As filed with the Securities and Exchange Commission on
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------
SYNERGY BRANDS INC.
-----------------------
(Exact name of Issuer as specified in its charter)
Delaware 22-2993066
- --------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer ID No.)
incorporation or organization)
40 Underhill Blvd., Syosset, NY 11791
------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
KRANTOR CORPORATION 1994 SERVICES AND CONSULTING COMPENSATION PLAN
------------------------------------------------------------------
(full title of the plan)
Mr. Henry J. Platek, Jr., President
Synergy Brands Inc.
40 Underhill Blvd., Syosset, NY 11791
(516)682-1980
------------------
telephone number, including area code, of agent for service
Please send all copies of all correspondence to:
Randall J. Perry, Esq.
44 Union Avenue, Rutherford, NJ 07070
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum Amount of
securities Amount offering aggregate registration
to be to be price offering fee
registered registered per share (1) price (1)
Common Stock 2,300,000 $ 4.82 $11,086,000 $2,217.20
$.001 par value shares
per share
Total 2,300,000 $ 4.82 $11,086,000 $2,217.20
shares
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(b) and (c) on the basis of the average of the high
($5.00) and the low ($4.63) sales price per share of the Common Stock of
Synergy Brands Inc. on December 2, 1999 as reported by the NASDAQ National
Market System.
Page 1 of 25 pages contained in the sequential numbering system; the Exhibit
Index may be found on page 7 of the sequential numbering system.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation for Documents by Reference.
-----------------------------------------
The following documents, or portions thereof, heretofore filed by Synergy
Brands nc., formerly Krantor Corporation (the "Company"), with the U.S.
Securities and Exchange Commission (the "Commission") are hereby incorporated by
reference in this Registration Statement on Form S-8 (the "Registration
Statement"):
(a) The latest Prospectus dated November 14, 1994, filed by the Company
with the Commission pursuant to Rule 424(b) under the Securities Act of 1933, as
amended (the "Securities Act"), on November 16, 1994 relating to the
Registration Statement on Form S-1 (File No. 33-83226) filed by the Company with
the Commission on August 24, 1994;
(b) All other reports filed by the Company with the Commission pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), since the end of the Company's fiscal year ended December
31, 1993, covered by the Company's latest Prospectus referred to in (a) above;
and
(c) The description of the Company's Common Stock, $.001 par value per
share (the "Common Stock"), contained in the Company's Registration Statement on
Form 8-A (File No. 0-19409) filed by the Company with the Commission pursuant to
Section 12(g) of the Exchange Act on July 16, 1991, including any amendment or
report filed for the purpose of updating such description.
(d) The Registration Statement on Form S-8 filed by the Company with
the Commission on March 7, 1994 (File No. 33-76212) and all documents stated
therein as incorporated by reference, are hereby incorporated by reference.
(e) The Registration Statement on Form S-8 filed by the Company with
the Commission on August 6, 1996 (File No. 33-09629) and all documents stated
therein as incorporated by reference, are hereby incorporated by reference
(f) The Registration Statement on Form S-8 filed by the Company with
the Commission on February 12, 1997 (File No. 33-21623) and all documents stated
therein as incorporated by reference, are hereby incorporated by reference
(g) The Registration Statement on Form S-8 filed by the Company with
the Commission on April 28, 1999 (File No. 33-77251) and all documents stated
therein as incorporated by reference, are hereby incorporated by reference
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
-2-
<PAGE>
Any statement contained in a document 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 other
subsequent filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. Description of Securities.
--------------------------
The Company's Common Stock is registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended. See Item 3(c) above.
Item 5. Interests of Names Experts and Counsel.
---------------------------------------
Not applicable
Item 6. Indemnification of Directors and Officers.
------------------------------------------
no change
Item 7. Exemption From Registration Claimed.
------------------------------------
no change
Item 8. Exhibits.
---------
The following are filed as exhibits to this Registration Statement or
incorporated herein by reference:
-3-
<PAGE>
Exhibit No. Description
5.1 Opinion of Randall J. Perry, Esq.
23.1 Consent of Belew Averitt LLP, independent public
accountants
23.2 Consent of Randall J. Perry, Esq. (contained in the opinion
filed as Exhibit 5.1)
99.1 Krantor Corporation 1994 Services and Consulting Compensation
Plan as amended
- --------
Item 9. Undertakings.
-------------
no change
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Deer Park, State of New York, on this 19th day of
November, 1999.
SYNERGY BRANDS INC.
By: /s/ Henry J. Platek, Jr.
------------------------------------
Henry J. Platek, Jr., Pres.
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Henry J. Platek and Mair Faibish, or either one
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and re-substitution for him and in his name, place and stead, in
any and all capacities, to sign any and all pre or post effective amendments to
this Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitutes, may lawfully do or cause to be done by virtue hereof.
-5-
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Henry J. Platek, Jr.
