- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than 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 ss.240.14a-11(c) or ss.240.14a-12
---------------------------
USCI, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
---------------------------
Payment of Filing Fee (Check the Appropriate Box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 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:
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
---------------------------
Copies of all communications to:
LEONARD R. GLASS, ESQ.
Cole, Schotz, Meisel, Forman & Leonard, P.A.
25 Main Street, Post Office Box 800
Hackensack, New Jersey 07602-0800
(201) 489-3000
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<PAGE>
USCI, INC.
6140-C Northbelt Parkway
Norcross, Georgia 30071
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of USCI, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of USCI, Inc.
(the "Company") will be held at Hotel Nikko, 3300 Peachtree Road, Atlanta,
Georgia 30305 on Wednesday, July 10, 1996 at 9:00 a.m., local time, for the
following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
1. To elect as directors the five (5) persons listed in the accompanying
Proxy Statement;
2. To approve an amendment to the Company's Amended and Restated 1992 Stock
Option Plan to increase by 250,000 the number of shares of Common Stock
that may be issued pursuant to that plan;
3. To ratify the appointment of Arthur Andersen LLP as the independent
accountants of the Company for the fiscal year ending December 31, 1996;
and
4. To consider and transact any other business that may lawfully come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on June 17, 1996
as the record date for the determination of stockholders entitled to vote at the
Meeting and to receive notice thereof. Accordingly, only stockholders of record
on such date will be entitled to vote at the meeting. The stock transfer books
of the Company will not be closed.
Please sign the enclosed proxy and return it in the enclosed envelope.
June 20, 1996 By Order of the Board of Directors
Mailed at Norcross, Georgia
Bruce A. Hahn, Chairman
IMPORTANT
STOCKHOLDERS ARE REQUESTED TO DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY SO
THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT
THE PRESENCE OF A QUORUM MAY BE ASSURED, A POSTAGE-PAID ENVELOPE IS PROVIDED FOR
MAILING IN THE UNITED STATES. YOU ARE ENTITLED TO REVOKE YOUR PROXY AT ANY TIME
BEFORE IT IS EXERCISED BY WRITTEN NOTICE TO THE COMPANY. ALSO, IF YOU ATTEND THE
MEETING AND VOTE IN PERSON, THE PROXY WILL NOT BE USED.
<PAGE>
PROXY STATEMENT
1996 ANNUAL MEETING OF STOCKHOLDERS OF
USCI, INC.
TO BE HELD JULY 10, 1996
Approximate Date of Mailing to Stockholders:
June 20, 1996
TIME AND PLACE OF MEETING
This Proxy Statement is furnished to stockholders by the Board of
Directors of USCI, Inc., a Delaware corporation (the "Company"), for
solicitation of Proxies for use at the 1996 Annual Meeting of Stockholders to be
held on July 10, 1996 at 9:00 a.m., and at all adjournments thereof, for the
purposes set forth in the attached Notice of Annual Meeting.
The Company's principal executive offices are located at 6140-C
Northbelt Parkway, Norcross, Georgia 30071 (770-840-8888).
Proxies in the form enclosed are solicited on behalf of the Board of
Directors. Any stockholder giving a proxy in such form has the power to revoke
it at any time before it is exercised by filing a later proxy with the Company,
by attending the meeting and voting in person, or by notifying the Company of
the revocation in writing to its Secretary at 6140-C Northbelt Parkway,
Norcross, Georgia 30071. Any such proxy, if received in time for voting and not
revoked, will be voted at the meeting in accordance with the directions of the
stockholder. Any proxy which fails to specify a choice with respect to the
matters to be acted upon will be voted for the proposals.
VOTING RIGHTS AND VOTE REQUIRED
As of June 17, 1996 (the "Record Date"), the Company had outstanding
and entitled to vote 10,186,264 shares of Common Stock (the "Common Stock").
There is no other class of Common Stock of the Company outstanding. Only
stockholders of record at the close of business on the Record Date are entitled
to vote at the Annual Meeting. Each outstanding share entitles the record holder
to one (1) vote on the matters to be voted upon at the meeting. The stock
transfer books will not be closed for the purposes of such vote.
The holders of a majority of interest of all Common Stock issued,
outstanding and entitled to vote at a stockholders' meeting, present in person
or by proxy, constitute a quorum pursuant to the Company's By-Laws. In the
absence of a quorum, the Annual Meeting may be postponed from time to time until
stockholders holding the requisite amount are present or represented by proxy.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as of May 31, 1996
with respect to the Common Stock beneficially owned by each Director and Nominee
for Director, by all of the Directors and Executive Officers of the Company as a
group, and by each person known by the management of the Company to own
beneficially more than five (5%) percent of the outstanding shares of the Common
Stock.
