SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
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 240.14a-11(c) or 240.14a-12
RGB Computer & Video, 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 the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a- 6(i)(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 was
determined):
.................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
5) Total fee paid:
.................................................................
[x] 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:
$125.00..........................................................
2) Form, Schedule or Registration Statement No.:
.................................................................
3) Filing Party:
.................................................................
4) Date Filed:
.................................................................
============================================================================
============================================================================
June 25, 1996
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: RGB Computer & Video, Inc., Proxy Materials
Dear Sirs:
The definitive Proxy Statement for RGB Computer &
Video, Inc., is being filed by EDGAR.
Since the requisite fee was paid with the filing of the
preliminary Proxy materials, no fee is due or included with
this filing.
Very truly yours,
Cynthia T. Gilbert
Vice President
============================================================================
============================================================================
******************
* NEW DOCUMENT *
******************
RGB COMPUTER & VIDEO, INC.
18245 S.E. Federal Highway
Tequesta, FL 33469
June 24, 1996
To Our Shareholders:
Dear Shareholders and Friends:
RGB Computer & Video's first six months of 1996, have
been hallmarked by dramatic and exciting changes in overall
corporate focus and direction, and we want to take this time
to bring you up to date.
The Company completed its single most significant event
with the acquisition of SAF T LOK on February 12, 1996. In
SAF T LOK we realized key acquisition objectives of : strong
revenue potential, unique product advantages with formidable
barriers to competition through solid patent protection and
potential for broad product lines as additional applications
and markets are developed.
SAF T LOK is the manufacturer of a patented locking
system, initially for application on handguns. The lock
renders firearms virtually childproof, yet ready for use
with push-button ease. Effectively launched, we believe
significant sales should begin late in the third
quarter/early fourth quarter of this year.
THE FIREARMS PROBLEM
According to a study commissioned by the Johns Hopkins
School of Public Health, firearm-related deaths, whether
accidental, homicides or suicides, jumped 32 percent since
1989. Further, these deaths accounted for 27 percent of all
injury/deaths of children and teenagers.
Our research indicates that more than 2,000 accidental
firearm deaths occur in the US each year. Twenty percent
of those deaths involve children under 15 years of age and
fifty percent of those are caused by guns kept in the home.
Experts further estimate that more than 240,000 handguns are
brought into schools each year.
THE SAF T LOK SOLUTION
We believe that other gun locking systems on the
market, while effective at keeping a firearm disabled, fall
short of being able to immediately reactivate the firearm if
necessary. Shortcomings include keys needed to unlock a
system that can easily be lost, as well as systems that
cannot be deactivated in the dark.
SAF T LOK was designed by Frank Brooks, a firearms
expert and chairman of the Board of Directors. Seven
painstaking years of development, refinement and patent
protection make it what we believe to be the most fail-safe
firearm locking system on the market. Its unique touch
system is based on a three digit combination, easily
recalled and quickly accomplished, even in complete
darkness.
OUR MARKETING EFFORT
During the first quarter, we began initial
introductions at trade shows with modest production and
shipments of the SAF T LOK device. Most of our shipments
were demonstration pieces to dealerships. We have also
submitted the SAF T LOCK device to several gun manufacturers
and law enforcement agencies for testing. We will use the
second quarter and part of the third quarter to ramp up
production.
We received an important endorsement from Nick Navarro,
the former Sheriff of Broward County (Ft. Lauderdale, FL)
and a nationally known spokesman on law enforcement. After
witnessing SAF T LOK's demonstrated ability to render a
weapon inoperable, Mr. Navarro joined the Company as Law
Enforcement Liaison. His high profile and compelling first
hand knowledge of the firearms problem combine to reach a
key audience of professional law enforcement personnel.
Our marketing strategy is directed to gun dealers, gun
manufacturers and law enforcement agencies. We are pursuing
various levels of strategic partnering. Our goal is to have
our products part of the manufacturing process as well as
the retrofit market.
FINANCIAL REVIEW AND OTHER CORPORATE HIGHLIGHTS
As we began the transition into commercializing SAF T
LOK at the end of the first quarter, our revenues through
March 31, 1996, only amounted to $80,648, while the costs
associated with the acquisition and marketing for SAF T LOK
contributed to the net loss of $530,468, or 11 cents a
share. Our current ratio remained strong at more than 11 to
1.0 as we remained virtually debt-free.
We want to thank you, our shareholders, for your
continuing support and look forward to sharing more exciting
corporate updates as they develop.
Sincerely,
Frank W. Brooks Robert L Gilbert
Chairman President
*************************
* END OF NEW DOCUMENT *
*************************
============================================================================
============================================================================
RGB COMPUTER & VIDEO, INC.
18245 S.E. Federal Highway
Tequesta, FL 33469
_____________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 18, 1996
__________________________
TO THE HOLDERS OF COMMON STOCK OF RGB COMPUTER & VIDEO, INC.:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Share
holders of RGB COMPUTER & VIDEO, INC., a Florida corporation (the
"Corporation"), will be held at the Marriott Hotel, 4000 RCA
Boulevard, Palm Beach Gardens, Florida 33410 on Thursday, July
18, 1996 at 9:00 a.m., local time, for the following purposes:
1. To consider and vote upon a proposal to amend the
Corporation's charter by approving Amended and Restated
Articles of Incorporation;
2. To elect a Board of Directors of six (6) members
effective upon filing of the Amended and Restated Ar
ticles of Incorporation;
3. To consider and vote upon a proposal to increase
to 500,000 the number of shares of Common Stock
reserved for issuance pursuant to the Corporation's
1993 Stock Plan;
4. To ratify the selection of Michaelson & Co., P.A.,
independent certified public accountants, to audit the
Corporation's 1996 fin-ancial statements; and
5. To act upon such other matters as may properly
come before the meeting or any postponements or
adjournments thereof.
All shareholders of the Corporation are cordially invited to
attend, although only shareholders of record at the close of busi
ness on June 21, 1996 shall be entitled to notice of and to vote
at the meeting or any postponements or adjournments thereof.
By Order of the Board of Directors
Cynthia T. Gilbert
Secretary
Tequesta, Florida
June 24, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. THIS IS IMPORTANT FOR
THE PURPOSE OF ENSURING A QUORUM AT THE MEETING.
============================================================================
============================================================================
1996 Annual Meeting of Shareholders
of
RGB Computer & Video, Inc.
_____________________________
PROXY STATEMENT
___________________________________
DATE, PLACE AND TIME OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors and management of RGB
Computer & Video, Inc., a Florida corporation (the "Company"), of
proxies for use at the 1996 Annual Meeting of Shareholders (the
"1996 Annual Meeting") to be held at the Marriott Hotel, 4000 RCA
Boulevard, Palm Beach Gardens, Florida 33410 on Thursday, July
18, 1996, at 9:00 a.m., local time, or at any and all postpone
ments or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting.
INFORMATION CONCERNING PROXY
This Proxy Statement, Notice of Annual Meeting and accompanying
proxy card are first being mailed to shareholders on or about
June 24, 1996.
Only shareholders of record at the close of business on June 21,
1996 (the "Record Date") will be entitled to notice of and to
vote the shares of common stock of the Company ("Common Stock")
held by them on such date at the 1996 Annual Meeting or any and
all postponements or adjournments thereof. On June 21, 1996,
5,522,057 shares of Common Stock were outstanding and entitled to
vote at the 1996 Annual Meeting. Each share of Common Stock
entitles the holder thereof to cast one vote on each matter to
be voted upon at the 1996 Annual Meeting.
If the accompanying proxy card is properly signed and returned to
the Company and not revoked, it will be voted in accordance with
the instructions contained therein. Unless contrary instructions
are given, the persons designated as proxy holders in the accom
panying proxy card will vote FOR the Board of Directors' nominees
as directors, and as recommended by the Board of Directors with
regard to all other matters as may properly come before the 1996
Annual Meeting or, if no such recommendation is given, in their
own discretion. Each such proxy granted may be revoked by the
shareholder giving such proxy at any time before it is exercised
by filing with the Secretary of the Company a revoking
instrument or a duly executed proxy bearing a later date. The
powers of the proxy holders will be suspended if the person
executing the proxy attends the 1996 Annual Meeting in person and
so requests. Attendance at the 1996 Annual Meeting will not, in
itself, constitute revocation of the proxy.
The six persons receiving the largest number of votes for
director will be elected. The adoption of the proposal to
approve Amended and Restated Articles of Incorporation requires
the affirmative vote of not less than 75 percent of the votes
entitled to be cast by all shares of Common Stock issued and out
standing on the Record Date.
The cost of soliciting proxies will be borne by the Company. In
addition to the solicitation of proxies by mail, the Company,
through its directors, officers, employees and agents, may also
solicit proxies personally or by telephone. Only independent
third party agents not otherwise affiliated with the Company will
be specifically compensated for such solicitation activities.
The Company will also request persons, firms and corporations
holding shares in their names or in the names of their nominees,
which are beneficially owned by others, to send proxy material to
and obtain proxies from such beneficial owners and will reimburse
such holders for their reasonable expenses in doing so.
The presence at the 1996 Annual Meeting, in person or by proxy,
of a majority of the shares of Common Stock outstanding on June
21, 1996 will constitute a quorum.
CHANGE IN CONTROL
On February 13, 1996 the Company, Saf T Lok Corporation, a
Florida corporation now known as STL Lock, Inc. ("STL"), and
Sphere Enterprises Inc., a Florida corporation ("Sphere"), consum-
mated a tax-free reverse triangular merger (the "Merger"). Under
the terms of the Merger the shareholders of STL exchanged their
shares of STL common stock for shares of the Company's Common
Stock, constituting a 40 percent interest in the Company. STL
became a wholly-owned subsidiary of the Company. Frank W.
Brooks, founder, principal shareholder, chairman of the board of
directors and president of STL, became Chairman of the Board of
the Company. As part of the Merger, Mr. Brooks obtained the
proxy to vote the shares of Robert L. Gilbert III and his wife,
Cynthia T. Gilbert, in director elections through February 2000.
