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Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Intervisual Books, Inc.
(Exact Name of Registrant as Specified in Its Charter)
CALIFORNIA 92-2929217
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
2716 OCEAN PARK BLVD., STE. 2020 90405
SANTA MONICA, CALIFORNIA (Zip Code)
(Address of Principal Executive Offices)
NONSTATUTORY STOCK OPTION AGREEMENTS BETWEEN THE REGISTRANT AND
DAN P. REAVIS, MARCIA J. GAYLOR, LYNETTE RUSCHAK,
WALDO H. HUNT AND LEONARD W. JAFFE
(Full Title of the Plan)
Waldo H. Hunt
Chief Executive Officer
Intervisual Books, Inc.
2716 Ocean Park Blvd., Ste. 2020
Santa Monica, California 90405
(Name and Address of Agent for Service)
(310) 396-8708
(Telephone Number, Including Area Code, of Agent for Service)
Please address a copy of all communications to:
Stephen D. Cooke, Esq.
Paul, Hastings, Janofsky & Walker LLP
695 Town Center Drive, 17th Floor
Costa Mesa, California 92626
Telephone: (714) 668-6200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered(1) Per Share(2) Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock, 175,000(3) $1.50 $262,500 $ 73
no par value 50,000(4) $1.50 $ 75,000 $ 21
per share 50,000(5) $1.50 $ 75,000 $ 21
31,000(6) $1.625 $ 50,375 $ 15
25,000(7) $1.50 $ 37,500 $ 11
Total $141
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</TABLE>
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(1) This Registration Statement covers, in addition to such number of shares
issuable upon exercise of the options granted under the agreements, an
indeterminate number of additional shares which may become subject to
options as a result of the adjustment provisions of the agreements. The
registration fee is calculated only on the stated number of shares.
(2) Calculated pursuant to Rule 457(h)(1), based on the actual price at
which options may be exercised under the Nonstatutory Stock Option
Agreements.
(3) Based on the Nonstatutory Stock Option Agreement dated November 13, 1997
between Intervisual Books, Inc. and Dan P. Reavis, as amended.
(4) Based on the Nonstatutory Stock Option Agreement dated April 1, 1998
between Intervisual Books, Inc. and Marcia J. Gaylor, as amended.
(5) Based on the Nonstatutory Stock Option Agreement dated February 10, 1998
between Intervisual Books, Inc. and Lynette Ruschak, as amended.
(6) Based on the Nonstatutory Stock Option Agreement dated October 1, 1997
between Intervisual Books, Inc. and Waldo H. Hunt.
(7) Based on the Nonstatutory Stock Option Agreement dated July 16, 1998
between Intervisual Books, Inc. and Leonard W. Jaffe.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance with
Rule 428 under the Securities Act of 1933 and the Note to Part I of Form
S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
(a) The Registrant's annual report on Form 10-K for the fiscal
year ended December 31, 1998 filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the Registrant's
annual report referred to in (a) above;
(c) The description of the Registrant's common stock, no par
value, which is contained in its Form 8-A filed on May 26, 1992 under the
Exchange Act, including any amendments filed for the purpose of updating such
description; and
(d) 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 to this Registration Statement
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 into this Registration Statement and to be a part hereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 204 and 317 of the California Corporations Code (the
"Code") contain provisions concerning the Registrant's ability to indemnify its
agents (including directors and officers) from certain liabilities and expenses
incurred as a result of any proceeding arising by reason of the fact that such
person is or was an agent of the Registrant. The Registrant has adopted
provisions in its Restated Articles of Incorporation which eliminate the
personal liability of a director from monetary damages to the fullest extent
permissible under the Code and which authorize the Registrant to provide
indemnification of its agents. The Registrant's Bylaws provide indemnification
to its agents to the maximum extent permitted by the Code. The Registrant has
also entered into indemnification agreements with its directors and certain key
officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The exhibits filed as part of this Registration Statement are as
follows:
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<CAPTION>
Exhibit Number Description of Exhibit
- -------------- ----------------------
<S> <C>
4.1 Nonstatutory Stock Option Agreement dated November 13,
1997, between Intervisual Books, Inc. and Dan P. Reavis
(the "Reavis Option Agreement") (Incorporated by reference
to Exhibit 10.19 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1998.)
4.2 Letter dated July 16, 1998 amending the Reavis Option
Agreement (Incorporated by reference to Exhibit 10.28 to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998.)
4.3 Nonstatutory Stock Option Agreement dated April 1, 1998
between Intervisual Books, Inc. and Marcia J. Gaylor (the
"Gaylor Option Agreement").
