As filed with the Securities and Exchange Commission on October 30, 1996
Registration No. 33-
- -------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EXECUTIVE TELECARD, LTD.
(Exact name of registrant as specified in its charter)
Delaware 13-3486241
(State of incorporation) (I.R.S. Employer ID No.)
One Blue Hill Plaza, Suite 1650
P.O. Box 1769, Pearl River, New York 10965
(Address of Principal Executive Offices) (Zip Code)
DIRECTORS AND EMPLOYEES 1993 STOCK OPTION PLAN
1995 EMPLOYEE STOCK OPTION AND APPRECIATION RIGHTS PLAN
1995 DIRECTORS STOCK OPTION AND APPRECIATION RIGHTS PLAN
(Full title of the plans)
Robert N. Schuck
Executive Telecard, Ltd.
One Blue Hill Plaza, Suite 1650, P.O. Box 1769
Pearl River, New York 10965
(Name and address of agent for service)
(914) 627-2060
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount Proposed maximum Proposed maximum Amount of
securities to to be offering aggregate registration
be registered registered price per share offering price fee
<S> <C> <C> <C> <C>
Common Stock
$0.001 Par
Value Per
Share 1,340,594 $9.0156<FN1> $12,086,259.26 $3,662.50
Common Stock
$0.001 Par
Value Per
Share 829,406 Various<FN2> $4,670,210.44 $1,415.22
Total 2,170,000 $16,756,469.70 $5,077.72
<FN>
(1) Computed on the basis of the last price reported to the National
Association of Securities Dealers Automated Quotation System on
October 28, 1996, solely for purposes of calculating the filing
fee, pursuant to Rule 457(h) of the Securities Act of 1933, as
amended.
(2) Computed on the basis of the actual exercise price per share for
options previously granted, solely for purposes of calculating the
filing fee, pursuant to Rule 457(h) of the Securities Act of 1933,
as amended.
</FN>
</TABLE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in this Item
1 will be sent or given to employees as specified by Rule 428(b)(1). In
accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission") and the instructions to Form S-8, such
documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424.
Item 2. Registrant Information and Employee Plan Annual Information
The documents containing the information specified in this Item
2 will be sent or given to employees as specified by Rule 428(b)(1). In
accordance with the rules and regulations of the Commission and the
instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission are
incorporated by reference in this Registration Statement:
(1) The Registrant's Form 10-K filed for the year ended March
31, 1996, as amended on Form 10-K/A filed on September 13,
1996.
(2) The Registrant's Form 10-Q for the quarter ended June 30,
1996.
(3) All other documents filed by Registrant under Sections
13(a), and 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") since the end of the fiscal year
covered by the report referred to in (1) above;
(4) The section entitled "Description of Securities to be
Registered" contained in the Registrant's registration
statement on Form 8-A, File No. 0-23866, filed on March 30,
1989 and as amended on Form 8 on April 14, 1989 pursuant to
Section 12(g) of the Exchange Act.
All documents subsequently filed with the Commission by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in the Registration Statement and to be a part hereof from the
date of filing of such documents.
Any statement contained in any document incorporated, or deemed
to be incorporated, by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that
a statement contained herein or in any subsequently filed document which
also is, or is deemed to be, incorporated by reference herein modifies or
supersedes such statement. Except as so modified or superseded, such
statement shall not be deemed to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Officers and Directors.
The Registrant's Certificate of Incorporation and Bylaws and the
laws of the State of Delaware provide for indemnification of officers and
directors of the Registrant, made a party to a proceeding because they
were an officer or director of the Company, against all expenses,
liability, loss, judgments, fines and amounts paid in settlement incurred
in connection with proceedings, whether civil, criminal, administrative,
or investigative, provided that it is determined that they acted in good
faith, that, in the case of their official capacity with the Company, they
reasonably believed that their conduct was in the Company's best interests
or, in all other cases, that their conduct was at least not opposed to the
Company's best interests, and, in any criminal matter, that they had
reasonable cause to believe that their conduct was not unlawful.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
The Exhibit Index immediately preceding the exhibits is
incorporated herein by reference.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth
in the Registration Statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3 or
S-8, and the information required in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13(d) or Section 15(a) of
the Securities Exchange Act of 1934, as amended, that are incorporated by
reference in the Registration Statement.
(2) That the purpose for determining any liability under
the Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(b) Insofar as indemnification for liabilities arising under
the Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the Securities Act of 1933, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pearl River, State
of New York, on October 28, 1996.
EXECUTIVE TELECARD, LTD.
By:/s/Anthony Balinger
Anthony Balinger, President and
Principal Executive Officer
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Dated: October 28, 1996 By:/s/Anthony Balinger
Anthony Balinger, Director
Dated: October 28, 1996 By:/s/Edward J. Gerrity, Jr.
Edward J. Gerrity, Jr., Chairman and
Director
Dated: October 28, 1996 By:/s/Allen Mandel
Allen Mandel, Executive Vice President and
Principal Financial Officer
Dated: October 28, 1996 By:/s/Timothy A. Peach
Timothy A. Peach, Controller, Principal
Accounting Officer
Dated: October 28, 1996 By:/s/Stig Sonnerberg
Stig Sonnerberg, Director
Dated: October 28, 1996 By:/s/Richard A. Krinsley
Richard A. Krinsley, Director
Dated: October 28, 1996 By:/s/David W. Warnes
David W. Warnes, Director
Dated: October 28, 1996 By:/s/Ebrahim Ali Abdul Aal
Ebrahim Ali Abdul Aal, Director
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Exhibit Method of Filing
<S> <C> <C>
4.1a Restated (and Amended) Certificate of
Incorporation dated October 28, 1988
(incorporated by reference from Exhibit 3.1
of the Registrant's Registration Statement
on Form S-3, SEC reference No. 33-67136). --
4.1b Amendment to Certificate of Incorporation Filed herewith
dated July 31, 1996. electronically
4.1c Amendment to Certificate of Incorporation Filed herewith
dated September 12, 1996. electronically
4.2 Bylaws (incorporated by reference from
Exhibit 3.2 of the Registrant's
Registration Statement on Form S-3,
SEC reference No. 33-67136). --
4.3a Directors and Employees 1993 Filed herewith
Stock Option Plan electronically
4.3b 1995 Employee Stock Option and
Appreciation Rights Plan dated Filed herewith
December 14, 1995. electronically
4.3c 1995 Directors Stock Option and
Appreciation Rights Plan Filed herewith
dated December 14, 1995. electronically
5.1 Opinion of Gorsuch Kirgis L.L.C.
regarding legality of shares being Filed herewith
issued. electronically
23.1 Consent of BDO Seidman, LLP. Filed herewith
electronically
23.2 Consent of Goldstein, Karlewicz Filed herewith
& Goldstein LLP. electronically
23.3 Consent of Gorsuch Kirgis L.L.C.
(contained in its opinion as Exhibit 5.1). --
</TABLE>
Exhibit 5.1
GORSUCH KIRGIS L.L.C.
Attorneys at Law
Suite 1100
1401 Seventeenth Street
Denver, Colorado 80202
Telephone (303) 299-8900
October 29, 1996
Executive Telecard, Ltd.
One Blue Hill Plaza, Suite 1650
Pearl River, New York 10965
Re: Executive Telecard, Ltd.
Registration Statement on Form S-8
Gentlemen:
We are counsel to Executive Telecard, Ltd., a Delaware corporation
(the "Company"), in connection with the preparation of a registration
statement on Form S-8 to be filed with the Securities and Exchange
Commission (the "Registration Statement"), relating to the proposed
offering by the Company of up to 2,170,000 shares of Common Stock pursuant
to the Company's Directors and Employees 1993 Stock Option Plan, 1995
Employee Stock Option and Appreciation Rights Plan and 1995 Directors
Stock Option and Appreciation Rights Plan (collectively, the "Plans").
In this connection, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of such corporate records,
certificates and written or oral statements of officers, legal counsel and
accountants of the Company and of public officials, and other documents
that we have considered necessary and appropriate, and, based thereon, we
advise you that in our opinion:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Delaware.
2. The shares offered by the Company, when issued pursuant to and
in accordance with the Plans will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/Gorsuch Kirgis L.L.C.
GORSUCH KIRGIS L.L.C.
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Executive TeleCard, Ltd.
Pearl River, New York
We hereby consent to the incorporation by reference in this Registration
Statement of our report dated June 3, 1996, relating to the consolidated
financial statements and schedule of Executive Telecard, Ltd. appearing in
the Company's Annual Report on Form 10-K for the year ended March 31,
1996.
/s/ BDO Seidman, LLP
BDO SEIDMAN, LLP
Denver, Colorado
October 28, 1996
Exhibit 4.3a
EXECUTIVE TELECARD, LTD.
DIRECTORS AND EMPLOYEES
1993 STOCK OPTION PLAN
1. PURPOSE: It is the belief of the management of Executive TeleCard,
Ltd. (the "Company") that the Company's economic growth is enhanced by
attracting, retaining and motivating Directors and Employees of experience
and skill. Accordingly, Directors and Employees of the Company shall be
afforded the opportunity to acquire shares of the Company's authorized
Common Stock, par value $.10 per share, at a price which the Company
expects to be below the fair market value of such shares on the exercise
date. By providing this opportunity through the adoption of the Executive
TeleCard, Ltd. Directors and Employees Stock Option Plan and Agreement
(the "Plan"), the Company hopes to motivate superior performance on the
part of these Directors and Employees and insure the continuing growth and
profitability of the Company.
2. ADMINISTRATION:
(a) IN GENERAL: The Plan shall be administered by one or more
members of the Board of Directors of the Company (the "Committee"). The
Committee shall be appointed by and serve at the pleasure of the Board.