SECURITY OWNERSHIP
The following table sets forth the number of shares and
percentage of the Company's Common Stock beneficially owned as
of June 21, 1996 by (i) owners of more than five percent of the
Common Stock, (ii) each director and officer of the Company, and
(iii) all officers, directors and director nominees of the Com
pany as a group.
<TABLE>
<CAPTION>
Number Percentage
Name and Address of Shares Owned
- ---------------------- ------------------- ----------
<S> <C> <C>
Cynthia T. Gilbert 1,074,600<F3><F4> 19.46%
50 E. Riverside Dr.
Jupiter, FL 33458
Robert L. Gilbert III 1,074,600<F2><F3><F4> 19.46%
50 E. Riverside Dr.
Jupiter, FL 33458
Frank W. Brooks 760,994<F1><F4> 13.78%
7689 S.E. Rivers
Edge St.
Jupiter, FL 33458
William M. Schmidt 219,596<F4> 3.98%
9338C S.E. Randall Ct.
Hobe Sound, FL 33455
Jeffrey W. Brooks 155,400<F4> 2.81%
7689 S.E. Rivers Edge St.
Jupiter, FL 33458
Eugene V. Horanoff 108,508<F4> 1.96%
322 Natchez Ct.
Jupiter, FL 33477
All officers, directors and 42.00%
director nominees as a
group (6 persons)
<FN>
<F1>
Does not include an option to acquire an additional
1,000,000 shares pursuant to an Option Agreement dated
February 13, 1996.
<F2>
Does not include an option to acquire an additional 600,000
shares pursuant to an Option Agreement dated February 13, 1996.
<F3>
Robert L. and Cynthia T. Gilbert hold their shares as
tenants by the entireties. Includes 224,600 shares held by
Mr. and Mrs. Gilbert and Richard M. Taylor, Mrs. Gilbert's
father, as trustees of two trusts for the Gilberts'
children. Does not include 76,948 shares held by family
members, with respect to which the Gilberts disclaim beneficial
ownership. Such family members are over age 21 and do not reside
with the Gilberts.
<F4>
A nominee for director.
</FN>
</TABLE>
Section 16 Compliance. Executive officers, directors and
beneficial owners of more than 10% of the Company's Common Stock
are required to file reports of changes in ownership of the
Company's Common Stock pursuant to Section 16(a) of the
Securities Exchange Act of 1934. Based on a review of copies of
filings received by it and representations of such persons, the
Company believes that all filings required to be made during the
year ended December 31, 1995 were filed in a timely manner.
Proposal Number 1
Amendment of Corporate Charter
On May 31, 1996 the Board of Directors approved a resolution to
amend the Company's charter by adopting Amended and Restated
Articles of Incorporation that would (a) change the name of the
Company to Saf T Lok Incorporated, (b) change the authorized capi
tal of the Company to 20,000,000 shares of common stock, $0.01
par value, (c) eliminate staggered terms for directors, and (d)
eliminate supermajority vote requirements for removal of
directors and amendments to the charter. At the 1996 Annual Meet
ing, the shareholders will be asked to approve the proposed
Amended and Restated Articles of Incorporation, the full text of
which is attached hereto as Exhibit "A".
If the new charter is approved, upon its filing at the Florida
State Department, the name of the Company will become Saf T Lok
Incorporated. Additionally, the Board of Directors will be
empowered, without the necessity of further action or approval of
the Company's shareholders, to issue up to 20,000,000 shares of
Common Stock. Each additional share of Common Stock issued will
have the same rights and privileges as each share of Common Stock
currently issued. The Board of Directors has no present
agreement, arrangement, plan or understanding with respect to the
issuance of any of the additional authorized shares of Common
Stock. The increase in authorized Common Stock will have no
immediate effect on the rights of existing shareholders. To the
extent that the additional authorized shares of Common Stock are
issued in the future, they will decrease the existing
shareholders' percentage equity ownership and, depending on the
price at which they are issued, could be dilutive to the existing
shareholders.
In addition, shareholders will have the right to elect all of the
directors of the Company at each annual meeting. Furthermore,
directors will be subject to removal with or without cause by
shareholders in accordance with Florida law. Lastly, the vote of
a simple majority of shares will suffice for approval of sub
sequent amendments to the Company's charter.
Approval of the proposed Amended and Restated Articles of Incor
poration requires the affirmative vote of not less than 75
percent of the votes entitled to be cast by all shares of Common
Stock issued and outstanding on the Record Date. Without such
approval, the Company's charter will not change.
The Board of Directors unanimously recommends that the
shareholders vote FOR the proposed Amended and Restated Articles
of Incorporation.
Proposal Number 2
Election of Directors
The persons named as proxies intend (unless authority is
withheld) to vote for the election as directors of the persons
hereinafter named (the "Nominees") upon their nomination for such
position at the 1996 Annual Meeting. In accordance with the
proposed Amended and Restated Articles of Incorporation to be
voted upon in accordance with Proposal Number 1, the Board of
Directors shall consist of not less than three nor more than 13
members, with the exact number to be fixed from time to time by
the Board of Directors. On May 31, 1996 the Board of Directors
approved a resolution fixing the number of directors at six (6),
effective upon conclusion of the 1996 Annual Meeting. Directors
so elected will hold office until the next annual meeting of
shareholders or until their successors are elected and qualified
to serve.
The six (6) Nominees for election as directors are Frank W.
Brooks, Robert L. Gilbert III, Cynthia T. Gilbert, Jeffrey W.
Brooks, Eugene V. Horanoff and William M. Schmidt. Directors are
elected by a plurality of the votes cast.
Robert L. Gilbert III and Cynthia T. Gilbert are husband and
wife. Jeffrey W. Brooks is the son of Frank W. Brooks. All of
the Nominees are currently directors of the Company. Mr. and
Mrs. Gilbert were elected as directors in July 1989; no proxies
were solicited in connection therewith. Frank Brooks, Jeffrey
Brooks, Eugene V. Horanoff and William M. Schmidt were elected as
directors by the Board of Directors on February 13, 1996 im
mediately upon consummation of the merger between the Company and
Saf T Lok Corporation (now known as STL Lock, Inc.) ("STL") (the
"STL Acquisition"). Frank Brooks has been the chairman of the
board of STL since he founded that entity in 1989. His election
to the Company's Board of Directors was required by the Agreement
and Plan of Merger dated January 10, 1996 among the Company, its
subsidiary Sphere Enterprises, Inc. and STL (the "STL Merger
Agreement"). See "Interest of Directors in Certain Transactions
of the Company."
If any of the Nominees should become unavailable for election,
all uninstructed proxies will be voted for the election of such
other person or persons as may be designated by the Board of
Directors, but the Board of Directors has no reason to anticipate
that this will occur.
The following information is furnished with respect to each of
the Nominees and is based on information submitted by the person
named:
Frank W. Brooks, the inventor of the Saf T LokTM, STL's initial
product, serves as the Company's Chairman. He formed STL in 1989
and has actively participated in all organizational and financial
aspects of that company. Mr. Brooks is a longtime gun owner and
father of four children, the protection of whom provided the
impetus for the invention of the Saf T LokTM. Mr. Brooks owns
and operates Palm Beach Business Services, Inc. d/b/a Ding-A-Ling
Answering Service in West Palm Beach, Florida, a leading
telephone answering service in the Fort Lauderdale to Orlando
market, with 70 employees.
Robert L. Gilbert, III, the Company's President, Chief Executive
Officer and a director since 1989, founded the Company in July
1989 and is the creator of the AmiLink concept, the initial
product of RGB Video, Inc., a subsidiary of the Company. From in
ception through June 1, 1993, Mr. Gilbert was the President and
Chief Executive Officer of the Company; on June 2, 1993, the Com
pany appointed Mr. Gilbert Chairman of the Company. Mr. Gilbert
was President of RGB Video Creations, Inc., the Company's
predecessor, from its inception in December 1987 until he formed
the Company.
Cynthia T. Gilbert is the wife of Mr. Gilbert. She is the Com
pany's Vice President of Finance, Treasurer and Secretary, and a
director since 1989, and has handled all financial transactions
for the Company since its inception. From December 1987 through
September 1989, she had similar duties with the Company's
predecessor.
William M. Schmidt serves as Vice President and a director of the
Company. He joined STL in September 1995 from Ilco Unican Inc.'s
Simplex Safelock Division in Greensboro, North Carolina where he
was Vice President and General Manager, accountable for two com
mercial lock divisions with sales of $35 million.
Jeffrey W. Brooks, the son of Frank Brooks, serves as a director
of the Company. He joined STL in 1989 at its inception as
Manager of Research & Development. Mr. Brooks has also served as
General Manager of Palm Beach Business Services, Inc. since 1985
and was promoted to President in 1994.
Eugene V. Horanoff serves as a director and Chief Engineer of the
Company. He joined STL in 1989 at the commencement of prototype
development. He was instrumental in designing and engineering
the Saf T LokTM. He spent 28 years with the Naval Surface War
fare Center in Silver Spring, Maryland, retiring in 1982 as a
Senior Aerospace Design Engineer.
INTEREST OF DIRECTORS IN CERTAIN TRANSACTIONS OF THE COMPANY
During 1995, Richard Taylor, Mrs. Gilbert's father, was employed
as General Manager of the Company, Jean Taylor, Mrs. Gilbert's
mother, was employed as Administrative Assistant of the Company,
and Kevin Maranville, Mr. and Mrs. Gilbert's brother-in-law, was
employed as Sales Executive of the Company. With respect to
services performed for the Company in 1995, Mr. Taylor earned
$40,000, Mrs. Taylor earned $20,000 and Mr. Maranville earned
$40,000. See "Executive Compensation" for a description of Mr.
and Mrs. Gilbert's respective compensation packages.
On February 13, 1996 the Company completed the STL Acquisition.
Pursuant to the STL Merger Agreement, Frank W. Brooks, Jeffrey W.
