As filed with the Securities and Exchange Commission on June 26, 1996.
Registration No. 333-_____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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VIDEO SENTRY CORPORATION
(Exact name of issuer as specified in its charter)
MINNESOTA 41-1679157
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6365 CARLSON DRIVE, EDEN PRAIRIE, MINNESOTA 55346
(Address of principal executive offices, including Zip Code)
VIDEO SENTRY CORPORATION
1995 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
ANDREW L. BENSON Copy to:
PRESIDENT TREVOR V. GUNDERSON
VIDEO SENTRY CORPORATION WINTHROP & WEINSTINE
6365 CARLSON DRIVE 3000 DAIN BOSWORTH PLAZA
EDEN PRAIRIE, MINNESOTA 55346 60 SOUTH SIXTH STREET
(Name and address of agent for service) MINNEAPOLIS, MINNESOTA 55402
(612) 347-0700
(612) 934-9900
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 100,000 shares $6.625 $662,500 $229
$.01 par value
- -------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c), based upon the quotations for such Common Stock
on June 21, 1996, as reported on the NASDAQ Small-Cap Market.
===================================================================================================================
</TABLE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in this Part I will be
sent or given to employees as specified by Rule 428(b)(1). Such documents need
not be filed with the Securities and Exchange Commission either as part of this
registration statement or as prospectuses or prospectus supplements pursuant to
Rule 424. Such documents and the documents incorporated by reference in this
registration statement pursuant to Item 3 of Part II of this form, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933.
ITEM 1. PLAN INFORMATION.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
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 Company's Annual Report on Form 10-KSB for the year ended December
31, 1995 which contains audited financial statements for the year ended December
31, 1995 and Form 10-KSB/A amending such Annual Report.
b. The Company's Proxy Statement dated June 4, 1996.
c. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996.
d. All other reports filed by the Company with the Securities and Exchange
Commission since December 31, 1995, pursuant to Sections 13 or 15(d) of the
Exchange Act.
e. Description of the Company's Securities, contained in the Company's
Registration Statement on Form SB-2 (Registration No. 33-83786C), as
incorporated by reference into the Company's Registration Statement on Form 8-A
(File No. 0-24820), filed with the Securities and Exchange Commission.
f. All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 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 such
securities then remaining to be sold.
ITEM 4. DESCRIPTION OF SECURITIES.
The common stock, $.01 par value, (the "Common Stock") of the Company
offered pursuant to this registration statement is registered under Section
12(g) of the Securities Exchange Act of 1934. The description of the Company's
Common Stock is incorporated by reference pursuant to Item 3.e. above.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 302A.521 of the Minnesota Business Corporation Act provides that
unless prohibited or limited by a corporation's articles of incorporation or
bylaws, the Company must indemnify its current and former officers, directors,
employees and agents against expenses (including attorneys' fees), judgments,
penalties, fines and amounts paid in settlement and which were incurred in
connection with actions, suits, or proceedings in which such persons are parties
by reason of the fact that they are or were an officer, director, employee or
agent of the corporation, if they (i) have not been indemnified by another
organization, (ii) acted in good faith, (iii) received no improper personal
benefit, (iv) in the case of a criminal proceeding, had no reasonable cause to
believe the conduct was unlawful, and (v) reasonably believed that the conduct
was in the best interests of the corporation. Section 302A.521 also permits a
corporation to purchase and maintain insurance on behalf of its officers,
directors, employees and agents against any liability which may be asserted
against, or incurred by, such persons in their capacities as officers,
directors, employees and agents of the corporation, whether or not the
corporation would have been required to indemnify the person against the
liability under the provisions of such section.
Article VI of the Bylaws of the Company provides that the directors,
officers, committee members, of the Company and other persons shall have the
rights to indemnification provided by Section 302A.521 of the Minnesota
Statutes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION PAGE
5.1 Opinion of Winthrop & Weinstine, P.A. as to the legality of
Common Stock of the Company
23.1 Consent of Ernst & Young LLP......................................
23.2 Consent of Winthrop & Weinstine, P.A. [included in its opinion
filed as Exhibit 5.1].
24.1 Powers of Attorney [included as part of signature page].
99.1 Video Sentry Corporation 1995 Employee Stock Purchase Plan........
ITEM 9. UNDERTAKINGS.