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address of Beneficial Owner Beneficially Owned (1) of Class
- --------------------------------------------------- ----------------------------- ------------------------
<S> <C> <C>
Bruce A. Hahn 1,144,784 (2) 11.20%
6140-C Northbelt Parkway
Norcross, Georgia 30071
Edgar Puthuff 146,256 (3) 1.43%
Jerome S. Baron 63,385 (4) *
Lawrence Burstein 372,350 (5) 3.61%
Salvatore T. DiMascio 2,000 *
All directors and executive officers as a 1,921,014 (6) 18.34%
group (six persons)
<FN>
- ---------------
* Less than 1%.
(1) As used herein, beneficial ownership means the sole or shared power to
vote, or direct the voting of, a security, or the sole or shared power to
invest or dispose, or direct the investment or disposition, of a security.
Except as otherwise indicated, based on information furnished by the
beneficial owners of the Common Stock listed above, the Company believes
that each such person has sole voting power and investment power with
respect to his shares of the Company's Common Stock, except to the extent
that authority is shared by spouses under applicable law.
(2) Includes 39,479 shares issuable upon the exercise of currently exercisable
options at $3.80 per share and 54,500 shares held by members of Mr. Hahn's
immediate family.
(3) Includes 39,479 shares issuable upon the exercise of currently exercisable
options, at $4.43 per share; also includes 54,138 shares held by the
Puthuff Littleton & Smith, Inc. Pension and Profit Sharing Plan, of which
Mr. Puthuff is the trustee.
(4) Includes 39,479 shares issuable upon the exercise of currently exercisable
options, at $4.43 per share.
(5) Includes 8,667 shares of the Company's Common Stock owned by Trinity
Capital Corp. over which shares Mr. Burstein has shared voting and
investment power; 8,334 shares owned by members of Mr. Burstein's family;
and 100,000 shares issuable upon the exercise of currently exercisable
warrants at $5.50 (50,000 shares) and $6.00 (50,000 shares) per share and
39,479 shares issuable upon the exercise of currently exercisable options,
at $5.75 per share.
(6) Includes 383,555 shares including those issuable upon the exercise of the
options and warrants described in footnotes (2) through (5) above, and
59,739 shares issuable upon other currently exercisable options held by
executive officers at $3.80 (19,739 shares) and $7.25 (10,000 shares) per
share.
</FN>
</TABLE>
PROPOSAL 1:
ELECTION OF DIRECTORS
Unless the authority to do so is withheld, the enclosed Proxy will be
voted for the election of the Nominees named below to hold office until the next
Annual Meeting of the Stockholders and until their successors shall be duly
elected and qualified. In the event any of the Nominees should be unwilling or
unable to serve as a Director, the Proxy will be voted for such substitute
Nominee as the Board of Directors may designate or in the absence of such
designation in accordance with the best judgment of the person or persons acting
under the Proxy. Management is not aware of any Nominee who is unable or will
decline to serve as a Director.
2
<PAGE>
The following table sets forth the name and age of each Nominee, the
period during which he has served as Director and the other capacities in which
he currently serves the Company:
<TABLE>
<CAPTION>
Period
Served as Other Capacities in which
Name Age Director Currently Serving
- ------------------------------------------- ---------------- --------------------- -----------------------------
<S> <C> <C> <C>
Bruce A. Hahn (1) 46 Since May 1995 Chairman, President and
Chief Executive Officer
Edgar Puthuff (2) 60 Since May 1995 None
Jerome S. Baron (2)(3) 69 Since May 1995 None
Lawrence Burstein (1)(3) 53 Since None
September 1992
Salvatore T. DiMascio 56 Nominee None
<FN>
- --------------------
(1) Current member of the Stock Option Committee.
(2) Current member of the Compensation Committee.
(3) Current member of the Audit Committee.
</FN>
</TABLE>
Bruce A. Hahn has been a director of U.S. Communications, Inc. since
its inception in January 1991, its Chairman since November 1991 and Chief
Executive Officer since December 1992. He has held the same positions with the
Company since the completion of the merger (the "Merger") with Trinity Six Inc.