- ---------------------------- Director and Pres. (Prin- November 19, 1999
Henry J. Platek, Jr. cipal Executive Officer)
/s/ Mair Faibish
- ---------------------------- Director, Vice President and November 19, 1999
Mair Faibish Chief Financial Officer
/s/ Mitchell Gerstein
- ---------------------------- Director, Vice Pres., November 19, 1999
Mitchell Gerstein Secretary, and Treasurer
- ---------------------------- Director
Dominic A. Marsicovetere
- ---------------------------- Director
Michael Ferrone
-6-
<PAGE>
EXHIBIT INDEX
Page in
Sequentially
Exhibit No. Description
Numbered Doc.
5.1 Opinion of Randall J. Perry, Esq. 8
23.1 Consent of Belew Averitt LLP, 9
independent public accountants
23.2 Consent of Randall J. Perry, Esq.
(contained in the opinion filed as
Exhibit 5.1)
99.1 Krantor Corporation 1994 Services and 10
Consulting Compensation Plan as amended
-7-
EXHIBIT 5.1
RANDALL J. PERRY, ESQ.
Attorney at Law
44 Union Avenue * P.O. Box 108
Rutherford, New Jersey 07070
Telephone (201) 939-7200 Telefax: (201) 939-7348
November 19, 1999
Synergy Brands Inc
40 Underhill Blvd.
Syosset, NY 11791
Gentlemen:
We have acted as legal counsel to Synergy Brands Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement') filed with the U.S. Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, on or about the date hereof. The Registration Statement relates to
2,300,000 shares of the Company's common stock $.001 par value per share (the
"Shares"), offered pursuant to the provisions of the Company's 1994 Services and
Consulting Compensation Plan, as amended (the "Plan").
In connection with this opinion, we have examined the Company's Certificate
of Incorporation; the Company's By-laws; minutes of the Company's corporate
proceedings, as made available to us by officers of the Company; the Company's
1994 Services and Consulting Compensation Plan, as amended; an executed copy of
such Registration Statement, and all exhibits thereto in the form filed with the
Commission; and such matters of law deemed necessary by us in order to deliver
the within opinion.
In the course of our examination, we have assumed the genuineness of all
signatures, the authority of all signatories to sign on behalf of their
principals, if any, the authenticity of all documents submitted to us as
original documents, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the due execution and
delivery are a prerequisite to the effectiveness thereof. As to certain factual
matters, we have relied upon information furnished to us by officers of the
Company.
On the basis of the foregoing, and solely in reliance thereon, we are of
the opinion that the Shares have been duly authorized and, when issued, for
consideration received by the Company for shares granted or to be granted
pursuant to the Plan in accordance with the terms thereof, or upon the exercise
of, and payment of the exercise price as provided in, stock options granted or
to be granted pursuant to the Plan in accordance with the terms thereof, the
Shares will be validly issued, fully-paid and nonassessable.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement.
Very truly yours,
/s/ RANDALL J. PERRY
----------------------------------------
RANDALL J. PERRY
RJP:lv
-8-
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
Synergy Brands Inc.
We consent to the incorporation by reference in this Registration Statement of
Synergy Brands Inc. (formerly Krantor Corporation)on Form S-8 of our report
dated April 26, 1994 with respect to the financial statements of Synergy Brands
Inc. appearing in the Prospectus, which is a part of the Registration Statement
of Form S-1 (File No. 33-83226) filed with the Securities and Exchange
Commission and declared effective on November 14, 1994 as amended through the
date hereof and of our reports dated March 10, 1995, April 5, 1996, April 4,
1997, March 18, 1998, and March 20, 1999 included in the annual reports on Form
10-K and Form 10-KSB of Synergy Brands Inc. on file with the Securities and
Exchange Commission for the fiscal years ended December 31, 1994 and December
31, 1995, December 31, 1996, December 31, 1997 and December 31, 1998
respectively.
Our audits of the financial statements referred to in our aforementioned report
also included the financial statement schedules of Synergy Brands Inc., listed
in Item 16 of Form S-1 and in Item 14 of Form 10K. These financial statement
schedules are the responsibility of the Corporation's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
/s/ BELEW AVERITT LLP
- ----------------------------
BELEW AVERITT LLP
Dallas, Texas
November 10, 1999
-9-
EXHIBIT 99.1
KRANTOR CORPORATION
1994 SERVICES AND CONSULTING COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE I
THE PLAN
1.1 Name................................................................
1.2 Purpose ............................................................
1.3 Definitions ........................................................
1.4 Effective Date .....................................................
1.5 Eligibility to Participate .........................................
1.6 Shares Subject to the Plan .........................................
1.7 Minimum Consideration or Exercise Price ............................
1.8 Stock and Options Granted under the Plan ...........................
1.9 Reservation of Shares of Common Stock ..............................
1.10 Tax Withholding ....................................................
1.11 Exercise of Options ................................................
1.12 Acceleration of Right to Exercise Options ..........................
1.13 Written Notice and Acknowledgment Required to Exercise Option.......
1.14 Compliance with Securities Laws ....................................
1.15 Employment of Employee .............................................
1.16 Option Upon Termination of Employment ..............................
1.17 Termination of Employment for Cause ................................
1.18 Option Upon Disability of Optionee .................................
1.19 Stock or Option Upon Death of Optionee .............................
1.20 Transferability ....................................................
1.21 Information to Optionees ...........................................
ARTICLE II
ADMINISTRATION
2.1 Committee ..........................................................
2.2 Action of Committee ................................................
2.3 Report of Grant ....................................................
2.4 Company Assistance .................................................
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<PAGE>
ARTICLE III
REGISTRATION OF PLAN SHARES ..............................................