(A) RULE 415 OFFERING.
The undersigned small business issuer will:
(1) File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and
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 the registration statement.
(2) For determining liability under the Securities Act of 1933, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of securities at that time to
be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(H) STATEMENT REQUIRED IN CONNECTION WITH FILING OF REGISTRATION STATEMENT ON
FORM S-8.
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.
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 Eden Prairie, State of Minnesota on June 14, 1996.
VIDEO SENTRY CORPORATION
By /s/ Andrew L. Benson
Andrew L. Benson
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Andrew L. Benson and Ronald R. McClurg, or either of them, such person's true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution for such person and in such person's name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits hereto 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 and necessary to be done in and about the premises, as fully to
all intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their substitute or substitutes, may lawfully 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 by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Andrew L. Benson President and Director (Principal June 14, 1996
- ---------------------------- Executive Officer)
Andrew L. Benson
/s/ Robert D. Furst Director June 14, 1996
- ----------------------------
Robert D. Furst
/s/ Dennis R. Johnson Director June 14, 1996
- ----------------------------
Dennis R. Johnson
Director June __, 1996
- ----------------------------
Jean R. Stiegemeier
/s/ Ronald W. McClurg Vice President Finance June 14, 1996
Ronald W. McClurg (Principal Accounting Officer)
Exhibit 5.1
WINTHROP & WEINSTINE, P.A.
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402
(612) 347-0700
June 26, 1996
Video Sentry Corporation EXHIBIT 5.1
6365 Carlson Drive
Eden Prairie, Minnesota 55346
Re: Registration Statement on Form S-8
Video Sentry Corporation 1995 Employee Stock Purchase Plan
100,000 Shares
Gentlemen:
We have acted as legal counsel for Video Sentry Corporation (the "Company") in
connection with the preparation of a Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission, and the Prospectus to be used in conjunction with the Registration
Statement (the "Prospectus"), relating to the registration under the Securities
Act of 1933, as amended, of 100,000 shares (the "Shares") of common stock, par
value $.01 per share (the "Common Stock"), to be issued under the Video Sentry
Corporation 1995 Employee Stock Purchase Plan, in the manner set forth in the
Registration Statement and the Prospectus.
In connection therewith, we have examined (a) the Articles of Incorporation and
Bylaws of the Company, both as amended to date; (b) the corporate proceedings of
the Company relative to its organization and to the authorization and issuance
of the Shares; and (c) the Registration Statement and the Prospectus. In
addition to such examination, we have reviewed such other proceedings, documents
and records and have ascertained or verified such additional facts as we deem
necessary or appropriate for purposes of this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company has been legally incorporated and is validly existing under
the laws of the State of Minnesota.
2. All necessary corporate action has been taken by the Company to authorize
the issuance of the Shares.
3. The Shares are validly authorized by the Company's Articles of
Incorporation, as amended, and when issued and paid for as contemplated in
the Registration Statement and Prospectus, will be validly issued, fully
paid, and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus.
Very truly yours,
WINTHROP & WEINSTINE, P.A.
By - /s/ Scott J. Dongoske
Scott J. Dongoske
TVG/dbm
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-_______) pertaining to the Video Sentry Corporation 1995 Employee
Stock Purchase Plan of our report dated February 27, 1996, except as to Note 12
as to which the date is March 26, 1996, with respect to the financial statements
of Video Sentry Corporation included in the Annual Report (Form 10-KSB) for the
year ended December 31, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
June 25, 1996
Exhibit 99.1
VIDEO SENTRY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. ESTABLISHMENT OF PLAN. Video Sentry Corporation (the "Company")
proposes to grant to certain employees of the Company the opportunity to
purchase common stock, $.01 par value (the "Common Stock"), of the Company. Such
Common Stock shall be purchased pursuant to the "VIDEO SENTRY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN" (the "Plan"). The Company intends that the Plan
shall qualify as an "Employee Stock Purchase Plan" under Section 423 of the
Internal Revenue Code (the "Code") of 1986, as amended, and shall be construed
in a manner consistent with the requirements of Section 423 of the Code and the
regulations thereunder.
2. PURPOSE. The Plan is intended to encourage stock ownership by employees
of the Company, and thus provide an incentive to them to remain employed with
the Company, improve operations, increase profits, and contribute more
significantly to the Company's success.
