Schedule 14A
(Rule 14a-101)
Information required in proxy statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or Section 240.14a-12
Greg Manning Auctions, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it is determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum value of transaction
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0- 11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid.
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
GREG MANNING AUCTIONS, INC.
775 Passaic Avenue
West Caldwell, New Jersey 07006
October 28, 1997
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of Greg
Manning Auctions, Inc. (the "Company"), which will be held at the Radisson Hotel
& Suites, 690 Route 46 East, Fairfield, New Jersey 07004, on Wednesday, December
10, 1997, at 10:00 A.M., Eastern Standard Time.
The Notice of Annual Meeting and Proxy Statement covering the formal business to
be conducted at the Annual Meeting follow this letter.
We hope you will attend the Annual Meeting in person. Whether or not you plan to
attend, please complete, sign, date and return the enclosed proxy promptly in
the accompanying reply envelope to assure that your shares are represented at
the meeting.
Sincerely,
MARTHA HUSICK
Secretary
<PAGE>
GREG MANNING AUCTIONS, INC.
775 Passaic Avenue
West Caldwell, New Jersey 07006
(973) 882-0004
---------------------------------
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
December 10, 1997
---------------------------------
The Annual Meeting of Shareholders of Greg Manning Auctions, Inc. (the
"Company") will be held at the Radisson Hotel & Suites, 690 Route 46 East,
Fairfield, New Jersey 07004, at 10:00 A.M., Eastern Standard Time, on Wednesday,
December 10, 1997, for the following purposes:
1. To elect two directors to serve for terms of three years
and until their respective successors have been duly elected and
qualified.
2. To ratify the appointment of Amper, Politziner & Mattia as
the Company's independent public accountants for the Company's fiscal
year ending June 30, 1998.
3. To approve the adoption of the Company's 1997 Stock
Incentive Plan.
4. To approve the Repricing Plan adopted by the Board of
Directors to reprice certain options awarded under the Company's 1993
Stock Option Plan, as amended.
5. To transact such other business as may be properly brought
before the meeting and any adjournment or postponement thereof.
Shareholders of record at the close of business on October 24, 1997 are entitled
to notice of, and to vote at, the Annual Meeting and any adjournment or
postponement thereof. Whether or not you plan to attend the Annual Meeting,
please complete, sign, date and return the enclosed proxy in the reply envelope
provided which requires no postage if mailed in the United States. Shareholders
attending the Annual Meeting may vote in person even if they have returned a
proxy. By promptly returning your proxy, you will greatly assist us in preparing
for the Annual Meeting.
By Order of the Board of Directors
MARTHA HUSICK
Secretary
West Caldwell, New Jersey
October 28, 1997
<PAGE>
GREG MANNING AUCTIONS, INC.
PROXY STATEMENT FOR
1997 ANNUAL MEETING OF SHAREHOLDERS
To Be Held December 10, 1997
This Proxy Statement and the enclosed form of proxy are being furnished,
commencing on or about October 28, 1997, in connection with the solicitation of
proxies in the enclosed form by the Board of Directors of Greg Manning Auctions,
Inc., a New York corporation (the "Company"), for use at the Annual Meeting of
Shareholders ("Shareholders") of the Company (the "Annual Meeting") to be held
at the Radisson Hotel & Suites, 690 Route 46 East, Fairfield, New Jersey 07004,
at 10 A.M., on Wednesday, December 10, 1997, and at any adjournment or
postponement thereof, for the purposes set forth in the foregoing Notice of
Annual Meeting of Shareholders.
The annual report of the Company, containing financial statements of the Company
as of June 30, 1997, and for the year then ended, and other information
concerning the Company is included with this proxy statement. The principal
executive offices of the Company are located at 775 Passaic Avenue, West
Caldwell, New Jersey 07006.
A list of the Shareholders entitled to vote at the Annual Meeting will be
available for examination by Shareholders during ordinary business hours for a
period of ten days prior to the Annual Meeting at the offices of the Company,
775 Passaic Avenue, West Caldwell, New Jersey 07006. A Shareholder list will
also be available for examination at the Annual Meeting.
If you are unable to attend the Annual Meeting, you may vote by proxy on any
matter to come before that meeting. The enclosed proxy is being solicited by the
Board of Directors. Any proxy given pursuant to such solicitation and received
in time for the Annual Meeting will be voted as specified in such proxy. If no
instructions are given, proxies will be voted (i) FOR the election of the
nominees named below under the caption "Election of Directors," (ii) FOR the
ratification of the appointment of Amper, Politziner & Mattia ("APM") as
independent public accountants for the Company's fiscal year ending June 30,
1998, (iii) FOR the approval of the adoption of the Company's 1997 Stock
Incentive Plan, (iv) FOR the approval of the Repricing Plan to reprice certain
options awarded under the Company's 1993 Stock Option Plan, as amended (the
"1993 Plan"), and (v) in the discretion of the proxies named on the proxy card
with respect to any other matters properly brought before the Annual Meeting.
Attendance in person at the Annual Meeting will not of itself revoke a proxy;
however, any Shareholder who does attend the Annual Meeting may revoke a proxy
orally and vote in person. Proxies may be revoked at any time before they are
voted by submitting a properly executed proxy with a later date or by sending a
written notice of revocation to the Secretary of the Company at the Company's
principal executive offices.
The holders of a majority of the outstanding shares of Common Stock entitled to
vote, present in person or represented by proxy, will constitute a quorum for
the transaction of business. Abstentions and shares held of record by a broker
or its nominee ("Broker Shares") that are voted on any matter are included in
determining the number of votes present. Abstentions and Broker Shares that are
not voted on any matter will not be included in determining whether a quorum is
present.
<PAGE>
The election of each nominee for director requires a plurality of votes cast.
The affirmative vote of the holders of a majority of the issued and outstanding
shares of the Common Stock present in person or by proxy and voting thereon is
required for (i) the approval of the appointment of the independent public
accountants, (ii) the approval of the adoption of the Company's 1997 Stock
Incentive Plan, and (iii) the approval of a Repricing Plan to reprice certain
options awarded under the 1993 Plan. In all cases abstentions and Broker Shares
that are not voted will not be included in determining the number of votes cast.
The Company has appointed an inspector who shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all Shareholders. On request of
the person presiding at the meeting or any Shareholder entitled to vote thereat,
the inspectors shall make a report in writing of any challenge, question or
matter determined by them and execute a certificate of any fact found by them.
Any report or certificate made by them shall be prima facie evidence of the
facts stated and of the vote as certified by them.
Only Shareholders of record at the close of business on October 24, 1997 are
entitled to notice of, and to vote at, the Annual Meeting, and any adjournment
or postponement thereof. As of the close of business on October 28, 1997, there
were 4,419,997 shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), outstanding. Each share of Common Stock entitles the
record holder thereof to one vote on all matters properly brought before the
Annual Meeting and any adjournment or postponement thereof, with no cumulative
voting.
Collectibles Realty Management, Inc. ("CRM") owns 1,300,000 shares (or
approximately 30%) of Common Stock of the Company. All the shares owned by CRM
are owned beneficially by Greg Manning, the Chairman of the Board, President and
Chief Executive Officer of the Company. Afinsa Bienes Tangibles S.A. ("Afinsa")
owns 442,000 shares (or approximately 10%) of Common Stock of the Company. Mr.
de Figueiredo, a director of the Company, owns 50% of the outstanding shares of
common stock of Afinsa. Messrs. Manning and de Figueiredo will be entitled to
participate in the 1997 Stock Incentive Plan, and Mr. Manning will be entitled
to participate in the Repricing Plan (see "Proposal 3 - Approval of the Adoption
of the 1997 Stock Incentive Plan", and "Proposal 4 - Approval of the Stock
Option Repricing Plan", below), with respect to which shareholder approval is
being sought. Accordingly, Mr. Manning and Mr. de Figueiredo may be deemed to
have a substantial interest in these matters.
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The Company's Restated Certificate of Incorporation provides that the members of
the Company's Board of Directors be divided into three classes, as nearly equal
in size as possible, with the term of office of one class expiring each year.
Accordingly, only those directors of a single class can be changed in any one
year and it would take elections in three consecutive years to change the entire
Board. At the upcoming annual meeting, two directors will be elected to serve
three-year terms (until the third succeeding annual meeting, in 2000) and until
their respective successors are duly elected and qualified. Unless authority to
vote for the election of directors is withheld, the enclosed proxy will be voted
FOR the election of the nominee named below.
Scott S. Rosenblum and Anthony L. Bongiovanni, who are presently directors of
the Company, have been nominated by the Board of Directors for re-election to
the Board, to serve until the third succeeding annual meeting, in 2000, and
until their respective successors are duly elected and qualified. No other
nominations were submitted. Effective May 8, 1997, Mr. William Dolan resigned as
a member of Board in the class of directors whose term expires in 1997. On June
27, 1997, Mr. Bongiovanni was appointed by the Board of Directors to fill the
vacancy created by Mr. Dolan's resignation. There is one vacancy in the class of
directors whose term is currently expiring.
Greg Manning has been elected to serve until the 1998 annual meeting of
Shareholders. On September 10, 1997, Albertino de Figueiredo was appointed by
the Board of Directors to fill a vacancy in the class of directors whose term
expires in 1998. There is, accordingly, one vacancy in the class of directors
whose term expires in 1998.
William T. Tully, Jr. has been elected to serve until the 1999 annual meeting of
shareholders. There are two vacancies in the class of directors whose term
expires in 1999.
<PAGE>
Although a number of Director vacancies currently exist, the Board has
determined that it is in the Company's best interest for no additional Directors
to be nominated at this time other than the nominees set forth below in order to
give the Board of Directors flexibility to appoint additional directors if the
need arises. Accordingly, proxies may not be voted for a greater number of
persons than the number of nominees named. The Company's Restated Certificate of
Incorporation also provides that directors may be removed only for cause and
that any such removal must be approved by the affirmative vote of at least a
majority of the outstanding shares of capital stock of the Company entitled to
vote generally in the election of directors. While the Company believes that the
foregoing provisions of the Company's Restated Certificate of Incorporation are
in the best interests of the Company and its Shareholders, such requirements may
have the effect of protecting management against outside interests and in
retaining its position.
INFORMATION CONCERNING DIRECTORS AND OFFICERS
Background information with respect to the nominee for election, and certain
information regarding such nominee, including his principal occupation and
business experience for at least the past five years, and the directors whose
terms of office will continue after the upcoming annual meeting, appears below.
See "Security Ownership of Certain Beneficial Owners and Management" for
information regarding such persons' holdings of common stock.
NOMINEES TO SERVE UNTIL 2000:
Scott S. Rosenblum, age 48, has been a director of the Company since December 8,
1992. Mr. Rosenblum has been a partner since 1991 in the law firm of Kramer,
Levin, Naftalis & Frankel and has served as Managing Partner of that firm since
March 1994. Mr. Rosenblum received his J.D. degree from the University of
Pennsylvania.
Anthony L. Bongiovanni, Jr., age 38, is President of Micro Strategies,
Incorporated, a leading developer and supplier of microcomputer based business
applications throughout the New York, New Jersey and Pennsylvania areas, which
he founded in 1983. Mr. Bongiovanni has a B.S. in mechanical engineering from
Rensellaer Polytechnical Institute.
The Board of Directors recommends that Shareholders vote FOR the election of the
nominees named above.
DIRECTORS WHOSE TERMS EXPIRE IN 1998:
Greg Manning, age 51, has been Chairman of the Board of the Company since its
inception in 1981 and Chief Executive Officer since December 1992. Mr. Manning
has served as President of the Company from 1981 until August 1993, and from
March 1995 to the present. Mr. Manning also has been Chairman of the Board and
President of CRM since its inception, which he founded as "Greg Manning Company,
Inc." in 1961. Mr. Manning is currently on the Board of Directors of the State
Bank of South Orange, New Jersey and is Chairman of the bank's audit committee
and member of the bank's executive committee
Albertino de Figueiredo, age 66, was appointed as a director of the Company on
September 10, 1997. In 1980, Mr. De Figueiredo founded Afinsa Bienes Tangibles
S.A., a company engaged in the business of philatelics and numismatics, and is
currently Chairman of the Board of Afinsa Bienes Tangibles S.A. and its
subsidiaries. Mr. De Figueiredo is also Vice-Chairman of the Board of Directors
of Finarte Espana, an art auction house, and a member of the Executive Board of
ASCAT, the International Association of the Stamp Catalogue and Philatelic
Publishers.