("Trinity"). From June 1985 to February 1992, Mr. Hahn was the Chief Executive
Officer, Chairman of the Board, and, from June 1985 to October 1989, and July
1990 to February 1992, President of International Consumer Brands, Inc., a
company engaged in the manufacture and sale of consumer products. International
Consumer Brands filed a petition for reorganization under Chapter 11 of the
federal bankruptcy laws in April 1992. From April 1984 to June 1985, Mr. Hahn
was Executive Vice President and General Manager of Cosmo Communications Corp.,
a manufacturer of consumer communications and electronics products. From April
1980 to March 1984, Mr. Hahn was employed by Conair Corporation, a leading
manufacturer of personal care appliances and residential telephone products,
first as new products marketing manager and subsequently as Vice President and
General Manager, Conair Appliance and Electronics Division.
Edgar Puthuff has been a director of U.S. Communications, Inc. since
June 1992 and a director of the Company since completion of the Merger with
Trinity. Mr. Puthuff has been Chairman of Puthuff Littleton & Smith, Inc.
(formerly Miller Puthuff Associates, Inc.), a sales/marketing representative for
major accounts such as Kmart Corporation, for more than 20 years. Mr. Puthuff is
also currently a director of General Energy Corp., and served briefly as
director of International Consumer Brands, Inc.
Jerome S. Baron has been a director of U.S. Communications, Inc. since
December 1993 and a director of the Company since completion of the Merger with
Trinity. Mr. Baron is President of Brean Murray, Foster Securities, Inc., a New
York Stock Exchange member firm. Mr. Baron is also a director of CAS Medical
Systems, Inc., a public company engaged in the manufacture and marketing of
blood pressure monitors and other medical products principally for the neonatal
care market.
3
<PAGE>
Lawrence Burstein has been a director of U.S. Communications, Inc.
since December 1993, President, Treasurer and a director of Trinity from its
inception in September 1992 until May 1995 and a director of the Company since
completion of the Merger with Trinity. Since March 1996, Mr. Burstein has been
President and a principal shareholder of Unity Venture Capital Associates Ltd.,
and since October 1982, Mr. Burstein has been Chairman of the Board and a
principal shareholder of Trinity Capital Corp., each of which is engaged
principally in making investments in privately-held companies. Mr. Burstein is a
director of four other public companies, being, respectively, CAS Medical
Systems, Inc., engaged in the manufacture and marketing of blood pressure
monitors and other medical products principally for the neonatal market, The MNI
Group Inc., engaged in the marketing of specially formulated medical foods,
ToHQ, Inc., a Nintendo game and children's toy company, and Brazil Fast Food
Corp., an operator of fast food restaurants in Brazil. Mr. Burstein received an
LL.B. from Columbia Law School.
Salvatore T. DiMascio is a nominee for Director. Since June 1994, Mr.
DiMascio has been been Executive Vice President and Chief Financial Officer of
Anchor Gaming, a publicly held diversified gaming company. Prior to joining
Anchor Gaming, Mr. DiMascio served as President of DiMascio Venture Management,
Inc., a management and investment firm, for over eight years. From 1978 to 1986
Mr. DiMascio was Senior Vice President and Chief Financial Officer of Conair
Corporation. Mr. DiMascio is a certified public accountant.
During the fiscal year ended December 31, 1995, the Board of Directors
held five meetings. Each Director participated in all five meetings.
Simultaneously with the completion of the Merger with Trinity in May
1995, the Company's directors and executive officers and certain other
stockholders entered into a voting agreement (the "Voting Agreement") which
provides that, for a three-year period, each of the parties will use all
reasonable efforts to cause management of the Company to nominate as directors
of the Company one designee of the parties who were previously affiliates of
Trinity and up to six designees of the other parties to the Voting Agreement and
to vote their shares in favor of the election as directors of such designated
nominees.
Prior to the Merger, Trinity's directors were Lawrence Burstein, Barry
Goldin, John Cattier and Barry Ridings. Bruce Hahn, Lawrence Burstein, Edgar
Puthuff and Jerome Baron comprised the Board of Directors of U.S.
Communications. As a result of the Merger and pursuant to the Voting Agreement,
Messrs. Goldin, Cattier and Ridings resigned as directors of the Company and the
directors of U.S. Communications were elected directors of the Company.
There are no arrangements known to the Company the operation of which
may at a subsequent date result in a change in control of the Company.
Committees of the Board
Stock Option Committee. The Board of Directors has a Stock Option
Committee, consisting of Messrs. Hahn and Burstein, which administers the
Company's Amended and Restated 1992 Stock Option Plan. The Stock Option
Committee took action on three occasions during the fiscal year ended December
31, 1995.