Brooks, Eugene V. Horanoff and William M. Schmidt were elected
directors of the Company. The STL Merger Agreement further
provided that Frank Brooks shall be included as a Nominee for
director at least through the 2000 Annual Meeting of
Shareholders, provided he is willing and able to serve.
The STL Merger Agreement also provides Mr. Brooks certain manage
ment and other rights relating to the composition of the Board of
Directors and the management and the continued separate existence
of STL. Mr. Brooks has an employment agreement with the Company
and STL that provides that he will remain employed by STL until
February 2001 at a certain salary (as adjusted in the ordinary
course) and with certain benefits. Mr. Brooks has a Stock Option
Agreement with the Company pursuant to which he may acquire
1,000,000 shares of the Company's Common Stock at an exercise
price of $2.00 per share through December 31, 1999, subject to
certain vesting conditions.
Mr. Gilbert has a Stock Option Agreement with the Company
pursuant to which he may acquire 600,000 shares of the Company's
Common Stock at an exercise price of $2.00 per share through
December 31, 1999, subject to certain vesting conditions.
The following table sets forth information with respect to the
current directors and executive officers of the Company.
<TABLE>
<CAPTION>
Name Age Position or Office
Held
- ------------------------ ------ --------------------
<S> <C> <S>
Frank W. Brooks 61 Chairman of the
Board, Director
Robert L. Gilbert III. 44 President and Chief
Executive Officer,
Director
Cynthia T. Gilbert 41 Vice President, Treasurer
and Secretary, Director
William M. Schmidt 53 Vice President,
Director
Eugene V. Horanoff 64 Director
Jeffrey W. Brooks 35 Director
</TABLE>
Directors' Compensation; Meetings; Committees
Compensation
The directors do not receive a salary for their services. Each
non-employee director of the Company is reimbursed for out-of-
pocket expenses incurred in attending meetings of the Board of
Directors and its committees. No sums were paid in 1995 to
directors for reimbursement of sums expended for attendance.
Meetings
The Board of Directors of the Company met six times during 1995.
Additionally, the Board of Directors took certain actions by
written consent. No director attended fewer than 75 percent of
the meetings of the Board of Directors held during the period he
served on the Board of Directors.
Committees
The Board of Directors has an Audit Committee and a Compensation
Committee. These committees were formed in August 1995. The
Board of Directors does not have a standing Nominating Committee.
The functions performed by these committees, their number of
meetings and membership are as follows:
Audit Committee
The Audit Committee selects the independent auditors for the
Company (subject to ratification by the shareholders), reviews
the scope and results of the annual audit, approves the services
to be performed by the independent auditors, reviews the in
dependence of the auditors, reviews the performance and fees of
the independent auditors, reviews the adequacy of the system of
internal accounting controls and reviews the scope and results of
internal auditing procedures. The current members of the Audit
Committee are Cynthia T. Gilbert and Jeffrey W. Brooks. In 1995
Mrs. Gilbert served as the sole member of the Audit Committee.
Compensation Committee
The Compensation Committee adopts and oversees the administration
of compensation plans for executive officers and senior manage
ment of the Company, determines awards granted senior management
under such plans, approves remuneration arrangements for senior
management and reviews the reasonableness of all such compensa
tion. It also oversees the administration of the 1993 Stock
Option Plan for eligible employees of the Company and its sub
sidiaries. The current members of the Compensation Committee are
Frank W. Brooks and Robert L. Gilbert III. In 1995 Mr. Gilbert
served as the sole member of the Compensation Committee.
Executive Compensation
The following table and discussion summarize the compensation of
the three most highly compensated executive officers of the Com
pany for the year ended December 31, 1995. No other employee of
the Company earned in excess of $50,000 in 1995.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Compensation
--------------------------------------------- -------------
Name and Principal Other Annual Stock
Position Year Salary Bonus Compensation Options
- ------------------- ---- ------ ----- ------------ -------
<S> <C> <C> <C> <C> <C>
Frank W. Brooks 1995 NA NA NA NA
Chairman of the 1994 NA NA NA NA
Board<F1> 1993 NA NA NA NA
Robert L Gilbert III. 1995 $85,000 $ 0 $8000<F2> 0
President and Chief 1994 85,000 7500 8000<F2> 0
Executive Officer 1993 85,000 18,031 8000<F2> 0
Cynthia T. Gilbert 1995 $60,000 $ 0 $ 0
Vice President, 1994 60,000 7500 0
Secretary and Treasurer 1993 60,000 0 0 0
- ---------------------------------------------------------------------------------------
<FN>
<F1>
Mr. Brooks joined the Company in February 1996.
<F2>
Represents premium paid on life insurance policy.
</FN>
</TABLE>
______________________________________________
No options to acquire shares of the Company's Common Stock were
granted or exercised in 1995.
The Company does not have any longterm incentive or pension or
profitsharing plans.
Employment Agreements
The Company and Frank Brooks entered into an Employment Agreement
on February 13, 1996 pursuant to which Mr. Brooks' position as
Chief Officer of STL was confirmed through February 2001 at an
annual base salary of $100,000. Additionally, the Agreement and
Plan of Merger dated January 10, 1996 between the Company and STL
provided that Mr. Brooks would serve as a director of the Company
through 2002.
The Company and Robert Gilbert entered into an Employment Agree
ment on April 22, 1993 pursuant to which Mr. Gilbert's position
as President of the Company was confirmed. That Agreement has
since been modified, such that Mr. Gilbert has assumed the
presidency of STL and earns an annual base salary of $100,000
through February 2001.
The Company and Cynthia T. Gilbert entered into an Employment
Agreement on April 22, 1993 pursuant to which Mrs. Gilbert's posi
tion as Vice President/ Secretary/Treasurer of the Company was
confirmed. That Agreement has since been modified, such that
Mrs. Gilbert has assumed the roles of Treasurer and Chief Finan
cial Officer of STL and earns an annual base salary of $85,000
through February 2001.
STL and Mr. Schmidt entered into an Employment Agreement in
November 1995, since amended, pursuant to which he serves as Vice
President of STL at an annual salary of $75,000.
Performance Presentation
The following graph compares the cumulative total shareholder
returns on the Company's Common Stock based on the market price
of Common Stock from the date of the Company's initial public
offering in June 1993 and including for the two years ending
December 31, 1995 on an assumed investment of $100 with the
cumulative total return of the Standard & Poor's S&P 500 Stock
Index and Standard & Poor's Specialty Retail Index. Shareholder
return is measured by dividing (a) the sum of (i) the cumulative
amount of dividends declared for the measurement period, and (ii)
the difference between the issuer's share price at the end and at
the beginning of the measurement period by (b) the share price at
the beginning of the measurement period.
<TABLE>
Performance Presentation Table
<CAPTION>
Name of Index or Investment Return
Company in comparison 12/31/93 12/31/94 12/31/95
- ----------------------- -------- -------- --------
<S> <C> <C> <C>
Standard & Poor 500 $110.08 $111.53 $153.44
Standard & Poor
Specialty Retail $99.56 $94.03 $91.50
RGB Computer & Video, Inc.<F1> $42.10 $6.57 $5.92
<FN>
<F1>
RGB IPO was Sept. 93. Investment calculated at that day's price.
</FN>
</TABLE>
Compensation Committee Report
In January 1996, the Compensation Committee of the Board of
Directors furnished the following report on executive
compensation for inclusion in this proxy statement:
To the Shareholders of RGB Computer & Video, Inc.:
In order effectively to serve the interests of the
Company and its shareholders, compensation for the Com
pany's executive officers is designed to incentivize
high levels of individual and Company performance and
to reward such performance. Annual and long term bo
nuses are paid only if financial targets are achieved.
These targets are set by the Committee in advance in
conjunction with its review of the Company's strategic
and operating plans. The Committee grants stock
options as part of executive compensation because it
views stock options as a means of motivating superior
performance and direction by linking the incentives of
executives with those of shareholders. Stock options
produce value for executives only if the Company's
stock price increases over the option price, which is
set at the market price on the date of grant.
Salaries for executive officers were set for 1995 in
employment agreements entered into by Mr. and Mrs.
Gilbert in 1993. The Committee believes these
salaries were appropriate in light of the individual
performance of the executives.
No bonuses were paid in 1995. No stock options were
granted.
The Committee believes that executive compensation in
1995 was appropriate for 1995 but substandard
thereafter in light of the executives' role in ex
ecution of the Company's diversification strategy and
in restructuring the Company's Board of Directors and
senior management team.
ROBERT L. GILBERT III
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation Committee of the Board of
Directors are Frank W. Brooks and Robert L. Gilbert. Each is a
director of the Company. In 1995 the Company employed Mr.
Gilbert as its President and Chief Executive Officer and Cynthia
T. Gilbert, Mr. Gilbert's wife, as Vice President, Secretary and
Treasurer. Because the Compensation Committee in 1995 comprised
only Mr. Gilbert, by necessity he would have had to participate
in any vote (none occurred) respecting his compensation and that
of his wife.
Proposal Number 3
Amendment of 1993 Stock Plan
In February 1996 the Board of Directors adopted, acting on the
recommendation of the Compensation Committee and subject to
approval by the Company's shareholders, a resolution to increase
to 500,000 shares the number of shares of Common Stock that are
reserved for issuance under the Company's 1993 Stock Plan (the
"Plan"). The Plan presently contemplates the issuance of 150,000
shares. The number of shares of Common Stock that may be issued
under the Plan, as it may be increased pursuant to the proposed
amendment, is subject to adjustment in the case of stock splits,
stock dividends, reclassifications or certain other events. The
current text of the Plan, as modified pursuant to this amendment,
is attached hereto as Exhibit "B". The material features of the
Plan are discussed below, but such description is subject to and
is qualified in its entirety by the full text of the Plan, as
amended.
The purpose of the Plan is to advance the interests of the
Company by providing an additional incentive to attract and
retain directors, officers, employees and consultants through
the encouragement of stock ownership in the Company by such
persons. Reflective of this purpose, the Plan provides for each
nonemployee director to receive an automatic grant of a non-
qualified option to purchase 5000 shares of Common Stock each
full year he remains on the Board.