DIRECTORS WHOSE TERMS EXPIRE IN 1999:
William T. Tully, age 51, has been Executive Vice President of the Company since
August 1990. From August 1993 to August 1994, and since February 1995, Mr. Tully
has been Chief Operating Officer. From the Company's inception in 1981 until
August 1994, Mr. Tully was Secretary and Treasurer of the Company, and from
December 1992 until August 1994, and from June 1995 to present, Mr. Tully has
been a director. Mr. Tully was Senior Vice President of the Company since its
inception in 1981 until August 1990. Mr. Tully has been Executive Vice President
of CRM from August 1990, and has served CRM in other management capacities since
1974.
<PAGE>
The Company has agreed, for a period ending May 1998, that J.W. Charles
Securities, Inc. and Corporate Securities Group (collectively, the
"Underwriters") may designate a nominee to the Board of Directors, reasonably
acceptable to the Company, or have a representative attend all Board meetings.
CRM and Messrs. Manning, Tully, Graham and Rosenblum each have previously agreed
with the Underwriters to vote any shares of Common Stock that they own or
beneficially own for the election of such nominee.
Of the Company's current directors, only Messrs. Bongiovanni, de Figueiredo and
Rosenblum might qualify as disinterested directors with respect to any
transaction between the Company and CRM.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During the fiscal year ended June 30, 1997, there were three meetings and one
action by written consent of the Board of Directors of the Company. No director
attended fewer than 75% of the meetings of the Board of Directors or meetings of
the committees on which such director served.
COMMITTEES OF THE BOARD
The Company's Board of Directors has an Audit Committee. During fiscal 1997 the
Audit Committee consisted of Mr. Rosenblum and, until his resignation effective
May 8, 1997, Mr. Dolan. On September 10, 1997, Mr. Bongiovanni was appointed to
the Audit Committee. This committee recommends to the Board of Directors the
appointment of the independent public accountants, reviews the scope and budget
for the annual audit and reviews the results of the examination of the Company's
financial statements by the independent public accountants. The Audit Committee
met one time during fiscal 1997.
There are no nominating, compensation or stock option committees of the Board of
Directors.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
Name Age Position
Greg Manning 51 Chairman of the Board, Chief
Executive Officer and President
William T. Tully, Jr. 51 Executive Vice President and
Chief Operating Officer
David C. Graham 57 Senior Vice President
Daniel M Kaplan 52 Chief Financial Officer and Vice
President
See "Election of Directors" for information relating to Messrs. Manning and
Tully.
David C. Graham, age 57, has been a Senior Vice President of the Company since
August 1990 and has been Senior Vice President of CRM since August 1990. Mr.
Graham has served the Company and CRM in various capacities since September
1978. Mr. Graham has been a licensed auctioneer since 1965. Prior to joining the
Company, Mr. Graham was employed by H.R. Harmer, a public auction house, from
1955 to 1977.
<PAGE>
Daniel M. Kaplan, CPA, age 52, has served as Chief Financial Officer and Vice
President of the Company since October 1995. Mr. Kaplan served as controller of
Horowitz Rae Book Manufacturers, Inc. from 1994 to 1995, as controller of Apex
One, Inc. during 1993 and as a private management consultant from 1991 to 1993.
Mr. Kaplan has submitted his resignation as Chief Financial Officer and Vice
President, effective October 31, 1997. It is expected that Mr. Tully will assume
the duties of Chief Financial Officer until such time as a replacement has been
retained by the Company.
There are no family relationships among any of the directors or executive
officers of the Company.
ADVISORY COMMITTEE
The Company has an advisory committee (the "Advisory Committee") that includes
prominent collectors and other individuals involved in the philatelic and
collectibles business, with whom Mr. Manning has developed relationships over
the years. The members of the Advisory Committee individually meet from time to
time with the Company's Chairman and Chief Executive Officer to discuss current
trends or developments in the collectibles market. Members of the Advisory
Committee receive no compensation for their services, and their availability is
subject to their personal schedules and other time commitments. The Company
reimburses members for their reasonable out-of-pocket expenses in serving on the
Advisory Committee.
The Company believes that the members of the Advisory Committee have no
fiduciary or other duties, obligations or responsibilities to the Company or its
Shareholders, and they will not acquire any such duty, obligation or
responsibility as a result of any meeting or consultation they may have with
management of the Company. Each member of the Advisory Committee has entered
into an agreement with the Company which, among other things, confirms that the
member has no such duty, obligation or responsibility, but also commits the
member to keep confidential and not disclose (or in any manner use for personal
benefit or attempt to profit from) any non-public information relating to the
Company that the member receives in such capacity, except to the extent that
disclosure is required by applicable law or legal process or to the extent the
information becomes public other than as a result of a breach of any member's
confidentiality agreement. The members serve at will and may resign, or be asked
to discontinue their services, at any time.
The members of the current Advisory Committee and their principal occupations
are as follows:
Sir Ronald Brierley, age 60, is Founder/President of Brierley Investments,
Limited, a publicly held New Zealand investment company. Sir Ronald is also
Chairman of GPG P/C, an investment company based in London, England. Sir Ronald
serves on the boards of Advance Bank, Australia, Ltd., Adriadne Australia Ltd.,
Australia Oil & Gas Corporation, Ltd., and the Australian Gaslight Company, and
he is also a trustee of Sydney Cricket and Sports Ground Trust. Sir Ronald has
had a life-long interest in stamps, beginning as a schoolboy, when he formed
Kiwi Stamp Company and acquired a dealer's certificate from the New Zealand
Stamp Dealers Federation. Sir Ronald has been selling and collecting stamps
since that time.
Robert G. Driscoll, age 65, has been Chief Executive Officer (since 1981) of
Barrett & Worthen, Inc. and the Brookman Stamp Company of Bedford, New
Hampshire, both of which are engaged in the business of buying and selling
stamps. Mr. Driscoll served as Vice President of H.E. Harris Company, a
subsidiary of General Mills from 1978 to 1981, after having founded R&R Stamp
Company in 1958 and serving as its President until it was sold in 1978 to
General Mills. Mr. Driscoll is a past President of the American Stamp Dealers
Association (from 1977 to 1978) and is a lifetime member of the American First
Day Cover Society. He has been a member of the American Philatelic Society for
over 45 years.
<PAGE>
Herman Herst, Jr., age 88, is recognized as the most prolific philatelic author
in the world, and has written numerous articles on philately and has authored
several stamp related books, including Nassau Street. Mr. Herst was President of
Hennan Herst Jr. Auctions Inc., a public auction house (from 1934 to 1972) and
conducted a private retail stamp business as a sole proprietorship. He was also
an active philatelic auctioneer for many years, until his semi-retirement in
1981. He is a former President of the Society of Philatelic Americans and served
two terms on the Board of Directors of the American Stamp Dealers Association.
Among his many accomplishments, Mr. Herst received the John Luff Award from the
American Philatelic Society, the merit award from the Society of Philatelic
Americans and the Collectors Club of New York's award for Service to Philately.
He is currently a senior member of the American Society of Appraisers, an
honorary life member of the Philatelic Traders' Society of London and an
honorary life member of the American Stamp Dealers Association, a life member of
the Philatelic Traders' Society of London and an honorary life member of the
Writers Unit of the American Philatelic Society. He is also the only American
stamp dealer to have ever served on the council of the Philatelic Traders'
Society of London.
Herbert LaTuchie, age 78, is President of House of Collectors, a retail
collectibles business, as well as President of Herb LaTuchie Auctions, a public
auction house of stamps. He was Chairman of the Board and Chief Executive
Officer (from 1954 to 1986) of Modern Builders Supply Company, Inc. and Modern
Manufacturing, Inc., the latter of which is one of the ten leading distributors
of building products in the United States. Mr. LaTuchie has been a life-long
collector of rare stamps, and he also collects sheet music and other paper
collectibles.
Joseph Levy, Jr., age 71, is president of Levy Venture Management, a real estate
rental development group involved in automotive retailing real estate in three
states. He is also a real estate developer of several properties located in
Illinois. Prior to joining Levy Venture Management, Mr. Levy was President of
Walton Chrysler-Plymouth (from 1953 to 1960), a car dealership in Chicago,
Illinois, and of Carol Buick (from 1961 to 1984), a car dealership in Evanston,
Illinois. He serves as a director of the Evanston Historical Society. He is also
a trustee of Evanston Hospital and the Culver Educational Foundation, a life
trustee of the Evanston Historical Society and the Levy Senior Centers, and a
member of the Community Advisory Board of N.B.D. Bank. Mr.
Levy is a collector of stamps, coins, watches and other collectibles.
Hector D. Wiltshire, age 55, is President and CEO of Wiltshire Technologies,
Inc., a high technology venture capital and consulting group, and is an
experienced collector of rare stamps. Mr. Wiltshire is a member of the
Association of Certified and Corporate Accountants (A.C.C.A) and the British
Computer Society (M.B.C.S.). Mr. Wiltshire holds degrees in Executive Business
Administration and marketing.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation for
services in all capacities for the fiscal years ended June 30, 1997, June 30,
1996 and June 30, 1995 of those persons who were, during all or part of the
fiscal year ended June 30, 1997, the chief executive officer and the three
executive officers of the Company who received compensation in excess of
$100,000 in fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
- --------------------- -------------------------------------------------- ==================================================
Long Term Compensation
Annual Compensation
- --------------------- -------------------------------------------------- ==================================================
- --------------------- -------------------------------------------------- ------------------------ ------------ ============
Awards Payouts
- --------------------- -------- ------------ ----------- ---------------- ------------- ---------- ------------ ============
Name and Principal Year Salary ($) Bonus($) Other Restricted Securities All Other
Position Annual Stock Underly- Compen-sation
Compensation Awards ing ($)
Options/
SARs(#) LTIP
Payouts
- --------------------- -------- ------------ ----------- ---------------- ------------- ---------- ------------ ============
- --------------------- -------- ------------ ----------- ---------------- ------------- ---------- ------------ ============
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Greg Manning, 1997 175,000 105,271(1) $26,650 (2) None None None None
Chairman of the 1996 175,000 54,758(1) $26,650 (2) None None None None
Board, Chief 1995 150,000 0(1) 0 (3) None None None None
Executive Officer
and President
- --------------------- -------- ------------ ----------- ---------------- ------------- ---------- ------------ ============
William T. Tully, 1997 127,206 30,136(1) None 100,000 None None
Chief Operating 1996 129,769 17,379(1) (3) None None None None
Officer and 1995 114,223 0(1) (3) None 50,000 None None
Executive Vice (3)
President
- --------------------- -------- ------------ ----------- ---------------- ------------- ---------- ============ ============
</TABLE>
- ------------------------------------------
(1) Employment agreements with Messrs. Manning and Tully provide for an annual
bonus equal (i) in the case of Mr. Manning, for fiscal year 1995, 8.33% of
the pre-tax net income of the Company in excess of $700,000 and 10% of such
pre-tax net income in excess of $1,000,000; and for fiscal years 1996 and
1997, 10% of pre-tax net income between $500,000 and $2,000,000 (subject to
increase by the Board of Directors in its discretion); and (ii) in the case
of Mr. Tully, for fiscal years 1995, 1996 and 1997, 5% of pre-tax income of
the Company in excess of $700,000, in each case subject to certain
limitations. See "Executive Compensation -- Employment Agreements and
Insurance." For fiscal year 1997, the Board of Directors approved an
additional bonus to Mr. Manning in the amount of $25,000.
(2) Represents (a) a non-accountable expense allowance equal to $25,000, and
(b) the value of the use of certain automobiles.
(3) The Company has concluded that the aggregate amount of perquisites and
other personal benefits, if any, paid did not exceed the lesser of 10% of
such officer's total annual salary and bonus for such years or $50,000;
such amounts are not included in the table.
The Company has no long-term incentive plan.
