six outside
(non-employee) directors who are presently eligible to participate in the Plan.
The shares granted under the Grant Plan will be authorized and unissued
shares of Company Common Stock. The Company's shareholders will not have any
preemptive rights to purchase or subscribe for the shares reserved for issuance
under the Grant Plan. The aggregate number of shares of Common Stock which may
be issued as part of grants under the Grant Plan will not exceed 30,000 shares
for each director.
Terms and Conditions
All shares of Common Stock granted under the Grant Plan will be evidenced
by a written agreement between the Company and the grantee. Such agreements
shall contain such terms and conditions, consistent with the Grant Plan,
relating to the grant and other terms of the grant as the Board of Directors
prescribes. Under the Grant Plan, the term "fair market value" of a share of
Common Stock on any date of reference shall mean the Closing Price (as defined)
of the Common Stock on the business day immediately preceding such date, unless
the Board of Directors in its sole discretion shall determine otherwise in a
fair and uniform manner. No shares of Common Stock granted under the Grant Plan
are assignable or transferable, other than by will or by the laws of descent and
distribution.
As a condition of any grant of shares of Common Stock under the Grant
Plan, the Board of Directors may require such agreements or undertakings, if
any, as the Board may deem necessary or advisable to assure compliance with any
such law or regulation including, but not limited to, the following: (i) a
representation and warranty by the grantee to the Company that he is acquiring
the shares of Common Stock to be granted to him for investment and not with a
view to, or for sale in connection with, the distribution of any such shares;
and (ii) a representation, warranty and/or agreement to be bound by any legends
that are, in the opinion of the Board of Directors, necessary or appropriate to
comply with the provisions of any
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securities law deemed by the Board to be applicable to the issuance of the
shares of Common Stock and are endorsed upon the share certificates.
To prevent dilution of the rights of a grantee under the Grant Plan, the
Grant Plan provides for adjustment of the number of shares which may be granted
in the event of any issuance of Common Stock or any security convertible into
shares of Common Stock, any subdivision or consolidation of shares, or any stock
dividend, recapitalization or other capital adjustment of the Company.
Provisions governing the effect of any issuance of securities, merger,
consolidation or other reorganization of the Company are also included in the
Grant Plan.
Vesting
Shares of Common Stock included in the Grant Plan are subject to the
vesting provisions set forth in the Grant Plan. Shares which have vested
according to the formula described herein are considered "Vested Shares" and
shares which have not so vested are considered "Non-Vested Shares." The shares
of Common Stock included in each grant vest on the date of each successive
Annual Meeting of Stockholders of the Company (the "Annual Meeting Date")
following the effective date of the grant. The number of shares of Common Stock
subject to a grant which become Vested Shares as of each Annual Meeting Date is
calculated by multiplying the number of shares of Common Stock included in the
grant by a fraction, the numerator of which is equal to the number of months
which have elapsed since the later of (i) the election or re-election of such
grantee (i.e., the effective date of the grant) or (ii) the last Annual Meeting
Date, and the denominator of which is the number of full months during which the
grantee serves as director following the award of the grant and until the next
Annual Meeting of Stockholders at which the class of directors to which the
grantee belongs is to be elected (assuming for purposes of this calculation that
the Annual Meeting Date is August 31 of such fiscal year).
A grantee may not assign, sell, pledge, hypothecate or otherwise transfer
any grant or any Non-Vested Shares. If a grantee ceases to be a director for any
reason or no reason, including upon death or disability, removal (with or
without cause) or resignation, the grant will be automatically terminated
immediately upon the effective date of such cessation and all shares included in
grants which are Non-Vested Shares as of the effective date of such cessation,
will be forfeited automatically and will, effective immediately upon such
cessation, be returned to the status of authorized to be issued pursuant to
grants under the Grant Plan.
A grantee will have all rights as a stockholder with respect to all shares
of Common Stock included in the grant, regardless of whether the shares awarded
are Vested or Non-Vested, including, without limitation, the right to vote any
such shares and the right to receive dividends.
Amendments
The Grant Plan will expire on October 2, 2005. The Board of Directors may
amend, suspend or terminate the Grant Plan at any time; provided, however, that,
without the approval
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<PAGE>
by the Company's shareholders, no such amendment shall (i) materially increase
the benefits accruing to participants under the Grant Plan, (ii) materially
increase the number of shares of Common Stock or other securities reserved for
grant, (iii) materially modify the requirements as to eligibility for
participation under the Grant Plan or (iv) otherwise involve any other change or
modification requiring shareholder approval under Rule 16b-3 of the Securities
Exchange Act; and, provided, further, that no amendment or suspension of the
Plan shall substantially impair any shares of Common Stock previously granted to
any grantee without the consent of such grantee.
Federal Tax Consequences
The following discussion is intended only as a general summary of the
federal income tax consequences to grantees under the Grant Plan and the Company
with respect to the Grant Plan. The discussion is based on current laws which
are subject to change at any time or which may be interpreted differently. The
discussion does not address tax consequences under the laws of any state, local
or foreign jurisdiction and the tax treatment of each grantee will depend in
part upon such grantee's particular tax situation.