ARTICLE IV
PLAN SHARES; STOCK OPTIONS
4.1 Terms and Conditions of Stock and Option Grants ....................
4.2 Duration of Options ................................................
4.3 Consideration; Exercise Price ......................................
4.4 Individual Option Agreements .......................................
ARTICLE V
TERMINATION, AMENDMENT AND ADJUSTMENT
5.1 Termination ........................................................
5.2 Amendment ..........................................................
5.3 Adjustments ........................................................
ARTICLE VI
MISCELLANEOUS
6.1 Rights Under Plan ..................................................
6.2 Other Option Plans .................................................
6.3 Plan Binding on Successors .........................................
6.4 Number and Gender ..................................................
6.5 Headings ...........................................................
-11-
<PAGE>
KRANTOR CORPORATION
1994 SERVICES AND CONSULTING COMPENSATION PLAN
ARTICLE I
THE PLAN
1. Name. This Plan shall be known as the "Krantor Corporation 1994 Services
and Consulting Compensation Plan."
1.2 Purpose. The purpose of this Plan is to promote the growth and general
prosperity of the Company by permitting the Company to grant to its and its
subsidiaries' and affiliates' employees, consultants and non-employee members of
the Board of Directors, (a) shares of Common Stock of the Company or (b) Options
to purchase shares of Common Stock of the Company, as defined in Section 1.3
below captioned "Definitions." This Plan is designed to assist the Company and
its subsidiaries and affiliates attract and retain superior personnel for
positions of substantial responsibility and to provide employees and
non-employee members of the Board with additional incentive to contribute to the
success of the Company.
1.3 Definitions. As used herein with initial capital letters, the following
terms shall have the meanings hereinafter set forth unless the context clearly
indicates to the contrary:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee appointed in accordance with
Section 2.1 or, if the Committee shall no longer be in existence or no such
Committee shall have been appointed, the Board.
(d) "Common Stock" shall mean (i) the Common Stock, $.001 par value per
share, of the Company or (ii) preferred stock of the Company intended by
the Committee to be convertible into shares of such Common Stock, $.001 par
value per share, or (iii) if the outstanding shares of such Common Stock,
$.001 par value per share, are hereinafter changed into or exchanged for
shares of a different stock or security of the Company or some other
corporation, such other stock or security.
(e) "Company" shall mean "Krantor Corporation," a Delaware corporation.
(f) "Disinterested Person" shall mean an individual who is a
"disinterested person" within the meaning of Rule 16b-3 promulgated under
the Exchange Act.
-12-
<PAGE>
(g) "Effective Date" shall mean the date of the approval of the Plan by
the Board; provided that Options may be granted under the Plan by the
Committee contingent upon their ratification and approval by the Board
within ten months of such action by the Committee and provided further that
no such Options may be exercised prior to such approval.
(h) "Employee(s)" shall mean employee(s) and consultant(s) of the
Company or any of its subsidiaries or affiliates and any other person(s)
performing services for the Company or for any of its subsidiaries or
affiliates, with or without compensation, to whom the Company chooses to
grant shares of Common Stock or Options in accordance with this Plan.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" shall mean such value as determined by the
Committee on the basis of such factors as it deems appropriate; provided
that if the Common Stock is listed on a national securities exchange or
transactions in the Common Stock are quoted on the NASDAQ National Market
System, such value shall be determined by the Committee on the basis of the
last reported sales price for the Common Stock on the date for which such
determination is relevant, as reported on the national securities exchange
or the NASDAQ National Market System, as the case may be; and provided
further that if the Common Stock is not listed on a national securities
exchange or quoted on the NASDAQ National Market System, but bid and asked
quotations on the Common Stock are available from NASDAQ or a recognized
stock quotation service, such value shall be determined by the Committee on
the basis of the mean between the closing bid and asked quotations for such
stock on the date for which such determination is relevant, as reported by
NASDAQ or a recognized stock quotation service or, in the event that there
shall be no bid or asked quotations on such stock on the date for which
such determination is relevant, then on the basis of the mean between the
closing bid and asked quotations on such stock on the date nearest
preceding the date for which such determination is relevant for which such
bid and asked quotations were available.
(k) "Option" shall mean an Option granted pursuant to Article III of
this Plan.
(l) "Optionee" shall mean an employee, consultant or non-employee
member of the Board to whom an Optionee has been granted hereunder.
(m) "Option Agreement" shall mean an agreement between the Company and
an Optionee with respect to one or more Options.
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<PAGE>
(n) "Plan" shall mean the "Krantor Corporation 1994 Services and
Consulting Compensation Plan," the terms of which are set forth herein.
(o) "Plan Shares" shall mean the shares of Common Stock, as defined
herein, issuable pursuant to the Plan.
(p) "Securities Act" shall mean the Securities Act of 1933, as amended.
1.4 Effective Date. The Plan shall become effective upon the Effective
Date.