(b) PROCEDURAL GUIDELINES: The Committee shall act by agreement
of a majority of its entire membership, either by vote taken at a duly
convened meeting (which may include a meeting conducted by way of
conference telephone call) or by written direction executed by all members
of the Committee.
(c) POWERS AND DUTIES: The Committee shall have the power and
duty to do all things necessary or convenient to effect the intent and
purpose of the Plan not inconsistent with any of the provisions hereof,
whether or not such powers and duties are specifically set forth herein,
and not in limitation but in application the foregoing, shall have the
power and/or obligation to:
(1) provide rules and regulations for the administration of
the Plan and the conduct of the Committee's affairs, and from time to
time, as appropriate, to amend or supplement such rules and regulations;
(2) correct any defect, supply any omission or reconcile any
inconsistency in the Plan of a procedural nature in such manner and to
such extent as it shall deem advisable to maintain the Plan in the manner
intended; but it shall have no power to add to, subtract from or modify
any of the substantive terms of the Plan, and
(3) appoint or employ such advisors, agents or
representatives as it shall reasonably deem advisable in connection with
its proper administration of the Plan, and to rely upon their written
opinions, certificates or advice.
Notwithstanding the above, in no event shall the Committee exercise any
discretion as to the selection of Directors to whom options may be granted
or the number of shares subject to options granted under the Plan.
(d) COMPENSATION AND EXPENSE: The members of the Committee shall
receive no special compensation as a result of the rendition of their
services hereunder, but shall be entitled to receive any reasonable
expenses actually incurred in administering the Plan, as long as the same
are substantiated by appropriate written documentation of such expenses.
All such substantiated expenses shall be paid by the Company.
3. ELIGIBILITY: The persons eligible to receive options under the
Plan shall be those of the Company's Directors and Employees, excluding
any such person to whom the issuance of such an option is prohibited by
any federal or state law, rule or regulation.
4. SHARES SUBJECT TO PLAN: The shares which shall be issued and
delivered upon exercise of options being granted under the plan shall be
shares of the Company's authorized but unissued or issued and reacquired
Common Stock, par value $.10 per share (the "Shares"). Subject to the
adjustments described below, the maximum aggregate number of Shares which
may be issued or transferred under the Plan shall not exceed 300,000
Shares. Appropriate equitable adjustments in the option price per Share
and number of Shares subject to each option shall be made by the
Committee, to give effect to any merger, consolidation, reorganization,
recapitalization, reclassification, combination, stock dividend, stock
split, reverse stock split or other relevant change in the capital
structure of the Company after the date an option is granted.
5. OPTION GRANTS: Subject to the terms and conditions herein set
forth and evidenced by separate acceptance forms executed by the option
holders, each Director and Employee described in Section 3 above shall be
granted an option to acquire, at the Option Price described in Subsection
6(c) below, in the amount to be established by the Committee. Each such
option shall be initially exercisable only on or after June 1, 1993 and
only if the option holder is a Director or Employee of the Company on said
date.
6. TERMS AND CONDITIONS OF OPTIONS. Each option granted under the
Plan shall be subject to the following terms and conditions.
a.) DATE OF GRANT. The date on which an option is deemed granted
(the "Date of Grant") shall be the date on which the option holder was
granted options under the Plan.
b.) OPTION PRICE. The purchase price of each Share capable of
being acquired upon exercising an option shall be the fair market value of
each Share as of the Date of Grant, (the "Option Price"). For purposes
hereof, the fair market value of a Share on a particular date shall be the
last sale price for one Share, as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") as of the close
of business of such date. If there were no bid and asked prices for the
Company's Shares reported by NASDAQ on the valuation date, but such bid
and asked prices for the Company's Shares were reported by NASDAQ within a
reasonable period before that date, the fair market value shall be
determined by taking the mean between the bid and asked prices for the
Share, as reported by NASDAQ as of the close of business on the nearest
date preceding the valuation date. In the event the Shares become listed
on a national securities exchange, the fair market value of such Shares
shall be the mean between the highest and lowest sales prices of Shares on
the principal securities exchange on which the Company's stock is listed
on the relevant valuation date.
c.) MECHANICS OF EXERCISE. A Director or Employee entitled to any
option granted under the Plan may exercise the same either in whole or in
part at any time by delivering written notice of exercise to the office of
the Secretary of the Company specifying therein the dollar amount and the
number of Shares with respect to which the option is being exercised,
which notice shall be accompanied by payment in full of the purchase price
of the Shares being acquired; provided, however, that the Company, in its
discretion, may also require the Director or Employee (or any other person
then having the right to exercise the option) to make such representations
and furnish such information as it may consider appropriate in connection
with the issuance or delivery of the Shares in compliance with applicable
laws, rules and regulations. Payment of the purchase price may be made by
(i) cash or (ii) check. No Shares shall be issued until full payment
therefor has been made.
d.) EXPIRATION OF OPTION. Each option granted under the Plan
shall expire and all rights to purchase Shares thereunder shall cease five
years after the Date of Grant or ninety (90) days after termination of
employment whichever comes first.
e.) TERMINATION OF OPTION. Each option granted hereunder shall
terminate and may no longer be exercised if the option holder ceases for
any reason to perform services for the Company as a Director or Employee
of the Company, or a subsidiary, in accordance with the following
provisions:
(1) if the option holder's services shall terminate by
resignation or other voluntary action, or if such services shall have been
terminated involuntarily for cause, the option shall expire immediately
upon such termination and may no longer be exercised;
(2) if the option holder's services shall terminate
involuntarily and without cause, the option holder may at any time within
a period of ninety (90) days after such termination of services exercise
the option to the extent it was exercisable on the date of termination of
the option holder's services;
(3) if the option holder's services shall terminate because
of disability within the meaning of Section 105(d)(4) of the Internal
Revenue Code, the option holder may at any time within a period of six (6)
months after such termination of services exercise the option to the
extent that the option was exercisable on the date of termination of the
option holder's services; and
(4) if the option holder dies at a time when he might have
exercised the option, then his estate, personal representative or
beneficiary to whom it has been transferred may at any time within a
period of six (6) months after the option holder's death exercise the
option to the extent the option holder might have exercised it at the time
of his death;
provided, however, that no option may be exercised to any extent by anyone
after the date of expiration of the option. For purposes of this
Subsection (e)(1), termination for cause shall mean termination of
employment by reason of the option holder's commission of a felony, fraud
or willful misconduct which has resulted, or is likely to result, in
substantial and material damage to the Company, all as the Committee, in
its sole discretion, may determine.
(f) TRANSFERABILITY. No option shall be transferable by the
option holder otherwise than by will or the laws of descent or
distribution, and each option shall be exercisable during his lifetime
only by him.
(g) INVESTMENT PURPOSE. Each option is granted on the express
condition that the purchase of Shares upon an exercise thereof shall be
made for investment purposes only and not with a view to their resale or
further distribution unless such Shares, at the time of their issuance and
delivery, are registered under the Securities Act of 1933, as amended (the
"Act"), or, alternatively, at some time following such issuance their
resale is determined by counsel for the Company to be exempt from the
registration requirements of the Act and of any other applicable law,
regulation or ruling.
(h) RIGHTS AS SHAREHOLDER. The option holder shall have no rights
as a shareholder with respect to any Shares covered by his option until
the date of issuance of a stock certificate to him for such Shares.
(i) NOTICES. Any notice required hereunder to the Company shall
be addressed to its Secretary at its office and any notice required
hereunder to an option holder shall be addressed to his last known mailing
address, as it may appear in the records of the Company, subject to the
right of any party hereto to designate at any time hereafter in writing
some other address.
7. AMENDMENT, SUSPENSION OR DISCONTINUANCE OF PLAN. The Board may
from time to time amend, suspend or discontinue the Plan. Notwithstanding
the above, no amendment shall adversely affect or impair any then
outstanding option without the consent of the option holder.
8. LEGENDS. The Committee shall cause appropriate legends to be
placed on certificates representing any Shares issued pursuant to the
exercise of any options granted under the Plan in order to reflect any
limitations imposed on the transfer of such Shares by the Act or other
applicable federal and state laws or regulations.
9. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant
and exercise of options thereunder, and the obligation of the Company to
sell and deliver Shares under such options, shall be subject to all
applicable federal and state laws, rules and regulations and to such
approvals by any government or regulatory agency as may be required. The
Company, in its discretion, may postpone the issuance of delivery of any
certificates for Shares prior to (a) the listing of such Shares on any
stock exchange on which they may then be listed and (b) the completion of
any registration or qualification of such Shares under any federal or
state law, or any ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be necessary or
advisable.
10. BINDING AGREEMENT. The terms and conditions of the Plan shall be
binding upon and inure to the benefit of the Company and each option
holder and their respective heirs, representatives and successors.
11. OPTION HOLDER'S ACCEPTANCE. Each option holder shall be provided
with a copy of the Plan upon issuance of the grant.
Exhibit 4.1b
Certificate of Amendment
to the
Restated Certificate of Incorporation
of
Executive Telecard, Ltd.
Executive Telecard, Ltd., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Executive
Telecard, Ltd., held on May 14, 1996, resolutions were duly adopted
setting forth proposed amendments to the Restated Certificate of
Incorporation of said corporation, declaring said amendments to be
advisable and calling a meeting of the shareholders of said corporation
for consideration thereof. The resolutions setting forth the proposed
amendments are as follows:
RESOLVED, that the Board of Directors declares it advisable and
recommends that the Restated Certificate of Incorporation of the
Corporation be amended by striking out all of Article IV of the Restated
Certificate of Incorporation and inserting in place thereof:
"The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
100,000,000 shares of Common Stock, with a par value
of $0.001."