Unless a grantee makes an election under Section 83(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), as described below, amounts paid
to a grantee as dividends with respect to such shares of Common Stock prior to
the date that a grantee's shares vest under the Grant Plan will be treated for
federal income tax purposes as compensation income (taxable at ordinary income
rates) for which the Company will be entitled to a compensation deduction with
respect to such amounts. However, upon the vesting of a grantee's shares (or a
grantee's making of a timely Code Section 83(b) election), amounts paid to a
grantee as dividends will be treated as dividends for federal income tax
purposes for which the Company will not be entitled to a deduction with respect
to such amounts.
In general, a grantee will not recognize income upon receipt of shares
pursuant to a grant. However, upon vesting of a grantee's shares of Common
Stock, a grantee will recognize compensation income (and receive basis in such
shares) in an amount equal to the fair market value of the vested shares
determined on the vesting date, and the Company will be entitled to a
compensation deduction equal to such amount. Alternatively, no later than 30
days after a grant of shares of Common Stock, a grantee may make an election
under Code Section 83(b). In such case, the grantee will recognize compensation
income in the taxable year of the grant (and receive a basis) equal to the fair
market value of such shares determined on the date of grant, and the Company
will be entitled to a compensation deduction equal to such amount. In general,
under either alternative, a grantee will recognize capital gain or loss upon the
subsequent disposition of the shares of Common Stock.
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Grants Prior to Shareholder Approval
The following table sets forth information with respect to grants of the
Company's Common Stock and options to purchase Common Stock pursuant to the
Company's 1995 Directors Stock Grant Plan and the Company's 1995 Directors Stock
Option Plan, respectively, during the fiscal year ended April 30, 1996. Such
grants are subject to the approval of the Company's shareholders of this
Proposal No. 3.
Number of Options to
Number of Shares of Purchase Common Stock
Common Stock under under 1995 Directors
Name of Director 1995 Directors Stock Grant Plan Stock Option Plan
- ---------------- ------------------------------- -----------------
Steven S. Elbaum 10,000 25,000
Lyman C. Hamilton, Jr. 10,000 25,000
Stephen C. Knup 10,000 25,000
Robert J. Levenson 3,333 6,250
Thomas M. Ramseur 10,000 25,000
Bragi F. Schut 10,000 25,000
Shareholders are being asked to ratify the adoption of the 1995 Directors
Stock Option Plan and the 1995 Directors Stock Grant Plan. The affirmative vote
of the holders of a majority of the outstanding shares of Company Common Stock
present and voting at the Annual Meeting is required for approval and adoption
of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE
PROPOSAL.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present
proposals for consideration at shareholders meetings. Any such proposal to be
included in the proxy statement for the Company's 1997 Annual Meeting of
Shareholders must be submitted to the Secretary of the Company prior to May 31,
1997. It is suggested that such proposals be sent by Certified Mail, Return
Receipt Requested.
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OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Company knows of no other matters to be presented at the Annual
Meeting, but if any other matters should properly come before the meeting, it is
intended that the persons named in the accompanying form of proxy will vote the
same in accordance with their best judgment and their discretion, and authority
to do so is included in the proxy.
By Order of the Board of Directors
LAWRENCE W. HAY
Vice President of Finance and Secretary
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Exhibit A
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger (this "Plan of Merger") made as of the ____
day of ___________ 1996, by and between PolyVision Corporation, a New York
corporation ("PolyVision New York") and PolyVision Corporation, a Delaware
corporation ("PolyVision"); PolyVision New York and PolyVision Delaware are
hereinafter sometimes collectively referred to as the "Constituent
Corporations"). PolyVision Delaware will be the surviving corporation, sometimes
hereinafter referred to as the "Surviving Corporation".
W I T N E S S E T H:
WHEREAS, PolyVision New York has an authorized capital stock consisting of
25,000,000 shares of common stock, $.001 par value, of which _____________
shares are issued and outstanding and ___________ shares are held as treasury
shares, and 1,500,000 shares of preferred stock, ____________ of which are
issued and outstanding; and
WHEREAS, PolyVision Delaware has an authorized capital stock consisting of
25,000,000 shares of common stock, $.001 par value of which 100 shares are
issued and outstanding, and 1,500,000 shares of preferred stock, ________ of
which are issued and outstanding; and
WHEREAS, all of the outstanding shares of PolyVision Delaware are held by
PolyVision New York;
WHEREAS, the Board of Directors of each of the Constituent Corporations
deems it advisable and generally to the advantage and welfare of their
respective Constituent Corporations and shareholders that PolyVision New York
merge with and into PolyVision Delaware, with PolyVision Delaware to be the
Surviving Corporation, pursuant to the provisions of Section 907 of the Business
Corporation Law of the State of New York (the "NYBCL") and Section 252 of the
General Corporation Law of the State of Delaware;
NOW, THEREFORE, subject to the approval of this Plan of Merger by the
shareholders of PolyVision New York, the Constituent Corporations hereby agree
as follows:
FIRST: Merger. At the Effective Time (as defined in Section SECOND
herein), PolyVision New York will be and it hereby is merged with and into
PolyVision Delaware (the "Merger").