Pursuant to the Plan, options to purchase 150,000 shares of
Common Stock are outstanding. No options granted under the Plan
have been exercised and none have expired. No current director
has been granted any options under the Plan.
Approval of the increase in the number of shares reserved for
issuance under the Plan by the Company's shareholders is one of
the conditions of Rule 16b-3 as promulgated by the Securities and
Exchange Commission, which provides an exemption from the
operation of the "short swing profit" recovery provisions of
Section 16(b) of the Securities Exchange Act of 1934, as amended,
with respect to the acquisition of options and certain trans
actions by directors of the Company.
Assuming approval of the proposed amendment, an aggregate of
500,000 shares of Common Stock (subject to adjustment as
discussed below) will be reserved for issuance under the Plan.
Shares acquired upon exercise of options granted under the Plan
will be authorized and unissued shares of Common Stock. The
Company's shareholders have no preemptive rights to purchase or
subscribe for the shares reserved for issuance under the Plan.
If any option granted under the Plan should expire or terminate
for any reason other than having been exercised in full, the
unpurchased shares subject to that option will again be available
for purposes of the Plan.
Terms and Conditions
The Plan is administered by the Compensation Committee of the
Board. In addition to the two kinds of options described in the
next sentence, the Compensation Committee may authorize stock
awards (discussed below) to directors, officers, employees and
consultants.
The Plan provides for the granting of "incentive stock options"
as defined in Section 422 of the Internal Revenue Code (the
"Code") to officers and employees and for the granting of "non-
qualified stock options" which do not meet the requirements of
Section 422 of the Code to directors, officers, employees and
consultants.
The exercise price of a non-qualified stock option and an
incentive stock option granted pursuant to the Plan is the fair
market value of the Common Stock at the time the option is
granted, except as noted below with respect to incentive stock op
tions. On June 3, 1996 the fair market value was $12.50 based on
the last trade occurring that day on the NASDAQ SmallCap Market.
The exercise price of an option may be paid in cash or by
delivery of already owned shares of Common Stock having a fair
market value equal to the exercise price, or by a combination
thereof.
Each option, except as noted below with respect to incentive
stock options, must be exercised within 10 years of the date
granted. Options become exercisable ("vest") in such
installments, if any, as specified by the Compensation Committee
at the time of grant. Upon termination of active employment by
reason of retirement, vesting stops as of the date of termination
of employment and the optionee has three months from such date to
exercise vested options. Upon termination of employment by
reason of death, the optionee's estate may exercise vested
options for three months after such termination (but not beyond
the original expiration date). Upon termination of employment by
reason of disability, the optionee may exercise vested options
for one year after such termination (but not beyond the original
expiration date).
With respect to incentive stock options, if the aggregate fair
market value (determined as of the date the option is granted) of
the shares for which any optionee may for the first time exercise
incentive stock options in any calendar year exceeds $100,000,
such excess incentive stock options are treated as nonqualified
stock options. In the case of incentive stock options that are
granted to an employee who owns, or is deemed by reason of the
attribution rules under Section 425(d) of the Code to own, more
than 10% of the combined voting power of all classes of the stock
of the Company, the exercise price of such options must be at
least 110% of the fair market value at the time the options are
granted, and such options must be exercised within five years
from the date granted.
The Plan provides that each optionee will enter into an Option
Agreement with the Company containing such terms as the
Compensation Committee may deem advisable.
Federal Income Tax Consequences
Options. The grant of a non-qualified stock option or an
incentive stock option will not result in income for the
participant or in a deduction for the Company.
The exercise of a non-qualified stock option will generally
result in compensation income for the participant and a deduction
for the Company, in each case measured by the difference between
the option price and the fair market value of the shares at the
time of exercise.
The exercise of an incentive stock option will not result in
income to the participant if the participant (a) does not dispose
of the shares within two years after the date of grant or one
year after exercise and (b) is an employee of the Company from
the date of the grant at least until three months before the
exercise or until one year before the exercise in the event of
permanent and total disability. If these requirements are met,
the basis of the shares upon later disposition, in the case of an
exercise for cash, will be the option price. Any gain will be
taxed to the participant as longterm capital gain and the
Company will not be entitled to a deduction. The excess of the
market value of the shares on the exercise date over the option
price is
an item of tax preference, potentially subject to the alternative
minimum tax. If the participant disposes of the shares prior to
the expiration of either of the holding periods in (a) above, the
participant will recognize compensation income and the Company
will be entitled to a deduction equal to the lesser of (i) the
fair market value of the shares on the exercise date minus the
option price, or (ii) the amount realized on the disposition
minus the option price. Any gain in excess of the compensation
income portion will be treated as long-term or short-term capital
gain. If an optionee ceases to be an employee of the Company and
exercises his option after the expiration of the period des
cribed in (b) above, the Option will be deemed a non-qualified
stock option for tax purposes.
Stock Awards. An amount equal to the fair market value of a
stock award on the date of award under the Plan will be taxable
to the participant as ordinary income in the year or years in
which the award is paid or made available to the participant.
The Company is usually entitled to a deduction in the cor
responding amount.
Withholding. When required by applicable law, the Company will
withhold or collect from the participant all amounts required to
satisfy applicable withholding taxes with respect to awards.
Amounts due on the distribution of stock or the exercise of an
option must be paid by the participant. In lieu of cash, the
participant may elect to provide such required amount by reques
ting the Company to withhold from the shares being acquired
shares having a fair market value equal to such amount, or may
deliver to the Company previously acquired shares having such
value.
The discussions set forth above do not purport to be a complete
analysis of all potential tax effects relevant to recipients of
awards or options or to the Company. It is based on federal
income tax law, regulations and rulings as of the date of this
Proxy Statement, which are subject to change at any time.
Amendments; Non-exclusivity
The Board may, in its discretion, amend the Plan at any time.
The Board may, however, make no change that would prevent
incentive stock options granted under the Plan from being
incentive stock options without the consent of the optionees
concerned, and the Board may not make any amendment to the Plan
that (1) changes the class of persons eligible for incentive
stock options, (2) increases the total number of shares for which
options may be granted, or (3) increases the total number of
shares authorized for stock awards, without the approval of the
holders of a majority of the outstanding shares of Common Stock
entitled to vote thereon.
Participation in the Plan is not exclusive and does not prevent
any participant from participating in any other compensation
plan of the Company or from receiving any other compensation from
the Company.
If the shareholders approve this amendment to the Plan, 350,000
additional shares of Common Stock of the Company will be reserved
for issuance under the Plan.
Recommendation and Vote Required
The Board of Directors recommends a vote FOR the following
resolution which will presented at the meeting:
RESOLVED, that Section 4 of the 1993
Stock Plan be, and hereby is, amended to
increase the number of shares of Common Stock
which may be issued thereunder by an
additional 350,000 shares.
The affirmative vote of the holders of a majority of the shares
represented at the 1996 Annual Meeting in person or by proxy is
required for approval of this resolution. As a result, an absten
tion or a broker nonvote will have the same effect as a vote
against the resolution.
Proposal Number 4
Selection of Auditors
The current members of the Audit Committee of the Board of
Directors are Cynthia T. Gilbert and Jeffrey W. Brooks, both of
whom are employed by the Company.
The Audit Committee has selected the firm of Michaelson & Co.,
P.A., independent certified public accountants, as auditors of
the Company for the year ending December 31, 1996, subject to
ratification of such selection by the shareholders of the Com
pany. Michaelson & Co., P.A. has audited the financial state
ments of the Company for the last three years.
The Company has been informed by Michaelson & Co., P.A. that such
firm has no direct financial interest nor any material indirect
financial interest in the Company or any of its subsidiaries.
Michaelson & Co., P.A. has not during the past five years had any
connection with the Company or any of its subsidiaries in the
capacity of promoter, underwriter, voting trustee, director,
officer or employee.
The Board of Directors recommends a vote FOR the following
resolution which will be presented at the meeting:
RESOLVED, that the selection by the Audit
Committee of the Board of Directors of Michaelson
& Co., P.A., independent certified public
accountants, as auditors of the Company for the
year ending December 31, 1996, is hereby ratified,
confirmed and approved.
The affirmative vote of the holders of a majority of the shares
represented at the 1996 Annual Meeting in person or by proxy is
required for approval of this resolution. As a result, an absten
tion or a broker non-vote will have the same effect as a vote
against the resolution.
OTHER MATTERS
The Board of Directors has no knowledge of any other matters
which may come before the 1996 Annual Meeting and does not intend
to present any other matters. However, if any other matters
shall properly come before the 1996 Annual Meeting or any adjourn
ment thereof, the persons soliciting the proxies will have the
discretion to vote on such matters as they see fit.
If you do not plan to attend the 1996 Annual Meeting, in order
that your shares may be represented and in order to assure the
required quorum, please sign, date and return your proxy prompt
ly. In the event you are able to attend the meeting, at your
request the Company will cancel any proxy executed by you.
Representatives of Michaelson & Co., P.A. will be present at the
1996 Annual Meeting to respond to appropriate questions and to
make such statements as they may desire.
Any shareholder of the Company who wishes to present a proposal
to be considered at the 1997 Annual Meeting of Shareholders of
the Company and who wishes to have such proposal presented in the
Company's proxy statement for such meeting must deliver such
proposal in writing to the Company not later than April 1, 1997.
No shareholder proposals were submitted to the Company for
consideration at the 1996 Annual Meeting.
Detailed financial information of the Company and its subsidiary
for the year ended December 31, 1995 is included in the Company's
1995 Annual Report on Form 10-KSB, a copy of which is enclosed
herewith. A copy of the Company's quarterly report on Form 10-
QSB for the quarter ended March 31, 1996 is also enclosed
herewith.
By Order of the Board of Directors
Cynthia T. Gilbert
Secretary
Tequesta, Florida
June 24, 1996
==========================================================================
Appendix A.
RGB COMPUTER & VIDEO, INC.
This Proxy is Solicited on Behalf of the Board of Directors
Annual Meeting of Shareholders -- July 18, 1996
The undersigned appoints each of Frank W. Brooks and Robert L.