3. DEFINITIONS.
(a) "Subsidiary" shall include any corporation defined as a subsidiary
of the Company in Section 424(f) of the Code.
(b) "Employee" shall mean any employee, including an officer, of the
Company who as of the day immediately preceding the commencement of
a phase (the "Commencement Date") is customarily employed by the
Company for more than twenty (20) hours per week and more than five
(5) months in a calendar year.
(c) "Base Pay" is the regular pay for employment for each employee as
annualized for a twelve (12) month period, exclusive of overtime,
commissions, bonuses, disability payments, shift differentials,
incentives and other similar payments, determined as of the
Commencement Date of each phase.
4. ELIGIBILITY. All Employees, as defined in Paragraph 3 hereof, who are
employed by the Company at least one day prior to the Commencement Date of a
phase shall be eligible to participate in such phase.
5. PARTICIPATION. Participation in the Plan is voluntary. An eligible
Employee may elect to participate in any phase of the Plan, and thereby become a
"Participant" in the Plan, by completing the Plan payroll deduction form
provided by the Company and delivering it to the Company or its designated
representative prior to the Commencement Date of that phase. Payroll deductions
for a Participant shall commence on the first payday after the Commencement Date
of the phase and shall terminate on the last payday immediately prior to or
coinciding with the termination date of that phase unless sooner terminated by
the Participant as provided in Paragraph 10 hereof.
6. ADMINISTRATION. The Plan shall be administered by a compensation
committee (the "Committee") consisting of not less than two directors or
employees of the Company, as designated by the Board of Directors of the Company
(the "Board of Directors"). No member of the Committee shall be eligible to
purchase stock under the Plan. The Board of Directors shall fill all vacancies
in the Committee and may remove any member of the Committee at any time, with or
without cause. The Committee shall select its own chairman and hold its meetings
at such times and places as it may determine. All determinations of the
Committee shall be made by a majority of its members. Any decision which is made
in writing and signed by a majority of the members of the Committee shall be
effective as fully as though made by a majority vote at a meeting duly called
and held. The determinations of the Committee shall be made in accordance with
its judgment as to the best interests of the Company, its employees and it
shareholders and in accordance with the purposes of the Plan; provided, however,
that the provisions of the Plan shall be construed in a manner consistent with
the requirements of Section 423 of the Code. Such determinations shall be
binding upon the Company and the participants in the Plan unless otherwise
determined by the Board of Directors. The Company shall pay all expenses of
administering the Plan. No member of the Board of Directors or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under it.
7. DURATION AND PHASES OF THE PLAN.
(a) The Plan will commence on July 1, 1995 and will terminate June 30,
1998, except that any phase commenced prior to such termination
shall, if necessary, be allowed to continue beyond such termination
until completion. Notwithstanding the foregoing, this Plan shall be
considered of no force and effect and any options granted shall be
considered null and void unless the holders of a majority of all of
the issued and outstanding shares of the common stock of the Company
approve the Plan within twelve (12) months after the date of its
adoption by the Board of Directors.
(b) The Plan shall be carried out in one or more phases, each phase
being for a period of one year. Each phase shall commence
immediately after the termination of the preceding phase. The
existence and Commencement Date of each phase shall be determined by
the Committee, provided that the commencement of the first phase
shall be within twelve (12) months before or after the date of
approval of the Plan by the shareholders of the Company. In the
event all of the stock reserved for grant of options hereunder is
issued pursuant to the terms hereof prior to the commencement of one
or more phases scheduled by the Committee or the number of shares
remaining is so small, in the opinion of the Committee, as to render
administration of any succeeding phase impracticable, such phase or
phases shall be canceled. Phases shall be numbered successively as
Phase 1, Phase 2 and Phase 3.
(c) The Board of Directors may elect to accelerate the termination date
of any phase effective on the date specified by the Board of
Directors in the event of (i) any consolidation or merger of the
Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares would be converted into
cash, securities or other property, other than a merger of the
Company in which shareholders immediately prior to the merger have
the same proportionate ownership of stock in the surviving
corporation immediately after the merger; (ii) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of
the Company, or (iii) any plan or liquidation or dissolution of the
Company.