1.5 Eligibility to Participate. Any employee, consultant or non-employee
member of the Board of the Company or any of its subsidiaries or affiliates
shall be eligible to participate in the Plan.
1.6 Shares Subject to the Plan. The Plan Shares subject to the Plan shall
be 600,000 shares of the Common Stock, $.001 par value per share, of the
Company.
1.7 Minimum Consideration or Exercise Price. Notwithstanding anything to
the contrary contained herein, no share of Common Stock shall be granted
hereunder for consideration valued at less than the par value of the Company's
Common Stock and no Option shall be granted hereunder with an exercise price
which is less than the par value of the Company's Common Stock.
1.8 Stock and Options Granted Under the Plan. Plan Shares granted or with
respect to which Options shall have been exercised, shall not again be available
for grant hereunder. If Options terminate for any reason without being wholly
exercised, the Company may grant the number of Plan Shares to which the
termination of such Options relates or new Options covering such number of Plan
Shares.
1.9 Reservation of Shares of Common Stock. During the term of the Plan, the
Company will at all times reserve and keep available for issuance such number of
shares of Common Stock as shall be necessary to satisfy the requirements of the
Plan as to the number of Plan Shares; which shares may be issued in whole or in
part as the Committee shall from time to time determine from authorized but
unissued shares of Common Stock or issued shares of Common Stock which have been
reacquired by the Company and held in the treasury. In addition, the Company
will from time to time, as is necessary to accomplish the purposes of the Plan,
use its best efforts to obtain from any regulatory agency having jurisdiction
any requisite authority necessary to issue Plan Shares hereunder. The inability
of the Company to obtain from any regulatory agency having jurisdiction the
authority deemed by the Company's counsel to be necessary for the lawful
issuance of any Plan Shares shall relieve the Company of any liability in
respect of the non-issuance of Plan Shares as to which the requisite authority
shall not have been obtained.
-14-
<PAGE>
1.10 Tax Withholding
(a) Conditions Precedent. The issuance, delivery or exercise of any
Plan Shares or Options under the Plan is subject to the condition that if
at any time the Committee shall determine, in its discretion, that the
satisfaction of withholding tax or other withholding liabilities under any
state or federal law is necessary or desirable as a condition of, or in
connection with, the issuance, delivery or exercise of the Plan Shares or
Options, then the issuance, delivery or exercise of the Plan Shares or
Options shall not be effective unless the withholding shall have been
effected or obtained in a manner acceptable to the Committee.
(b) Manner of Satisfying Withholding Obligations. When an Employee
participating in the Plan is required to pay to the Company an amount
required to be withheld under applicable income tax laws in connection with
the grant of Plan Shares or the exercise of an Option, the Employee may
satisfy the obligation, in whole or in part, by electing to do either of
the following: (i) have the Company withhold a portion of the Plan Shares
granted by the Company or acquired upon the exercise of the Option which
have a Fair Market Value on the date the amount of tax to be withheld is to
be determined (the "Tax Date") equal to the amount required to be withheld
or (ii) deliver to the Company shares of Common Stock already owned by the
Employee which have a Fair Market Value on the Tax Date equal to the amount
required to be withheld.
(c) Special Rules for Use of Stock. An election by an Employee subject
to Section 16 of the Exchange Act with respect to the Company's equity
securities to have Plan Shares or other shares of Common Stock withheld or
delivered out of already-owned Common Stock for this purpose will be
subject to the following restrictions, i.e., the election: (i) will be
subject at all times to the approval of the Committee; (ii) must be made on
or prior to the Tax Date and during the period beginning on the third
business day following the date of release of the financial information
specified in paragraph (e)(1)(ii) of rule 16b-3 promulgated under the
Exchange Act and ending on the twelfth day following such date of release;
(iii) will be irrevocable; (iv) may not be made within six months after the
date of grant of the Plan Shares or Option in question; and (v) may not be
made unless the Company has been subject to the reporting requirements of
Section 13(a) of the Exchange Act for at least one year prior to the
election and has filed all reports and statements required to be filed
pursuant to that Section for that year.
-15-
<PAGE>
1.11 Exercise of Options.
(a) Method of Exercise. Each Option shall be exercisable in accordance
with the terms of the Option Agreement pursuant to which the Option was
granted. No Option may be exercised for a fraction of a Plan Share.
(b) Payment of Exercise Price. The exercise price of any Option shall
be paid either (i) in cash, (ii) by cashier's check, (iii) by shares of
Common Stock, if permitted by the Committee, (iv) by cash or cashier's
check for the par value of the Plan Shares plus a promissory note for the
balance of the exercise price, which note shall (A) provide for full
personal liability of the maker, (B) bear interest at the lowest rate then
possible without causing the maker thereof to have income imputed in
connection therewith, (C) be due and payable both as to principal and
interest five years from the date such note is made, (D) be secured by the
Plan Shares issued in connection therewith, (E) be payable in advance in
whole or in part (with the Plan Shares pledged in connection therewith
released in the same proportion as such pre-payment) and (F) contain such
other terms and provisions as the Committee may determine, including
without limitation the right to repay the note partially or wholly with
Common Stock or (v) by delivery of a copy of irrevocable instructions from
the Employee to a broker or dealer, reasonably acceptable to the Company,
to sell certain of the Plan Shares purchased upon exercise of the Option or
to pledge them as collateral for a loan and promptly deliver to the Company
the amount of sale or loan proceeds necessary to pay such purchase price.