Gilbert III, each with the power to appoint his substitute, as
proxies of the undersigned and hereby authorizes them to repre
sent and to vote, as designated below, all the shares of Common
Stock of RGB Computer & Video, Inc. held of record by the under
signed on June 21, 1996 at the Annual Meeting of Shareholders of
RGB Computer & Video, Inc. to be held on July 18, 1996.
1. Proposal to approve Amended and Restated Articles of Incor
poration to (i) increase the number of authorized shares of
Common Stock to 20,000,000 shares, $0.01 par value, (ii)
change the name of the corporation to Saf T Lok Incorpora
ted, (iii) eliminate staggered terms for directors, and (iv)
eliminate supermajority vote requirements for removal of
directors and amendments to the Articles of Incorporation.
FOR ____ AGAINST ____ ABSTAIN ____
2. Election of Directors
FOR all nominees listed WITHHOLD AUTHORITY to vote for
below (except as marked all nominees listed below [ ]
to the contrary below) [ ]
Frank W. Brooks, Robert L. Gilbert III, Cynthia T. Gilbert,
Jeffrey W. Brooks, Eugene V. Horanoff, William M. Schmidt
(INSTRUCTIONS: To withhold authority to vote for any in
dividual nominee, write that nominee's name in the space
provided below.)
_______________________________________
3. Proposal to increase the number of shares reserved for issuance
under the Company's 1993 Stock Plan to 500,000 from 150,000.
FOR ____ AGAINST ____ ABSTAIN ____
4. Proposal to approve the appointment of Michaelson & Co.,
P.A. as independent accountants for the Company.
FOR ____ AGAINST ____ ABSTAIN ____
5. In their discretion, the proxies are authorized to vote on
such other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR DIRECTORS
LISTED ABOVE AND FOR PROPOSALS 1, 3 and 4.
Please sign exactly
as name appears below. When Shares are held by joint tenants,
both should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by the President or other authorized
officer. If a Partnership, please sign in
partnership name by authorized person.
DATED: ___________________________, 1996
________________________________________
Signature
________________________________________
Signature, if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED RETURN ENVELOPE.
============================================================================
============================================================================
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
RGB COMPUTER & VIDEO, INC.
Pursuant to Section 607.1007 of the Florida Business Corporation
Act, RGB Computer & Video, Inc., a Florida corporation (the
"Corporation"), certifies that:
1. The original Articles of Incorporation of the Corporation
were filed with the Florida Department of State on July 10, 1989,
were amended by Articles of Amendment to the Articles of
Incorporation filed on April 26, 1990, were further amended by Arti-
cles of Amendment to the Articles of Incorporation filed on January 8,
1991, were again amended by Amended and Restated Articles
of Incorporation filed on April 13, 1993 and were then amended by
Articles of Amendment to the Amended and Restated Articles of In-
corporation filed on May 17, 1995;
2. In accordance with the provisions of Sections 607.0821 and
607.0701 of the Florida Business Corporation Act, these Amended
and Restated Articles of Incorporation were duly adopted by the
Board of Directors of the Corporation pursuant to a unanimous
written consent dated as of May 31, 1996 and by the holders of
more than 75 percent of the outstanding stock of the Corporation,
the requisite amount under the current Amended and Restated Articles
of Incorporation;
3. The current Amended and Restated Articles of Incorporation
of the Corporation are amended as follows:
a. Article I is amended to change the name of the Corporation
to Saf T Lok Incorporated;
b. Article II is amended to change the principal address
of the Corporation to 18245 S.E. Federal Highway, Tequesta,
Florida 33469;
c. Article III is deleted;
d. Article IV is restated and renumbered as Article III;
e. Article V is amended to change the authorized capital
of the Corporation to 20,000,000 shares of common stock, $0.01
par value, and renumbered as Article IV;
f. Article VI is amended to reflect revised provisions
applicable to directors of the Corporation, and renumbered as
Article V;
g. Article VII is deleted;
h. Article VIII is expanded and divided into new Articles
VI and VII;
i. Article IX is deleted; and
j. Article X is deleted.
4. The foregoing amendments to the current Amended and Restated
Articles of Incorporation were duly adopted by the shareholders
of the Corporation; and
5. There are no discrepancies between the provisions of the
current Amended and Restated Articles of Incorporation, as amended,
and the provisions of these Amended and Restated Articles of
Incorporation other than the inclusion of the foregoing amendments
which were adopted pursuant to Section 607.1003 of the
Florida Business Corporation Act, and the omission of matters of
historical interest.
The text of the current Amended and Restated Articles of Incorporation
of the Corporation is restated with the amendments
described above, effective as of the date of filing hereof with
the Florida Department of State, to read as follows:
ARTICLE I NAME
The name of the Corporation is Saf T Lok Incorporated.
ARTICLE II PRINCIPAL OFFICE AND MAILING ADDRESS
The address of the principal office and mailing address of the
Corporation is 18245 S.E. Federal Highway, Tequesta, Florida
33469.
ARTICLE III PURPOSE
The Corporation is organized for the purpose of transacting any
and all lawful businesses for which corporations may be incorpor-
ated under the Florida Business Corporation Act.
ARTICLE IV CAPITAL STOCK
The total number of shares of capital stock which the Corporation
shall be authorized to have outstanding at any time is 20,000,000
shares of Common Stock with a par value of $0.01 per share, all
of which shares shall be issued fully paid and nonassessable.
ARTICLE V DIRECTORS
The number of directors of the Corporation constituting the en-
tire Board of Directors shall be not less than three (3) nor more
than thirteen (13). The Board of Directors shall determine from
time to time the number of directors who shall constitute the en-
tire Board of Directors. Any such determination made by the
Board of Directors shall continue in effect unless and until
changed by the Board of Directors, but no such changes shall af-
fect the term of any directors then in office.
The term of office of each of the directors shall expire at each
Annual Meeting of Shareholders. The successors to directors
whose terms shall then expire shall be elected to serve from the
time of election and qualification until the next Annual Meeting
of Shareholders following election and until a successor shall
have been duly elected and shall have qualified.
ARTICLE VI LIMITATION OF DIRECTOR LIABILITY
1. No director shall be personally liable for monetary damages
to the Corporation or any other person for any statement, vote,
decision or failure to act, regarding corporate management or
policy, by a director, unless: (a) the director breached or
failed to perform his duties as a director; and (b) the direc-
tor's breach of, or failure to perform, those duties constitutes
(i) a violation of the criminal law, unless the director had rea-
sonable cause to believe his conduct was lawful or had no reason-
able cause to believe his conduct was unlawful, (ii) a transaction
from which the director derived an improper personal bene-
fit, either directly or indirectly, (iii) a circumstance under
which the liability provisions of Section 607.0834 of the Florida
Business Corporation Act are applicable, (iv) in a proceeding by
or in the right of the Corporation to procure a judgment in its
favor or by or in the right of a shareholder, conscious disregard
for the best interest of the Corporation, or willful misconduct,
or (v) in a proceeding by or in the right of someone other than
the Corporation or a shareholder, recklessness or an act or omission
which was committed in bad faith or with malicious purpose
or in a manner exhibiting wanton and willful disregard of human
rights, safety or property.
2. For purposes of this Article VI, the term "recklessness"
means the action, or omission to act, in conscious disregard of a
risk: (a) known, or so obvious that it should have been known, to
the director; and (b) known to the director, or so obvious that
it should have been known, to be so great as to make it highly
probable that harm would follow from such action or omission.
ARTICLE VII INDEMNIFICATION
1. Each person (including here and hereinafter, the heirs,
executors, administrators or estate of such person) (a) who is or
was a director or officer of the Corporation, (b) who is or was
an agent or employee of the Corporation other than an officer and
as to whom the Corporation has agreed to grant such indemnity, or
(c) who is or was serving at the request of the Corporation as
its representative in the position of a director, officer, agent
or employee of another corporation, partnership, joint venture,
trust or other enterprise and as to whom the Corporation has ag-
reed to grant such indemnity, shall be indemnified by the Corpor-
ation as of right to the fullest extent permitted or authorized
by current or future legislation or by current or future judicial
or administrative decision (but, in the case of any such future
legislation or decision, only to the extent that it permits the
Corporation to provide broader indemnification rights than per-
mitted prior to such legislation or decision), against any fine,
liability, cost or expense, including attorneys' fees, asserted
against him or incurred by him in his capacity as such director,
officer, agent, employee or representative, or arising out of his
status as such director, which indemnification shall not be
exclusive of other rights to which those seeking indemnification
may be entitled. The Corporation may maintain insurance, at its
expense, to protect itself and any such person against any such
fine, liability, cost or expense, whether or not the Corporation
would have the legal power directly to indemnify him against such
liability.
2. Costs, charges and expenses (including attorneys' fees) in-
curred by a person referred to in Section 1 of this Article VII
in defending a civil or criminal suit, action or proceeding shall
be paid by the Corporation in advance of the final disposition
thereof upon receipt, in the case of an officer or director, of
an undertaking to repay all amounts so advanced in the event it
shall ultimately be determined that such person is not entitled
to be indemnified by the Corporation as authorized by this Article
VII, and upon satisfaction of such other conditions as are
required by current or future legislation (but with respect to
future legislation, only to the extent that it provides conditions
less burdensome than those previously provided). Such
costs, charges and expenses incurred by other employees and ag-
ents may be so paid upon such terms and conditions, if any, as
the Board of Directors may deem appropriate.
3. If this Article VII or any portion hereof shall be invalida-
ted on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each person des-
cribed in Section 1 of this Article VII to the fullest extent
permitted by any applicable portion and to the fullest extent
permitted by law.
IN WITNESS WHEREOF, the undersigned have made, subscribed and ac-
knowledged these Amended and Restated Articles of Incorporation
this ___ day of July, 1996.
// Robert L. Gilbert III.
___________________________________
Robert L. Gilbert, III, President
// Cynthia T. Gilbert
___________________________________
Cynthia T. Gilbert, Secretary
====================================================================
====================================================================
RGB SALES AND MARKETING, INC.