4.4 Letter dated July 16, 1998 amending the Gaylor Option
Agreement.
4.5 Nonstatutory Stock Option Agreement dated February 10,
1998 between Intervisual Books, Inc. and Lynette Ruschak
(the "Ruschak Option Agreement").
4.6 Letter dated July 16, 1998 amending the Ruschak Option
Agreement.
4.7 Nonstatutory Stock Option Agreement dated October 1, 1997
between Intervisual Books, Inc. and Waldo H. Hunt
(Incorporated by reference to Exhibit 10.17 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998.)
</TABLE>
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<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
- -------------- ----------------------
<S> <C>
4.8 Nonstatutory Stock Option Agreement dated July 16, 1998
between Intervisual Books, Inc. and Leonard W. Jaffe
(Incorporated by reference to Exhibit 10.29 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998.)
5 Opinion of Paul, Hastings, Janofsky & Walker LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP
(contained in Exhibit 5)
24 Power of Attorney (contained on Signature Page of
Registration Statement)
</TABLE>
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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
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(b) The Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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.
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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 Santa Monica, State of California, on this 21st day
of April, 1999.
INTERVISUAL BOOKS, INC.
By: /s/ Nathan N. Sheinman
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Nathan N. Sheinman
President and Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Nathan N. Sheinman and Dan P. Reavis,
jointly and severally, his or her attorneys-in-fact, each with power of
substitution for him or her in any and all capacities, to sign any amendments to
this Registration Statement, and to file the same, with the exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission hereby ratifying and confirming all that each of said
attorneys-in-fact, or his or her substitute or substitutes, may do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/s/ Waldo H. Hunt April 21, 1999
- ---------------------------------------- --------------
Waldo H. Hunt, Chairman of the Board, Date
Chief Executive Officer, Director
(Principal Executive Officer)
/s/ Nathan N. Sheinman April 21, 1999
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Nathan N. Sheinman, President, Date
Chief Operating Officer, Director
(Signatures Continued on Following Page)
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/s/ Dan P. Reavis April 21, 1999
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Dan P. Reavis, Executive Vice President, Date
Chief Financial Officer, Director
(Principal Financial Officer)
/s/ Gail A. Thornhill April 21, 1999
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Gail A. Thornhill, Controller Date
(Principal Accounting Officer)
/s/ Gordon Hearne April 21, 1999
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Gordon Hearne Date
Director
/s/ Leonard W. Jaffee April 21, 1999
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Leonard W. Jaffee Date
Director
/s/ John J. McNaughton April 21, 1999
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John J. McNaughton Date
Director
/s/ Peter Seymour April 21, 1999
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Peter Seymour Date
Director
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibits
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<S> <C>
4.1 Nonstatutory Stock Option Agreement dated November 13, 1997,
between Intervisual Books, Inc. and Dan P. Reavis (the "Reavis
Option Agreement") (Incorporated by reference to Exhibit 10.19 to
the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998.)
4.2 Letter dated July 16, 1998 amending the Reavis Option Agreement
(Incorporated by reference to Exhibit 10.28 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1998.)
4.3 Nonstatutory Stock Option Agreement dated April 1, 1998 between
Intervisual Books, Inc. and Marcia J. Gaylor (the "Gaylor Option
Agreement")
4.4 Letter dated July 16, 1998 amending the Gaylor Option Agreement.
4.5 Nonstatutory Stock Option Agreement dated February 10, 1998
between Intervisual Books, Inc. and Lynette Ruschak (the "Ruschak
Option Agreement")
4.6 Letter dated July 16, 1998 amending the Ruschak Option Agreement.
4.7 Nonstatutory Stock Option Agreement dated October 1, 1997 between
Intervisual Books, Inc. and Waldo H. Hunt (Incorporated by
reference to Exhibit 10.17 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998.)
4.8 Nonstatutory Stock Option Agreement dated July 16, 1998 between
Intervisual Books, Inc. and Leonard W. Jaffe (Incorporated by
reference to Exhibit 10.29 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998.)
5 Opinion of Paul, Hastings, Janofsky & Walker LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP (contained in
Exhibit 5)
24 Power of Attorney (contained on Signature Page of Registration
Statement)
</TABLE>
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EXHIBIT 4.3
INTERVISUAL BOOKS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement") between INTERVISUAL BOOKS, INC.,
a California corporation (the "Company"), and Marcia J. Gaylor ("Employee") is
entered into as of the 1st day of April, 1998.