If any portion of the exercise price or a note given at the time of
exercise of the Option is paid in shares of Common Stock, those shares
shall be valued at the then Fair Market Value.
1.12 Acceleration of Right to Exercise Options. Notwithstanding the
provisions of any Option Agreement regarding the time for exercise of an Option,
the following provisions shall apply:
(a) Mergers and Reorganizations. If the Company or its shareholders
enter into an agreement to dispose of all or substantially all of the
assets of the Company by means of a sale, merger or other reorganization or
liquidation, or otherwise in a transaction in which the Company is not the
surviving corporation, any Option shall become immediately exercisable with
respect to the full number of shares subject to that Option during the
period commencing as of the date of the agreement to dispose of all or
substantially all of the assets or stock of the Company and ending when the
disposition of assets or stock contemplated by that agreement is
consummated or the Option is otherwise terminated in accordance with its
provisions or the provisions of the Article pursuant to which it was
granted, whichever occurs first. The Option shall not become immediately
exercisable, however, if the transaction contemplated in the agreement is a
merger or reorganization in which the Company will survive.
-16-
<PAGE>
(b) Change in Control. In the event of a change in control or
threatened change in control of the Company, all Options granted prior to
the change in control shall become immediately exercisable. The term
"change in control" for purposes of this Section shall refer to the
acquisition of 20 percent or more of the voting securities of the Company
by any person or by persons acting as a group within the meaning of Section
13(d)(3) of the Exchange Act; provided that no change in control or
threatened change in control shall be deemed to have occurred if, prior to
the acquisition of, or offer to acquire 20 percent or more of the voting
securities of the Company, the full Board of Directors shall have adopted
by not less than two-thirds vote a resolution specifically approving such
acquisition or offer. The term "person" refers, for purposes of this
Section, to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically
listed herein. Whether a change in control is threatened shall be
determined solely by the Committee.
1.13 Written Notice and Acknowledgment Required to Exercise Option. Any
Option shall be deemed to be exercised for purposes of the Plan when written
notice of exercise has been received by the Company at its principal office from
the person entitled to exercise the Option and payment for the Plan Shares with
respect to which the Option is exercised has been received by the Company in
accordance with Section 1.11. The written notice of exercise of the Option must
be accompanied by a written acknowledgment by the Employee (a) of the taxable
nature of the event and that the Employee will not hold the Company responsible
for the reporting or payment of such taxes and (b) that, unless otherwise agreed
in writing, the Company will not be liable to the Employee for its failure or
inability to cause the Plan Shares purchased upon the exercise of the Option to
be registered with the Commission or any state securities authority.
1.14 Compliance with Securities Laws. Plan Shares shall not be granted by
the Company or issued with respect to any Option unless the grant, issuance and
delivery of the Plan Shares and the exercise of the Option shall comply with all
relevant provisions of federal and state law, including without limitation the
Securities Act, the rules and regulations promulgated thereunder and the
requirements of any stock exchange upon which the Plan Shares may then be
listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance. The Committee may also require an Employee to
furnish evidence satisfactory to the Company, including a written and signed
representation letter and consent to be bound by any transfer restrictions
imposed by law, legend, condition or otherwise, that the Plan Shares are being
acquired only for investment and without any present intention to sell or
distribute the shares in violation of any federal or state law, rule or
regulation. Further, each Employee shall consent to the imposition of a legend
on the certificate representing the Plan Shares granted by the Company or issued
upon the exercise of the Option, restricting their transferability as required
by law or by this Section.
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<PAGE>
1.15 Employment of Employee. Nothing in the Plan or in any Option granted
hereunder shall confer upon any Employee any right to continued employment by
the Company, or any of its subsidiaries or affiliates, or limit in any way the
right at any time of the Company, or any subsidiary or affiliate, to terminate
or alter the terms and conditions of that employment without any liability to
the Company, or any of its subsidiaries or affiliates.
1.16 Option Upon Termination of Employment. If an Optionee ceases to be
employed by the Company or any of its subsidiaries or affiliates for any reason
other than termination for cause, retirement, death or disability, his Option
may be exercised, to the extent exercisable pursuant to the Option grant or as
otherwise provided by his employment agreement on the date of termination of
employment, at any time within three months after the date of termination of
employment, unless either the Option or the Article pursuant to which it was
granted provides for earlier termination. If an Optionee ceases to be employed
by the Company or any of its subsidiaries or affiliates because the Optionee has
retired under a qualified retirement plan of the Company, as determined by the
Committee, his Option shall be exercisable (to the extent exercisable on the
effective date of such retirement) at any time within twelve months after the
effective date of such retirement unless by its terms the Option expires sooner.