1993 STOCK PLAN
1. PURPOSE AND ELIGIBILITY. This 1993 Stock Plan (the
"Plan") is intended to advance the interests of RGB Sales
and Marketing, Inc. (The "Company") and its Related
Corporations as defined below by enhancing the ability of
the Company to attract and retain qualified employees,
consultants, officers and directors by creating incentives
and rewards for their contributions to the success of the
Company. This Plan will provide to: (a) officers and other
employees of the Company and its Related Corporations
opportunities to purchase stock in the Company pursuant to
options granted hereunder which qualify as incentive stock
options ("ISOs") under Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code"); (b)
directors, officers, employees and consultants of the
Company and Related Corporations opportunities to purchase
stock in the Company pursuant to options granted hereunder
which do not qualify as ISOs ("Non-Qualified Options");
(c) directors, officers, employees and consultants of the
Company and Related Corporations awards of stock in the
Company ("Awards"); (d) directors, officers, employees and
consultants of the Company and Related Corporations
opportunities to make direct purchases of stock in the
Company ("Purchases"): and (e) directors of the Company and
Related Corporations who are not officers or employees of
the Company or Related Corporations with the opportunities
to purchase stock in the Company pursuant to Options granted
hereunder ("Non-Discretionary Options"). ISOs, Non-
Discretionary Options and Non-Qualified Options are referred
to hereafter as "Options". Options, Awards and
authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights".
For purposes of the Plan, the term "Related
Corporations" shall mean a corporation which is a subsidiary
corporation with respect to the Company within the meaning
of Section 425(f) of the Code.
2. Administration of the Plan.
a. The Plan shall be administered by the board of
directors of the Company (the "Board"). The Board may, in
its discretion, delegate its
EXHIBIT B
powers with respect to the Plan to an employee benefit plan
committee or any other committee (the "Committee"). The
Committee shall consist of not fewer than two members. Each
of the members must be a "disinterested person" as that term
is defined in Rule 16b-3 adopted pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"). A majority of
the members of any such Committee shall constitute a quorum,
and all determinations of the Committee shall be made by the
majority of its members present at a meeting. Any
determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing
signed by all of the Committee members. Subject to
ratification of the grant or authorization of each Stock
Right by the Board (but only if so required by applicable
state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine the
employees of the Company and Related Corporations (from
among the class of employees eligible under Paragraph 3 to
receive ISOs) to whom ISOs may be granted, and to determine
(from among the class of individuals and entities eligible
under Paragraph 3 to receive Non-Qualified Options and
Awards and to make Purchases) to whom Non-Qualified Options,
Awards and authorizations to make Purchase may be granted;
(ii) determine the time or times at which Options or Awards
may be granted or Purchases made; (iii) determine the
exercise price of shares subject to each Option which price
for any ISO shall not be less than the minimum price
specified in Paragraph 7, and the purchase price of shares
subject to each Purchase; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to Paragraph 8) the time or times
when each Option, except for non-discretionary Options,
shall be exercisable, the duration of the exercise period
and when each Option shall vest; (vi) determine whether
restrictions such as repurchase options are to be imposed on
shares subject to Options, Awards and Purchases and the
nature of such restrictions, if any, and (vii) interpret the
Plan and promulgate and rescind rules and regulations
relating to it. The interpretation and construction by the
Committee of any provisions of the Plan or of any Stock
Right granted under it shall be final, binding and
conclusive unless otherwise determined by the Board. The
Committee may from time to time adopt such rules and
regulations for carrying out the Plan as it may deem best.
No members of the Committee or the Board shall be
liable for any action or determination made in good faith
with respect to the Plan or any stock right granted under
it. No member of the Committee or the Board shall
- 2 -
be liable for any act or omission of any other member of the
Committee or the Board or for any act or omission on his own
part, including but not limited to the exercise of any power
and discretion given to him under the Plan, except those
resulting from his own gross negligence or willful
misconduct.
b. The Committee may select one of its members as its
chairman and shall hold meetings at such time and places as
it may determine. All references in this Plan to the
Committee shall mean the Board if no Committee has been
appointed. From time to time, the Board may increase the
size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however
caused, or remove all members of the Committee and
thereafter directly administer the Plan.
c. Stock Rights may be granted to members of the
Board, whether such grants are in their capacity as
directors, officers or consultants, but no discretionary
Stock Rights shall be granted to any person who is, at the
time of the proposed grant, a member of the Board unless
such grant has been approved as provided in paragraph 2d.
All grants of Stock Rights to members of the Board shall in
all other respects be made in accordance with the provisions
of this Plan applicable to other eligible persons. Members
of the Board who are either (i) eligible for Stock Rights
pursuant to the Plan or (ii) have been granted Stock Rights
may vote on any matters affecting the administration of the
Plan or the grant of any Stock Rights pursuant to the Plan,
except that no such member shall act upon the granting to
himself of discretionary Stock Rights but any such member
may be counted in determining the existence of a quorum at
any meeting of the Board during which action is taken with
respect to the granting to him of Stock Rights.
d. Notwithstanding any other provision of Paragraph 2,
any discretionary grants to a person who is a member of the
Board shall be made only by the Board provided, however,
that is a majority of the Board is eligible to participate
in the Plan or in any other stock option or other stock plan
of the Company or any of its Related Corporations, or has
been so eligible at any time within the preceding year, any
grant to directors of Stock Rights must be made by, or only
in accordance with the recommendation of, a Committee
consisting of two or more persons, who shall be directors of
the Company, appointed by the Board but having full
authority to act in the matter, none of whom is eligible to
participate in this Plan or any other stock
- 3 -
option or other stock plan of the Company or any of its
affiliates, or has been eligible at any time within the
preceding year. The requirements imposed by this
subparagraph 2d shall also apply with respect to grants to
officers who are also directors. Once appointed, such
Committee shall continue to serve until otherwise directed
by the Board.
e. In addition to such other rights of indemnification
as he may have as a member of the Board, and with respect to
administration of the Plan and the granting of Options under
it, each member of the Board and of the Committee shall be
entitled without further act on his part to indemnification
from the Company pursuant to Florida law. Section 607.0850
of the Florida Business Corporation Act (the "FBCA"), grants
to a corporation the power to indemnify its officers and
directors for all reasonable expenses incurred by such
individuals in connection with the defense or settlement of
an action. Even if there is a finding of liability the
Court can award indemnification if it finds that the officer
and/or director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. Unless ordered by the
Court, this determination shall be made (1) by the board of
directors by a majority vote of a quorum consisting of
directors who were not parties to such proceeding; (2) if
such quorum is not obtainable, or, even if obtainable, by a
majority vote of a committee duly designated by the board of
directors (in which directors who are parties may
participate) consisting solely of two or more directors not
at the time parties to the proceeding; (3) by independent
legal counsel selected by the board of directors described
in (1) above or the committee described in (2) above or if
a quorum of directors for (1) above cannot be obtained and
the committee in (2) above cannot be designated, selected
by a majority vote of the full board of directors (in which
directors who are parties may participate); or by a majority
vote of the shareholders of a quorum consisting of
shareholders who were not parties to such proceeding, or if
such quorum is not obtainable, by a majority vote of
shareholders who were not parties to such proceeding.
However, if such individual has been adjudged liable to
the corporation, he will not be entitled to indemnification
without court approval. The FBCA also contains provisions
allowing the advancement of expenses under certain
circumstances.
- 4 -
The foregoing right of indemnification shall inure to
the benefit of the heirs, executors or administrators of
each such member of the Board or the Committee and shall be
in addition to all other rights to which such member of the
Board or the Committee would be entitled to as a matter of
law, contract or otherwise. The indemnification provided by
this Section 2e shall only be made after the requirements of
Section 607.0850 of the FBCA has been complied with or as
required by the Company's bylaws as amended except that the
Company may pay for or reimburse reasonable expenses
incurred by a director who is a party to a proceeding in
advance of the final disposition of the proceeding in
accordance with the provisions of Section 607.0805 (6) (7)
of the FBCA.
3. Eligible Employees and Others.
a. ISOs may be granted to any employee of the
Company or any Related Corporation. Those officers and
directors of the Company who are not employees may not be
granted ISOs under the Plan. Subject to compliance with
Rule 16b-3 and other applicable securities laws, Non-
Qualified Options, Awards and authorizations to make
Purchases may be granted to any director (whether or not an
employee), officer, employee or consultant of the Company or
any Related Corporation. The Committee may take into
consideration a recipient's individual circumstances in
determining whether to grant an ISO, a Non-Qualified Option
or an authorization to make a Purchase. Granting of any
Stock Right to any individual or entity shall neither
entitle that individual or entity to, nor disqualify him
from participation in any other grant of Stock Rights.
b. All directors of the Company who are not
employees of the Company or Related Corporations shall
automatically receive grants of 5,000 Non-Qualified Options
(i) at the time this Plan is adopted by the Board; (ii)
upon election or appointment to the Board if not a member of
the Board at the time this Plan is adopted by the Board; and
(iii) upon election to the Board after all Options
previously granted have vested.
(1) The exercise price of the Options shall
be fair market value on the date of grant as defined by
Paragraph 7.
(2) The Options shall vest in equal
increments of 2,500 Options per director on June 1 and
December 1 of each year, provided that
- 5 -
the director is still serving as a director of the Company.
To the extent that any Options which have not been exercised
do not vest, the Options shall lapse and no longer be
exercisable.
c. The Options shall be exercisable for a period of 10
years from the date of grant, except where a shorter period
is required by the Code for certain ISOs.
4. Stock. The stock subject to Options, Awards and
Purchases shall be authorized but unissued shares of Common
Stock or shares of Common Stock reacquired by the Company in
any manner. The aggregate number of shares of Common Stock
which may be issued pursuant to the Plan is 500,000 subject
to adjustment as provided in Paragraph 14. Any such shares
may be issued as ISOs, Non-Qualified Options or Awards, or
to persons or entities making Purchases, so long as the
number of shares so issued does exceed such number, as
adjusted. If any Option granted under the Plan shall expire
or terminate for any reason without having been exercised in
full or shall cease for any reason to be exercisable in
whole or in part, or if the Company shall reacquire any
unvested shares issued pursuant to Awards or Purchases, the
unpurchased shares subject to such Options and any unvested
shares so reacquired by the Company shall again be available
for grants of Stock Rights under the Plan.