RECITALS
A. Pursuant to your employment offer letter, the Company has agreed to
grant to Employee this option to purchase shares of the Company's common stock.
B. As a condition precedent to the effectiveness of this Agreement,
Employee must commence full time employment with the Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant. The Company hereby grants to Employee the right to
purchase up to 50,000 shares of common stock of the Company at a price of
$2.8125 per share (which price equals the fair market value of the Company's
common stock as of the date of this Agreement), on the terms and conditions set
forth herein. This option is not intended to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code, as amended, and is not
made pursuant to any Company stock option plan. Employee agrees that Employee
and any other person who may be entitled hereunder to exercise this option shall
be bound by all terms and conditions of this Agreement.
2. Exercisability. The option granted herein shall become
exercisable at the following times and in the following amounts:
The option shall become exercisable in cumulative increments of
25,000 shares on each of April 1, 1999, and April 1, 2000. The
option granted hereunder shall lapse and expire on the seventh
(7th) anniversary of the date hereof.
If Employee does not purchase the full number of shares he
is entitled to purchase in any one year, the right to purchase such shares
carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall
automatically become fully exercisable upon a "Change in Control of the
Company," as such term is defined below.
For purposes of this Agreement, a "Change in Control of
the Company" shall be deemed to have occurred if:
(a) the shareholders of the Company approve a definitive
agreement to sell, transfer, or otherwise dispose of all or
substantially all of the Company's assets and properties; or
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(b) any "person" (as such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934), other than the Company or any
"person" who as of the date this Agreement is a director or officer of
the Company (including any trust of such director or officer), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the combined
voting power of the Company's then outstanding securities; provided,
however, that the following shall not constitute a "Change in Control"
of the Company:
(i) any acquisition directly from the Company (excluding
any acquisition resulting from the exercise of a conversion or exchange
privilege in respect of outstanding convertible or exchangeable
securities);
(ii) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or
(iii) upon the death of any person who as of the date of
this Agreement is a director or officer of the Company, the transfer (A)
by testamentary disposition or the laws of intestate succession to the
estate or the legal beneficiaries or heirs of such person, or (B) by the
provisions of any trust to the beneficiaries thereof of the securities
of the Company beneficially owned by such director or officer of the
Company; or
(c) the shareholders of the Company approve the dissolution or
liquidation of the Company or a definitive agreement to merge or
consolidate the Company with or into another entity in which the Company
is not the continuing or surviving corporation or pursuant to which any
shares of the Company's stock would be converted into cash, securities
or other property of another entity, other than a merger of the Company
in which holders of the Company's common stock immediately prior to the
merger have the same proportionate ownership of common stock (or
equivalent securities) of the surviving entity immediately after the
merger as immediately before.
3. Exercise. This option may be exercised on the terms and
conditions contained herein by giving ten (10) days' prior written notice of
exercise to the Company, specifying the number of shares to be purchased and the
price to be paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock previously held by the Employee valued at "Fair Market
Value".
For the purposes of this Agreement, "Fair Market Value" as
of a certain date (the "Determination Date") means: (a) the closing price of a
share of the Company's common stock on the principal exchange on which shares of
the Company's common stock are then trading, if any, on the Determination Date,
or, if shares were not traded on the Determination Date, then on the nearest
preceding trading day during which a sale occurred; or (b) if such stock is not
traded on an exchange but is quoted on NASDAQ or a successor quotation system,
(i) the last sales price (if the stock is then
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listed as a National Market Issue under The Nasdaq National Market System) or
(ii) the mean between the closing representative bid and asked prices (in all
other cases) for the stock on the Determination Date as reported by NASDAQ or
such successor quotation system; or (c) if such stock is not publicly traded on
an exchange and not quoted on NASDAQ or a successor quotation system, the mean
between the closing bid and asked prices for the stock, on the Determination
Date, as determined in good faith by the Board; or (d) if the Company's stock is
not publicly traded, the fair market value established in good faith by the
Board.
4. Termination of Employment.
(a) Termination by Employee. If Employee's employment is
terminated by Employee, Employee shall have ninety (90) days following the date
of termination to exercise this option, but only to the extent that this option
was exercisable on such date of termination.
(b) Termination for Cause. If Employee's employment is
terminated by the Company for cause, neither Employee nor his estate shall be
entitled to exercise this option after the date of termination.
(c) Death or Incapacity. If Employee's employment is
terminated for death, disability or incapacity, Employee or Employee's estate,
as the case may be, shall have the right for six (6) months following the date
of termination to exercise this option, but only to the extent that this option
was exercisable on such date of termination.