1.17 Termination of Employment for Cause. If an Optionee ceases to be
employed by the Company or any of the subsidiaries or affiliates of the Company
because the Optionee is terminated for cause, the Option shall automatically
expire. For purposes of this Section, "cause" shall mean an act or acts
involving a felony, fraud, willful misconduct, the commission of any act that
causes, or reasonably may be expected to cause substantial injury to the Company
or other good cause. The term "other good cause," as used in this Section, shall
include, but shall not be limited to, habitual impertinence, a pattern of
conduct that tends to hold the Company up to ridicule in the community, conduct
disloyal to the Company, conviction of any crime of moral turpitude or
substantial dependence, as judged by the Committee, on alcohol or any controlled
substance. "Controlled substance" means a drug, immediate precursor or other
substance listed in Schedules I-V of the New York State Controlled Substances
Act, as amended, or a drug, immediate precursor or other substance listed in
Schedules, I-V of the Federal Comprehensive Drug Abuse Prevention and Control
Act of 1970, as amended. Notwithstanding the foregoing, if an Optionee is an
Employee employed pursuant to a written employment agreement, the Employee shall
be deemed to be terminated for "cause" for purposes of the Plan only if the
Employee is considered under the circumstances to have been terminated for cause
for purposes of such employment agreement.
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1.18 Option Upon Disability of Optionee. If an Optionee becomes disabled
within the meaning of Section 22(e)(3) of the Code while employed by the Company
or any subsidiaries or affiliates of the Company, his Option shall become fully
exercisable and shall expire twelve months after the date of such termination,
unless either the Option or the Article pursuant to which it was issued
otherwise provides for earlier termination.
1.19 Stock or Option Upon Death of Optionee. Except as otherwise limited by
the Committee at the time of the grant of an Option, if an Optionee dies while
employed by the Company or any of the subsidiaries or affiliates thereof, or
within three months after ceasing to be an Employee, his Option shall expire
twelve months after the date of death, unless by its terms it expires sooner.
During this twelve-month or shorter period, the Option may be fully exercised,
to the extent that it remains unexercised on the date of death, by the
Optionee's personal representative or by the distributees to whom the Optionee's
rights under the Option shall pass by will or by the laws of descent and
distribution. The estate of any Employee who dies while he is employed by the
Company or any subsidiary or affiliate of the Company, shall be eligible to
receive an award of Plan Shares or an Option for up to six months following the
Employee's death.
1.20 Transferability. Options may not be sold, assigned, transferred,
pledged or otherwise disposed of or encumbered in any manner otherwise than by
will, the laws of descent and distribution, or pursuant to a qualified domestic
relations order as defined by the Code; provided, however, that an Optionee may
assign or transfer Options to members of his immediate family or to a trust for
the benefit of such members of his immediate family and, during the lifetime of
the Optionee, Options may be exercised only by the Optionee or assignee, as the
case may be, or his legally authorized representative. No Employee shall have
any right to sell, assign, transfer, pledge or otherwise dispose of or encumber
any potential benefit which may be granted pursuant to the Plan, and any
attempted transfer, sale, assignment, pledge or encumbrance shall have no effect
on the Company or the Committee.
1.21 Information to Optionees. The Company shall furnish to each Optionee a
copy of the annual report, proxy statements and all other reports sent to the
Company's shareholders. Upon written request, the Company shall furnish to each
Optionee a copy of its most recent Annual Report on Form 10-K and each quarterly
report to shareholders issued since the end of the Company's most recent fiscal
year.
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ARTICLE II
ADMINISTRATION
2.1 Committee. The Plan shall be administered by the Board; provided,
however, that the Board may appoint a Committee consisting of not fewer than two
members, who shall be members of the Board and who are Disinterested Persons, to
administer this Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. From time to time, the
Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause), appoint new members in
substitution therefor, fill vacancies however caused and remove all members of
the Committee and thereafter directly administer this Plan. Subject to the
express provisions of the Plan and the Board, the Committee shall have the sole
discretion and authority to determine the employees, consultants and
non-employee members of the Board to whom, and the time or times at which, Plan
Shares or Options may be granted and the number of Plan Shares to be granted or
subject to each Option. No member of the Committee shall be eligible to vote on,
or consent with respect to, any grant to him of Plan Shares or Options under the
Plan. Notwithstanding anything to the contrary contained herein, all
transactions under the Plan or with respect to any Plan Shares or Options (other
than the exercise of an outstanding Option in accordance with its terms) between
the Company, or any of its subsidiaries or affiliates, and any director or
officer of the Company, or any of its subsidiaries or affiliates, must be
approved by a majority vote of the Committee.
2.2 Action of Committee. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present or any action taken without a meeting evidenced by a writing
executed by all of the members of the Committee shall constitute the action of
the Committee; provided, however, that a member of the Committee may abstain
from voting on, or consenting to any action with respect to, any grant of Plan
Shares or Options to him, which will not affect any such action of the Committee
provided such action is by the Board. The Committee may appoint a secretary to
keep minutes of its meetings and may make such rules and regulations for the
conduct of its business as it shall deem advisable. Meetings of the Committee
may take place by conference telephone call.
2.3 Report of Grant. The Committee shall file with the Company's Secretary,
within ten days following the grant of Plan Shares or an Option to an Employee,
a written report of the grant; which report shall be made available to the other
members of the Board.