8. PAYROLL DEDUCTIONS.
(a) Upon enrollment, a Participant shall elect to make contributions to
the Plan by payroll deductions (in full dollar amounts and in
amounts calculated to be as uniform as practicable throughout the
period of the phase), in the aggregate amount not in excess of 10%
of such Participant's Base Pay for the term of the phase, as
determined according to Paragraph 3 hereof.
The minimum authorized payroll deduction must aggregate to not less
than $10 per pay period.
(b) In the event that the Participant's compensation for any pay period
is terminated or reduced from the compensation rate for such a
period as of the Commencement Date of the phase for any reason so
that the amount actually withheld on behalf of the Participant as of
the termination date of the phase is less than the amount
anticipated to be withheld over the phase year as determined on the
Commencement Date of the phase, then the extent to which the
Participant may exercise his option shall be based on the amount
actually withheld on his behalf. In the event of a change in the pay
period of any Participant, such as from biweekly to monthly, an
appropriate adjustment shall be made to the deduction in each new
pay period so as to ensure the deduction of the proper amount
authorized by the Participant.
(c) All payroll deductions made for Participants shall be credited to
their accounts under the Plan. A Participant may not make any
separate cash payments into such account.
(d) Except for his right to discontinue participation in the Plan as
provided in Paragraph 10, no Participant shall be entitled to
increase or decrease the amount to be deducted in a given phase
after the Commencement Date.
9. OPTIONS.
(a) GRANT OF OPTION.
(i) A Participant who is employed by the Company as of the
Commencement Date of a phase shall be granted an option as of
such date to purchase a number of full shares of Common Stock
to be determined by dividing the total amount to be credited
to that Participant's account under Paragraph 8 hereof by the
option price set forth in Paragraph 9(a)(ii)(A) hereof,
subject to the limitations of Paragraph 11 hereof.
(ii) The option price for such shares of Common Stock shall be the
lower of:
A. Eighty-five percent (85%) of the fair market value of
such shares of common stock on the Commencement Date of
the phase; or
B. Eighty-five percent (85%) of the fair market value of
such shares of common stock on the termination date of
the phase.
(iii) The fair market value of shares of Common Stock of the Company
shall be the average of the bid and asked price of the Common
Stock on each valuation date or the nearest prior business day
on which the bid and asked prices were quoted on the NASDAQ
SmallCap Market, or if the Common Stock is listed on the
Nasdaq National Market, the average high and low sales price
for the Common Stock as reported on the Nasdaq National
Market. If the Common Stock is not listed in the foregoing
markets, then the fair market value shall be determined by the
Committee for each valuation date in a manner acceptable under
Section 423 of the Code.
(iv) Anything herein to the contrary notwithstanding, no Employee
shall be granted an option hereunder:
A. Which permits his rights to purchase stock under all
employee stock purchase plans of the Company, its
subsidiaries or its parent, if any to accrue at a rate
which exceeds Twenty-Five Thousand Dollars ($25,000) of
the fair market value of such stock (determined at the
time such option is granted) for each calendar year in
which such option is outstanding at any time;
B. If immediately after the grant such Employee would own
and/or hold outstanding options to purchase stock
possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock
of the Company, its parent, if any, or of any subsidiary
of the Company. For purposes of determining stock
ownership under this Paragraph, the rules of Section
424(d) of the Code shall apply; or
C. Which can be exercised after the expiration of 27 months
from the date the option is granted.
(b) EXERCISE OF OPTION.
(i) Unless a Participant gives written notice to the Company
pursuant to Paragraph 9(b)(ii) or Paragraph 10 prior to the
termination date of a phase, his option for the purchase of
shares will be exercised automatically for him as of such
termination date for the purchase of the number of full shares
of Company Common Stock which the accumulated payroll
deductions in his account at that time will purchase at the
applicable option price, subject to the limitations set forth
in Paragraph 11 hereof.
(ii) A Participant may, by written notice to the Company at any
time during the thirty (30) day period immediately preceding
the termination date of a phase, elect, effective as of the
termination date of that phase, to exercise his option for a
specified number of full shares less than the maximum number
which may be purchased under his option.
(iii) As promptly as practicable after the termination date of any
phase, the Company will deliver to each Participant herein the
Common Stock purchased upon the exercise of his option,
together with a cash payment equal to the balance, if any, of
his account which was not used for the purchase of common
stock.