(d) Other. If Employee's employment is terminated for any
reason other than as set forth in Sections 4(a), (b) and (c) above, Employee
shall have ninety (90) days following such date of termination to exercise this
option, but only to the extent that this option was exercisable on such date of
termination.
5. Transferability. This option shall be transferable only by
will or by the law of descent and distribution to the estate (or other personal
representative) of Employee and shall be exercisable during Employee's lifetime
only by him. Except as otherwise provided herein, any attempt at alienation,
assignment, pledge, hypothecation, transfer, sale, attachment, execution or
similar process, whether voluntary or involuntary, with respect to all or any
part of this option or any right under this Agreement, shall be null and void
and, at the Company's option, shall cause Employee's rights under this Agreement
to terminate.
6. Withholding Requirements. In the event the Company determines
that it is required to withhold state or Federal income taxes as a result of the
exercise of this option, Employee shall be required, as a condition to the
exercise hereof, to make arrangements satisfactory to the Company to enable it
to satisfy such withholding requirements.
7. Rights as a Stockholder. Employee, or any permitted transferee
of Employee, shall have no rights as a stockholder with respect to any shares
covered by this option until the date of the issuance of a stock certificate for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions or
other rights for which the record date is prior to the date
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such stock certificate is issued, except as provided in Section 8 of this
Agreement. This Agreement shall not confer upon Employee any right of continued
employment by the Company or interfere in any way in the Company's right to
terminate Employee.
8. Recapitalization. Subject to any required action by
stockholders, the number of shares of Common Stock covered by this option and
the exercise price thereof shall be proportionately adjusted for any increase or
decrease in the number of issued shares of common stock resulting from a
subdivision or consolidation of such shares or the payment of a stock dividend
(but only of common stock) or any other increase or decrease in the number of
issued shares of common stock effected without receipt of consideration by the
Company. Subject to any required action by stockholders, if the Company is the
surviving corporation in any merger or consolidation, this option shall pertain
and apply to the securities to which a holder of the number of shares of common
stock subject to the option would have been entitled.
The foregoing adjustments shall be made by the Company's
Board of Directors, whose determination shall be conclusive and binding on the
Company and Employee.
Except as expressly provided in this Section 8, Employee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
dissolution, liquidation, merger, consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares subject to this option or the exercise price thereof.
This option 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, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.
9. Securities Act and Other Regulatory Requirements. This option
is not exercisable, in whole or in part, and the Company is not obligated to
sell any shares of the Company's common stock subject to this option, if such
exercise or sale, in the opinion of counsel for the Company, would violate the
Securities Act of 1933 (or any other federal or state statutes having similar
requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require
as a condition of issuance of any shares under this option that Employee furnish
a written representation that he is acquiring the shares for investment and not
with a view to distribution to the public. The certificate evidencing any shares
issued pursuant to this option shall bear such restrictive legends as required
by federal or state law.
Further, the Board of Directors of the Company may decide,
in its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been
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effected or obtained free of any conditions that are not acceptable to the Board
of Directors of the Company.
10. Effect of Exercise. Upon the exercise of all or any part of
this option, the number of shares of common stock subject to the option under
this Agreement shall be reduced by the number of shares with respect to which
such exercise is made.
11. Right of First Refusal. If Employee desires to transfer any
shares of common stock which he has acquired pursuant to the exercise of the
option granted herein ("Shares"), Employee shall deliver to the Company written
notice of his intention to transfer such Shares (the "Notice") together with
either a copy of a signed and binding offer by the proposed transferee (a
"Negotiated Sale") or a statement that such Shares are to be sold into the
public market at Fair Market Value at the time of sale (a "Market Sale"). The
Notice for a Negotiated Sale shall state the name and address of the proposed
transferee, the number of Shares to be transferred, the price per Share, and the
other terms of such transfer. The Notice for a Market Sale shall state the
expected date of the proposed sale and the number of Shares to be sold. For
thirty (30) days following delivery of the Notice, the Company shall have the
option to purchase all (but not less than all) of the Shares proposed to be sold
by Employee at the price and terms stated in the Notice. In the event of a
Market Sale, such purchase price shall be the Fair Market Value of the Shares on
the day the Company exercises its option, less five (5) percent. Such option
shall be exercisable by delivery of written notice to Employee within such
thirty (30) day period. Any Shares not purchased by the Company may, for a
period of sixty (60) days commencing on the expiration of the Company's option
to purchase such Shares, be sold to the proposed transferee at the price and
upon the terms specified in the Notice. Shares which are not transferred by
Employee within such sixty (60) day period shall again become subject to the
notice and option provisions of this Section 11. The certificate evidencing any
shares issued pursuant to this option shall bear a restrictive legend stating
that such shares are subject to the right of first refusal set forth in this
Section 11.