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2.4 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to Employees, their
employment, death, retirement, disability or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary to
the performance of its duties.
ARTICLE III
REGISTRATION OF PLAN SHARES
The Company shall use its best efforts, in a commercially reasonable
manner, to cause a registration statement covering the Plan Shares to be (a)
prepared pursuant to the Plan and to be filed with the United States Securities
and Exchange Commission (the "Commission") and such state "blue sky" authorities
as may be required and (b) declared "effective" by the Commission and such state
authorities (and to remain "effective") for the purpose of enabling the
Employees who receive Plan Shares to have a readily salable or transferable
security. The Employees shall not be required to pay any costs or expenses
(other than sales commissions relating to the sale of Plan Shares) relating to
the registration and effectiveness of the registration statement relating to the
Plan Shares and the preparation and printing of any prospectus that is required
to be delivered in connection with the sale of such Plan Shares. The Company
shall advise each employee who receives a grant of Plan Shares or an Option of
the rights and privileges (or limitations) with respect to the sale or transfer
of such Plan Shares, and the stock certificates evidencing such Plan Shares
shall contain such legends as may be deemed appropriate or necessary by the
Company's counsel. The Company's intent to cause such Plan Shares to be
registered with the Commission so as to be freely salable and transferable does
not constitute a binding or enforceable agreement with, or commitment to, any
person (including any Employee) that the Company will be able to effect such
registration or effectiveness, or that such Plan Shares will be salable over any
extended period of time or that they will be salable at any particular price
over such period. The Company reserves the right, at any time, to terminate its
efforts to register the Plan Shares with the Commission or to discontinue the
effectiveness of such Registration Statement without any liability, obligation
or penalty to any person (including any Employee who may have been granted any
Plan Shares or an Option). The Committee, in its discretion, may determine that
the Company will provide and bear the expense (other than commissions) of an
underwriting or brokerage mechanism through which Employees may, at their
option, sell any Plan Shares awarded to them or purchased upon the exercise of
Options, subject to any restrictions or limitations imposed under any applicable
federal or state securities laws. If the Company has made any underwritings or
brokerage arrangements, the Company will advise the Employees of the terms and
conditions of such arrangements, but shall not be responsible for any action or
inaction on the part of such broker or underwriter with respect to the purchase
of any Plan Shares from the Employee.
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ARTICLE IV
PLAN SHARES; STOCK OPTIONS
4.1 Terms and Conditions of Stock and Option Grants. The terms and
conditions relating to grants of Plan Shares and Options under this Article may
differ from one another as the Committee shall in its discretion determine, as
long as all grants of Plan Shares and Options under this Article satisfy the
requirements of this Article. No Employee shall have any rights as a shareholder
until the Plan Shares have been granted to him by the Committee and the grant of
Plan Shares has been accepted in writing by the Employee or the Option granted
to him by the Committee has been exercised pursuant to Section 1.11. In either
case, the written notice of acceptance of grant or the notice of exercise of the
Option must be accompanied by a written acknowledgment by the Employee (a) of
the taxable nature of the event and that the Employee will not hold the Company
responsible for the reporting or payment of such taxes and (b) that, unless
otherwise agreed in writing, the Company shall not be liable to the Employee for
its failure or inability to cause the Plan Shares granted to such Employee or
purchased upon the exercise of an Option to be registered with the Commission or
any state securities authority. Certificates representing any Plan Shares
awarded or purchased upon the exercise of an Option shall be issued to the
Employee as promptly as possible after the receipt of the Employee's
acknowledgment and, with respect to Plan Shares purchased upon the exercise of
Options, compliance with the provisions of Section 1.11.
4.2 Duration of Options. Each Option granted pursuant to this Article and
all rights thereunder shall expire on the date determined by the Committee, but
in no event shall any Option granted under this Article expire later than ten
years after the date on which the Option is granted. In addition, each Option
shall be subject to early termination as provided elsewhere in the Plan.
4.3 Consideration; Exercise Price. The consideration received by the
Company for Plan Shares granted under this Article and the exercise price for
Plan Shares acquired pursuant to the exercise, in whole or in part, of any
Option granted under this Article, shall not be less than the Fair Market Value
of the Plan Shares at the time of grant of the Plan Shares or Option.
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<PAGE>
4.4 Individual Option Agreements. Each Optionee receiving Options pursuant
to this Article shall be required to enter into a written Option Agreement with
the Company as a precondition to receiving an Option under this Article. In such
Option Agreement, the Employee shall agree to be bound by the terms and
conditions of the Plan and such other matters as the Committee deems
appropriate.
ARTICLE V
TERMINATION, AMENDMENT AND ADJUSTMENT
5.1 Termination. The Plan shall terminate ten years after the Effective
Date. No Plan Shares or Options shall be granted under the Plan after the date
of termination.