RESOLVED, that the Board of Directors declares it advisable and
recommends that the Restated Certificate of Incorporation of the
Corporation be amended by striking out all of Article V of the Restated
Certificate of Incorporation and inserting in place thereof:
"Meetings of the stockholders may be held within or
without the State of Delaware as the by-laws may
provide. The books of the Corporation may be kept,
subject to any provision contained in Delaware
statutes, outside the State of Delaware at such
place(s) as may be designated from time to time by the
Board of Directors or in the by-laws of the
Corporation. Any action required or permitted to be
taken by the stockholders of the Corporation must be
effected at a duly called Annual or Special Meeting of
such holders and may not be effected by a consent in
writing by any such holders. This Article may not be
amended except by the affirmative vote of the holders
of at least sixty-six and two-thirds percent (662/3%)
of the shares of stock of the Corporation issued and
outstanding and entitled to vote."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an Annual Meeting of the stockholders of said Corporation was
duly called upon notice in accordance with Section 222 of the Delaware
General Corporation Law and held on July 26, 1996, at which Meeting the
stockholders of the Corporation duly approved said proposed amendments by
majority vote.
THIRD: That said amendments were duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, said Executive Telecard, Ltd. has caused
this Certificate to be signed by Robert N. Schuck, its Executive Vice
President, and John J. Gitlin, its Secretary, this 30th day of July, 1996.
By:/s/ Robert N. Schuck
Robert N. Schuck
Its: Executive Vice President
Attest:/s/John J. Gitlin
John J. Gitlin
Its: Secretary
Exhibit 4.1c
Certificate of Amendment
to the
Restated Certificate of Incorporation
of
Executive Telecard, Ltd.
Executive Telecard, Ltd., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Executive
Telecard, Ltd., held on May 14, 1996, a resolution was duly adopted
setting forth a proposed amendment to the Restated Certificate of
Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the shareholders of said corporation
for consideration thereof. The resolution setting forth the proposed
amendment are as follows:
RESOLVED, that the Board of Directors declares it advisable and
recommends that the Restated Certificate of Incorporation of the
Corporation be amended by striking out all of Article IV of the Restated
Certificate of Incorporation of the Corporation and inserting in place
thereof:
"The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
100,000,000 shares of Common Stock, with a par value
of $0.001 and 5,000,000 shares of Preferred Stock with
a par value of $.0001 per share."
The Board of Directors is hereby authorized to divide
the Preferred Stock into one or more series of stock
and to fix and determine the relative rights and
preferences of the various series, including but not
limited to: the rate of dividend, if any; whether
dividends will be cumulative or non-cumulative;
whether preferred stockholders will participate in
dividends declared on Common Stock, if any; whether
Preferred Stock may be redeemed and the terms of any
such redemption; the amount payable upon shares in the
event of voluntary or involuntary liquidation; the
terms on which Preferred Stock may be converted to
Common Stock, if any; and the voting rights, if any,
of holders of Preferred Stock."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an Annual Meeting of the stockholders of said Corporation was
duly called upon notice in accordance with Section 222 of the Delaware
General Corporation Law and held on July 26, 1996, adjourned to August 9,
and re-adjourned to August 29, 1996, at which re-adjourned Meeting the
stockholders of the Corporation duly approved said proposed amendments by
majority vote.
THIRD: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, said Executive Telecard, Ltd. has caused
this Certificate to be signed by Robert N. Schuck, its Executive Vice
President, and John J. Gitlin, its Secretary, this 11th day of September,
1996.
By:/s/ Robert N. Schuck
Robert N. Schuck
Its: Executive Vice President
Attest:/s/ John J. Gitlin
John J. Gitlin
Its: Secretary
Exhibit 4.3b
Executive TeleCard, Ltd.
1995 Employee Stock Option and
Appreciation Rights Plan
Article I.
Establishment & Purpose
Section 1.1 Executive Telecard, Ltd. (the "Company"), a
Delaware corporation, hereby establishes a stock option and appreciation
rights plan to be named the Executive TeleCard, Ltd. 1995 Employee Stock
Option and Appreciation Rights Plan (the "Plan"). All options granted on
or after the date that this Plan has been approved and adopted by the
Company's board of directors shall be governed by the terms and conditions
of this Plan unless the terms of such an option specifically indicate that
it is not to be so governed. With respect to persons subject to Section
16 of the Securities Exchange Act (the "Exchange Act"), transactions under
this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act ("Rule 16b-3"). To the
extent that any provision of this Plan or any action by the Committee
fails to comply with Rule 16b-3, such provision or action shall be deemed
to be null and void, to the extent permitted by law and deemed advisable
by the Committee.
Section 1.2 The purpose of this Plan is to provide persons
who are key employees, advisors and consultants of or to the Company (or
any of its subsidiaries or other entities in common control with the
Company) with incentives and rewards in recognition of their services and
other contributions which have been critical to the success of the
Company, and to induce such individuals to continue to provide service to
the Company in the future. The Plan provides for the grant of Options to
purchase shares of common stock of the Company (the "Common Stock") which:
a) qualify as incentive stock Options ("Incentive Options") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") to
employees, and b) do not so qualify ("Non-Qualified Options"), to all Plan
participants. This Plan also provides for the grant of stock appreciation
rights ("Rights") to all Plan participants in connection with the grant of
Options hereunder. Incentive Options and Non-Qualified Options may be
collectively referred to as "Options" as the context may require.
Section 1.3 Options may be granted pursuant to this Plan to
any Plan participant for a period commencing on the effective date of the
Plan and ending not later than the tenth (10th) anniversary of the date
that this Plan is adopted by the Board of Directors, provided, however,
that the term of options granted during that period may extend beyond such
tenth year anniversary date.
Article II.
Administration
Section 2.1 All determinations under the Plan concerning the
selection of persons eligible to receive awards hereunder and with respect
to the timing, pricing and amount of an award hereunder shall be made by a
Committee of the Board of Directors (the "Committee") who shall be
charged with administration of this Plan. The Committee shall be
comprised of not less than two members of the Board of Directors, each of
whom is a "disinterested person." A "disinterested person" within the
meaning of Rule 16b-3 as in effect upon the date this Plan is adopted by
the Board of Directors is a person who has not been granted or awarded
equity securities (within the meaning of the Exchange Act) under any other
plan of the Company (or any affiliate thereof) at any time within one year
prior to such person's service as a member of the Committee, or during
such service except as otherwise permitted by Rule 16b-3(c). The
Committee shall select one of its members to serve as the chairman
thereof, and shall hold its meeting at such times and places as it may
determine. At any such meeting, a majority of the total number of members
of the Committee shall be necessary to constitute a quorum. Either the
affirmative vote of a majority of the members present at any meeting at
which a quorum is present, or the unanimous approval in writing of the
total number of members of the Committee, shall be necessary to constitute
action by the Committee.
Section 2.2 The provisions of this Plan relating to Incentive
Options are also intended to comply in every respect with Section 422 of
the Code ("Section 422") and the regulations promulgated thereunder. In
the event that any future statute or regulation shall modify Section 422,
the Plan and any stock option agreement relating to the grant of any
Incentive Option pursuant to this Plan, which option is outstanding and
unexercised at the time that any modifying statute or regulation becomes
effective, shall also be deemed to incorporate by reference such
modification, and no notice of such modification need be given to the
Optionee (as hereinafter defined). Any stock option grant relating to an
Incentive Option shall provide that the Optionee (as hereinafter defined)
hold the stock received upon exercise of such Incentive Option for a
minimum of two years from the date of grant of the Incentive Option and
one year from the date of exercise of such Incentive Option, absent the
written approval, consent or waiver of the Committee.
Section 2.3 If any provision of this Plan is determined to
disqualify the shares of Common Stock purchasable upon exercise of an
Incentive Option granted under this Plan from the special tax treatment
provided by Section 422, such provision shall be deemed to incorporate by
reference the modification required to qualify such shares of Common Stock
for said tax treatment.
Section 2.4 The Company shall grant options under this Plan
in accordance with determinations made by the Committee pursuant to the
provisions of this Plan. No member of the Committee shall be eligible to
participate in this Plan. All Options granted pursuant to this Plan shall
be clearly identified as Incentive Options or Non-Qualified Options. The
Committee may from time to time adopt (and thereafter amend or rescind)
such rules and regulations for carrying out the provisions of this Plan
and take such action in the administration of this Plan, not inconsistent
with the provisions hereof, as it shall deem proper. The interpretation
and construction of any provision of this Plan by the Committee (unless
otherwise determined by the Board of Directors) shall be final, conclusive
and binding upon all persons.
Section 2.5 Each Option granted pursuant to this Plan shall
be exerciseable for a period of ten years from the date of grant subject
to the limitations on exercise and restrictions upon transfer of the
shares of Common Stock to be issued upon exercise of the Option as are set
forth elsewhere herein or as are imposed by applicable laws including
without limitation applicable federal and state securities laws. Except
as otherwise provided in this section, all Options issued pursuant to this
section shall be subject to the other terms and conditions of this Plan;
to the extent such terms and conditions are inconsistent with this section
this section shall control.
Section 2.6 The Committee may, in its discretion, grant in
connection with any Option, at any time prior to the exercise thereof, the
right (previously defined as a "Right" or collectively, the "Rights") to
surrender all or part of the Option to the extent that such Option is
exerciseable and receive in exchange an amount payable in shares of Common
Stock valued at the then fair market value, determined in accordance with
Section 5.1(b) herein, equal to the difference (the "Spread") between the
then fair market value of the shares of Common Stock issuable upon the
exercise of the Option (or portions thereof surrendered) and the option
price payable upon the exercise of the Option (or portions thereof
surrendered). Such rights shall be subject to the following conditions:
(a) the Rights will expire at the same time as the underlying Option; (b)
the Rights shall be for 100 percent of the Spread; (c) the Rights are
transferable only when the underlying Option is transferable and under the
same conditions; (d) the Rights may be exercised only when the underlying
Option is eligible to be exercised; and (e) the Rights may be exercised
only when the Spread is positive, i.e., when the market price of the
Common Stock subject to the Option exceeds the exercise price of the
Option.