12. Notices. Any notice or other communication required or
permitted hereunder or by law shall be validly given or made only if in writing
and delivered in person to an officer or duly authorized representative of the
other party, or deposited in the United States mail, duly certified or
registered, return receipt requested, postage prepaid, and addressed to the
party to whom intended. If sent to the Company, it shall be addressed in care of
the President, 2716 Ocean Park Boulevard, Suite 2020, Santa Monica, California
90405, and if sent to Employee, it shall be addressed to Employee's address on
file with the Company on the date of such notice. If sent by mail, notice shall
be deemed given two days after deposit of such notice in the mail and in
accordance with this section. Any party may from time to time, by written notice
to the other, designate a different address for notice which shall be
substituted for that specified above.
13. Choice of Law; Counterparts. This Agreement, and all rights
and obligations hereunder, shall be governed by the laws of the State of
California. This Agreement may be executed in one or more counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
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14. Successor. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs,
beneficiaries, executors and administrators.
15. Paragraph Headings; Employment. Paragraph headings are for
convenience only and are not part of the context. This Agreement shall not
obligate the Company or any affiliate to employ Employee for any period of time
nor does this Agreement constitute a contract or agreement for employment.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first written above.
INTERVISUAL BOOKS, INC.
By: /s/ Nathan N. Sheinman
-----------------------------
Name: Nathan N. Sheinman
Title: President
EMPLOYEE:
/s/ Marcia J. Gaylor
----------------------------------
Marcia J. Gaylor
6
<PAGE> 1
EXHIBIT 4.4
[LETTERHEAD OF INTERVISUAL BOOKS, INC.]
July 16, 1998
Marcia J. Gaylor
1132 12th Street
Santa Monica, CA 90403
Re: Amendment of Nonstatutory Stock Option Agreement ("Option Agreement")
Dear Marcia:
Intervisual Books, Inc. hereby amends your Option Agreement April 1,
1998 for 50,000 shares of the Company's common stock. This agreement is amended
only as to the following:
Paragraph B. Item 1. Grant.
1. Amendment. The Company hereby agrees to reduce the grant price of
referenced stock options to $1.50 per share (which price equals the fair market
value of the Company's common stock on July 16, 1998, the date of this
amendment).
2. Miscellaneous. Except as expressly amended herein, all the terms and
conditions of the Option Agreement remain in full force and effect. This letter
may be executed in one or more counterparts, each of which shall be deemed an
original. This letter shall be construed and enforced in accordance of the laws
of the State of California.
<PAGE> 2
Please acknowledge your agreement to this letter by executing the
enclosed copy of this letter and returning the copy to the undersigned.
INTERVISUAL BOOKS, INC., a
California corporation
By: /s/ Waldo H. Hunt
--------------------------
Waldo H. Hunt
Chairman of the Board
Agreed:
/s/ Marcia J. Gaylor Date: August 13, 1998
- -------------------------------
MARCIA J. GAYLOR, an individual
<PAGE> 1
EXHIBIT 4.5
INTERVISUAL BOOKS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement") between INTERVISUAL BOOKS, INC.,
a California corporation (the "Company"), and Lynette Ruschak ("Employee") is
entered into as of the 10th day of February, 1998.
RECITALS
A. Pursuant to your employment offer letter, the Company has agreed to
grant to Employee this option to purchase shares of the Company's common stock.
B. As a condition precedent to the effectiveness of this Agreement,
Employee must commence full time employment with the Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant. The Company hereby grants to Employee the right to
purchase up to 50,000 shares of common stock of the Company at a price of $2.75
per share (which price equals the fair market value of the Company's common
stock as of the date of this Agreement), on the terms and conditions set forth
herein. This option is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code, as amended, and is not made
pursuant to any Company stock option plan. Employee agrees that Employee and any
other person who may be entitled hereunder to exercise this option shall be
bound by all terms and conditions of this Agreement.
2. Exercisability. The option granted herein shall become
exercisable at the following times and in the following amounts:
The option shall become exercisable in cumulative increments of
25,000 shares on February 10, 1999; 12,500 shares on February 10,
2000; and 12,500 shares on February 10, 2001. The option granted
hereunder shall lapse and expire on the seventh (7th) anniversary
of the date hereof.