<PAGE>
OPTION GRANTS TABLE FOR FISCAL 1997
The following table sets forth additional information concerning stock option
grants made during the fiscal year ended June 30, 1997 under the 1993 Stock
Option Plan, as amended, of the Company (the "1993 Plan") to the executive
officers named in the Summary Compensation table. These grants are also
reflected in the Summary Compensation Table. The Company has not granted any
stock appreciation rights.
<TABLE>
<CAPTION>
- --------------------------- =============================================================
Individual Grants
- --------------------------- =============================================================
- --------------------------- ------------- ------------- ----------- =====================
Name Number of % of Total Exercise Expiration
Securities Options Price Date
UnderlyingOptioGranted to ($/Share)
(#) Employees
in Fiscal
1997
- --------------------------- ------------- ------------- ----------- =====================
- --------------------------- ------------- ------------- ----------- =====================
<S> <C> <C> <C> <C>
Greg Manning 0 0% N/A N/A
- --------------------------- ------------- ------------- ----------- =====================
William T. Tully, Jr.(1) 100,000 49% $1.375 January 23, 2007
- --------------------------- ------------- ------------- ----------- =====================
</TABLE>
- --------------------------
(1) On January 23, 1997, Mr. Tully, Chief Operating Officer and Executive Vice
President of the Company, was granted, pursuant to the 1993 Plan, an option
to purchase 100,000 shares of Common Stock at an exercise price of $1.375
per share, the market price on the day of the grant. The option was granted
subject to a one-year vesting period, with 100% of the option granted
becoming exercisable on the first anniversary of the grant date.
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information regarding the exercise of stock
options during the last fiscal year by the executive officers named in the
Summary Compensation Table and the fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
- ------------------------------ --------------------- --------------- ------------------------ ======================
Number of
Securities Underlying Value of
Unexercised Unexercised
Name Options at In-the-Money
June 30, 1997 Options at
Exercisable/Unexercisable June 30,1997
Shares Acquired Value Exercisable/Unex-
on Exercise Realized ercisable (1) (2)
- ------------------------------ --------------------- --------------- ------------------------ ======================
<S> <C> <C> <C> <C>
Greg Manning None N/A 100,000/0 $0/$0
- ------------------------------ --------------------- --------------- ------------------------ ======================
William T. Tully, Jr. None N/A 100,000/100,000 $0/$56,250
- ------------------------------ --------------------- --------------- ------------------------ ======================
</TABLE>
(1) Based on a closing sale price per share of $1.9375 on June 30, 1997, as
reported by NASDAQ.
(2) Assumes the exercise price of the options in effect on October 28, 1997. If
the Repricing Plan is approved, such exercise prices may be reduced. See
"Proposal 4 - Approval of the Stock Option Repricing Plan" below.
COMPENSATION OF DIRECTORS
The Company currently reimburses each director for expenses incurred in
connection with his attendance at each meeting of the Board of Directors or a
committee on which he serves.
EMPLOYMENT AGREEMENTS AND INSURANCE
The Company has entered into employment agreements with each of Messrs. Manning
and Tully. The agreement with Mr. Manning provides for his services as President
and Chief Executive Officer. The agreement with Mr. Manning for the period
ending June 30, 1997 provided, among other things, for a salary equal to
$175,000 per annum and a bonus equal to 10% of the Company's audited pre-tax
income between $500,000 and $2,000,000 (as calculated excluding the
formula-based bonus payable to either of Messrs. Manning or Tully and subject to
increase by the Board of Directors). Mr. Manning received from the Company a
base salary of $175,000, $175,000 and $150,000 for fiscal years 1997, 1996 and
1995, respectively, and a bonus of $105,271 (includes a bonus of $25,000 in
addition to the formula-based bonus), $54,758, and $0 for fiscal years 1997,
1996 and 1995, respectively. The Company entered into an amendment to the
employment agreement with Mr. Manning, effective July 1, 1997, increasing his
base salary to $210,000 per annum and extending the term to June 30, 1999.
<PAGE>
On September 20, 1993 the Company amended Mr. Tully's employment agreement,
extending the term to June 30, 1998 and increasing the base salary to $110,000
per year, with an annual increases equal to the increase in the Consumer Price
Index plus 1.5%, plus a bonus based on 5% of the Company's audited pre-tax
income above $700,000 in each such year, as calculated excluding the
formula-based bonus payable to either of Messrs. Manning or Tully and subject to
certain maximum limitations ($50,000 for fiscal year 1998). Mr. Tully received a
bonus of $30,136, $17,379 and $0 for fiscal years 1997, 1996 and 1995,
respectively. Mr. Tully is also entitled to a vehicle for business use. Messrs.
Manning and Tully are both eligible to participate in any employee benefit plan
and fringe benefit programs, if any, as may be maintained by the Company for its
employees generally from time to time.
Each employment agreement also provides that in the event the agreement is
terminated as a result of disability (as defined therein) or death, Mr. Manning
and Mr. Tully will receive from the Company compensation equal to 66-2/3% of
such executive's annual base salary and the executive's cash bonus for a period
of 12 months.
Messrs. Manning and Tully is each permitted to devote some working time to the
business of CRM, so long as, in the judgment of a majority of the Company's
disinterested directors, it does not interfere with his complete and faithful
performance of his duties to the Company. The Company expects that substantially
all of Messrs. Manning and Tully's time will continue to be devoted to the
Company.
The Company currently maintains a $1,000,000 term life insurance policy on the
life of Mr. Manning with benefits payable to the Company.
The Company offers basic health, major medical and life insurance to its
employees. The Company adopted a 401(k) Retirement Plan effective July 1, 1997,
with respect to which all employees are entitled to participate. The Company has
agreed to match employee contributions in an amount equal to 10% of each
employee's contribution, up to a maximum of $500 per employee per year. The
Company has adopted no other retirement, pension or similar program.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Restated Certificate of Incorporation includes certain provisions
permitted pursuant to the New York Business Corporation Law (the "NYBCL"),
whereby officers and directors of the Company are to be indemnified against
certain liabilities. The Restated Certificate of Incorporation also limits to
the fullest extent permitted by the NYBCL a director's liability to the Company
or its Shareholders for monetary damages for breach of any duty as a director,
except for certain instances of bad faith, intentional misconduct, a knowing
violation of any law or illegal personal gain. This provision of the Restated
Certificate of Incorporation has no effect on any director's liability under
Federal securities laws or the availability of equitable remedies, such as
injunction or recission, for breach of fiduciary duty. The Company believes that
these provisions will facilitate the Company's ability to continue to attract
and retain qualified individuals to serve as directors and officers of the
Company.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is certain information with respect to persons known by the
Company to own beneficially, as of October 24, 1997, 5% or more of the
outstanding shares of its Common Stock:
<TABLE>
<CAPTION>
- ---------------------------------------------- ------------------------------------------- =========================
Name and Address of Amount and Nature Percent
Beneficial Owner of Beneficial of Common Stock
Ownership
- ---------------------------------------------- ------------------------------------------- =========================
<S> <C> <C>
Collectibles Realty Management, Inc.(1) 1,400,000 30.9%
775 Passaic Avenue
West Caldwell, NJ 07006
Afinsa Bienes Tangibles S.A. (2) 442,000 10%
Lagasca 88
Madrid, Spain 28001
- ---------------------------------------------- ------------------------------------------- =========================
</TABLE>
(1) Collectibles Realty Management, Inc. ("CRM") owns 1,300,000 shares of
Common Stock of the Company. All the shares owned by CRM are owned
beneficially by Greg Manning. Includes options to purchase 100,000 shares
(all of which are exercisable within 60 days of October 24, 1997) granted
pursuant to the 1993 Plan.
(2) Afinsa Bienes Tangibles S.A. ("Afinsa") owns 442,000 shares of Common Stock
of the Company. Mr. de Figueiredo, a director of the Company, owns 50% of
the outstanding shares of common stock of Afinsa.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of the
Company as of October 24, 1997, by each director, each executive officer named
in the Summary Compensation Table, and by all directors and executive officers
of the Company as a group:
<TABLE>
<CAPTION>
- --------------------------------- ------------------------------ ====================
Name and Address of Amount and Nature Percent
Beneficial Owner of Beneficial of Common Stock (2)
Ownership (1)
- --------------------------------- ------------------------------ ====================
<S> <C> <C>
Greg Manning (3) 1,400,000 30.9%
775 Passaic Avenue
West Caldwell, NJ 07006
- --------------------------------- ------------------------------ ====================
Albertino de Figueiredo (4) 442,000 10.0%
Lagasca 88
Madrid, Spain 28001
- --------------------------------- ------------------------------ ====================
Scott S. Rosenblum (5) 10,500 *
919 Third Avenue
New York, NY 10022
- --------------------------------- ------------------------------ ====================
Daniel M. Kaplan (6) 2,500 *
775 Passaic Avenue
West Caldwell, NJ 07006
- --------------------------------- ------------------------------ ====================
David Graham (7) 16,875 *
775 Passaic Avenue
West Caldwell, NJ 07006
- --------------------------------- ------------------------------ ====================
Anthony L. Bongiovanni (9) 2,000 *
104 Broadway
Denville, NJ 07866
- --------------------------------- ------------------------------ ====================
William T. Tully, Jr. (8) 100,800 2.2%
775 Passaic Avenue
West Caldwell, NJ 07006
- --------------------------------- ------------------------------ ====================
All Executive Officers and
Directors as a group, including 1,974,675 42%
those named above (7 persons)
- --------------------------------- ------------------------------ ====================
- ---------------------------------
</TABLE>
* Less than 1%.
<PAGE>
(1) Except as otherwise indicated below, each named person has voting and
investment power with respect to the securities owned by them.
(2) Based on 4,419,997 shares outstanding, calculated in accordance with Rule
13d-3(d)(1)(i) under the Securities Exchange Act of 1934, as amended.
(3) Mr. Manning is the owner of all the outstanding shares of common stock of
CRM. CRM owns 1,300,000 shares of the Company's Common Stock. Includes
options to purchase 100,000 shares (all of which are exercisable within 60
days of October 24, 1997) granted pursuant to the 1993 Plan.
(4) Includes 442,000 shares of the Company's Common Stock owned by Afinsa. Mr.
de Figueiredo owns 50% of the outstanding shares of common stock of Afinsa.
(5) Includes (a) 4,000 shares of Common Stock issuable upon the exercise of
Warrants owned by Mr. Rosenblum; and (b) options exercisable within 60 days
of October 24, 1997 to purchase 2,500 shares of Common Stock granted to Mr.
Rosenblum pursuant to the Stock Option Plan (but does not include options
not exercisable within 60 days of October 24, 1997 to purchase 12,500
shares of Common Stock).
(6) Includes options exercisable within 60 days of October 24, 1997 to purchase
2,500 shares of common stock granted to Mr. Kaplan pursuant to the 1993
Plan (but does not include options not exercisable within 60 days of
October 24, 1997 to purchase 7,500 shares of Common Stock).
(7) Includes options exercisable within 60 days of October 24, 1997 to purchase
16,875 shares of common stock granted to Mr. Graham pursuant to the 1993
Plan (but does not include options not exercisable within 60 days of
October 24, 1997 to purchase 5,625 shares of Common Stock).
(8) Includes (a) 400 shares of Common Stock owned by members of Mr. Tully's
immediate family; (b) 400 shares of Common Stock issuable upon the exercise
of Warrants owned by members of Mr. Tully's immediate family; and (c)
options exercisable within 60 days of October 24, 1997 to purchase 100,000
shares of Common Stock granted to Mr. Tully pursuant to the 1993 Plan (but
does not include options not exercisable within 60 days of October 24, 1997
to purchase an additional 100,000 shares of Common Stock).
(9) Includes (a) 1,000 shares of Common Stock issuable upon the exercise of
Warrants owned by Mr. Bongiovanni.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to the completion of its initial public offering in May 1993, the Company
operated as a wholly owned subsidiary of CRM. CRM owns 1,300,000 shares, or
approximately 30%, of the total outstanding shares of the Company's Common
Stock. CRM is wholly owned by Greg Manning, the founder, Chairman and Chief
Executive Officer of the Company. CRM has historically been engaged in the
business of acquiring collectibles (including collectibles of the type that are
currently being sold by the Company) and selling them both through direct sales
and through consignments for sale at auction.