Compensation Committee. The Compensation Committee of the Board of
Directors consists of Messrs. Baron and Puthuff and acts upon the compensation
of such persons as are determined by the Board of Directors. During the fiscal
year ended December 31, 1995, the General Compensation Committee held two
meetings.
Audit Committee. The Audit Committee is comprised of Messrs. Burstein
and Baron. During the fiscal year ended December 31, 1995, the Audit Committee
held three meetings.
4
<PAGE>
The Board of Directors does not have a nominating committee.
All members of the committees of the Board of Directors attended all of
their respective committee meetings.
Executive Officers
The following table sets forth the name and age of each executive
officer of the Company and the office and period during which he has held such
office.
<TABLE>
<CAPTION>
Period
Served as
Name Age Office Officer
- ------------------------------------ ------- ------------------------------------------ -----------------
<S> <C> <C> <C>
Bruce A. Hahn 46 Chairman, President and Chief Since
Executive Officer May 1995
Robert J. Kostrinsky 37 Executive Vice President; Since
Secretary-Treasurer; Chief Financial May 1995
Officer
Mark Rapoport 39 Vice President - Finance; Principal Since
Accounting Officer April 1996
</TABLE>
Currently, there is no fixed term of office for any executive officer.
Each person selected to become an executive officer has consented to act as such
and there are no arrangements or understandings between the executive officers
or any other persons pursuant to which he or she was or is to be selected as an
officer.
Robert J. Kostrinsky has been Secretary-Treasurer of U.S.
Communications, Inc. since November 1991 and Executive Vice President since
November 1994. He has held the same positions with the Company since completion
of the Merger with Trinity and became Chief Financial Officer in April 1996.
From April 1987 to July 1992, Mr. Kostrinsky was Secretary-Treasurer of
International Consumer Brands, Inc., which filed a petition for reorganization
under Chapter 11 of the Federal Bankruptcy Laws in April 1992. Mr. Kostrinsky, a
certified public accountant, was employed from 1981 to April 1987 by the
accounting firm of Grant Thornton. At the time he joined International Consumer
Brands, Inc., he was an audit manager for Grant Thornton.
Mark Rapoport joined the Company as Vice President of Finance and
Principal Accounting Officer in April 1996. From 1994 to March 1996, Mr.
Rapoport was Director of Finance for Dial Call, Inc., an Atlanta, Georgia based
wireless communications company. From 1987 to 1984, Mr. Rapoport was the
Controller and Chief Financial Officer for two subsidiaries of BellSouth
Corporation, also in Atlanta. Mr. Rapoport is a certified public accountant and
holds a Masters of Business Administration degree in finance and accounting.
For a description of the business background of Mr. Hahn see the text
immediately following the table on page 3 of this Proxy Statement.
Executive Compensation
The following summary compensation table sets forth information
concerning compensation for services in all capacities awarded to, earned by or
paid to the two individuals who served as the Chief Executive Officer of the
Company ("named executive officers") during the fiscal year ended December 31,
1995.
5
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------
Annual Compensation Awards Payouts
--------------------------------------- --------------------- ---------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Other Under-
Annual Restricted lying
Compen- Stock Options/ LTIP All Other
Name and Salary Bonus sation Award(s) SARs Payouts Compen-
Principal Position Year ($) ($) ($) ($) (#) ($) sation
- ----------------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Bruce A. Hahn(1), 1995 158,000 - 18,000 118,437
Chairman, 1994 101,500 16,500 -
President, 1993 52,230 -
Chief Executive
Officer
Lawrence 1995 39,479
Burstein(2), 1994 -
President, 1993 -
Treasurer, Director
<FN>
- --------------------------------
(1) Salary payments include commissions paid pursuant to Mr. Hahn's
employment agreement. Such commissions totaled $0, $10,500 and $3,230
for the years ended December 31, 1995, 1994 and 1993, respectively. Mr.
Hahn has been Chairman, President and Chief Executive Officer of U.S.
Communications, Inc since its inception and assumed those positions
with the Company upon completion of the Merger with Trinity on May 15,
1995.
(2) Mr. Burstein was President and Treasurer of Trinity since its inception
until May 15, 1995. He received no compensation from Trinity for
serving as an officer other than accountable reimbursement for
reasonable business expenses incurred in connection with activities
undertaken on Trinity's behalf.