If Employee does not purchase the full number of shares he
is entitled to purchase in any one year, the right to purchase such shares
carries over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall
automatically become fully exercisable upon a "Change in Control of the
Company," as such term is defined below.
For purposes of this Agreement, a "Change in Control of
the Company" shall be deemed to have occurred if:
<PAGE> 2
(a) the shareholders of the Company approve a definitive
agreement to sell, transfer, or otherwise dispose of all or
substantially all of the Company's assets and properties; or
(b) any "person" (as such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934), other than the Company or any
"person" who as of the date this Agreement is a director or officer of
the Company (including any trust of such director or officer), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the combined
voting power of the Company's then outstanding securities; provided,
however, that the following shall not constitute a "Change in Control"
of the Company:
(i) any acquisition directly from the Company (excluding
any acquisition resulting from the exercise of a conversion or exchange
privilege in respect of outstanding convertible or exchangeable
securities);
(ii) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or
(iii) upon the death of any person who as of the date of
this Agreement is a director or officer of the Company, the transfer (A)
by testamentary disposition or the laws of intestate succession to the
estate or the legal beneficiaries or heirs of such person, or (B) by the
provisions of any trust to the beneficiaries thereof of the securities
of the Company beneficially owned by such director or officer of the
Company; or
(c) the shareholders of the Company approve the dissolution or
liquidation of the Company or a definitive agreement to merge or
consolidate the Company with or into another entity in which the Company
is not the continuing or surviving corporation or pursuant to which any
shares of the Company's stock would be converted into cash, securities
or other property of another entity, other than a merger of the Company
in which holders of the Company's common stock immediately prior to the
merger have the same proportionate ownership of common stock (or
equivalent securities) of the surviving entity immediately after the
merger as immediately before.
3. Exercise. This option may be exercised on the terms and
conditions contained herein by giving ten (10) days' prior written notice of
exercise to the Company, specifying the number of shares to be purchased and the
price to be paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock previously held by the Employee valued at "Fair Market
Value".
For the purposes of this Agreement, "Fair Market Value" as
of a certain date (the "Determination Date") means: (a) the closing price of a
share of the Company's common stock on the principal exchange on which shares of
the Company's
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<PAGE> 3
common stock are then trading, if any, on the Determination Date, or, if shares
were not traded on the Determination Date, then on the nearest preceding trading
day during which a sale occurred; or (b) if such stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, (i) the last
sales price (if the stock is then listed as a National Market Issue under The
Nasdaq National Market System) or (ii) the mean between the closing
representative bid and asked prices (in all other cases) for the stock on the
Determination Date as reported by NASDAQ or such successor quotation system; or
(c) if such stock is not publicly traded on an exchange and not quoted on NASDAQ
or a successor quotation system, the mean between the closing bid and asked
prices for the stock, on the Determination Date, as determined in good faith by
the Board; or (d) if the Company's stock is not publicly traded, the fair market
value established in good faith by the Board.
4. Termination of Employment.
(a) Termination by Employee. If Employee's employment is
terminated by Employee, Employee shall have ninety (90) days following the date
of termination" to exercise this option, but only to the extent that this option
was exercisable on such date of termination.
(b) Termination for Cause. If Employee's employment is
terminated by the Company for cause, neither Employee nor his estate shall be
entitled to exercise this option after the date of termination.
(c) Death or Incapacity. If Employee's employment is
terminated for death, disability or incapacity, Employee or Employee's estate,
as the case may be, shall have the right for six (6) months following the date
of termination to exercise this option, but only to the extent that this option
was exercisable on such date of termination.
(d) Other. If Employee's employment is terminated for any
reason other than as set forth in Sections 4(a), (b) and (c) above, Employee
shall have ninety (90) days following the date of termination to exercise this
option, but only to the extent that this option was exercisable on such date of
termination.
5. Transferability. This option shall be transferable only by
will or by the law of descent and distribution to the estate (or other personal
representative) of Employee and shall be exercisable during Employee's lifetime
only by him. Except as otherwise provided herein, any attempt at alienation,
assignment, pledge, hypothecation, transfer, sale, attachment, execution or
similar process, whether voluntary or involuntary, with respect to all or any
part of this option or any right under this Agreement, shall be null and void
and, at the Company's option, shall cause Employee's rights under this Agreement
to terminate.
6. Withholding Requirements. In the event the Company determines
that it is required to withhold state or Federal income taxes as a result of the
exercise of this option, Employee shall be required, as a condition to the
exercise hereof, to make arrangements satisfactory to the Company to enable it
to satisfy such withholding requirements.