Section 2.7 No member of the Committee shall be liable for
any action or determination made in good faith with respect to
administration of this Plan or the Options granted hereunder. A member of
the Committee shall be indemnified by the Company, pursuant to the
Company's by-laws, for any expenses, judgments or other costs incurred as
a result of a lawsuit filed against such member claiming any rights or
remedies arising out of such member's participation in and administration
of this Plan.
Article III.
Total Number of Shares to be Optioned
Section 3.1 There shall be reserved for issuance or transfer
upon exercise of the Options to be granted from time to time under this
Plan an aggregate of one million (1,000,000) shares of Common Stock of the
Company (subject to adjustment as provided in Article VIII hereof). The
shares of Common Stock issued upon exercise of any Option granted under
this Plan may be shares of Common Stock previously issued and reacquired
by the Company at any time or authorized but unissued shares of Common
Stock, as the Board of Directors from time to time may determine.
Section 3.2 In the event that any Options outstanding under
this Plan for any reason expire or are terminated without having been
exercised in full or shares of Common Stock subject to Options are
surrendered in whole or in part pursuant to Rights granted under Section
2.6 hereof (except to the extent that shares of Common Stock are issued as
payment to the holder of the Option upon such surrender) the unpurchased
shares of Common Stock subject to such Option and any such surrendered
shares shall again be available for issuance under this Plan.
Section 3.3 No Options shall be granted pursuant to this Plan
to any Optionee after the tenth anniversary of the earlier of: (a) the
date that this Plan is adopted by the Board of Directors or (b) the date
that this Plan is approved by the stockholders of the Company.
Article IV.
Eligibility
Section 4.1 Any key employee, advisor and consultant of or to
the Company (or any of its subsidiaries or other entities in common
control with the Company) shall be eligible to be granted Options
hereunder (any such persons granted Options pursuant to this Plan are
referred to herein as "Optionees"). For purposes of determining who is an
employee with respect to eligibility for Incentive Options, Section 422 of
the Code shall govern. The Committee may determine (in its sole
discretion) that any person who would otherwise be eligible to be granted
Options shall, nonetheless, be ineligible to receive any award under this
Plan. No Employee shall be eligible to receive more than 300,000 under
the Plan in any three (3) year period.
Section 4.1 The Committee shall have sole discretion, subject
to the express provisions of the Plan, to determine which employees,
advisors or consultants, shall be granted Options, the number of shares
subject to each Option, the time or times when an Option may be exercised
(whether in whole or in installments), the terms of a vesting or
forfeiture schedule, if any, the type of Option issued, the manner in
which Options may be exercised and whether Rights under Section 2.6 hereof
shall be granted, and all other terms and conditions related to the
Options and Rights (which need not be identical); provided, however, that
each such Option shall be exerciseable for a period of at least ten (10)
years from the date of grant, unless sooner terminated pursuant the terms
of this Plan and further provided that no Option will be granted which has
terms or conditions inconsistent with those stated in Articles V and VI
hereof.
Article V.
Terms & Conditions of Options
Section 5.1 Each Option granted under this Plan shall be
subject to the following terms and conditions:
(a) The price at which each share of Common Stock covered by an
Option may be purchased shall be determined by the Board of
Directors or the Committee, provided that the option price for
any Incentive Option shall not be less than equal to the "fair
market value" of the shares of Common Stock at the time of grant
determined in accordance with Section 5.1(b) below.
Notwithstanding the foregoing, if an Incentive Option to
purchase shares of Common Stock is granted pursuant to the Plan
to an Optionee who, on the date of the grant, directly or
indirectly owns more than 10 percent of the voting power of all
classes of capital stock of the Company (or its parent of
subsidiary), not including the shares of Common Stock obtainable
upon exercise of the Option, the minimum exercise price of such
Option shall be not less than one hundred ten percent (110%) of
the "fair market value" of the shares of Common Stock on the
date of grant determined in accordance with Section 5.1(b)
below.
(b) the "fair market value" shall be determined by the
Committee which determination shall be binding upon the Company
and its directors. The determination of the fair market value
shall be based upon the following: (i) if the shares of Common
Stock are not listed and traded upon a recognized securities
exchange and there is no report of stock prices with respect to
the shares of Common Stock published by a recognized stock
quotation service then the Committee shall set the fair market
value based upon the recent purchases and sales of the shares of
Common Stock in arms length transactions; or (ii) if the shares
of Common Stock are not then listed and traded upon a recognized
securities exchange or listed for quotation on the NASDAQ
National Market System, and there are reports of stock prices by
a recognized quotation service, upon the basis of the last
reported sales or transaction price of such stock on the date of
grant as reported by a recognized quotation service, or, if
there is no last reported sale or transaction price on that day,
then upon the basis of the mean of the last reported closing bid
and closing asked prices for such stock on that day or on the
date nearest preceding that day; or (iii) if the shares of
Common Stock shall then be listed and traded upon a recognized
securities exchange or listed for quotation on the NASDAQ
National Market System, upon the basis of the last reported sale
or transaction price at which shares of Common Stock were traded
on such recognized securities exchange on the date of grant or,
if the shares of Common Stock were not traded on such date, upon
the basis of the last reported sale or transaction price on the
date nearest preceding that date. The Committee shall also
consider such other factors relating to the fair market value of
the shares of Common Stock as it shall deem appropriate.
(c) For the purpose of determining whether an Optionee owns
more than 10 percent of the voting power of all classes of stock
of the Company, an Optionee is considered to own those shares
which are owned directly or indirectly through brothers and
sisters (including half-blooded siblings), spouse, ancestors and
lineal descendants; and proportionately as a shareholder of a
corporation, a partner of a partnership, and/or a beneficiary of
a trust or an estate that owns shares of the Company.
(d) Notwithstanding any other provision of this Plan, in
accordance with the provision of Section 422(d) of the Code, to
the extent that the aggregate fair market value (determined at
the time the Option is granted) of the shares of Common Stock of
the Company with respect to which Incentive Options (without
reference to this provision) are exerciseable for the first time
by any individual in any calendar year under any and all stock
option plans of the Company, its subsidiary corporations and its
parent (if any ) exceeds $100,000, such Options shall be treated
as Non-Qualified Options.
(e) An Optionee may, at the Committee's discretion, be granted
more than one Incentive Option or Non-Qualified Option during
the duration of this Plan, and may be issued a combination of
Non-Qualified Options and Incentive Options.
(f) The duration of any Option and any Right related thereto
granted to a 10% or less stockholder or any non-qualified
Option, shall, by it's terms, be exercised within ten (10) years
after the date of grant and any Incentive Option granted to a
greater than 10% stockholder shall, by it's terms, be exercised
within five (5) years after the date that the Option is granted.
(g) An Option and any Right related thereto shall not be
transferable by the Optionee other than by will, or by the laws
of descent and distribution. An Option may be exercised during
the Optionee's lifetime only by the Optionee.
(h) At least six months shall have elapsed from the date on
which an Option is granted hereunder to the date on which any
share of Common Stock underlying such Option is sold or any
Right related thereto is exercised unless the Committee
otherwise consents in wiring.
Article VI.
Employment or Service of Optionee
Section 6.1 If the service of an Optionee is terminated for
cause, the rights of such Optionee, both accrued and future, under any
then outstanding Option or Right shall terminate immediately. "Cause"
shall mean incompetence in the performance of duties, disloyalty,
dishonesty, theft, embezzlement, unauthorized disclosure of patents,
processes or trade secrets of the Company, individually or as an employee,
partner, associate, officer or director of any organization. The
determination of the existence and the proof of "cause" shall be made by
the Board of Directors , such determination shall be binding on the
Optionee and the Company.
Section 6.2 If the employment or service of the Optionee is
terminated by the Optionee or the Company for any reason other than for
cause, death, or for disability, as defined in Section 22(e) (3) of the
Code, the option rights of such Optionee under any then outstanding
Options or Rights shall, subject to the provisions of Section 5.1(h)
hereof, be exerciseable by such Optionee at any time prior to the
expiration of the Option or within three months after the date of such
termination, whichever period of time is shorter, but only to the extent
of the accrued right to exercise the Option or Right at the date of such
termination.
Section 6.3 In the case of an Optionee who becomes disabled,
as defined by Section 22(e)(3) of the Code, the option rights of such
Optionee under any then outstanding Option or Right shall, subject to the
provisions of Section 5.1(h) hereof, be exercised by such Optionee at any
time prior to the expiration of the Option or within one year after the
date of termination of employment or service due to disability, whichever
period of time is shorter, but only to the extent of the accrued right to
exercise the Option or Right at the date of such termination.
Section 6.4 In the event of the death of an Optionee, the
rights of such Optionee under any then outstanding Option or Right shall
be exerciseable by the person or persons to whom these rights pass by will
or by the laws of decent and distribution, at anytime prior to the
expiration of the Option or Right or within three years after the date of
death, whichever period of time is shorter, but only to the extent of the
accrued right to exercise the Option or Right at the date of death. If a
person or estate acquires the right to exercise an Option or Right by
bequest or inheritance, the Committee may require reasonable evidence as
to the ownership of such Option, and may require such consents and
releases of taxing authorities as the Committee may deem advisable.
Section 6.5 Options or Rights granted under this Plan shall
not be affected by any change of duties or position, so long as the
Optionee continues in the service of the Company.
Section 6.6 Nothing contained in this Plan, or in any Option
or Right granted pursuant to this Plan, shall confer upon any Optionee any
right with respect to continuance of employment or service by the Company
nor interfere in any way with the right of the Company to terminate the
Optionee's employment or service or change the Optionee's compensation at
any time.
Article VII.