In the past, CRM was an important source of property consigned to the Company
for sale at auction. Although CRM continues to provide the Company with
property, the amounts in relation to the Company's overall business has been
decreasing. For the year ended June 30, 1997, consignments by CRM were not
material, accounting for less than 1% of the Company's aggregate sales and
aggregate revenues.
<PAGE>
Pursuant to an Inventory Acquisition and Non-Competition Agreement (the "CRM
Inventory Agreement"), dated May 14, 1993, the Company was granted the right to
accept on a consignment basis any or all collectibles in CRM's existing
inventory on terms no less favorable to the Company than would be offered to
unrelated third parties. The CRM Inventory Agreement provides that, with respect
to all property from CRM's existing inventory that is accepted on consignment by
the Company, the Company will receive from CRM a commission in the amount of 10%
of the sales price (exclusive of any buyer's commission received by the
Company); provided that the Company will receive no commission from CRM with
respect to items valued at over $100,000 per lot (but will earn any commission
or premium paid by the buyer). The inventory available for consignment to the
Company pursuant to the CRM Inventory Agreement has been diminishing. The CRM
Inventory Agreement also provides that CRM will not compete with the Company for
the acquisition of collectibles from third parties that are suitable for
acquisition by the Company from time to time for use in its business.
In addition, CRM has advanced funds to the Company from time to time. During the
year ended June 30, 1997, the Company received advances from CRM of up to
$600,000, all of which were repaid, together with interest at the rate of 8% per
annum, prior to October 22, 1996. Thereafter, CRM received certain advances from
the Company which, at June 30, 1997 aggregated approximately $170,000. CRM has
agreed to repay this amount by March 31, 1998, together with interest.
The Company has filed a "shelf" registration statement and post-effective
amendment with the Securities and Exchange Commission (the "SEC") covering,
among other securities, shares of Common Stock owned by CRM. The registration
statement was declared effective by the SEC on September 6, 1996. CRM has
reimbursed the Company for the portion of the registration expenses allocable to
the registration of its securities.
During the year ended June 30, 1996, the Company filed with the SEC a
registration statement covering shares of Common Stock issuable upon the
exercise of stock options issued and to be issued pursuant to the 1993 Plan by
such officers, employees and directors of the Company who may be deemed to be
deemed to be "affiliates"of the Company. All expenses of such registration, in
the amount of approximately $25,000, were borne by the Company.
The registration statement has been declared effective by the SEC.
Scott Rosenblum, a director of the Company, is a partner of the law firm Kramer,
Levin, Naftalis & Frankel, which provides legal services to the Company. Anthony
L. Bongiovanni, Jr., also a director of the Company, is president of Micro
Strategies, Incorporated, which provides computer services to the Company.
Amounts charged to operations for services rendered by these firms for the year
ended June 30, 1997 were approximately $184,000, in the case of Kramer, Levin,
Naftalis & Frankel, and approximately $127,000, in the case of Micro Strategies,
Incorporated.
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Amper, Politziner & Mattia as
the Company's independent public accountants for the fiscal year ending June 30,
1998.
The Shareholders will be asked to ratify the appointment of Amper, Politziner &
Mattia as independent public accountants of the Company for the fiscal year
ending June 30, 1998. Ratification of the appointment requires the affirmative
vote of a majority of the shares of Common Stock present at the Annual Meeting
(or represented by proxy) and entitled to vote thereon.
The Board of Directors recommends that Shareholders vote FOR ratification of the
appointment of Amper, Politziner & Mattia.
It is expected that a representative of Amper, Politziner & Mattia will be
present at the Annual Meeting with the opportunity to make a statement if Amper,
Politziner & Mattia desires to do so, and will be available to respond to
appropriate questions.
<PAGE>
On October 31, 1995, the Company dismissed Price Waterhouse LLP (PW) as its
independent auditors. Such dismissal was approved by the Company's Board of
Directors. PW did not issue a report on the Company's financial statements for
the fiscal year ended June 30, 1996 or June 30, 1997.
PROPOSAL 3 - APPROVAL OF THE ADOPTION OF THE 1997 STOCK INCENTIVE PLAN
In 1993, the Company's Board of Directors adopted and the Company's shareholders
approved the 1993 Stock Option Plan, as amended (the "1993 Plan") which
permitted the issuance of up to 650,000 shares of Common Stock. The Board of
Directors has made grants of options as a means of providing incentives to
officers, employees and consultants and enabling them to realize compensation
based on increases in shareholder value. Grants were made to persons who had
been, and were expected to continue to be, important in helping the Company
achieve and continue its rapid growth. As of October 1, 1997, options to
purchase a total of 632,500 shares of Common Stock were outstanding under the
1993 Plan and, accordingly, 17,500 shares remained available for grants under
the 1993 Plan.
The Board of Directors believes that in light of the Company's continuing
growth, its intent to make acquisitions in the future and the need to remain
competitive in its industry in attracting and retaining talented employees,
including senior executives, the Company will need the authority to make grants
covering a greater number of shares in the next several years than remain
authorized under the 1993 Plan. The failure to make available such grants when
necessary would, in the Board's judgment, negatively impact the Company's future
growth and profitability and, therefore, its ability to enhance stockholder
value.
Consequently, the Board of Directors has adopted, subject to shareholder
approval, the Company's 1997 Stock Incentive Plan (the "1997 Plan"), which,
among other things, increases the number of shares available to be issued under
the 1993 Plan and the 1997 Plan to 850,000 in the aggregate. The full text of
the 1997 Plan is set forth in Appendix A hereto and the following outline of the
1997 Plan is qualified by reference to the complete text of the plan.
GENERAL. On October 24, 1997, the Company's Board of Directors adopted, subject
to shareholder approval, the 1997 Plan. The 1997 Plan provides for the issuance
of a total of 850,000 authorized and unissued shares of Common Stock, treasury
shares and/or shares acquired by the Company for purposes of the 1997 Plan,
including any shares issued under the 1993 Plan. Generally, shares subject to an
award that remain unissued upon expiration or cancellation of the award are
available for other awards under the 1997 Plan. In the event of a stock
dividend, stock split, recapitalization or the like, the Board of Directors will
equitably adjust the aggregate number of shares subject to the 1997 Plan, the
number of shares subject to each outstanding award, and the exercise price of
each outstanding option.
Awards under the 1997 Plan may be made in the form of (i) incentive stock
options, (ii) non-qualified stock options (incentive and non-qualified stock
options are collectively referred to as "options"), (iii) stock appreciation
rights, (iv) restricted stock, (v) restricted stock units, (vi) dividend
equivalent rights and (vii) other stock based awards. Awards may be made to such
directors, officers and other employees of the Company and its subsidiaries
(including employees who are directors and prospective employees who become
employees), and to such consultants to the Company and its subsidiaries, as the
Committee shall in its discretion select (collectively, "key persons").
ADMINISTRATION. The 1997 Plan may be administered by the Board or a committee of
the Board, composed of not fewer than two "non-employee" directors as defined
under Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). The Board and Committee are authorized to construe,
interpret and implement the provisions of the 1997 Plan, to select the key
persons to whom awards will be granted, to determine the terms and provisions of
such awards, and to amend outstanding awards. The determinations of the Board
and Committee are made in their sole discretion and are conclusive. The 1993
Plan is currently administered by the Board and it is anticipated that the 1997
will also initially be administered by the Board. (As used herein, "Committee"
refers to the Committee and/or Board as appropriate).
<PAGE>
GRANTS UNDER THE 1997 PLAN
Stock Options. Unless the Committee expressly provides otherwise, an option will
become exercisable as to 25% of the shares subject thereto on each of the first
through fourth anniversaries of the grant. The purchase price per share payable
upon the exercise of an option (the "option exercise price") will be established
by the Committee, provided that the option exercise price shall be no less than
100% of the fair market value of a share of the Common Stock on the date of
grant in the case of an incentive stock option. The option exercise price is
payable in cash, or, with the consent of the Committee, by surrender of shares
of Common Stock having a fair market value on the date of the exercise equal to
part or all of the option exercise price, or by such other payment method as the
Committee may prescribe.
The total number of shares of Common Stock with respect to which options may be
granted to any one employee during any one-year period may not exceed 100,000.
STOCK APPRECIATION RIGHTS. Stock appreciation rights may be granted in
connection with all or any part of, or independently of, any option granted
under the 1997 Plan. Generally, no stock appreciation right will be exercisable
at a time when any option to which it relates is not exercisable. The grantee of
a stock appreciation right has the right to surrender the stock appreciation
right and to receive from the Company an amount equal to the aggregate
appreciation (since the date of the grant, or over the option exercise price if
the stock appreciation right is granted in connection with an option) in the
shares of Common Stock in respect of which such stock appreciation right is
being exercised. Payment due upon exercise of a stock appreciation right may be
in cash, in Common Stock, or partly in each, as determined by the Committee in
its discretion.
RESTRICTED STOCK. The Committee may grant or sell restricted shares of Common
Stock to such key persons, in such amounts, and subject to such terms and
conditions (which may depend upon or be related to performance goals and other
conditions) as the Committee shall determine in its discretion. Certificates for
the shares of Common Stock covered by a restricted stock award will remain in
the possession of the Company until such shares are free of restrictions.
Subject to the applicable restrictions, the grantee has the rights of a
stockholder with respect to the restricted stock.
RESTRICTED STOCK UNITS. The Committee may grant restricted stock units to such
key persons, in such amounts, and subject to such terms and conditions as the
Committee shall determine in its discretion. Restricted stock units are intended
to give the recipient the economic equivalent of actual restricted shares of
stock, while postponing the tax consequences. A restricted stock unit is an
unsecured promise to transfer an unrestricted share of stock at a specified
future maturity date (which can be later than the vesting date at which the
right to receive the shares becomes nonforfeitable) selected by the recipient of
the unit at the time of grant or subsequent thereto.
DIVIDEND EQUIVALENT RIGHTS. The Committee may include in any award a dividend
equivalent right entitling the recipient to receive amounts equal to the
ordinary dividends that would have been paid, during the time such award is
outstanding, unexercised or not vested, on the shares of Common Stock covered by
such award if such shares were then outstanding.
OTHER STOCK BASED AWARDS. The 1997 Plan permits the Committee to grant other
stock based awards, such as performance shares or unrestricted stock, subject to
such terms and conditions as the Committee deems appropriate.
TERMINATION OF EMPLOYMENT OR SERVICE
<PAGE>
Options and Stock Appreciation Rights. Unless the Committee otherwise specifies:
(i) all options and stock appreciation rights not yet exercised shall terminate
upon termination of the grantee's employment or service by reason of discharge
for cause; (ii) if a grantee's employment or service terminates for reasons
other than cause or death, the grantee's options and/or stock appreciation
rights generally will be exercisable for 90 days after termination to the extent
that they were exercisable at termination, but not after the expiration date of
the award; and (iii) if a grantee dies while in the Company's employ or service
or during the aforementioned post-employment exercise period, the grantee's
options and/or stock appreciation rights will, to the extent exercisable
immediately prior to death, generally remain exercisable for one year after the
date of death, but not after the expiration date of the award.
RESTRICTED STOCK. If a grantee's employment or service terminates for any
reason, the Company will have the right at any during the 120 days following the
termination of employment to require forfeiture of restricted shares in exchange
for any amount paid by the grantee for such shares.
REPRICING OF OPTIONS UNDER THE 1997 PLAN. The Committee has the authority, at
any time or from time to time, without additional shareholder approval, to
cancel any outstanding option and issue a new option at a lower exercise price
in the event that the Fair Market Value of a share of Common Stock at any time
prior to the date of exercise falls below the applicable option exercise price.
OTHER FEATURES OF THE 1997 PLAN. The Committee may amend any outstanding award,
including, without limitation, by amendment which would accelerate the time or
times at which the award becomes unrestricted or may be exercised, or waive or
amend any goals, restrictions or conditions on the award. The Board of Directors
may, without stockholder approval, suspend, discontinue, revise or amend the
1997 Plan at any time or from time to time; provided, however, that stockholder
approval shall be obtained to the extent necessary to comply with Section 422 of
the Code (relating to the grant of incentive stock options) and other applicable
law. Unless sooner terminated by the Board of Directors, the provisions of the
1997 Plan respecting the grant of incentive stock options shall terminate on the
tenth anniversary of the adoption of the 1997 Plan by the Board of Directors.