10. WITHDRAWAL OR TERMINATION OF PARTICIPATION.
(a) A Participant may, at any time prior to the termination date of a
phase, withdraw all payroll deductions then credited to his account
by giving written notice to the Company. Promptly upon receipt of
such notice of withdrawal, all payroll deductions credited to the
Participant's account will be paid to him and no further payroll
deductions will be made during the phase. In such event, the option
granted the Participant under that phase of the Plan shall lapse
immediately. Partial withdrawals of payroll deductions hereunder may
not be made. The Company may, at its option, treat any attempt by a
Participant to borrow on the security of his or her accumulated
payroll deductions as an election to withdraw such deductions.
(b) In the event of the death of a Participant, the person or persons
specified in Paragraph 15 may give notice to the Company within
sixty (60) days of the death of the Participant electing to purchase
the number of full shares which the accumulated payroll deductions
in the account of such deceased Participant will purchase at the
option price specified in Paragraph 9(a)(ii) and have the balance in
the account distributed in cash. If no such notice is received by
the Company within said sixty (60) days, the accumulated payroll
deductions will be distributed in full in cash.
(c) Upon termination of Participant's employment for any reason other
than death of the Participant, the payroll deductions credited to
his account, shall be returned to him and his option shall be
terminated.
11. STOCK RESERVED FOR OPTIONS.
(a) One Hundred Thousand (100,000) shares of the Company's Common Stock
are reserved for issuance upon the exercise of options to be granted
under the Plan. Shares subject to the unexercised portion of any
lapsed or expired option may again be subject to option under the
Plan.
(b) If the total number of shares of the Common Stock for which options
are to be granted for a given phase as specified in Paragraph 9
exceeds the number of shares then remaining available under the Plan
(after deduction of all shares for which options have been exercised
or are then outstanding) and if the Committee does not elect to
cancel such phase pursuant to Paragraph 4, the Committee shall make
a pro rata allocation of the shares remaining available in as
uniform and equitable a manner as it shall consider practicable. In
such event, the options to be granted and the payroll deductions to
be made pursuant to the Plan which would otherwise be effected may,
in the discretion of the Committee, be reduced accordingly. The
Committee shall give written notice of such reduction to each
Participant affected.
(c) The Participant (or a joint tenant named pursuant to Paragraph 11(d)
hereof) shall have no rights as a shareholder with respect to any
shares subject to the Participant's option until the date of the
issuance of a stock certificate evidencing 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 actually issued, except as otherwise provided
in Paragraph 13 hereof.
(d) The shares of the Common Stock to be delivered to a Participant
pursuant to the exercise of an option under the Plan will be
registered in the name of the Participant or, if the Participant so
directs by written notice to the Committee prior to the termination
date of that phase of the Plan, in the names of the Participant and
one other person the Participant may designate as his joint tenant
with rights of survivorship, to the extent permitted by law.
(e) The Board of Directors may, in its discretion, require as conditions
to the issuance of any shares of Common Stock under the Plan that
such shares shall have been duly listed, upon official notice of
issuance, upon a stock market, and that a Registration Statement
under the Securities Act of 1933, as amended, with respect to said
shares shall then be effective.
12. ACCOUNTING AND USE OF FUNDS. Payroll deductions for each Participant
shall be credited to an account established for him under the Plan. A
Participant may not make any separate cash payments into such account. Such
account shall be solely for bookkeeping purposes and no separate fund or trust
shall be established hereunder and the Company shall not be obligated to
segregate such funds. All funds from payroll deductions received or held by the
Company under the Plan may be used, without limitation, for any corporate
purpose by the Company.
13. ADJUSTMENT PROVISION.
(a) Subject to any required action by the shareholders of the Company,
the number of shares covered by each outstanding option, and the
price per share thereof in each such option, shall be
proportionately adjusted for any increase or decrease in the number
of issued shares of the Common Stock resulting from a subdivision or
consolidation of shares or the payment of a share dividend (but only
on the shares) or any other increase or decrease in the number of
such shares effected without receipt of consideration by the
Company.
(b) In the event of a change in the shares of the Company as presently
constituted, which is limited to a change of all its authorized
shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from
any such change shall be deemed to be the shares within the meaning
of this Plan.