5. Granting of Stock Rights. Stock Rights may be
granted under the Plan at any time on and after March 18,
1993, provided however that no ISO shall be granted more
than 10 years after the effective date of this Plan. The
date of grant of a Stock Right under the Plan will be the
date of grant by the Committee unless otherwise specified at
the time it grants the Stock Right; provided, however, that
such date shall not be prior to the date on which the
Committee acts to approve the grant. The Committee shall
have the right, with the consent of the optionee, to convert
an ISO granted under the Plan to a Non-Qualified Option
pursuant to Paragraph 17.
6. Sale of Shares. Any shares of the Company's
Stock granted pursuant to an Award or acquired pursuant to a
Purchase as set forth herein, cannot be sold for at least
six months after acquisition except in case of death or
disability. Nothing in this Paragraph 6 shall be deemed to
reduce the holding period set forth under the applicable
securities laws.
- 6 -
7. ISO Minimum Option Price and Other Limitations.
a. The exercise price per share specified in the
stock option agreement relating to each ISO granted under
the Plan shall not be less than the fair market value per
share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock
which represents more than 10 percent of the total combined
voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than 110
percent of the fair market value per share of Common Stock
on the date of grant and such ISO shall not be exercisable
after the expiration of five years from the date of grant.
b. In no event shall the aggregate fair market
value (determined at the time an ISO is granted) of Common
Stock for which ISOs granted to any employee are exercisable
for the first time by such employee during any calendar year
(under all stock option plans of the Company and any Related
Corporation) exceed $100,000.
c. If, at the time an Option is granted under
the Plan, the Company's Common Stock is publicly traded,
"fair market value" shall be determined as of the last
business day for which the prices or quotes discussed in
this sentence are available prior to the date such Option is
granted and shall mean:
(1) the closing price of the Company's
shares appearing on a national securities exchange if such
shares are listed on such an exchange or if not listed,
appearing on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ')
(2) if the Company's shares are not listed
on NASDAQ, then the average bid and asked price for its
shares as listed on the National Association of Securities
Dealers, Inc.'s Bulletin Board; or
(3) if the Company's shares are not listed
on the National Association of Securities Dealers, Inc.'s
Bulletin Board, then the average bid and asked price for the
Company's shares as listed in the National Quotation
Bureau's "pink sheets"; or
- 7 -
(4) if there are no listed bid and
asked prices published in the pink sheets, then the fair
market value shall be based upon the average closing bid and
asked price as determined following a polling of all dealers
making a market in the Company's shares.
d. Until closing of the Company's initial public
offering or the amendment of the Plan, as the case may be,
no Options shall be granted or Purchases issued at exercise
or purchase prices, respectively, less than the initial
public offering price.
8. Duration of Stock Rights. Subject to earlier
termination as provided in Paragraphs 10 and 11, each Stock
Right shall expire on the date specified in the original
instrument granting such Stock Right, (except with respect
to any part of an ISO that is converted into a Non-Qualified
Option pursuant to Paragraph 17) provided, however, that
such instrument must comply with Section 422 of the Code
with regard to ISOs granted to all employees and Rule 16b-3
of the Exchange Act with regard to all Stock Rights granted
to executive officers, directors and 10% shareholders of the
Company.
9. Exercise of Options. Subject to the provisions
of Paragraphs 3b and 10 through 14, each Option granted
under the Plan shall be exercisable as follows:
a. The Options shall either be fully
exercisable from the date of grant or shall become
exercisable thereafter in such installments as the Committee
may specify.
b. Once an installment becomes exercisable it
shall remain exercisable until expiration or termination of
the Option, unless otherwise specified by the Committee.
c. Each Option or installment, once it becomes
exercisable, may be exercised at any time or from time to
time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable.
d. The Committee shall have the right to
accelerate the date of exercise of any installment of any
Option; provided that the Committee shall not accelerate the
exercise date of any installment of any Option granted to
- 8 -
any employee as an ISO (and not previously converted into a
Non-Qualified Option pursuant to Paragraph 17) if such
acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code as described in
Paragraph 7(b). The date of exercise of all Options shall
accelerate in the event of any of the following: (i) the
Company is to merge or consolidate with or into any other
corporation or entity except a transaction where the Company
is the surviving corporation or a change of domicile merger
or similar transaction exempt from registration under the
Securities Act of 1933 (the "Act"), (ii) the sale of all or
substantially all of the Company's assets, (iii) the sale of
at least 90% of the outstanding Common Stock of the Company
to a third party (subparagraphs (i), (ii) and (iii)
collectively referred to as an "Acquisition"); or (iv) the
Company is dissolved. Upon a minimum of 20 days prior
written notice to the optionees, the exercisability of such
Options shall commence two business days prior to the
earlier of the scheduled closing of an Acquisition or
proposed dissolution or the actual closing of an Acquisition
or proposed dissolution.
e. All Options and stock grants shall be subject
to any vesting requirements imposed by the Committee. In
the event of an Acquisition or dissolution of the Company,
all unvested Options and stock grants shall immediately vest
two business days prior to the earlier of the scheduled
closing of the Acquisition or proposed dissolution or the
actual closing of the Acquisition or proposed dissolution
and a minimum of 20 days notice of such vesting shall be
given to the holders of such Options and unvested shares of
Common Stock.
10. Termination of Employment. Subject to any
greater restrictions or limitations as may be imposed by the
Committee upon the granting of any ISO, if an ISO optionee
ceases to be employed by the Company and all Related
Corporations other than by reason of death or disability as
defined in Paragraph 11, no further installments of his ISOs
shall become exercisable or vest, and his ISOs shall
terminate on the day three months after the day of the
termination of his employment, but in no event later than on
their specified expiration dates, except to the extent that
such ISOs (or unexercised installments thereof) have been
converted into Non-Qualified Options pursuant to Paragraph
17. Employment shall be considered as continuing
uninterrupted during any bona fide lease of absence (such as
those attributable to illness, military obligations or
governmental service) provided that the period of such leave
does not exceed 90 days or, if longer, any period
- 9 -
during which such optionee's right to re-employment is
guaranteed by statute. A leave of absence with the written
approval of the Company's Board shall not be considered an
interruption of employment under the Plan, provided that
such written approval contractrually obligates the Company
or any Related Corporation to continue the employment of the
optionee after the approved period of absence. ISOs granted
under the Plan shall not be affected by any change of
employment within or among the Company and Related
Corporations so long as the optionee continues to be an
employee of the Company or any Related Corporation.
11. Death or Disability. Subject to any greater
restrictions for limitations as may be imposed by the
Committee upon the granting of any ISO:
a. If an ISO optionee ceases to be employed by
the Company and all Related Corporations by reason of his
death, any ISO of his may be exercised to the extent of the
number of shares with respect to which he could have
exercised it on the date of his death, by his estate,
personal representative or beneficiary who has acquired the
ISO by Will or by the laws of descent and distribution, at
any time prior to the earlier of the ISO's specified
expiration date or three months from the date of the
optionee's death.
b. If an ISO optionee ceases to be employed by
the Company and all Related Corporations by reason of his
disability, he shall have the right to exercise any ISO held
by him on the date of termination of employment to the
extent of the number of shares with respect to which he
could on the earlier of the ISO's specified expiration date
or one year from the date of the termination of the
optionee's employment. For the purposes of the Plan, the
term "disability" shall mean "permanent and total
disability" as defined in Section 22(e) (3) of the Code or
successor statute.
12. Assignability. No Option granted to an
executive officer or director of the Company or beneficial
owner of 10% or more of the Company's equity securities
registered pursuant to Section 12 of the Exchange Act and no
ISO shall be assignable or transferable by the grantee
except by Will or by the laws of descent and distribution
and during the lifetime of the grantee each Option shall be
exercisable only by him, his guardian or legal
representative.
- 10 -
13. Terms and Conditions of Options. Options
shall be evidenced by instruments (which need not be
identical) in such forms as the Committee may from time to
time approve. Such instruments shall conform to the terms
and conditions set forth in Paragraphs 7 through 12 hereof
and may contain such other provisions as the Committee deems
advisable which are not inconsistent with the Plan,
including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. In granting any Non-
Qualified Option, the Committee may specify that such Non-
Qualified Option shall be subject to the restrictions set
forth herein with respect to ISOs, or to such other
termination and cancellation provisions as the Committee may
determine. The Committee may from time to time confer
authority and responsibility on one or more of its own
members and/or one or more officers of the Company to
execute and deliver such instruments. The proper officers
of the Company are authorized and directed to take any and
all action necessary or advisable from time to time to carry
out the terms of such instruments.