All awards made under the 1997 Plan prior to its termination shall remain in
effect until they are satisfied or terminated.
In the event of a merger or consolidation of the Company with or into any other
corporation or entity, or in the event of any other "change in control" (as
defined in the 1997 Plan), (i) any awards then outstanding whose date of grant
was at least one year prior to the date of the change of control will become
fully vested and immediately exercisable; and (ii) the Committee may in its
discretion amend any outstanding award in such manner as it deems appropriate,
including by amendments that advance the dates upon which any or all outstanding
awards of any type shall terminate.
TAX CONSEQUENCES. The following description of the tax consequences of awards
under the 1997 Plan is based on present Federal tax laws, and does not purport
to be a complete description of the tax consequences of the 1997 Plan.
There are generally no Federal tax consequences either to the optionee or to the
Company upon the grant of a stock option. On exercise of an incentive stock
option, the optionee will not realize any income, and the Company will not be
entitled to a deduction for tax purposes, although such exercise may give rise
to liability for the optionee under the alternative minimum tax provisions of
the Code. However, if the optionee disposes of shares acquired upon exercise of
an incentive stock option within two years of the date of grant or one year of
the date of exercise, the optionee will recognize compensation income, and the
Company will be entitled to a deduction in the amount of the excess of the fair
market value of the shares of Common Stock on the date of exercise over the
option exercise price (or the gain on sale, if less); the remainder of any gain
to the optionee will be treated as capital gain. On exercise of a non-qualified
stock option, the amount by which the fair market value of the Common Stock on
the date of exercise exceeds the option exercise price will generally be taxable
to the optionee as compensation income and will generally be deductible for tax
purposes by the Company.
The grant of a stock appreciation right or restricted stock unit award will not
result in income for the grantee or in a tax deduction for the Company. Upon the
settlement of such a right or award, the grantee will include in gross income an
amount equal to the fair market value of any shares of Common Stock and/or any
cash received, and the Company will be entitled to a tax deduction in the same
amount. An award of restricted shares of Common Stock will not result in income
for the grantee or in a tax deduction for the Company until such time as the
shares are no longer subject to forfeiture unless the grantee elects otherwise.
At that time, the grantee generally will include in gross income an amount equal
to the fair market value of the shares less any amount paid for them, and the
Company will be entitled to a tax deduction in the same amount.
<PAGE>
LIMITATIONS ON THE COMPANY'S COMPENSATION DEDUCTION. Section 162(m) of the Code
limits the deduction which the Company may take for otherwise deductible
compensation payable to certain executive officers to the extent that
compensation paid to such officers for a year exceeds $1 million, unless such
compensation meets certain criteria. The Company believes that compensation
realized from stock options and stock appreciation rights granted under the 1997
Plan generally will satisfy the requirements of Section 162(m) of the Code if
the options or stock appreciation rights are granted by a committee of "outside
directors" (as defined under Section 162(m)); however, there is no assurance
that such awards will satisfy such requirements. In addition, because other
awards under the 1997 Plan will generally not meet the requirements of Section
162(m) of the Code, the deduction attributable to any compensation realized
under any such awards to the affected executive officers may be limited.
VOTE REQUIRED
The affirmative vote of the holders of a majority of shares present in person or
represented by proxy and entitled to vote at the Annual Meeting is required to
approve the 1997 Plan.
The Board of Directors recommends that Shareholders vote FOR approval of the
adoption of the 1997 Stock Incentive Plan.
PROPOSAL 4 - APPROVAL OF THE STOCK OPTION REPRICING PLAN
On September 10, 1997, the Board authorized a repricing plan (the "Repricing
Plan"), subject to shareholder approval, pursuant to which employees and
consultants (including executive officers and directors) with non-qualified
stock options awarded under the 1993 Plan and bearing exercise prices equal to
or in excess of $2.8125 per share ("Old Options"), with certain exceptions, will
be permitted to exchange their Old Options for new options under the 1993 Plan
(the "New Options"), exercisable at a price equal to the Fair Market Value of
the Company's Common Stock on December 10, 1997 (the date of the 1997 Annual
Meeting of Shareholders), provided that such Fair Market Value is less than the
exercise price of the related Old Options. The determination of Fair Market
Value will be made in accordance with the terms of the 1993 Plan. Two
consultants to the Company will not be entitled to participate in the Repricing
Plan.
The closing price of the Company's Common Stock on October 17, 1997, as reported
on NASDAQ, was $2.00 per share.
The Board approved the Repricing Plan because it believes that the Company's
stock option program is a significant factor in the Company's ability to retain
and provide incentives to key employees. Prior to the approval of the Repricing
Plan the market value of the Company's Common Stock had fallen significantly.
Inasmuch as the Old Options were designed to attract and retain employees and to
provide incentives for such persons to work to achieve the Company's success,
the Board determined that the decline in the market value of the Company's
common stock since the dates the Old Options were awarded had frustrated these
purposes and diminished the value of the 1993 Plan as an element of the
Company's compensation arrangements. At October 24, 1997, only three of the 23
optionees under the 1993 Plan had options with exercise prices lower than the
current market value of the Company's common stock. Accordingly, the Board
approved the Repricing Plan as a means of ensuring that the Company's employees
have an opportunity to acquire a meaningful equity interest in the Company.
The executives listed in the Summary Compensation Table above and certain other
persons will be entitled to participate in the Repricing Plan with respect to
the options described below:
OPTIONS SUBJECT TO REPRICING PLAN
<PAGE>
<TABLE>
<CAPTION>
------------------------------- ------------------------------ ------------- =============
Name Original Date of
# of Securities Underlying Exercise Original
Old Options Price Grant
(Exercisable/Unexercisable) ($/share)
------------------------------- ------------------------------ ------------- =============
<S> <C> <C> <C>
Greg Manning 100,000/0 $3.3750 6/11/93
President, Chief Executive
Officer and Director
------------------------------- ------------------------------ ------------- =============
William T. Tully 50,000/0 $3.3750 6/11/93
Chief Operating Officer,
Executive Vice President and
Director
------------------------------- ------------------------------ ------------- =============
All current Executive 165,000/0 $3.3750 6/11/93
Officers as a group 1,875/5,625 $2.8125 2/5/96
------------------------------- ------------------------------ ------------- =============
All current Directors and 2,500/7,500 $3.3125 5/24/96
Nominees for Director who are
not Executive Officers
------------------------------- ------------------------------ ------------- =============
All Employees (other than 37,000/0 $3.3750 6/11//93
Directors and Executive 19,000/57,000 $2.8125 2/5/96
Officers) and consultants as 2,500/7,500 $3.3125 5/24/96
a group
------------------------------- ------------------------------ ------------- =============
</TABLE>
The New Options will retain the vesting schedules, expiration dates and other
terms and conditions of the Old Options. All of the Old Options subject to the
Repricing Plan are, and all of the New Options issued pursuant to the Repricing
Plan will be, subject to the following terms and conditions: (i) the options are
non-qualified stock options; (ii) the options become exercisable over a period
of four years from the date of the original grant, with 25% of each option
becoming exercisable in each year from the date of the original grant; (iii) the
options expire on the 10th anniversary of the date of the original grant; (iv)
the options may not be transferred during the lifetime of the option holder; and
(v) the exercise price of the options must be paid in full at the time of
exercise in any combination of cash and stock of the Company.
Based on present Federal tax laws, there are generally no Federal tax
consequences either to the optionee or to the Company upon the cancellation of
Old Options and the issuance of New Options under the Repricing Plan. On
exercise of the New Options, the amount by which the fair market value of the
Common Stock on the date of exercise exceeds the option price will generally be
taxable to the optionee as compensation income, and may be deductible for tax
purposes by the Company. The Company believes that compensation realized upon
the exercise of the New Options by executive officers who are subject to Section
162(m) of the Code will not satisfy the requirements for exemption from the $1
million limitation on deductibility under that section. The Company, however,
does not believe this to be material as the compensation paid by the Company to
its executive officers is (and historically has been) significantly below $1
million.
Although the Repricing Plan is not required to be submitted for shareholder
approval, the Board has determined that it is in the best interests of the
Company for such approval to be sought. In the event the Repricing Plan is not
approved, the Repricing Plan as described above will not be implemented,
although the Board may at any time or from time to time in the future determine
to implement another plan to reprice options issued under any of its stock
option plans.
<PAGE>
VOTE REQUIRED
The affirmative vote of the holders of a majority of shares present in person or
represented by proxy and entitled to vote at the Annual Meeting is required to
approve the Repricing Plan.
The Board of Directors recommends that Shareholders vote FOR approval of the
Repricing Plan.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be considered as of the next Annual Meeting of
Shareholders must be received by the Company, addressed to the attention of the
Company's Secretary, at its offices at 775 Passaic Avenue, West Caldwell, New
Jersey 07006, no later than June 30, 1998, in order to be included in the
Company's proxy statement relating to that meeting.
OTHER BUSINESS
The Board of Directors is not aware of any other matter that is to be presented
to Shareholders for formal action at the Annual Meeting. If, however, any other
matter properly comes before the meeting or any adjournment or postponement
thereof, it is the intention of the persons named in the enclosed form of proxy
to vote such proxies in accordance with their judgment on such matters.
OTHER INFORMATION
Although it has entered into no formal agreements to do so, the Company will
reimburse banks, brokerage houses and other custodians, nominees and fiduciaries
for their reasonable expenses in forwarding proxy-soliciting materials to their
principals. The cost of soliciting proxies on behalf of the Board of Directors
will be borne by the Company. Such proxies will be solicited principally through
the mail but, if deemed desirable, may also be solicited personally or by
telephone, telegraph, facsimile transmission or special letter by directors,
officers and regular employees of the Company without additional compensation.
<PAGE>
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE ANNUAL MEETING WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING. THE BOARD URGES YOU TO COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID REPLY
ENVELOPE. YOUR COOPERATION AS A SHAREHOLDER, REGARDLESS OF THE NUMBER OF SHARES
OF STOCK YOU OWN, WILL REDUCE THE EXPENSES INCIDENT TO A FOLLOW-UP SOLICITATION
OF PROXIES.
IF YOU HAVE ANY QUESTIONS ABOUT VOTING YOUR SHARES, PLEASE TELEPHONE THE COMPANY
AT (973) 882-0004.
Sincerely,
MARTHA HUSICK
Secretary
West Caldwell, New Jersey
October 28, 1997
<PAGE>
Exhibit A
GREG MANNING AUCTIONS, INC.
1997 STOCK INCENTIVE PLAN
<PAGE>
Table of Contents
Page
ARTICLE I
GENERAL
1.1 Purpose.....................................................1
1.2 Administration..............................................1
1.3 Persons Eligible for Awards.................................2
1.4 Types of Awards Under Plan..................................2
1.5 Shares Available for Awards.................................2
1.6 Definitions of Certain Terms................................3
ARTICLE II
AWARDS UNDER THE PLAN
2.1 Agreements Evidencing Awards................................5
2.2 No Rights as a Shareholder..................................5
2.3 Grant of Stock Options, Stock Appreciation
Rights and Reload Options.................................6
2.4 Exercise of Options and Stock Appreciation Rights...........8
2.5 Termination of Employment; Death............................9
2.6 Grant of Restricted Stock...................................9
2.7 Grant of Restricted Stock Units.............................10
2.8 Other Stock-Based Awards....................................11
2.9 Grant of Dividend Equivalent Rights.........................11
2.10 Right of Recapture..........................................11
ARTICLE III
MISCELLANEOUS
3.1 Amendment of the Plan; Modification
of Awards.................................................12
3.2 Tax Withholding.............................................12
3.3 Restrictions................................................13
3.4 Nonassignability............................................13
3.5 Requirement of Notification of Election
Under Section 83(b) of the Code.............................13
3.6 Requirement of Notification Upon Disqualifying Disposition
Under Section 421(b) of the Code............................14
3.7 Change in Control...........................................14
3.8 Right of Discharge Reserved.................................15
3.9 Nature of Payments..........................................15
3.10 Non-Uniform Determinations..................................15
3.11 Other Payments or Awards....................................15
3.12 Section Headings............................................15
3.13 Effective Date; Term of Plan; 1993 Plan.....................16
3.14 Governing Law...............................................16
<PAGE>
ARTICLE I
GENERAL
1.1 PURPOSE
The purpose of the Greg Manning Auctions, Inc. 1997 Stock
Incentive Plan (the "Plan") is to provide for officers, other employees and
directors of, and consultants to, Greg Manning Auctions, Inc. (the "Company")
and its subsidiaries an incentive (a) to enter into and remain in the service of
the Company, (b) to enhance the long-term performance of the Company, and (c) to
acquire a proprietary interest in the success of the Company.