Purchase of Shares
Section 7.1 Except as provided in this Article VII, an Option
shall be exercised by tender to the Company of the full exercise price of
the shares of Common Stock with respect to which the Option is being
exercised and written notice of such exercise. The right to purchase
shares of Common Stock shall be cumulative so that, once the right to
purchase any shares has accrued, such shares or any part thereof may be
purchased at any time thereafter until the expiration or termination of
the Option. A partial exercise of an Option shall not affect the right of
the Optionee to exercise the Option from time to time, in accordance with
this Plan, as to the remaining number of shares of Common Stock subject to
the Option. The purchase price of the shares shall be in United States
dollars, payable in cash or by certified bank check. Notwithstanding the
foregoing, in lieu of cash, an Optionee may, with the approval of the
Committee, exercise his or her Option by tendering to the Company shares
of Common Stock of the Company owned by him or her and having an aggregate
fair market value at least equal to the full exercise price. The fair
market value of any shares of Common Stock so surrendered shall be
determined by the Committee in accordance with Section 5.1(b) hereof.
Section 7.2 Except as provided in Article VI above, an Option
may not be exercised unless the holder thereof is an employee, consultant
or advisor of the Company at the time of exercise.
Section 7.3 No Optionee, or Optionee's executor,
administrator, legatee, or distributee or other permitted transferee,
shall be deemed to be a holder of any shares of Common Stock subject to an
Option for any purpose whatsoever unless and until a stock certificate or
certificates for such shares are issued to such person under the terms of
this Plan. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the
date such stock certificate is issued, except as provided in Article VIII
hereof.
Section 7.4 If: (i) the listing, registration or
qualification of the Options issued hereunder, or of any securities
issuable upon exercise of such Options (the "Common Stock") upon any
securities exchange or quotation system or under federal or state law is
necessary as a condition of or in connection with the issuance or exercise
of the Options, or (ii) the consent or approval of any governmental
regulatory body is necessary as a condition of or in connection with the
issuance or exercise of the Options, the Company shall not be obligated to
deliver the certificates representing the Subject Securities or to accept
or to recognize an Option exercise unless and until such listing,
registration, qualification, consent or approval shall have been effected
or obtained. The Company will take reasonable action to so list, register
or qualify the Options and the Subject Securities, or effect or obtain
such consent or approval, so as to allow for their issuance.
Section 7.5 Any Optionee may be required to represent to the
Company as a condition of his or her exercise of Options issued under this
Plan that: (i) the Common Stock acquired upon exercise of his or her
Option are being acquired by him or her for investment purposes only and
not with a view to distribution or resale, unless counsel for the Company
is then of the view that such a representation is not necessary and is not
required under the Securities Act of 1933, as amended (the "Securities
Act"), or any other applicable statue, law, regulation or rule; and (ii)
that the Optionee shall make no exercise or disposition of an Option or of
the Common Stock in contravention of the Securities Act, the Exchange Act
or the rules and regulations thereunder. Optionees may also be required
to provide (as a condition precedent to exercise of an Option, such
documentation as may be reasonably required by the Company to assure
compliance with applicable law and the terms and conditions of this Plan
and the subject Option.
Section 7.6 An Option may also be exercised by tender to the
Company of a written notice of exercise together with advice of the
delivery of an order to a broker to sell part or all of the shares of
Common Stock subject to such exercise notice and an irrevocable order to
such broker to deliver to the Company (or its transfer agent) sufficient
proceeds from the sale of such shares to pay the exercise price and any
withholding taxes. All documentation and procedures to be followed in
connection with such a "cashless exercise" shall be approved in advance by
the Committee.
Article VIII.
Change in Number of Outstanding Shares of
Stock, Adjustments, Reorganizations, etc.
Section 8.1 In the event that the outstanding shares of
Common Stock of the Company are hereafter increased or decreased or
changed into or exchanged for a different number of shares or kind of
shares or other securities of the Company or of another corporation by
reason or reorganization, merger, consolidation, re-capitalization,
reclassification, stock split, combination of shares or a dividend payable
in capital stock , appropriate adjustment shall be made by the Committee
in the number and kind of shares for the purchase of which Options may be
granted under this Plan, including the maximum number that may be granted
to any one person. In addition, the Committee shall make appropriate
adjustments in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised shall be exerciseable, to
the extent that the Optionee's proportionate interest shall be maintained
as before the occurrence to the unexercised portion of the Option and
with a corresponding adjustment in the option price per share. Any such
adjustment made by the Committee shall be conclusive.
Section 8.2 The grant of an Option pursuant to this Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or assets.
Section 8.3 Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company
as a result of which the outstanding securities of the class then subject
to Options hereunder are changed into or exchanged for cash or property or
securities not of the Company's issue, or upon a sale of substantially all
the property of the Company to an association, person, party, corporation,
partnership, or "control group" as that term is construed for the purposes
of the Exchange Act, this Plan shall terminate unless provision be made in
writing in connection with such transaction for the continuance of this
Plan or for the substitution for such Option or Options covering the stock
of a successor employer corporation, or a present or a subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and
prices, in which event this Plan and the Options theretofore granted shall
continue in the manner and under the terms so provided. If this Plan
shall terminate pursuant to the foregoing sentence, all persons owning any
unexercised portions of the Options then outstanding shall have the right
, at such time prior to the consummation of the transaction causing such
termination as the Company shall designate, to exercise the unexercised
portions of such Options, including the portions thereof which would, but
for this Section 8.3, not yet be exerciseable.
Section 8.4 If, while any Options remain outstanding under
the Plan, (i) the "beneficial ownership" (as defined Rule 13d-3 under the
Exchange Act) of securities representing more than 20% of the combined
voting power of the Company is acquired by a person (as defined in section
13(d) of the Exchange Act, other than the Company or an affiliate of the
Company), (ii) the stockholders of the company approve a definitive
agreement to merge or consolidate the Company with another company or to
sell or otherwise dispose of all or substantially all of it's assets, or
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the members of the board of directors
cease to constitute at least a majority of the members of the board of
directors at any time during such period for any reason (other than in the
case of a director whose election by the Board or nomination by the
Company's stockholders was approved by a vote of at least two thirds of
the directors then still in office who are either directors at the
beginning of the period or whose election or nomination for election was
previously so approved), then all Options then outstanding shall become
fully vested and exerciseable on the date of such event.
Article IX.
Duration, Amendment & Termination
Section 9.1 The Board of Directors may at any time terminate
this Plan or make such amendments hereto as it shall deem advisable and in
the best interests of the Company, without action on the part of the
stockholders of the Company, unless such approval is required pursuant to
Section 422 of the Code or the regulations thereunder or Rule 16b-3 under
the Exchange Act; provided, however, that no such termination or amendment
shall without the consent of the individual to whom any Option shall
heretofore have been granted, affect or impair the rights of such
individual under such Option, and provided further, that unless the
holders of a majority of all classes of the Company's outstanding voting
stock entitled to vote thereon shall have first approved thereof, no
amendment of this Plan shall be made whereby: (a) the total number of
shares of Common Stock which may be issued pursuant to the exercise of
Options under this Plan to all individuals, or any of them, shall be
increased, except by operation of the adjustment provisions of Article
VIII hereof, (b) the authority to administer this Plan by the Committee
shall be withdrawn, (c) the maximum term of the Options shall be extended,
(d) the minimum option price of Incentive Options shall be decreased, (e)
the price to Optionees to whom Options have been granted shall be changed
or (f) the class of individuals eligible to participate in this Plan is
modified. Pursuant to Section 422(b) of the Code, no Incentive Option may
be granted pursuant to this Plan after ten years from the date this Plan
is adopted or the date this Plan is approved by the stockholders of the
Company, whichever is earlier.
Article X.
Restrictions
Section 10.1 Any shares of Common Stock issued pursuant to
exercise of Options granted under this Plan shall be subject to such
restrictions on transfer and limitations as shall, in the opinion of the
Committee, be necessary or advisable to assure compliance with the laws,
rules and regulations of the United States government or any state or
jurisdiction thereof. In addition, the Committee may impose such other
restrictions upon the exercise of an Option or upon the sale or other
disposition of the shares of Common Stock deliverable upon exercise
thereof as the Committee may, in its sole discretion, determine. By
accepting an award pursuant to the Plan, each Optionee shall thereby agree
to any such restrictions.
Section 10.2 Any certificate issued to evidence shares of
Common Stock issued pursuant to exercise of an Option shall bear such
legends and statements as the Committee, the Board of Directors or counsel
to the Company shall deem advisable to assure compliance with the laws,
rules and regulations of the United States government or any state or
jurisdiction thereof. No shares of Common Stock will be delivered
pursuant to exercise of the Option granted under this Plan until the
Company has obtained such consents or approvals from such regulatory
bodies of the Untied States Government of any state or jurisdiction
thereof as the Committee, the Board of Directors or counsel to the Company
deems necessary or advisable.
Article XI.
Application of Funds
Section 11.1 The proceeds received by the Company from the
issuance and sale of Common Stock upon exercise of Options granted
pursuant to the Plan are to be added to the general funds of the Company
and used for its corporate purposes as determined by the Board of
Directors.
Article XII.
Effectiveness of Plan
Section 12.1 This Plan shall become effective upon adoption by
the Board of Directors, and Options may be issued hereunder from and after
that date subject to the provisions of Section 3.3 above. This Plan must
be approved by the Company's stockholders in accordance with the
applicable provisions (relating to the issuance of stock or options) of
the Company's governing documents and state law or, if no such approval is
prescribed therein, by the affirmative vote of the holders of a majority
of the votes cast at a duly held stockholders' meeting at which a quorum
representing a majority of all the Company's outstanding voting stock is
present and voting (in person or by proxy) or, without regard to any
required time period for approval, by any other method permitted by
Section 422 of the Code and the regulations thereunder. If such
stockholder approval is not obtained within one year of the adoption of
this Plan by the Board of Directors or within such other time period
required under Section 422 of the Code and the regulations thereunder,
this Plan shall remain in force, provided however, that all Options issued
and issuable hereunder shall automatically be deemed to be Non-Qualified
Options and provided further that no Option granted to any person subject
to Section 16 of the Exchange Act shall be exerciseable until such time as
stockholder approval of this Plan has been obtained.