5.2 Amendment. Subject to the limitations contained in this Section, the
Committee, at any time and without any notice, may suspend or terminate the Plan
or amend or modify the terms and conditions of the Plan, including the form and
substance of the Option Agreements to be used in connection herewith; provided,
however, that no amendment or modification shall (a) increase the maximum term
established under the Plan for any Option or (b) permit the granting of Plan
Shares or an Option to anyone other than as provided in the Plan. No amendment,
suspension, modification or termination of the Plan shall, without the consent
of an Employee, alter or impair any of such Employee's rights or obligations
with respect to any Plan Shares or under any Option granted under the Plan prior
to such amendment, suspension, modification or termination.
5.3 Adjustments. If the outstanding Common Stock is increased, decreased,
changed into or exchanged for a different number or kind of shares or other
securities through merger, consolidation, combination, exchange of shares, other
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or any other change in the capital structure of the Company,
the Committee may make such appropriate and proportionate adjustment, if any, as
it deems appropriate in the maximum number and kind of shares or other
securities which may be granted or as to which Options may be granted under the
Plan. A corresponding adjustment changing the number or kind of shares or other
securities allocated to unexercised Options or portions thereof, which shall
have been granted prior to any such change, may likewise be made. Any such
adjustment in outstanding Options shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share of Common Stock covered by
the Option. The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined solely by the Committee, and any such
adjustment may provide for the elimination of fractional share interests.
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ARTICLE VI
MISCELLANEOUS
6.1 Rights Under Plan. No Employee shall have any rights in any provision,
term or obligation of the Company as set forth in the Plan, whether directly or
as a third party beneficiary.
6.2 Other Option Plans. The adoption of the Plan shall not affect any other
stock option or incentive or other compensation plans in effect for the Company
or any subsidiaries or affiliates of the Company, nor shall the Plan preclude
the Company or any of its subsidiaries or affiliates from establishing any other
forms of incentive or other compensation for Employees.
6.3 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company and any of its subsidiaries or affiliates
that adopt the Plan.
6.4 Number and Gender. Whenever used herein, nouns in the singular shall
include the plural where appropriate, and the masculine pronoun shall include
the feminine gender.
6.5 Headings. Headings of articles and sections hereof are inserted for
convenience of reference and constitute no part of the Plan.
The following are amendments to the Company's 1994 Services and Consulting
Compensation Plan (the "Plan"):
1. Paragraph 1.3(g) "Effective Date" is amended to define Effective Date as
also the date the Plan may be amended by approval of the Committee or the Board.
2. Paragraph 1.6 of the Plan is hereby amended to delete "6,100,000" and
replace it with "8,400,000"*
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3. Paragraph 1.18 of the Plan is amended to delete the paragraph in its
entirety and replace it with the following language:
"1.18 Option Upon Disability of Optionee. If an Optionee becomes
disabled within the meaning of Section 22(e)(3) of the Code while
employed by the Company or any subsidiaries or affiliates of the
Company, his Option (unless otherwise determined by the Committee)
shall be exercisable only to the extent of those Options which have
vested on the date of disability (as determined by the Company's
disability insurance carrier, or if no carrier insures the Optionee, as
determined by the Committee) and only to the extent the Option remains
unexercised at such date, and shall expire twelve months after the date
of such determination, unless either the Option or the resolution
pursuant to which it was issued otherwise provides for earlier
termination."
4. Paragraph 1.19 of the Plan is amended to delete the paragraph in its
entirety and replace it with the following language:
"1.19 Stock or Option Upon Death of Optionee. If an Optionee dies while
employed by the Company or any of the subsidiaries or affiliates
thereof, or within three months after ceasing to be an Employee, his
Option shall expire twelve months after the date of death, unless by
its terms it expires sooner. During this twelve-month or shorter
period, the Option (unless otherwise determined by the Committee) may
be exercised only to the extent the Option has vested on the date of
death, and only to the extent the Option remains unexercised on such
date, by the Optionee's personal representative or by the distributees
to whom the Optionee's rights under the Option shall pass by will or by
the laws of descent and distribution. The estate of any Employee who
dies while he is employed by the Company, or any subsidiary or
affiliate of the Company, shall be eligible to receive an award of Plan
Shares or an Option for up to six months following the Employee's
death."
5. Paragraph 5.2 of the Plan is amended to delete the paragraph in its
entirety and replace it with the following language:
"5.2 Amendment. Subject to the limitations contained in this Section,
the Committee, at any time and without any notice, may suspend or
terminate the Plan or amend or modify the terms and conditions of the
Plan, including the form and substance of the Option Agreements to be
used in connection herewith; provided, however, that no amendment or
modification shall (a) increase the maximum term established under the
Plan for any Option or (b) expand the classes of persons eligible to
receive Options or Plan Shares. Stockholder approval shall be required
for any amendment or modification (i) if necessary to maintain
compliance of the Plan with Rule 16b-3 promulgated under the Exchange
Act or Section 422 of the Code or (ii) if otherwise deemed advisable by
the Committee."
*THE AMOUNT OF STOCK SUBJECT TO THE PLAN HAS BEEN INCREASED BY ADOPTED
AMENDMENTS IN INTERGALS OF 1,900,000 shares in August 1996, 2,000,000 shares in
February 1997, 1,600,000 shares in April 1999, and is furhter increased by the
latest amendment adopted in November 1999 by an additional 2,300,000 shares.
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