1.2 ADMINISTRATION
1.2.1 Subject to Section 1.2.6, the Plan shall be administered
by the Stock Option Committee (the "Committee") of the board of directors of the
Company (the "Board"), which shall consist of not less than two directors. The
members of the Committee shall be appointed by, and serve at the pleasure of,
the Board. To the extent required for transactions under the Plan to qualify for
the exemptions available under Rule 16b-3 ("Rule 16b-3") promulgated under the
Securities Exchange Act of 1934 (the "1934 Act"), all actions relating to awards
to persons subject to Section 16 of the 1934 Act shall be taken by the Board
unless each person who serves on the Committee is a "non-employee director"
within the meaning of Rule 16b-3 or such actions are taken by a sub-committee of
the Committee (or the Board) comprised solely of "non-employee directors". To
the extent required for compensation realized from awards under the Plan to be
deductible by the Company pursuant to section 162(m) of the Internal Revenue
Code of 1986 (the "Code"), the members of the Committee shall be "outside
directors" within the meaning of section 162(m).
1.2.2 The Committee shall have the authority (a) to exercise
all of the powers granted to it under the Plan, (b) to construe, interpret and
implement the Plan and any Plan Agreements executed pursuant to Section 2.1, (c)
to prescribe, amend and rescind rules and regulations relating to the Plan,
including rules governing its own operations, (d) to make all determinations
necessary or advisable in administering the Plan, (e) to correct any defect,
supply any omission and reconcile any inconsistency in the Plan, (f) to amend
the Plan to reflect changes in applicable law, (g) to determine whether, to what
extent and under what circumstances awards may be settled or exercised in cash,
Shares of Common Stock, other securities, other awards or other property, or
canceled, forfeited or suspended and the method or methods by which awards may
be settled, canceled, forfeited or suspended, and (h) to determine whether, to
what extent and under what circumstances cash, shares of Common Stock, other
securities, other awards or other property and other amounts payable with
respect to an award shall be deferred either automatically or at the election of
the holder thereof or of the Committee.
<PAGE>
1.2.3 Actions of the Committee shall be taken by the vote of a
majority of its members. Any action may be taken by a written instrument signed
by a majority of the Committee members, and action so taken shall be fully as
effective as if it had been taken by a vote at a meeting.
1.2.4 The determination of the Committee on all matters
relating to the Plan or any Plan Agreement shall be final, binding and
conclusive.
1.2.5 No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any award
thereunder.
1.2.6 Notwithstanding anything to the contrary contained
herein: (a) until the Board shall appoint the members of the Committee, the Plan
shall be administered by the Board; and (b) the Board may, in its sole
discretion, at any time and from time to time, grant awards or resolve to
administer the Plan. In either of the foregoing events, the Board shall have all
of the authority and responsibility granted to the Committee herein.
1.3 PERSONS ELIGIBLE FOR AWARDS
Awards under the Plan may be made to such directors, officers
and other employees of the Company and its subsidiaries (including prospective
employees conditioned on their becoming employees), and to such consultants to
the Company and its subsidiaries (collectively, "key persons") as the Committee
shall in its discretion select.
1.4 TYPES OF AWARDS UNDER PLAN
Awards may be made under the Plan in the form of (a) incentive
stock options (within the meaning of section 422 of the Code), (b) nonqualified
stock options, (c) stock appreciation rights, (d) dividend equivalent rights,
(e) restricted stock, (f) restricted stock units and (g) other stock-based
awards, all as more fully set forth in Article II. The term "award" means any of
the foregoing. No incentive stock option (other than an incentive stock option
that may be assumed or issued by the Company in connection with a transaction to
which section 424(a) of the Code applies) may be granted to a person who is not
an employee of the Company on the date of grant.
1.5 SHARES AVAILABLE FOR AWARDS
<PAGE>
1.5.1 The total number of shares of common stock of the
Company, par value $.01 per share ("Common Stock"), which may be issued in
connection with awards granted under the Plan shall, together with any shares
issued in connection with awards granted under the Greg Manning Auctions, Inc.
1993 Stock Option Plan, as amended (the "1993 Plan"), not exceed 850,000. Such
shares may be authorized but unissued Common Stock or authorized and issued
Common Stock held in the Company's treasury or acquired by the Company for the
purposes of the Plan. The Committee may direct that any stock certificate
evidencing shares issued pursuant to the Plan shall bear a legend setting forth
such restrictions on transferability as may apply to such shares pursuant to the
Plan. If, after the effective date of the Plan, any award is forfeited or any
award otherwise terminates or is cancelled without the delivery of shares of
Common Stock, then the shares covered by such award or to which such award
relates shall again become available for transfer pursuant to awards granted or
to be granted under this Plan. Any shares of Common Stock delivered by the
Company, any shares of Common Stock with respect to which awards are made by the
Company and any shares of Common Stock with respect to which the Company becomes
obligated to make awards, through the assumption of, or in substitution for,
outstanding awards previously granted by an acquired entity, shall not be
counted against the shares available for awards under this Plan.
1.5.2 The total number of shares of Common Stock with respect
to which stock options and stock appreciation rights may be granted to any one
employee of the Company or a subsidiary during any one-year period shall not
exceed 100,000.
1.5.3 Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding
award, the number of shares available for awards, the number of shares that may
be subject to awards to any one employee, and the price per share of Common
Stock covered by each such outstanding award shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the 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; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an award.
After any adjustment made pursuant to this Section 1.5.3, the number of shares
subject to each outstanding award shall be rounded to the nearest whole number.
1.5.4 Except as provided in this Section 1.5 and in Section
2.3.8, there shall be no limit on the number or the value of the shares of
Common Stock that may be subject to awards to any individual under the Plan.
1.6 Definitions of Certain Terms
1.6.1 The "Fair Market Value" of a share of Common Stock on
any day shall be determined as follows.
<PAGE>
(a) If the principal market for the Common Stock (the "Market") is a
national securities exchange or the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") National Market, the last sale price or,
if no reported sales take place on the applicable date, the average of the high
bid and low asked price of Common Stock as reported for such Market on such date
or, if no such quotation is made on such date, on the next preceding day on
which there were quotations, provided that such quotations shall have been made
within the ten (10) business days preceding the applicable date;
(b) If the Market is the NASDAQ National List, the NASDAQ Supplemental List
or another market, the average of the high bid and low asked price for Common
Stock on the applicable date, or, if no such quotations shall have been made on
such date, on the next preceding day on which there were quotations, provided
that such quotations shall have been made within the ten (10) business days
preceding the applicable date; or,
(c) In the event that neither paragraph (a) nor (b) shall apply, the Fair
Market Value of a share of Common Stock on any day shall be determined in good
faith by the Committee.
1.6.2 The term "incentive stock option" means an option that
is intended to qualify for special federal income tax treatment pursuant to
sections 421 and 422 of the Code, as now constituted or subsequently amended, or
pursuant to a successor provision of the Code, and which is so designated in the
applicable Plan Agreement. Any option that is not specifically designated as an
incentive stock option shall under no circumstances be considered an incentive
stock option. Any option that is not an incentive stock option is referred to
herein as a "nonqualified stock option."
1.6.3 The term "employment" means, in the case of a grantee of
an award under the Plan who is not an employee of the Company, the grantee's
association with the Company or a subsidiary as a director, consultant or
otherwise.
1.6.4 A grantee shall be deemed to have a "termination of
employment" upon ceasing to be employed by the Company and all of its
subsidiaries or by a corporation assuming awards in a transaction to which
section 424(a) of the Code applies. The Committee may in its discretion
determine (a) whether any leave of absence constitutes a termination of
employment for purposes of the Plan, (b) the impact, if any, of any such leave
of absence on awards theretofore made under the Plan, and (c) when a change in a
non-employee's association with the Company constitutes a termination of
employment for purposes of the Plan. The Committee shall have the right to
determine whether the termination of a grantee's employment is a dismissal for
cause and the date of termination in such case, which date the Committee may
retroactively deem to be the date of the action that is cause for dismissal.
Such determinations of the Committee shall be final, binding and conclusive.
<PAGE>
1.6.5 The term "cause," when used in connection with
termination of a grantee's employment, shall have the meaning set forth in any
then-effective employment agreement between the grantee and the Company or a
subsidiary thereof. In the absence of such an employment agreement provision,
"cause" means: (a) conviction of any crime (whether or not involving the
Company) constituting a felony in the jurisdiction involved; (b) engaging in any
substantiated act involving moral turpitude; (c) engaging in any act which, in
each case, subjects, or if generally known would subject, the Company to public
ridicule or embarrassment; (d) material violation of the Company's policies,
including, without limitation, those relating to sexual harassment or the
disclosure or misuse of confidential information; (e) serious neglect or
misconduct in the performance of the grantee's duties for the Company or a
subsidiary or willful or repeated failure or refusal to perform such duties; in
each case as determined by the Committee, which determination shall be final,
binding and conclusive.
ARTICLE II
AWARDS UNDER THE PLAN
2.1 AGREEMENTS EVIDENCING AWARDS
Each award granted under the Plan (except an award of
unrestricted stock) shall be evidenced by a written agreement ("Plan Agreement")
which shall contain such provisions as the Committee in its discretion deems
necessary or desirable. Such provisions may include, without limitation, a
requirement that the grantee become a party to a shareholders' agreement with
respect to any shares of Common Stock acquired pursuant to the award, a
requirement that the grantee acknowledge that such shares are acquired for
investment purposes only, and a right of first refusal exercisable by the
Company in the event that the grantee wishes to transfer any such shares. The
Committee may grant awards in tandem with or in substitution for any other award
or awards granted under this Plan or any award granted under any other plan of
the Company or any subsidiary. Payments or transfers to be made by the Company
or any subsidiary upon the grant, exercise or payment of an award may be made in
such form as the Committee shall determine, including cash, shares of Common
Stock, other securities, other awards or other property and may be made in a
single payment or transfer, in installments or on a deferred basis, in each case
in accordance with rules established by the Committee. By accepting an award
pursuant to the Plan, a grantee thereby agrees that the award shall be subject
to all of the terms and provisions of the Plan and the applicable Plan
Agreement.
2.2 NO RIGHTS AS A SHAREHOLDER
No grantee of an option or stock appreciation right (or other
person having the right to exercise such award) shall have any of the rights of
a shareholder of the Company with respect to shares subject to such award until
the issuance of a stock certificate to such person for such shares. Except as
otherwise provided in Section 1.5.3, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) for which the record date is prior to the
date such stock certificate is issued.
<PAGE>
2.3 GRANT OF STOCK OPTIONS, STOCK APPRECIATION
RIGHTS AND RELOAD OPTIONS
2.3.1 The Committee may grant incentive stock options and
nonqualified stock options (collectively, "options") to purchase shares of
Common Stock from the Company, to such key persons, in such amounts and subject
to such terms and conditions, as the Committee shall determine in its
discretion, subject to the provisions of the Plan.
2.3.2 The Committee may grant stock appreciation rights to
such key persons, in such amounts and subject to such terms and conditions, as
the Committee shall determine in its discretion, subject to the provisions of
the Plan. Stock appreciation rights may be granted in connection with all or any
part of, or independently of, any option granted under the Plan. A stock
appreciation right granted in connection with a nonqualified stock option may be
granted at or after the time of grant of such option. A stock appreciation right
granted in connection with an incentive stock option may be granted only at the
time of grant of such option.