EXECUTIVE TELECARD, LTD.
By: /s/ Edward J. Gerrity, Jr.
Edward J. Gerrity, Jr.
Its: Chairman of the Board
(CORPORATE SEAL)
ATTEST:
By: /s/John J. Gitlin
Secretary
Exhibit 4.3c
Executive TeleCard, Ltd.
1995 Directors Stock Option and
Appreciation Rights Plan
Article I.
Establishment & Purpose
Section 1.1 Executive Telecard, Ltd. (the "Company"), a
Delaware corporation, hereby establishes a stock option and appreciation
rights plan to be named the Executive TeleCard, Ltd. 1995 Directors Stock
Option and Appreciation Rights Plan (the "Plan"). All options granted on
or after the date that this Plan has been approved and adopted by the
Company's board of directors shall be governed by the terms and conditions
of this Plan unless the terms of such an option specifically indicate that
it is not to be so governed. With respect to persons subject to Section
16 of the Securities Exchange Act of 1934 (the "Exchange Act"),
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act ("Rule
16b-3").
Section 1.2 The purpose of this Plan is to provide persons
who are members of the board of directors (including employee-directors)
of the Company (the "Board of Directors") with incentives and rewards in
recognition of their services and other contributions which have been
critical to the success of the Company, and to induce such individuals to
continue to provide service to the Company in the future. The Plan
provides for the grant of options to purchase shares of common stock of
the Company, $.001 par value per share (the "Common Stock") which: a)
qualify as incentive stock options ("Incentive Options") under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code") to directors
who are employees; and b) do not so qualify ("Non-Qualified Options") to
directors, including those who are not employees. This Plan also provides
for the grant of stock appreciation rights ("Rights") to all plan
participants in connection with the grant of options hereunder. Incentive
Options and Non-Qualified Options may be collectively referred to
hereafter as the "Options" as the context may require.
Section 1.3 Options may be granted pursuant to this Plan to
any Plan participant for a period commencing on the effective date of this
Plan (pursuant to Section 12 hereof) and ending not later than the tenth
(10th) anniversary of the date that this Plan is adopted by the Board of
Directors.
Article II.
Administration
Section 2.1 A Committee of the Board of Directors Committee
(the "Committee") shall be charged with administration of this Plan. The
Committee shall be comprised of not less than two members of the Board of
Directors, each of whom is a "disinterested person." A "disinterested
person" within the meaning of Rule 16b-3 as in effect upon the date this
Plan is adopted by the Board of Directors, is a person who has not been
granted or awarded equity securities (within the meaning of the Exchange
Act) under any other plan of the Company (or any affiliate thereof) at any
time within one year prior to such person's service as a member of the
Committee, or during such service except as otherwise permitted by Rule
16b-3(c). The Committee shall select one of its members to serve as the
chairman thereof, and shall hold its meeting at such times and places as
it may determine. At any such meeting, a majority of the total number of
members of the Committee shall be necessary to constitute a quorum.
Either the affirmative vote of a majority of the members present at any
meeting at which a quorum is present, or the unanimous approval in writing
of the total number of members of the Committee, shall be necessary to
constitute action by the Committee.
Section 2.2 The provisions of this Plan relating to Incentive
Options are also intended to comply in every respect with Section 422 of
the Code ("Section 422") and the regulations promulgated thereunder. In
the event that any future statute or regulation shall modify Section 422,
this Plan and any stock option grant relating to the grant of any
Incentive Option pursuant to this Plan, which option is outstanding and
unexercised at the time that any modifying statute or regulation becomes
effective and is subject to such modification, shall be deemed to
incorporate by reference such modification, and no notice of such
modification need be given to the Optionee (as hereinafter defined). Any
stock option grant relating to an Incentive Option shall provide that the
Optionee (as hereinafter defined) hold the stock received upon exercise of
such Incentive Option for a minimum of two years from the date of grant of
the Incentive Option and one year from the date of exercise of such
Incentive Option, absent the written approval, consent or waiver of the
Committee.
Section 2.3 If any provision of this Plan is determined to
disqualify the shares of Common Stock purchasable upon exercise of an
Incentive Option granted under this Plan from the special tax treatment
provided by Section 422, such provision shall be deemed to incorporate by
reference the modification required to qualify such shares of Common Stock
for said tax treatment.
Section 2.4 The Committee shall grant options to members of
the board of directors with terms and conditions not inconsistent with
this Plan pursuant to the non-discretionary formula set forth in Section
2.6 hereof. All Options granted pursuant to this Plan shall be clearly
identified as Incentive Options or Non-Qualified Options. The Committee
may from time to time adopt (and thereafter amend or rescind) such rules
and regulations for carrying out the provisions of this Plan and take such
action in the administration of this Plan, not inconsistent with the
provisions hereof, as it shall deem proper. The Committee shall have sole
discretion, subject to the express provisions of this Plan, to determine
the type of Option issued and the manner in which Options may be
exercised, and all other terms and conditions related to the Options and
Rights not specifically provided in the non-discretionary formula provided
in Section 2.6 hereof, including such terms and provisions which may be
amended from time to time as shall be required, in the judgment of the
Committee to conform to any change in any law or regulation applicable
hereto, and to make all other determinations deemed necessary or advisable
for the administration of this Plan. The interpretation and construction
of any provision of this Plan by the Committee (unless otherwise
determined by the Board of Directors) shall be final, conclusive and
binding upon all persons.
Section 2.5 The Committee shall grant in connection with the
grant of Options at the time of such grant, the right (previously defined
as a "Right" or collectively, the "Rights") to surrender all or part of
the Option to the extent that such Option is exercisable and receive in
exchange an amount payable in shares of Common Stock valued at the then
fair market value, determined in accordance with Section 5.1(b) herein,
equal to the difference (the "Spread") between the then fair market value
of the shares of Common Stock issuable upon the exercise of the Option (or
portions thereof surrendered) and the option price payable upon the
exercise of the Option (or portions thereof surrendered). Such rights
shall be subject to the following conditions: (a) the Rights will expire
at the same time as the underlying Option; (b) the Rights shall be for
100 percent of the Spread; (c) the Rights are transferable only when the
underlying Option is transferable and under the same conditions; (d) the
Rights may be exercised only when the underlying Option is eligible to be
exercised; and (e) the Rights may be exercised only when the Spread is
positive, i.e., when the market price of the Common Stock subject to the
Option exceeds the exercise price of the Option.
Section 2.6 Directors of the Company shall receive Options
and Rights hereunder on a non-discretionary basis in accordance with the
following formula: On the third Friday in December in each calendar year,
each member of the Board of Directors then serving shall receive an Option
to purchase ten thousand (10,000) shares of Common Stock at an exercise
price equal to the fair market value per share of such shares on that date
as determined in accordance with Section 5.1(b) of this Plan and a
corresponding Right. Directors who are employees shall receive Incentive
Stock Options, to the extent by the Code. Directors who are not employees
shall receive Non-Qualified Stock Options. Each such Option shall be
exercisable for a period of ten (10) years from the date of grant unless
sooner terminated pursuant to the terms of this Plan. Each such Option
shall be subject to the limitations on exercise and restrictions upon
transfer of the shares of Common Stock to be issued upon exercise of the
Option as are set forth elsewhere herein or as are imposed by applicable
laws including without limitation applicable federal and state securities
laws. Except as otherwise provided in this section, all Options issued
pursuant to this section shall be subject to the other terms and
conditions of this Plan. To the extent such terms and conditions are
inconsistent with this section this section shall control. To the extent
required pursuant to Rule 16b-3 as such rule relates to formula awards,
this section shall not be amended more than once every six months other
than to comport with changes in the Code, the Employee Retirement Income
Security Act or the rules thereunder.
Section 2.7 No member of the Committee shall be liable for
any action or determination made in good faith with respect to
administration of this Plan or the Options granted hereunder. A member of
the Committee shall be indemnified by the Company, pursuant to the
Company's by-laws, for any expenses, judgments or other costs incurred as
a result of a lawsuit filed against such member claiming any rights or
remedies arising out of such Director's participation in and
administration of this Plan.
Article III.
Total Number of Shares to be Optioned
Section 3.1 There shall be reserved for issuance or transfer
upon exercise of the Options to be granted from time to time under this
Plan an aggregate of eight hundred seventy thousand (870,000) shares of
Common Stock of the Company (subject to adjustment as provided in Article
VIII hereof). The shares of Common Stock issued upon exercise of any
Option granted under this Plan may be shares of Common Stock previously
issued and reacquired by the Company at any time or authorized but
unissued shares of Common Stock, as the Board of Directors from time to
time may determine.
Section 3.2 In the event that any Options outstanding under
this Plan for any reason expire or are terminated without having been
exercised in full or shares of Common Stock subject to Options are
surrendered in whole or in part pursuant to Rights granted under Section
2.6 hereof (except to the extent that shares of Common Stock are issued as
payment to the holder of the Option upon such surrender) the unpurchased
shares of Common Stock subject to such Option and any such surrendered
shares shall again be available for issuance under this Plan.
Section 3.3 No Options shall be granted pursuant to this Plan
to any Optionee after the tenth anniversary of the earlier of: (a) the
date that this Plan is adopted by the Board of Directors or (b) the date
that this Plan is approved by the stockholders of the Company.
Article IV.
Eligibility
Section 4.1 Subject to Section 2.6 above, Options may be
granted pursuant to this Plan to directors of the Company (or any of its
subsidiaries) as selected by the Committee. Incentive Options may be
granted pursuant to this Plan only to directors who are also employees of
the Company (or any of its subsidiaries) as selected by the Committee.