-3-
<PAGE> 4
7. Rights as a Stockholder. Employee, or any permitted transferee
of Employee, shall have no rights as a stockholder with respect to any shares
covered by this option until the date of the issuance of a stock certificate for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions or
other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 8 of this Agreement. This
Agreement shall not confer upon Employee any right of continued employment by
the Company or interfere in any way in the Company's right to terminate
Employee.
8. Recapitalization. Subject to any required action by
stockholders, the number of shares of Common Stock covered by this option and
the exercise price thereof shall be proportionately adjusted for any increase or
decrease in the number of issued shares of common stock resulting from a
subdivision or consolidation of such shares or the payment of a stock dividend
(but only of common stock) or any other increase or decrease in the number of
issued shares of common stock effected without receipt of consideration by the
Company. Subject to any required action by stockholders, if the Company is the
surviving corporation in any merger or consolidation, this option shall pertain
and apply to the securities to which a holder of the number of shares of common
stock subject to the option would have been entitled.
The foregoing adjustments shall be made by the Company's
Board of Directors, whose determination shall be conclusive and binding on the
Company and Employee.
Except as expressly provided in this Section 8, Employee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
dissolution, liquidation, merger, consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares subject to this option or the exercise price thereof.
This option 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, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.
9. Securities Act and Other Regulatory Requirements. This option
is not exercisable, in whole or in part, and the Company is not obligated to
sell any shares of the Company's common stock subject to this option, if such
exercise or sale, in the opinion of counsel for the Company, would violate the
Securities Act of 1933 (or any other federal or state statutes having similar
requirements) as it may be in effect at that time.
Further, the Board of Directors of the Company may require
as a condition of issuance of any shares under this option that Employee furnish
a written representation that he is acquiring the shares for investment and not
with a view to distribution to the public. The certificate evidencing any shares
issued pursuant to this option shall bear such restrictive legends as required
by federal or state law.
-4-
<PAGE> 5
Further, the Board of Directors of the Company may decide,
in its sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions that are not acceptable to the Board of Directors of the
Company.
10. Effect of Exercise. Upon the exercise of all or any part of
this option, the number of shares of common stock subject to the option under
this Agreement shall be reduced by the number of shares with respect to which
such exercise is made.
11. Right of First Refusal. If Employee desires to transfer any
shares of common stock which he has acquired pursuant to the exercise of the
option granted herein ("Shares"), Employee shall deliver to the Company written
notice of his intention to transfer such Shares (the "Notice") together with
either a copy of a signed and binding offer by the proposed transferee (a
"Negotiated Sale") or a statement that such Shares are to be sold into the
public market at Fair Market Value at the time of sale (a "Market Sale"). The
Notice for a Negotiated Sale shall state the name and address of the proposed
transferee, the number of Shares to be transferred, the price per Share, and the
other terms of such transfer. The Notice for a Market Sale shall state the
expected date of the proposed sale and the number of Shares to be sold. For
thirty (30) days following delivery of the Notice, the Company shall have the
option to purchase all (but not less than all) of the Shares proposed to be sold
by Employee at the price and terms stated in the Notice. In the event of a
Market Sale, such purchase price shall be the Fair Market Value of the Shares on
the day the Company exercises its option, less five (5) percent. Such option
shall be exercisable by delivery of written notice to Employee within such
thirty (30) day period. Any Shares not purchased by the Company may, for a
period of sixty (60) days commencing on the expiration of the Company's option
to purchase such Shares, be sold to the proposed transferee at the price and
upon the terms specified in the Notice. Shares which are not transferred by
Employee within such sixty (60) day period shall again become subject to the
notice and option provisions of this Section 11. The certificate evidencing any
shares issued pursuant to this option shall bear a restrictive legend stating
that such shares are subject to the right of first refusal set forth in this
Section 11.
12. Notices. Any notice or other communication required or
permitted hereunder or by law shall be validly given or made only if in writing
and delivered in person to an officer or duly authorized representative of the
other party, or deposited in the United States mail, duly certified or
registered, return receipt requested, postage prepaid, and addressed to the
party to whom intended. If sent to the Company, it shall be addressed in care of
the President, 2716 Ocean Park Boulevard, Suite 2020, Santa Monica, California
90405, and if sent to Employee, it shall be addressed to Employee's address on
file with the Company on the date of such notice. If sent by mail, notice shall
be deemed given two days after deposit of such notice in the mail and in
accordance with this section. Any party may from time to time, by written notice
to the other, designate a different address for notice which shall be
substituted for that specified above.