2.3.3 The grantee of a stock appreciation right shall have the
right, subject to the terms of the Plan and the applicable Plan Agreement, to
receive from the Company an amount equal to (a) the excess of the Fair Market
Value of a share of Common Stock on the date of exercise of the stock
appreciation right over (b) the exercise price of such right as set forth in the
Plan Agreement (or over the option exercise price if the stock appreciation
right is granted in connection with an option), multiplied by (c) the number of
shares with respect to which the stock appreciation right is exercised. Payment
upon exercise of a stock appreciation right shall be in cash or in shares of
Common Stock (valued at their Fair Market Value on the date of exercise of the
stock appreciation right) or both, all as the Committee shall determine in its
discretion. Upon the exercise of a stock appreciation right granted in
connection with an option, the number of shares subject to the option shall be
correspondingly reduced by the number of shares with respect to which the stock
appreciation right is exercised. Upon the exercise of an option in connection
with which a stock appreciation right has been granted, the number of shares
subject to the stock appreciation right shall be correspondingly reduced by the
number of shares with respect to which the option is exercised.
<PAGE>
2.3.4 Each Plan Agreement with respect to an option shall set
forth the amount (the "option exercise price") payable by the grantee to the
Company upon exercise of the option evidenced thereby. The option exercise price
per share shall be determined by the Committee in its discretion; provided,
however, that the option exercise price of an incentive stock option shall be at
least 100% of the Fair Market Value of a share of Common Stock on the date the
option is granted (except as permitted in connection with the assumption or
issuance of options in a transaction to which section 424(a) of the Code
applies), and provided further that in no event shall the option exercise price
be less than the par value of a share of Common Stock. The Committee shall have
the authority, at any time or from time to time, to cancel any outstanding
option and reissue a new option at a lower exercise price in the event that the
Fair Market Value of a share of Common Stock at any time prior to the date of
exercise falls below the option exercise price.
2.3.5 Each Plan Agreement with respect to an option or stock
appreciation right shall set forth the periods during which the award evidenced
thereby shall be exercisable, whether in whole or in part. Such periods shall be
determined by the Committee in its discretion; provided, however, that no
incentive stock option (or a stock appreciation right granted in connection with
an incentive stock option) shall be exercisable more than 10 years after the
date of grant.
2.3.6 The Committee may in its discretion include in any Plan
Agreement with respect to an option (the "original option") a provision that an
additional option (the "additional option") shall be granted to any grantee who,
pursuant to Section 2.4.3(b), delivers shares of Common Stock in partial or full
payment of the exercise price of the original option. The additional option
shall be for a number of shares of Common Stock equal to the number thus
delivered, shall have an exercise price equal to the Fair Market Value of a
share of Common Stock on the date of exercise of the original option, and shall
have an expiration date no later than the expiration date of the original
option. In the event that a Plan Agreement provides for the grant of an
additional option, such Agreement shall also provide that the exercise price of
the original option be no less than the Fair Market Value of a share of Common
Stock on its date of grant, and that any shares that are delivered pursuant to
Section 2.4.3(b) in payment of such exercise price shall have been held for at
least six months.
2.3.7 To the extent that the aggregate Fair Market Value
(determined as of the time the option is granted) of the stock with respect to
which incentive stock options granted under this Plan and all other plans of the
Company and any subsidiary are first exercisable by any employee during any
calendar year shall exceed the maximum limit (currently, $100,000), if any,
imposed from time to time under section 422 of the Code, such options shall be
treated as nonqualified stock options.
2.3.8 Notwithstanding the provisions of Sections 2.3.4 and
2.3.5, to the extent required under section 422 of the Code, an incentive stock
option may not be granted under the Plan to an individual who, at the time the
option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of his employer corporation or of its
parent or subsidiary corporations (as such ownership may be determined for
purposes of section 422(b)(6) of the Code) unless (a) at the time such incentive
stock option is granted the option exercise price is at least 110% of the Fair
Market Value of the shares subject thereto and (b) the incentive stock option by
its terms is not exercisable after the expiration of 5 years from the date it is
granted.
<PAGE>
2.4 EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS
Subject to the provisions of this Article II, each option or
stock appreciation right granted under the Plan shall be exercisable as follows:
2.4.1 Unless the applicable Plan Agreement otherwise provides,
an option or stock appreciation right shall become exercisable in four
substantially equal installments, on each of the first, second, third and fourth
anniversaries of the date of grant, and each installment, once it becomes
exercisable, shall remain exercisable until expiration, cancellation or
termination of the award.
2.4.2 Unless the applicable Plan Agreement otherwise provides,
an option or stock appreciation right may be exercised from time to time as to
all or part of the shares as to which such award is then exercisable (but, in
any event, only for whole shares). A stock appreciation right granted in
connection with an option may be exercised at any time when, and to the same
extent that, the related option may be exercised. An option or stock
appreciation right shall be exercised by the filing of a written notice with the
Company, on such form and in such manner as the Committee shall prescribe.
2.4.3 Any written notice of exercise of an option shall be
accompanied by payment for the shares being purchased. Such payment shall be
made: (a) by certified or official bank check (or the equivalent thereof
acceptable to the Company) for the full option exercise price; or (b) unless the
applicable Plan Agreement provides otherwise, by delivery of shares of Common
Stock (which, if acquired pursuant to exercise of a stock option, were acquired
at least six months prior to the option exercise date) and having a Fair Market
Value (determined as of the exercise date) equal to all or part of the option
exercise price and a certified or official bank check (or the equivalent thereof
acceptable to the Company) for any remaining portion of the full option exercise
price; or (c) at the discretion of the Committee and to the extent permitted by
law, by such other provision as the Committee may from time to time prescribe.
2.4.4 Promptly after receiving payment of the full option
exercise price, or after receiving notice of the exercise of a stock
appreciation right for which payment will be made partly or entirely in shares,
the Company shall, subject to the provisions of Section 3.3 (relating to certain
restrictions), deliver to the grantee or to such other person as may then have
the right to exercise the award, a certificate or certificates for the shares of
Common Stock for which the award has been exercised. If the method of payment
employed upon option exercise so requires, and if applicable law permits, an
optionee may direct the Company to deliver the certificate(s) to the optionee's
stockbroker.
<PAGE>
2.5 TERMINATION OF EMPLOYMENT; DEATH
2.5.1 Except to the extent otherwise provided in Section 2.5.2
or 2.5.3 or in the applicable Plan Agreement, all options and stock appreciation
rights not theretofore exercised shall terminate upon termination of the
grantee's employment for any reason (including death).
2.5.2 If a grantee's employment terminates for any reason
other than death or dismissal for cause, the grantee may exercise any
outstanding option or stock appreciation right on the following terms and
conditions: (a) exercise may be made only to the extent that the grantee was
entitled to exercise the award on the date of employment termination; and (b)
exercise must occur within 90 days after employment terminates, except that this
90 day period shall be increased to one year if the termination is by reason of
disability, but in no event after the expiration date of the award as set forth
in the Plan Agreement. In the case of an incentive stock option, the term
"disability" for purposes of the preceding sentence shall have the meaning given
to it by section 422(c)(6) of the Code.
2.5.3 If a grantee dies while employed by the Company or any
subsidiary, or after employment termination but during the period in which the
grantee's awards are exercisable pursuant to Section 2.5.2, any outstanding
option or stock appreciation right shall be exercisable on the following terms
and conditions: (a) exercise may be made only to the extent that the grantee was
entitled to exercise the award on the date of death; and (b) exercise must occur
by the earlier of the first anniversary of the grantee's death or the expiration
date of the award. Any such exercise of an award following a grantee's death
shall be made only by the grantee's executor or administrator, unless the
grantee's will specifically disposes of such award, in which case such exercise
shall be made only by the recipient of such specific disposition. If a grantee's
personal representative or the recipient of a specific disposition under the
grantee's will shall be entitled to exercise any award pursuant to the preceding
sentence, such representative or recipient shall be bound by all the terms and
conditions of the Plan and the applicable Plan Agreement which would have
applied to the grantee including, without limitation, the provisions of Sections
3.3 and 3.7 hereof.
2.6 GRANT OF RESTRICTED STOCK
2.6.1 The Committee may grant restricted shares of Common
Stock to such key persons, in such amounts, and subject to such terms and
conditions as the Committee shall determine in its discretion, subject to the
provisions of the Plan. Restricted stock awards may be made independently of or
in connection with any other award under the Plan. A grantee of a restricted
stock award shall have no rights with respect to such award unless such grantee
accepts the award within such period as the Committee shall specify by executing
a Plan Agreement in such form as the Committee shall determine and, if the
Committee shall so require, makes payment to the Company by certified or
official bank check (or the equivalent thereof acceptable to the Company) in
such amount as the Committee may determine.
<PAGE>
2.6.2 Promptly after a grantee accepts a restricted stock
award, the Company shall issue in the grantee's name a certificate or
certificates for the shares of Common Stock covered by the award. Upon the
issuance of such certificate(s), the grantee shall have the rights of a
shareholder with respect to the restricted stock, subject to the
nontransferability restrictions and Company repurchase rights described in
Sections 2.6.4 and 2.6.5 and to such other restrictions and conditions as the
Committee in its discretion may include in the applicable Plan Agreement.
2.6.3 Unless the Committee shall otherwise determine, any
certificate issued evidencing shares of restricted stock shall remain in the
possession of the Company until such shares are free of any restrictions
specified in the applicable Plan Agreement.
2.6.4 Shares of restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in this Plan or the applicable Plan Agreement. The
Committee at the time of grant shall specify the date or dates (which may depend
upon or be related to the attainment of performance goals and other conditions)
on which the nontransferability of the restricted stock shall lapse. Unless the
applicable Plan Agreement provides otherwise, additional shares of Common Stock
or other property distributed to the grantee in respect of shares of restricted
stock, as dividends or otherwise, shall be subject to the same restrictions
applicable to such restricted stock.
2.6.5 During the 120 days following termination of the
grantee's employment for any reason, the Company shall have the right to require
the return of any shares to which restrictions on transferability apply, in
exchange for which the Company shall repay to the grantee (or the grantee's
estate) any amount paid by the grantee for such shares.
2.7 GRANT OF RESTRICTED STOCK UNITS
2.7.1 The Committee may grant awards of restricted stock units
to such key persons, in such amounts, and subject to such terms and conditions
as the Committee shall determine in its discretion, subject to the provisions of
the Plan. Restricted stock units may be awarded independently of or in
connection with any other award under the Plan.
2.7.2 At the time of grant, the Committee shall specify the
date or dates on which the restricted stock units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting as it deems
appropriate. In the event of the termination of the grantee's employment by the
Company and its subsidiaries for any reason, restricted stock units that have
not become nonforfeitable shall be forfeited and cancelled. The Committee at any
time may accelerate vesting dates and otherwise waive or amend any conditions of
an award of restricted stock units.
<PAGE>
2.7.3 At the time of grant, the Committee shall specify the
maturity date applicable to each grant of restricted stock units, which may be
determined at the election of the grantee. Such date may be later than the
vesting date or dates of the award. On the maturity date, the Company shall
transfer to the grantee one unrestricted, fully transferable share of Common
Stock for each restricted stock unit scheduled to be paid out on such date and
not previously forfeited. The Committee shall specify the purchase price, if
any, to be paid by the grantee to the Company for such shares of Common Stock.
2.8 OTHER STOCK-BASED AWARDS
The Committee may grant other types of stock-based awards
(including the grant of unrestricted shares) to such key persons, in such
amounts and subject to such terms and conditions, as the Committee shall in its
discretion determine, subject to the provisions of the Plan. Such awards may
entail the transfer of actual shares of Common Stock to Plan participants, or
payment in cash or otherwise of amounts based on the value of shares of Common
Stock.
2.9 GRANT OF DIVIDEND EQUIVALENT RIGHTS
The Committee may in its discretion include in the Plan
Agreement with respect to any award a dividend equivalent right entitling the
grantee to receive amounts equal to the ordinary dividends that would be paid,
during the time such award is outstanding and unexercised, on the shares of
Common Stock covered by such award if such shares were then outstanding. In the
event such a provision is included in a Plan Agreement, the Committee shall
determine whether such payments shall be made in cash, in shares of Common Stock
or in another form, whether they shall be conditioned upon the exercise of the
award to which they relate, the time or times at which they shall be made, and
such other terms and conditions as the Committee shall deem appropriate.