Persons granted Options pursuant to the Plan are referred to herein as
"Optionees." For purposes of determining who is an employee with respect
to eligibility for Incentive Options, Section 422 of the Code shall
govern. The Committee may determine (in its sole discretion) that any
person who would otherwise be eligible to be granted Options shall,
nonetheless, be ineligible to receive any award under this Plan. No
employee Director shall be eligible to receive more than 300,000 Options
under this Plan in any two (2) year period.
Section 4.2 No Options may be granted to any member of the
Committee or a member of the Board of Directors, other than pursuant to a
non-discretionary formula such as and including that which is set forth in
Section 2.6 above which meets the conditions in Rule 16b-3 under the
Exchange Act, nor may any Options be granted to a member of the Committee
if such member has, during the one year prior to such person's service as
a member of the Committee of this Plan or during such service, received
any equity securities pursuant to any plan of the Company or its
affiliates, other than pursuant to a non-discretionary formula such as and
including that which is set forth in Section 2.6 above which meets the
conditions in Rule 16b-3 under the Exchange Act. To the extent that any
provisions of this Plan or actions by the Committee fail to so comply, it
shall be deemed to be null and void, to the extent permitted by law and
deemed advisable by the Committee.
Article V.
Terms & Conditions of Options
Section 5.1 Each Option granted under this Plan shall be
subject to the following terms and conditions:
(a) The price at which each share of Common Stock covered by an
Option may be purchased shall be determined by the Board of
Directors or the Committee, provided that the option price for
any Incentive Option shall not be less than equal to the "fair
market value" of the shares of Common Stock at the time of grant
determined in accordance with Section 5.1(b) below.
Notwithstanding the foregoing, if an Incentive Option to
purchase shares of Common Stock is granted pursuant to the Plan
to an Optionee who, on the date of the grant, directly or
indirectly owns more than 10 percent of the voting power of all
classes of capital stock of the Company (or its parent of
subsidiary), not including the shares of Common Stock obtainable
upon exercise of the Option, the minimum exercise price of such
Option shall be not less than one hundred ten percent (110%) of
the "fair market value" of the shares of Common Stock on the
date of grant determined in accordance with Section 5.1(b)
below.
(b) the "fair market value" shall be determined by the
Committee which determination shall be binding upon the Company
and its directors. The determination of the fair market value
shall be based upon the following: (i) if the shares of Common
Stock are not listed and traded upon a recognized securities
exchange and there is no report of stock prices with respect to
the shares of Common Stock published by a recognized stock
quotation service then the Committee shall set the fair market
value based upon the recent purchases and sales of the shares of
Common Stock in arms length transactions; or (ii) if the shares
of Common Stock are not then listed and traded upon a recognized
securities exchange or listed for quotation on the NASDAQ
National Market System, and there are reports of stock prices by
a recognized quotation service, upon the basis of the last
reported sales or transaction price of such stock on the date of
grant as reported by a recognized quotation service, or, if
there is no last reported sale or transaction price on that day,
then upon the basis of the mean of the last reported closing bid
and closing asked prices for such stock on that day or on the
date nearest preceding that day; or (iii) if the shares of
Common Stock shall then be listed and traded upon a recognized
securities exchange or listed for quotation on the NASDAQ
National Market System, upon the basis of the last reported sale
or transaction price at which shares of Common Stock were traded
on such recognized securities exchange on the date of grant or,
if the shares of Common Stock were not traded on such date, upon
the basis of the last reported sale or transaction price on the
date nearest preceding that date. The Committee shall also
consider such other factors relating to the fair market value of
the shares of Common Stock as it shall deem appropriate.
(c) For the purpose of determining whether an Optionee owns
more than 10 percent of the voting power of all classes of stock
of the Company, an Optionee is considered to own those shares
which are owned directly or indirectly through brothers and
sisters (including half-blooded siblings), spouse, ancestors and
lineal descendants; and proportionately as a shareholder of a
corporation, a partner of a partnership, and/or a beneficiary of
a trust or an estate that owns shares of the Company.
(d) Notwithstanding any other provision of this Plan, in
accordance with the provision of Section 422(d) of the Code, to
the extent that the aggregate fair market value (determined at
the time the Option is granted) of the shares of Common Stock of
the Company with respect to which Incentive Options (without
reference to this provision) are exercisable for the first time
by any individual in any calendar year under any and all stock
option plans of the Company, its subsidiary corporations and its
parent (if any ) exceeds $100,000, such Options shall be treated
as Non-Qualified Options.
(e) An Optionee may, at the Committee's discretion, be granted
more than one Incentive Option or Non-Qualified Option during
the duration of this Plan, and may be issued a combination of
Non-Qualified Options and Incentive Options.
(f) Any Incentive Option granted to 10 percent or less
stockholder or any Non-Qualified Option shall, by its terms, be
exercised within ten years after the date the Option is granted
and any Incentive Option granted to a greater than 10 percent
stockholder shall, by its terms, be exercised within five years
after the date the Option is granted.
(g) An Option and any Right related thereto shall not be
transferable by the Optionee other than by will, or by the laws
of descent and distribution. An Option may be exercised during
the Optionee's lifetime only by the Optionee.
(h) At least six months shall have elapsed from the date on
which an Option is granted hereunder to the date on which any
share of Common Stock underlying such Option is sold or any
Right related thereto is exercised unless the Committee
otherwise consents in writing.
Article VI.
Employment or Service of Optionee
Section 6.1 If the service of an Optionee is terminated for
cause, the rights of such Optionee, both accrued and future, under any
then outstanding Option or Right shall terminate immediately. "Cause"
shall mean incompetence in the performance of duties, disloyalty,
dishonesty, theft, embezzlement, unauthorized disclosure of patents,
processes or trade secrets of the Company, individually or as an employee,
partner, associate, officer or director of any organization. The
determination of the existence and the proof of "cause" shall be made by
the Board of Directors. Such determination shall be binding on the
Optionee and the Company.
Section 6.2 If the employment or service of the Optionee is
terminated by the Optionee or the Company for any reason other than for
cause, death, or for disability, as defined in Section 22(e) (3) of the
Code, the option rights of such Optionee under any then outstanding
Options shall, subject to the provisions of Section 5.1(h) hereof, be
exercisable by such Optionee at any time prior to the expiration of the
Option or within three months after the date of such termination,
whichever period of time is shorter, by only to the extent of the accrued
right to exercise the Option at the date of such termination.
Section 6.3 In the case of an Optionee who becomes disabled,
as defined by Section 22(e)(3) of the Code, the option rights of such
Optionee under any then outstanding Option or Right may, subject to the
provisions of Section 5.1(h) hereof, be exercised by such Optionee at any
time prior to the expiration of the Option or within one year after the
date of termination of employment or service due to disability, whichever
period of time is shorter, but only to the extent of the accrued right to
exercise the Option or Right at the date of such termination.
Section 6.4 In the event of the death of an Optionee, the
rights of such Optionee under any then outstanding Option or Right shall
be exercisable by the person or persons to whom these rights pass by will
or by the laws of decent and distribution, at anytime prior to the
expiration of the Option or within three years after the date of death,
whichever period of time is shorter, but only the extent of the accrued
right to exercise the Option or Right at the date of death. If a person
or estate acquires the right to exercise a Option or Right by bequest or
inheritance, the Committee may require reasonable evidence as to the
ownership of such Option, and may require such consents and releases of
taxing authorities as the Committee may deem advisable.
Section 6.5 With the exception of Non-Qualified Options
issued pursuant to Section2.6 hereof, the Committee may also provide that
a director who is also an employee must continuously be employed by the
Company for such period of time as the Committee, in its discretion, deems
advisable before the right to exercise any portion of an Option or Right
granted to such employee will accrue, and may also set such other targets,
restrictions or other terms relating to the employment of the Optionee
which targets, restrictions, or terms must be fulfilled or complied with,
as the case may be, prior to the exercise of any portion of an Option or
Right granted to any employee-director.
Section 6.6 Options or Rights granted under this Plan shall
not be affected by any change of duties or position, so long as the
Optionee continues in the service of the Company.
Section 6.7 Nothing contained in this Plan, or in any Option
or Right granted pursuant to this Plan, shall confer upon any Optionee any
right with respect to continuance of employment or service by the Company
nor interfere in any way with the right of the Company to terminate the
Optionee's employment or service or change the Optionee's compensation at
any time.
Article VII.
Purchase of Shares
Section 7.1 Except as provided in this Article VII, an Option
shall be exercised by tender to the Company of the full exercise price of
the shares of Common Stock with respect to which the Option is being
exercised and written notice of such exercise. The right to purchase
shares of Common Stock shall be cumulative so that, once the right to
purchase any shares has accrued, such shares or any part thereof may be
purchased at any time thereafter until the expiration or termination of
the Option. A partial exercise of an Option shall not affect the right of
the Optionee to exercise the Option from time to time, in accordance with
this Plan, as to the remaining number of shares of Common Stock subject to
the Option. The purchase price of the shares shall be in United States
dollars, payable in cash or by certified bank check. Notwithstanding the
foregoing, in lieu of cash, an Optionee may, with the approval of the
Committee, exercise his or her Option by tendering to the Company shares
of Common Stock of the Company owned by him or her and having an aggregate
fair market value at least equal to the full exercise price. The fair
market value of any shares of Common Stock so surrendered shall be
determined by the Committee in accordance with Section 5.1(b) hereof.
Section 7.2 Except as provided in Article VI above, an Option
may not be exercised unless the holder thereof is a director of the
Company at the time of exercise.