14. NON-TRANSFERABILITY OF OPTIONS.
(a) Options granted under any phase of the Plan shall not be
transferable except under the laws of descent and distribution and
shall be exercisable only by the Participant during his lifetime and
after his death only by his beneficiary or the representative of his
estate as provided in Paragraph 10(b) hereof.
(b) Neither payroll deductions credited to a Participant's account, nor
any rights with regard to the exercise of an option or to receive
Common Stock under any phase of the Plan may be assigned,
transferred, pledged, or otherwise disposed of in any way by the
Participant except under the laws of descent and distribution. Any
such attempted assignment, transfer, pledge or other disposition
shall be null and void and without effect, except that the Company
may, at its option, treat such act as an election to withdraw funds
in accordance with Paragraph 10.
15. DESIGNATION OF BENEFICIARY. A Participant may file a written
designation of a beneficiary who is to receive any cash to the Participant's
credit under any phase of the Plan in the event of such Participant's death
prior to exercise of his option pursuant to Paragraph 10(b) hereof, or to
exercise his option and become entitled to any stock and/or cash upon such
exercise in the event of the Participant's death prior to exercise of the option
pursuant to Paragraph 10(b) hereof. The beneficiary designation may be changed
by the Participant at any time by written notice to the Company.
Upon the death of a Participant and upon receipt by the Company of proof
deemed adequate by it of the identity and existence at the Participant's death
of a beneficiary validly designated under the Plan, the Company shall in the
event of the Participant's death under the circumstances described in Paragraph
10(b) hereof, allow such beneficiary to exercise the Participant's option
pursuant to Paragraph 10(b) if such beneficiary is living on the termination
date of the phase and deliver to such beneficiary the appropriate stock and/or
cash after exercise of the option. In the event there is no validly designated
beneficiary under the Plan who is living at the time of the Participant's death
under the circumstances described in Paragraph 10(b) or in the event the option
lapses, the Company shall deliver the cash credited to the account of the
Participant to the executor or administrator of the estate of the Participant,
or if no such executor or administrator has been appointed to the knowledge of
the Company, it may, in its discretion, deliver such cash to the spouse or to
any one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate. The Company will not be responsible for or be required to
give effect to the disposition of any cash or stock or the exercise of any
option in accordance with any will or other testamentary disposition made by
such Participant or in accordance with the provision of any law concerning
intestacy, or otherwise. No designated beneficiary shall, prior to the death of
a Participant by whom he has been designated, acquire any interest in any stock
or in any option or in the cash credited to the Participant under any phase of
the Plan.
16. AMENDMENT AND TERMINATION. The Plan may be terminated at any time by
the Board of Directors provided that, except as permitted in Paragraph 4(c) with
respect to an acceleration of the termination date of any phase, no such
termination will take effect with respect to any options then outstanding. Also,
the Board may, from time to time, amend the Plan as it may deem proper and in
the best interests of the Company or as may be necessary to comply with Section
423 of the Code, or other applicable laws or regulations; provided, however,
that no such amendment shall, without prior approval of the shareholders of the
Company (1) increase the total number of shares for which options may be
granted under the Plan (except as provided in Paragraph 13 herein), (2) permit
aggregate payroll deductions in excess of ten percent (10%) of a Participant's
compensation as of the Compensation Date of a phase, or (3) impair any
outstanding option.
17. NOTICES. All notices or other communications in connection with the
Plan or any phase thereof shall be in the form specified by the Committee and
shall be deemed to have been duly given when received by the Participant or his
designated personal representative or beneficiary or by the Company or its
designated representative, as the case may be.
18. PARTICIPATION OF SUBSIDIARIES. The Employees of any Subsidiary of the
Company shall be entitled to participate in the Plan on the same basis as
Employees of the Company, unless the Board of Directors determines otherwise.
Effective as of the date of coverage of any Subsidiary, any references herein to
the "Company" shall be interpreted as referring to such Subsidiary as well as to
Video Sentry Corporation.
In the event that any Subsidiary which is covered under the Plan ceases to
be a Subsidiary of Video Sentry Corporation the employees of such Subsidiary
shall be considered to have terminated their employment for purposes of
Paragraph 10 hereof as of the date such Subsidiary ceases to be such a
Subsidiary:
Adopted by Board of Directors: June 30, 1995.
Approved by Stockholders: June 18, 1996.