SECOND: Effective Time. This Plan of Merger will become effective
immediately upon the filing of a Certificate of Merger pursuant to Section 906
of the NYBCL by the Department of State of the State of New York. The date and
time of such filing is herein referred to as the "Effective Time."
<PAGE>
THIRD: Plan of Merger. This Plan of Merger constitutes a plan of merger
pursuant to Section 906 of the NYBCL, to be carried out in the manner, on the
terms and subject to the conditions herein set forth.
FOURTH: Surviving Corporation. At the Effective Time the separate
existence of PolyVision New York will cease, and PolyVision Delaware, as the
surviving corporation of the Merger, will continue to exist under and be
governed by the laws of the State of Delaware. The name of the Surviving
Corporation will remain PolyVision Corporation
FIFTH: Terms and Conditions of the Merger.
(a) Rights and Liabilities of the Surviving Corporation. At and
after the Effective Time, the Surviving Corporation will succeed to and possess,
without further act or deed, all of the estate, rights, privileges, powers, and
franchises, both public and private, and all of the property, real, personal and
mixed, of the Constituent Corporations; all debts due either of the Constituent
Corporations will be vested in the Surviving Corporation; all claims, demands,
property, rights, privileges, powers and franchises and every other interest of
either of the Constituent Corporations will be the property of the Surviving
Corporation; the title to any real property of either of the Constituent
Corporations will not revert or be in any way impaired by reason of the Merger,
but will be vested in the Surviving Corporation; all rights of creditors and all
liens upon any property of either of the Constituent Corporations will be
preserved unimpaired, limited in lien to the property affected by such lien at
the Effective Time; and all debts, liabilities and duties of the Constituent
Corporations will thenceforth attach to the Surviving Corporation and may be
enforced against it to the same extent as if such debts, liabilities, and duties
had been incurred or contracted by it.
(b) Conversion of Outstanding Stock. At the Effective Time, the
issued shares of the common stock of PolyVision Delaware will automatically be
canceled, and without the surrender of stock certificates or any other action,
the shares of the common stock of PolyVision New York which are issued
immediately prior to the merger will be the shares of the Surviving Corporation.
The shares of common stock of PolyVision New York held as Treasury shares will
become treasury shares of PolyVision Delaware.
SIXTH: Certificate of Incorporation; By-laws. The certificate of
incorporation of PolyVision Delaware as existing at the Effective Time, a copy
of which is attached hereto as Annex I, will be unaffected by the Merger and
will be the certificate of incorporation of the Surviving Corporation until the
same is amended or repealed in accordance with Delaware law. The By-laws of
PolyVision Delaware as existing at the Effective Time, a copy of which is
attached hereto as Annex II, will continue in full force as the By-laws of the
Surviving Corporation until altered, amended or repealed as provided therein or
as provided by law.
SEVENTH: Directors and Officers of Surviving Corporation. The directors
and officers of PolyVision New York immediately prior to the Merger, whose names
and offices are set forth on Annex II attached hereto, will be the directors and
officers of the Surviving Corporation.
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EIGHTH: Termination. This Plan of Merger may be terminated and the Merger
abandoned for any reason whatsoever, by mutual consent of the Board of Directors
of the Constituent Corporations, at any time prior to the Effective Time,
notwithstanding adoption and approval of this Plan of Merger by the shareholders
of the Constituent Corporations.
NINTH: Amendment. This Plan of Merger may be amended at any time prior to
the Effective Time by mutual consent of the Boards of Directors of the
Constituents Corporations; provided, however, that no such amendment shall
adversely affect the rights of the shareholders of PolyVision New York or
PolyVision Delaware subsequent to the adoption and approval of this Plan of
Merger by the shareholders of PolyVision New York or PolyVision Delaware, as the
case may be.
IN WITNESS WHEREOF, the foregoing Plan of Merger, which was duly adopted
by the Board of Directors of each of the Constituent Corporations, has been
executed by the President and Chief Operating Officer, and by the Chief
Financial Officer and Secretary of each of the Constituent Corporations on and
as of the date first set forth above.
POLYVISION CORPORATION
(a New York corporation)
By:_____________________________
Joseph A. Menniti
President and Chief
Operating Officer
Attest:_________________________
Lawrence W. Hay
Vice President of Finance
and Secretary
POLYVISION CORPORATION
(a Delaware corporation)
By:_____________________________
Joseph A. Menniti
President and Chief
Operating Officer
Attest:_________________________
Lawrence W. Hay
Vice President of Finance
and Secretary
3