Section 7.3 No Optionee, or Optionee's executor,
administrator, legatee, or distributee or other permitted transferee,
shall be deemed to be a holder of any shares of Common Stock subject to an
Option for any purpose whatsoever unless and until a stock certificate or
certificates for such shares are issued to such person under the terms of
this Plan. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the
date such stock certificate is issued, except as provided in Article VIII
hereof.
Section 7.4 If: (i) the listing, registration or
qualification of the Options issued hereunder, or of any securities
issuable upon exercise of such Options (the "Common Stock") upon any
securities exchange or quotation system or under federal or state law is
necessary as a condition of or in connection with the issuance or of
exercise of the Options, or (ii) the consent or approval of any
governmental regulatory body is necessary as a condition of or in
connection with the issuance or exercise of the Options, the Company shall
not be obligated to deliver the certificates representing the Subject
Securities or to accept or to recognize an Option exercise unless and
until such listing, registration, qualification, consent or approval shall
have been effected or obtained. The Company will take reasonable action
to so list, register or qualify the Options and the Subject Securities, or
effect or obtain such consent or approval, so as to allow for their
issuance.
Section 7.5 Any Optionee may be required to represent to the
Company as a condition of his or her exercise of Options issued under this
Plan that: (i) the Common Stock acquired upon exercise of his or her
Option are being acquired by him or her for investment purposes only and
not with a view to distribution or resale, unless counsel for the Company
is then of the view that such a representation is not necessary and is not
required under the Securities Act of 1933, as amended (the "Securities
Act"), or any other applicable statue, law, regulation or rule; and (ii)
that the Optionee shall make no exercise or disposition of an Option or of
the Common Stock in contravention of the Securities Act, the Exchange Act
or the rules and regulations thereunder. Optionees may also be required
to provide (as a condition precedent to exercise of an Option, such
documentation as may be reasonably required by the Company to assure
compliance with applicable law and the terms and conditions of this Plan
and the subject Option.
Section 7.6 An Option may also be exercised by tender to the
Company of a written notice of exercise together with advice of the
delivery of an order to a broker to sell part or all of the shares of
Common Stock subject to such exercise notice and an irrevocable order to
such broker to deliver to the Company (or its transfer agent) sufficient
proceeds from the sale of such shares to pay the exercise price and any
withholding taxes. All documentation and procedures to be followed in
connection with such a "cashless exercise" shall be approved in advance by
the Committee.
Article VIII.
Change in Number of Outstanding Share of
Stock, Adjustments,Reorganizations, etc.
Section 8.1 In the event that the outstanding shares of
Common Stock of the Company are hereafter increased or decreased or
changed into or exchanged for a different number of shares or kind of
shares or other securities of the Company or of another corporation by
reason or reorganization, merger, consolidation, re-capitalization,
reclassification, stock split, combination of shares or a dividend payable
in capital stock , appropriate adjustment shall be made by the Committee
in the number and kind of shares for the purchase of which Options may be
granted under this Plan, including the maximum number that may be granted
to any one person. In addition, the Committee shall make appropriate
adjustments in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised shall be exercisable, to the
extent that the Optionee's proportionate interest shall be maintained as
before the occurrence to the unexercised portion of the Option and with a
corresponding adjustment in the option price per share. Any such
adjustment made by the Committee shall be conclusive.
Section 8.2 The grant of an Option pursuant to this Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or assets.
Section 8.3 Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company
as a result of which the outstanding securities of the class then subject
to Options hereunder are changed into or exchanged for cash or property or
securities not of the Company's issue, or upon a sale of substantially all
the property of the Company to an association, person, party, corporation,
partnership, or "control group" as that term is construed for the purposes
of the Exchange Act, this Plan shall terminate unless provision be made in
writing in connection with such transaction for the continuance of this
Plan or for the substitution for such Option or Options covering the stock
of a successor employer corporation, or a present or a subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and
prices, in which event this Plan and the Options theretofore granted shall
continue in the manner and under the terms so provided. If this Plan
shall terminate pursuant to the foregoing sentence, all persons owning any
unexercised portions of the Options then outstanding shall have the right
, at such time prior to the consummation of the transaction causing such
termination as the Company shall designate, to exercise the unexercised
portions of such Options, including the portions thereof which would, but
for this Section 8.3, not yet be exercisable.
Section 8.4 If, while any Options remain outstanding under
the Plan, (i) the "beneficial ownership" (as defined Rule 13d-3 under the
Exchange Act) of securities representing more than 20% of the combined
voting power of the Company is acquired by a person (as defined in section
13(d) of the Exchange Act, other than the Company or an affiliate of the
Company), (ii) the stockholders of the company approve a definitive
agreement to merge or consolidate the Company with another company or to
sell or otherwise dispose of all or substantially all of it's assets, or
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the members of the board of directors
cease to constitute at least a majority of the members of the board of
directors at any time during such period for any reason (other than in the
case of a director whose election by the Board or nomination by the
Company's stockholders was approved by a vote of at least two thirds of
the directors then still in office who are either directors at the
beginning of the period or whose election or nomination for election was
previously so approved), then all Options then outstanding shall become
fully vested and exercisable on the date of such event.
Article IX.
Duration, Amendment & Termination
Section 9.1 The Board of Directors may at any time terminate
this Plan or make such amendments hereto as it shall deem advisable and in
the best interests of the Company, without action on the part of the
stockholders of the Company, unless such approval is required pursuant to
Section 422 of the Code or the regulations thereunder or Rule 16b-3 under
the Exchange Act; provided, however, that no such termination or amendment
shall without the consent of the individual to whom any Option shall
heretofore have been granted, affect or impair the rights of such
individual under such Option, and provided further, that unless the
holders of a majority of all classes of the Company's outstanding voting
stock entitled to vote thereon shall have first approved thereof, no
amendment of this Plan shall be made whereby: (a) the total number of
shares of Common Stock which may be issued pursuant to the exercise of
Options under this Plan to all individuals, or any of them, shall be
increased, except by operation of the adjustment provisions of Article
VIII hereof, (b) the authority to administer this Plan by the Committee
shall be withdrawn, (c) the maximum term of the Options shall be extended,
(d) the minimum option price of Incentive Options shall be decreased, (e)
the price to Optionees to whom Options have been granted shall be changed
or (f) the class of individuals eligible to participate in this Plan is
modified. Pursuant to Section 422(b) of the Code, no Incentive Option may
be granted pursuant to this Plan after ten years from the date this Plan
is adopted or the date this Plan is approved by the stockholders of the
Company, whichever is earlier.
Article X.
Restrictions
Section 10.1 Any shares of Common Stock issued pursuant to
exercise of Options granted under this Plan shall be subject to such
restrictions or transfer and limitations as shall, in the opinion of the
Committee, be necessary or advisable to assure compliance with the laws,
rules and regulations of the United States government or any state or
jurisdiction thereof. In addition, except for those Non-Qualified Options
issued pursuant to Section 2.6 above, the Committee may impose such other
restrictions upon the exercise of an Option or upon the sale or other
disposition of the shares of Common Stock deliverable upon exercise
thereof as the Committee may, in its sole discretion, determine. By
accepting an award pursuant to the Plan, each Optionee shall thereby agree
to any such restrictions.
Section 10.2 Any certificate issued to evidence shares of
Common Stock issued pursuant to exercise of an Option shall bear such
legends and statements as the Committee, the Board of Directors or counsel
to the Company shall deem advisable to assure compliance with the laws,
rules and regulations of the United States government or any state or
jurisdiction thereof. No shares of Common Stock will be delivered
pursuant to exercise of the Option granted under this Plan until the
Company has obtained such consents or approvals from such regulatory
bodies of the Untied States Government of any state or jurisdiction
thereof as the Committee, the Board of Directors or counsel to the Company
deems necessary or advisable.
Article XI.
Application of Funds
Section 11.1 The proceeds received by the Company from the
issuance and sale of Common Stock upon exercise of Options granted
pursuant to the Plan are to be added to the general funds of the Company
and used for its corporate purposes as determined by the Board of
Directors.
Article XII.
Effectiveness of Plan
Section 12.1 This Plan shall become effective upon adoption by
the Board of Directors, and Options may be issued hereunder from and after
that date subject to the provisions of Section 3.3 above. This Plan must
be approved by the Company's stockholders in accordance with the
applicable provisions (relating to the issuance of stock or options) of
the Company's governing documents and state law or, if no such approval is
prescribed therein, by the affirmative vote of the holders of a majority
of the votes cast at a duly held stockholders' meeting at which a quorum
representing a majority of all the Company's outstanding voting stock is
present and voting (in person or by proxy) or, without regard to any
required time period for approval, by any other method permitted by
Section 422 of the Code and the regulations thereunder. If such
stockholder approval is not obtained within one year of the adoption of
this Plan by the Board of Directors or within such other time period
required under Section 422 of the Code and the regulations thereunder,
this Plan shall remain in force, provided however, that all Options issued
and issuable hereunder shall automatically be deemed to be Non-Qualified
Options and provided further that no Option granted to any person subject
to Section 16 of the Exchange Act shall be exercisable until such time as
stockholder approval of this Plan has been obtained.
IN WITNESS WHEREOF, pursuant to the approval or adoption of this
Plan by the Board of Directors, this Plan is executed and adopted this
14th day of December, 1995.
EXECUTIVE TELECARD, LTD.
By: /s/ Edward J. Gerrity, Jr.
Edward J. Gerrity, Jr.
Its: Chairman of the Board
(CORPORATE SEAL)
ATTEST:
By: /s/ John J. Gitlin
Secretary
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Executive Telecard, Ltd. on Form S-8 of our report dated May
20, 1994, appearing in the Annual Report on Form 10-K/A of Executive
Telecard, Ltd. for the year ended March 31, 1994.
/s/Goldstein, Karlewicz & Goldstein LLP
Goldstein, Karlewicz & Goldstein LLP
Certified Public Accountants
Chestnut Ridge, New York
October 28, 1996