14. Adjustments. Upon the occurrence of any of
the following events, an optionee's rights with respect to
Options granted to him hereunder shall be adjusted as
hereinafter provided unless otherwise specifically provided
in the written agreement between the optionee and the
Company relating to such Option:
a. If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of
shares or if the Company shall issue any shares of Common
Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the
exercise of Options shall be appropriately increased or
decreased proportionately, and appropriate adjustments shall
be made in the purchase price per share to reflect such
subdivision, combination or stock dividend.
b. If the Company is to be consolidated with or
acquired by another entity pursuant to an Acquisition, the
Committee or the board of directors of any entity assuming
the obligations of the Company hereunder (the "Successor
Board") shall, as to outstanding Options not exercised
pursuant to Paragraph 9, either (I) make appropriate
provision for the continuation of such Options by
substituting on an equitable basis for the shares then
subject to such Options the consideration payable with
respect to the outstanding shares of Common Stock in
connection with the Acquisition;
- 11 -
or (ii) terminate all Options in exchange for a cash payment
equal to the excess of the fair market value of the shares
subject to such Options over the exercise price thereof.
c. In the event of a recapitalization or
reorganization of the Company (other than a transaction
described in subparagraph b above) pursuant to which
securities of the Company or of another corporation are
issued with respect to the outstanding shares of Common
Stock, an optionee upon exercising an Option shall be
entitled to receive for the purchase price paid upon such
exercise the securities he would have received if he had
exercised his Option prior to such recapitalization or
reorganization.
d. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs a, b or c with
respect to ISOs shall be made only after the Committee,
after consulting with counsel for the Company, determines
whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 425(h) of
the Code) or would cause any adverse tax consequences for
the holders of such ISOs. If the Committee determines that
such adjustments made with respect to ISOs would constitute
a modification of such ISOs may refrain from making such
adjustments.
e. Except as expressly provided herein, no
issuance by the Company of shares of Common Stock of any
class or securities convertible into shares of Common Stock
of any class shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price
of shares subject to Options. No adjustments shall be made
for dividends or other distributions paid in cash or in
property other than securities of the Company.
f. No fractional share shall be issued under
the Plan and the optionee shall receive from the Company
cash in lieu of such fractional shares.
g. Upon the happening of any of the foregoing
events described in subparagraphs a, b or c above, the class
and aggregate number of shares set forth in Paragraph 14
hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan
shall also be appropriately adjusted to reflect
- 12 -
the events described in such subparagraphs. The Committee
or the Successor Board shall determine the specific
adjustments to be made under this Paragraph 14 and, subject
to Paragraph 2, its determination shall be conclusive. If
any person or entity owning restricted Common Stock obtained
by exercise of a Stock Right made hereunder receives shares
or securities or cash in connection with a corporate
transaction described in subparagraphs a, b or c above as a
result of owning such restricted Common Stock, such shares
or securities or cash shall be subject to all of the
conditions and restrictions applicable to the restricted
Common Stock with respect to which such shares or securities
or cash were issued, unless otherwise determined by the
Committee or the Successor Board.
15. Means of Exercising Stock Rights.
a. A Stock Right (or any part or installment
thereof) shall be exercised by giving written notice to the
Company at its principal office address. Such notice shall
identify the Stock Right being exercised and specify the
number of shares as to which such Stock Right is being
exercised, accompanied by full payment of the purchase or
exercise price therefor either (i) in United States dollars
in cash or by check; (ii) at the discretion of the
Committee, through delivery of shares of Common Stock having
a fair market value equal as of the date of the exercise to
the cash exercise price of the Stock Right; (iii) at the
discretion of the Committee, by delivery of the grantee's
personal recourse note bearing interest payable not less
than annually at no less than 100% of the lowest applicable
federal rate, as defined in Section 1274(d) of the Code, or
(iv) at the discretion of the Committee, by any combination
of (i), (ii) and (iii) above. If the Committee exercises
its discretion to permit payment of the exercise price of an
ISO by means of the methods set forth in clauses (ii), (iii)
or (iv) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in
question. The holder of a Stock Right shall not have the
rights of a shareholder with respect to the shares covered
by his Stock Right until the date of issuance of a stock
certificate to him for such shares. Except as expressly
provided above in Paragraph 14 with respect to changes in
capitalization and stock dividends, no adjustment shall be
made for dividends or similar rights for which the record
date is before the date such stock certificate is iussued.
- 13 -
b. Each notice of exercise shall, unless the
Option shares are covered by a then current registration
statement under the Act, contain the
optionee's acknowledgment in form and substance satisfactory
to the Company that (i) such Option shares are being
purchased for investment and not for distribution or resale
(other than a distribution or resale which, in the opinion
of counsel satisfactory to the Company, may be made without
violating the registration provisions of the Act), (ii) the
Optionee has been advised and understands that (1) the
Option shares have not been registered under the Act and are
"restricted securities" within the meaning of Rule 144 under
the Act and are subject to restrictions on transfer and (2)
the Company is under no obligation to register the Option
shares under the Act or to take any action which would make
available to the Optionee any exemption from such
registration, and (iii) such Option shares may not be
transferred without compliance with all applicable federal
and state securities laws. Notwithstanding the above,
should the Company be advised by counsel that issuance of
shares should be delayed pending registration under federal
or state securities laws or the receipt of an opinion that
an appropriate exemption therefrom is available, the Company
may defer exercise of any Option granted hereunder until
either such event has occurred.
16. Term and Amendment of Plan. This Plan was
adopted by the Board on March 22, 1993, and if not approved
by the holders of at least a majority of all shares present
in person and by proxy and entitled to vote therein at a
meeting of the shareholders of the Company within 12 months
from the date of the Plan's adoption by the Board, no ISOs
may be granted pursuant to the Plan. Nor shall the Plan in
such event conform to Rule 16b-3 promulgated under the
Securities Exchange Act of 1934. This Plan shall have no
expiration date, provided however that no ISOs shall be
granted more than 10 years after the Plan's effective date.
The Board may terminate or amend the Plan in any respect at
any time. However, if approved by the shareholders on or
before March 18, 1994, approval of the shareholders must be
obtained within 12 months before or after the Board adopts a
resolution authorizing any of the following actions: (a)
increase of the total number of shares that may be issued
under the Plan (except by adjustment pursuant to Paragraph
14); (b) modification of the provisions of Paragraph 3
regarding eligibility for grants of ISOs; and (c) any
other act requiring shareholder approval under Rule 16b-3
(or successor rule) promulgated under the Exchange Act.
Except as provided herein or as specified in the original
instrument granting such Stock Right, no action of the Board
or shareholders
- 14 -
may alter or impair the rights of a grantee, without his
consent, under any Stock Right previously granted to him.
17. Conversion of ISOs into non-Qualified Options;
Termination of ISOs. The Committee, at the written
request of any optionee, may in its discretion take such
actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof)
that have not been exercised on the date of conversion into
Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the optionee is an employee
of the Company or a Related Corporation at the time of such
conversion. Such actions may include, but not be limited
to, extending the exercise period or reducing the exercise
price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent
of the optionee) may impose such conditions on the exercise
of the resulting Non-Qualified Options as the Committee in
its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have
such optionee's ISOs converted into Non-Qualified Options,
and no such conversion shall occur until and unless the
Committee takes appropriate action. The Committee, with the
consent of the optionee, may also terminate any portion of
any ISO that has not been exercised at the time of such
termination.
18. Application of Funds. The proceeds received by
the Company from the sale of shares pursuant to Options
granted and Purchases authorized under the Plan shall be
used for general corporate purposes.
19. Governmental regulations. The Company's
obligation to sell and deliver shares of the Common Stock
under this Plan is subject to the approval of any
governmental authority required in connection with the
authorization, issuance or sale of such shares.
20. Withholding of Additional Income Taxes. Upon
the exercise of a Non-Qualified Option, the granting or
vesting of an Award, the purchase of common stock for less
than its fair market value, the making of a Disqualifying
Disposition (as defined in Paragraph 21) the Company, in
accordance with Section 3402(a) of the Code may require the
optionee, award recipient or purchaser to pay additional
withholding taxes in respect of
- 15 -
the amount that is considered compensation includable in
such person's gross income. The Committee in its discretion
may condition (i) the exercise of an Option; (ii) the
granting or vesting of an award; or (iii) the making of a
purchase of Common Stock for less than its fair market value
on the payment of such withholding taxes.
To the extent that the Company is required to withhold
taxes for federal income tax purposes in connection with the
exercise of any Option, the optionee shall have the right to
elect to satisfy such withholding requirement by (i) paying
the amount of the required withholding tax to the Company;
(ii) delivering to the Company shares of its Common Stock
previously owned by the optionee; or (iii) having the
Company retain a portion of the shares covered by the Option
exercise. The number of shares to be delivered to or
withheld by the Company times the fair market value of such
shares shall equal the cash required to be withheld. To the
extent that the Participant elects to either deliver or have
withheld shares of the Company's Common Stock, the Board, or
the Committee, may require him to make such election only
during certain period of time as may be necessary to comply
with appropriate exemptive procedures regarding the "short-
swing" profit provisions of Section 16(b) of the Exchange
Act or to meet certain Code requirements.
21. Notice to Company of Disqualifying Disposition.
Each employee who receives an ISO must agree to notify the
Company in writing immediately after the employee makes a
Disqualifying Disposition of any Common Stock acquired
pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such
Common Stock before the later of (i) two years after the
date of employee was granted the ISO or (ii) one year after
the date the employee acquired Common Stock by exercising
the ISO. If the employee has died before such stock is
sold, these holding period requirements do not apply and no
Disqualifying Disposition can occur thereafter.
22. Continued Employment. The grant of an Option
pursuant to the Plan shall not be construed to imply or to
constitute evidence of any agreement, express implied, on
the part of the Company or any Related Corporation to retain
the optionee in the employ of the Company or a Related
- 16 -
Corporation, as a member of the Company's board of directors
or in any other capacity, whichever the case may be.
23. Bonuses or Loans to Exercise Options. If
requested by any person to whom a grant of a Stock Right has
been made, the Company or any Related Corporation may loan
such person or guarantee a bank loan to such person for the
purpose of paying for the shares of the Common Stock. If
requested by any person to whom a grant of a Stock Right has
been made, the Company or any Related Corporation may loan
such person, guarantee a bank loan to such person, or pay
such person additional compensation equal to the amount of
money necessary to pay the federal income taxes incurred as
a result of the grant of the Stock Rights or the exercise of
any options, assuming that such person is in the maximum
federal income tax bracket six months from the time of grant
or exercise and assuming that such person has no deductions
which would reduce the amount of such tax owed. The tax
loan shall be made or tax offset bonus paid on or after
April 15th of the year following the year in which the
amount of tax is determined, and any loan shall be made on
such terms as the Company or lending bank determines.
24. Governing Law; Construction. The
valididty and construction of the Plan and the instruments
evidencing Stock Rights shall be governed by the laws of the
State of Florida. In construing this Plan, the singular
shall include the plural and the masculine gender shall
include the feminine and neuter, unless the context
otherwise requires.
- 17 -
====================================================================
====================================================================
====================================================================