-5-
<PAGE> 6
13. Choice of Law; Counterparts. This Agreement, and all rights
and obligations hereunder, shall be governed by the laws of the State of
California. This Agreement may be executed in one or more counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
14. Successor. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs,
beneficiaries, executors and administrators.
15. Paragraph Headings; Employment. Paragraph headings are for
convenience only and are not part of the context. This Agreement shall not
obligate the Company or any affiliate to employ Employee for any period of time
nor does this Agreement constitute a contract or agreement for employment.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first written above.
INTERVISUAL BOOKS, INC.
By: /s/ Nathan N. Sheinman
-----------------------------
Name: Nathan N. Sheinman
Title: President
EMPLOYEE:
/s/ Lynette Ruschak
---------------------------------
Lynette Ruschak
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<PAGE> 1
EXHIBIT 4.6
[LETTERHEAD OF INTERVISUAL BOOKS, INC.]
July 16, 1998
Lynette Ruschak
12312 Gorham Avenue
Los Angeles, CA 90049
Re: Amendment of Nonstatutory Stock Option Agreement ("Option Agreement")
Dear Lynette:
Intervisual Books, Inc. hereby amends your Option Agreement dated
February 10, 1998 for 50,000 shares of the Company's common stock. This
agreement is amended only as to the following:
Paragraph B. Item 1. Grant.
1. Amendment. The Company hereby agrees to reduce the grant price of
referenced stock options to $1.50 per share (which price equals the fair market
value of the Company's common stock on July 16, 1998, the date of this
amendment).
2. Miscellaneous. Except as expressly amended herein, all the terms and
conditions of the Option Agreement remain in full force and effect. This letter
may be executed in one or more counterparts, each of which shall be deemed an
original. This letter shall be construed and enforced in accordance of the laws
of the State of California.
<PAGE> 2
Please acknowledge your agreement to this letter by executing the
enclosed copy of this letter and returning the copy to the undersigned.
INTERVISUAL BOOKS, INC., a
California corporation
By: /s/ Waldo H. Hunt
------------------------
Waldo H. Hunt
Chairman of the Board
Agreed:
/s/ Lynette Ruschak Date: August 13, 1998
- ------------------------------
LYNETTE RUSCHAK, an individual
<PAGE> 1
EXHIBIT 5
LAW OFFICES OF
PAUL, HASTINGS, JANOFSKY & WALKER LLP
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
695 TOWN CENTER DRIVE
SEVENTEENTH FLOOR
COSTA MESA, CALIFORNIA 92626-1924
TELEPHONE (714) 668-6200
FACSIMILE (714) 979-1921
April 21, 1999
Intervisual Books, Inc.
2716 Ocean Park Boulevard, Suite 2020
Santa Monica, California 90405
Re: Nonstatutory Stock Option Agreements, between
Intervisual Books, Inc. and Dan P. Reavis, Marcia J.
Gaylor, Lynette Ruschak, Waldo H. Hunt and Leonard W.
Jaffee; Registration Statement on Form S-8
Ladies and Gentlemen:
As counsel for Intervisual Books, Inc., a California corporation
(the "Company"), you have requested our opinion in connection with the
preparation and filing with the Securities and Exchange Commission of a
Registration Statement on Form S-8 (the "Registration Statement") registering an
aggregate of 331,000 shares of the Company's common stock, no par value, for
issuance pursuant to options granted by the Company under Nonstatutory Stock
Option Agreements between the Company and each of Dan P. Reavis, dated November
13, 1997, as amended; Marcia J. Gaylor, dated April 1, 1998, as amended; Lynette
Ruschak, dated February 10, 1998, as amended; Waldo H. Hunt, dated October 1,
1997; and Leonard W. Jaffe, dated July 16, 1998 (collectively the "Option
Agreements").
We have examined such records and documents and made such
examination of law as we have deemed relevant in connection with this opinion.
Based on the foregoing, we are of the opinion that the 331,000 shares covered by
the Registration Statement, when issued in accordance with the terms of the
Prospectus forming a part of the Registration Statement and in accordance with
the Option Agreements, will be legally issued, fully-paid and nonassessible.
We hereby consent to the filing of this opinion as an exhibit to
the above-referenced Registration Statement.
Respectfully Submitted,
/s/ Paul, Hastings, Janofsky & Walker LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Intervisual Books, Inc.
Santa Monica, California
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated February 25, 1999, except for Note 17, as to which
the date is March 30, 1999 with respect to the financial statements of
Intervisual Books, Inc. included in the Annual Report on Form 10-K for the year
ended December 31, 1998.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
April 21, 1999
Los Angeles, California