2.10 RIGHT OF RECAPTURE
<PAGE>
2.10.1 If at any time within one year after the date on which
a participant exercises an option or stock appreciation right, or on which
restricted stock vests, or which is the maturity date of restricted stock units,
or on which income is realized by a participant in connection with any other
stock-based award (each of which events is a "Realization Event"), the
participant (a) is terminated for cause or (b) engages in any activity
determined in the discretion of the Committee to be in competition with any
activity of the Company, or otherwise inimical, contrary or harmful to the
interests of the Company (including, but not limited to, accepting employment
with or serving as a consultant, adviser or in any other capacity to an entity
that is in competition with or acting against the interests of the Company),
then any gain ("Gain") realized by the participant from the Realization Event
shall be paid by the participant to the Company upon notice from the Company.
Such Gain shall be determined as of the date of the Realization Event, without
regard to any subsequent change in the Fair Market Value of a share of Common
Stock. The Company shall have the right to offset such Gain against any amounts
otherwise owed to the participant by the Company (whether as wages, vacation
pay, or pursuant to any benefit plan or other compensatory arrangement).
ARTICLE III
MISCELLANEOUS
3.1 AMENDMENT OF THE PLAN; MODIFICATION OF AWARDS
3.1.1 The Board may from time to time suspend, discontinue,
revise or amend the Plan in any respect whatsoever, except that no such
amendment shall materially impair any rights or materially increase any
obligations under any award theretofore made under the Plan without the consent
of the grantee (or, after the grantee's death, the person having the right to
exercise the award). For purposes of this Section 3.1, any action of the Board
or the Committee that alters or affects the tax treatment of any award shall not
be considered to materially impair any rights of any grantee.
3.1.2 Shareholder approval of any amendment shall be obtained
to the extent necessary to comply with section 422 of the Code (relating to
incentive stock options) or other applicable law or regulation.
3.1.3 The Committee may amend any outstanding Plan Agreement,
including, without limitation, by amendment which would accelerate the time or
times at which the award becomes unrestricted or may be exercised, or waive or
amend any goals, restrictions or conditions set forth in the Agreement. However,
any such amendment (other than an amendment pursuant to Section 3.7.2, relating
to change in control) that materially impairs the rights or materially increases
the obligations of a grantee under an outstanding award shall be made only with
the consent of the grantee (or, upon the grantee's death, the person having the
right to exercise the award).
3.2 TAX WITHHOLDING
3.2.1 As a condition to the receipt of any shares of Common
Stock pursuant to any award or the lifting of restrictions on any award, or in
connection with any other event that gives rise to a federal or other
governmental tax withholding obligation on the part of the Company relating to
an award (including, without limitation, FICA tax), the Company shall be
entitled to require that the grantee remit to the Company an amount sufficient
in the opinion of the Company to satisfy such withholding obligation.
<PAGE>
3.2.2 If the event giving rise to the withholding obligation
is a transfer of shares of Common Stock, then, unless otherwise specified in the
applicable Plan Agreement, the grantee may satisfy the withholding obligation
imposed under Section 3.2.1 by electing to have the Company withhold shares of
Common Stock having a Fair Market Value equal to the amount of tax to be
withheld. For this purpose, Fair Market Value shall be determined as of the date
on which the amount of tax to be withheld is determined (and any fractional
share amount shall be settled in cash).
3.3 RESTRICTIONS
3.3.1 If the Committee shall at any time determine that any
consent (as hereinafter defined) is necessary or desirable as a condition of, or
in connection with, the granting of any award under the Plan, the issuance or
purchase of shares or other rights thereunder, or the taking of any other action
thereunder (each such action being hereinafter referred to as a "plan action"),
then such plan action shall not be taken, in whole or in part, unless and until
such consent shall have been effected or obtained to the full satisfaction of
the Committee.
3.3.2 The term "consent" as used herein with respect to any
plan action means (a) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (b) any and all written agreements and
representations by the grantee with respect to the disposition of shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (c) any and all consents,
clearances and approvals in respect of a plan action by any governmental or
other regulatory bodies.
3.4 NONASSIGNABILITY
Except to the extent otherwise provided in the applicable Plan
Agreement, no award or right granted to any person under the Plan shall be
assignable or transferable other than by will or by the laws of descent and
distribution, and all such awards and rights shall be exercisable during the
life of the grantee only by the grantee or the grantee's legal representative.
3.5 REQUIREMENT OF NOTIFICATION OF
ELECTION UNDER SECTION 83(B) OF THE CODE
If any grantee shall, in connection with the acquisition of
shares of Common Stock under the Plan, make the election permitted under section
83(b) of the Code (that is, an election to include in gross income in the year
of transfer the amounts specified in section 83(b)), such grantee shall notify
the Company of such election within 10 days of filing notice of the election
with the Internal Revenue Service, in addition to any filing and notification
required pursuant to regulations issued under the authority of Code section
83(b).
3.6 REQUIREMENT OF NOTIFICATION UPON DISQUALIFYING
DISPOSITION UNDER SECTION 421(B) OF THE CODE
<PAGE>
If any grantee shall make any disposition of shares of Common
Stock issued pursuant to the exercise of an incentive stock option under the
circumstances described in section 421(b) of the Code (relating to certain
disqualifying dispositions), such grantee shall notify the Company of such
disposition within 10 days thereof.
3.7 CHANGE IN CONTROL
3.7.1 For purposes of this Section 3.7, a "change in control"
shall be deemed to have occurred upon the happening of any of the following
events:
(a) any "person", as such term is used in Sections 13(d) and
14(d) of the 1934 Act, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, whether by purchase or
acquisition or agreement to act in concert or otherwise, of 15% or more of the
outstanding shares of Common Stock of the Company; or
(b) a cash tender or exchange offer for 50% or more of the
outstanding shares of Common Stock of the Company is commenced; or
(c) the shareholders of the Company approve an agreement to
merge, consolidate, liquidate, or sell all or substantially all of the assets of
the Company; or
(d) two or more directors are elected to the Board without
having previously been nominated and approved by the members of the Board
incumbent on the day immediately preceding such election.
3.7.2 Upon the happening of a change in control:
(a) notwithstanding any other provision of this Plan, any option or stock
appreciation right then outstanding whose date of grant was at least one year
prior to the date of the Change in Control shall become fully vested and
immediately exercisable unless the applicable Plan Agreement expressly provides
otherwise;
(b) to the fullest extent permitted by law, the Committee may, in its sole
discretion, amend any Plan Agreement in such manner as it deems appropriate,
including, without limitation, by amendments that advance the dates upon which
any or all outstanding shares of restricted stock shall become free of
restrictions or that advance the dates upon which any or all outstanding awards
of any type shall terminate.
3.7.3 Whenever deemed appropriate by the Committee, any action
referred to in Section 3.7.2(b) may be made conditional upon the consummation of
the applicable Change in Control transaction.
<PAGE>
3.8 RIGHT OF DISCHARGE RESERVED
Nothing in the Plan or in any Plan Agreement shall confer upon
any grantee the right to continue in the employ of the Company or affect any
right which the Company may have to terminate such employment.
3.9 NATURE OF PAYMENTS
3.9.1 Any and all grants of awards and issuances of shares of
Common Stock under the Plan shall be in consideration of services performed for
the Company by the grantee.
3.9.2 All such grants and issuances shall constitute a special
incentive payment to the grantee and shall not be taken into account in
computing the amount of salary or compensation of the grantee for the purpose of
determining any benefits under any pension, retirement, profit-sharing, bonus,
life insurance or other benefit plan of the Company or under any agreement
between the Company and the grantee, unless such plan or agreement specifically
provides otherwise.
3.10 NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan need not be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, awards under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the
Committee shall be entitled, among other things, to make non-uniform and
selective determinations, and to enter into non-uniform and selective Plan
agreements, as to (a) the persons to receive awards under the Plan, (b) the
terms and provisions of awards under the Plan, and (c) the treatment of leaves
of absence pursuant to Section 1.6.4.
3.11 OTHER PAYMENTS OR AWARDS
Nothing contained in the Plan shall be deemed in any way to
limit or restrict the Company from making any award or payment to any person
under any other plan, arrangement or understanding, whether now existing or
hereafter in effect.
3.12 SECTION HEADINGS
The section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of the
sections.
3.13 EFFECTIVE DATE; TERM OF PLAN; 1993 PLAN
<PAGE>
3.13.1 The Plan was adopted by the Board on October 24, 1997,
subject to approval by the Company's shareholders. All awards under the Plan
prior to such shareholder approval are subject in their entirety to such
approval. If such approval is not obtained prior to the first anniversary of the
date of adoption of the Plan, the Plan and all awards thereunder shall terminate
on that date.
3.13.2 Unless sooner terminated by the Board, the provisions
of the Plan respecting the grant of incentive stock options shall terminate on
the day before the tenth anniversary of the adoption of the Plan by the Board,
and no incentive stock option awards shall thereafter be made under the Plan.
All awards made under the Plan prior to its termination shall remain in effect
until such awards have been satisfied or terminated in accordance with the terms
and provisions of the Plan and the applicable Plan Agreements.
3.13.3 Nothing herein shall alter, modify, change or otherwise
affect any awards granted pursuant to the 1993 Plan, which shall be governed by
the terms of the 1993 Plan and any applicable agreement
3.14 GOVERNING LAW
All rights and obligations under the Plan shall be construed
and interpreted in accordance with the laws of the State of New York, without
giving effect to principles of conflict of laws.
<PAGE>
GREG MANNING AUCTIONS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD DECEMBER 10, 1997
The undersigned hereby appoints Greg Manning, William T. Tully, Jr. and
Martha Husick, or any of them, each with full power to act alone and with the
power of substitution, as proxies to vote all the shares of Common Stock the
undersigned is entitled to vote on the following proposals and upon such other
matters as may properly come before the Annual Meeting of Shareholders of Greg
Manning Auctions, Inc., (the "Company"), to be held at the Radisson Hotel &
Suites, 690 Route 46 East, Fairfield, New Jersey 07004, on December 10, 1997,
10:00 a.m., Eastern Standard Time, and at any adjournment or postponement
thereof.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF GREG MANNING
AUCTIONS, INC. AND WHEN PROPERLY EXECUTED AND RETURNED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN,
THIS PROXY WILL BE VOTED BY THE PROXIES FOR THE ELECTION OF THE DIRECTOR
NOMINEES LISTED BELOW, FOR THE RATIFICATION OF THE APPOINTMENT OF AMPER,
POLITZINER & MATTIA AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL
YEAR ENDING JUNE 30, 1998, FOR THE APPROVAL OF THE ADOPTION OF THE COMPANY'S
1997 STOCK INCENTIVE PLAN, FOR THE APPROVAL OF THE PLAN TO REPRICE CERTAIN
OPTIONS AWARDED UNDER THE COMPANY'S 1993 STOCK OPTION PLAN, AS AMENDED, AND IN
ACCORDANCE WITH THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE THE AUTHORITY HEREBY GRANTED
IS EXERCISED BY (I) DELIVERING A WRITTEN STATEMENT OF REVOCATION TO GREG MANNING
AUCTIONS, INC., 775 PASSAIC AVENUE, WEST CALDWELL, NEW JERSEY 07006, ATTENTION:
SECRETARY (II) BY SUBMITTING A LATER DATED PROXY OR (III) ATTENDING THE ANNUAL
MEETING AND VOTING IN PERSON.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO SIGN AND RETURN THIS
PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
[Please date and sign on the reverse side]
<PAGE>
The Board of Directors recommends a vote FOR the election of the director
nominees listed below and FOR all the items below, and shares will be so voted
unless you indicate otherwise.
1. Election of Directors, to serve until the 2000 annual meeting of shareholders
of the Company and until their respective successors shall have been duly
elected and qualified.
[ ] FOR the nominees listed at right.
[ ] WITHHOLD AUTHORITY to vote for the nominees listed at right.
Nominees for Directors are:
SCOTT S. ROSENBLUM
ANTHONY L. BONGIOVANNI
2. Ratification of the Appointment of Amper, Politziner & Mattia as the
Company's independent public accountants for the Company's fiscal year ending
June 30, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the adoption of the Company's 1997 Stock Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approval of the Repricing Plan to reprice certain options awarded under the
Company's 1993 Stock Option Plan, as amended.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to consider and act upon such
other matters as may properly come before the meeting or any and all
postponements or adjournments thereof.
Signature_____________________________________
Signature_____________________________________
Dated___________________________________, 1997
NOTE:
Please sign exactly as name appears. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee, broker
or guardian, please give full title and proof of authority as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