</FN>
</TABLE>
6
<PAGE>
The following table contains information concerning the stock option
grants made to the Company's named executive officers during the fiscal year
ended December 31, 1995. The Company has no outstanding stock appreciation
rights.
Option/SAR Grants in Fiscal Year Ended December 31, 1995
<TABLE>
<CAPTION>
Potential Realizable Value Alternative
at Assumed Annual Rates to (f) and
of Stock Price Appreciation (g): Grant
Individual Grants for Option Term Date Value
- --------------------------------------------------------------------- -------------------------- ------------
(a) (b) (c) (d) (e) (f) (g) (f)
% of Total
Number of Options/
Securities SARs
Underlying Granted to
Options/ Employees Exercise or
SARs in Fiscal Base Price Expiration
Name Granted (#) Year ($/Sh) Date 5% ($) 10% ($)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Bruce A. 118,437(1) 27.9 3.80 12/31/2000 $124,359 $274,774
Hahn
Lawrence 39,479 9.3 5.75 06/26/2000 $ 62,772 $138,571
Burstein
<FN>
(1) Exercisable in installments as follows: to the extent of 39,479 shares
commencing on the each of December 31, 1995, December 31, 1996 and
December 31, 1997.
</FN>
</TABLE>
The following table sets forth information concerning option exercises
and option holdings for the fiscal year ended December 31, 1995 with respect to
the Company's named executive officers.
Aggregate Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying In-The-Money
Unexercised Options Options/SARs at FY-
at FY-End (#) End ($)
Shares Acquired on Exercisable/ Exercisable/
Name Exercise (#) Value Realized ($) Unexercisable Unexercisable
- -------------------- -------------------- -------------------- -------------------- --------------------
<S> <C> <C>
Bruce A. Hahn 39,479/78,958 $225,030/$450,061
Lawrence Burstein 39,479/0 $148,046/$0
</TABLE>
7
<PAGE>
Directors' Compensation
Directors of the Company who are employees do not receive remuneration
for services as directors. Directors who are not employees receive options to
purchase shares of the Company's Common Stock, in an amount determined annually
by the Board of Directors, as compensation for services rendered as directors,
plus reimbursement of out-of-pocket expenses for each meeting attended.
Certain Relationships and Related Transactions
On June 26, 1995, the Company granted an option to purchase up to
50,000 shares of Common Stock at $5.75 per share to Puthuff Littleton & Smith,
Inc. ("PLS") a sales representative of the Company. The option becomes
exercisable in five annual installments commencing on June 26, 1996, of up to
10,000 shares each, provided that on each such exercise date the Company has in
effect a contract with two specified customers introduced to the Company by PLS.
If the Company has only one of such contracts in effect on each such exercise
date, the option shall be exercisable for 5,000 shares and if neither contract
is in effect on an exercise date then no shares shall become purchasable under
that installment. Notwithstanding the foregoing, the option shall become
exercisable for all 50,000 shares on June 26, 2000. The option will terminate on
June 26, 2001. Edgar Puthuff, a principal of PLS, is a director of the Company.
On June 26, 1995, the Company granted a five-year option to purchase
39,479 shares of Common Stock at $5.75 per share to Lawrence Burstein, a
director of the Company.
On April 23, 1996, the Company granted five year options to purchase
25,000 shares at $8.25 per share to each of Messrs. Puthuff and Baron as
directors' fees for 1996. The options vest on April 23, 1997. Mr.
Burstein waived his director's fee for 1996.
Board Recommendation
The Board of Directors recommends that the stockholders vote FOR the
election of the nominees named above. Unless instructed to the contrary, the
enclosed proxy will be voted for the election of such nominees. Election of
directors shall be determined by a plurality of the votes cast by stockholders
entitled to vote at the Meeting.
PROPOSAL 2:
AMENDMENT TO THE COMPANY'S AMENDED
AND RESTATED STOCK OPTION PLAN
The Company presently maintains the USCI, Inc. Amended and Restated
1992 Stock Option plan (the "1992 Option Plan"), which was originally adopted by
the Company's stockholders in 1992. On April 23, 1996, the Board of Directors
adopted an amendment to the 1992 Option Plan to increase the number of shares of
Common Stock issuable under the 1992 Option Plan by 250,000 to 750,000 from
500,000. During the last 12 months, the number of employees eligible to
participate in the Option Plan has increased substantially, and the number of
shares heretofore made available for the 1992 Option Plan's purpose has been
depleted. As of June 11, 1996, options to purchase 607,924 shares had been
granted under the 1992 Option Plan. The proposed
8
<PAGE>
amendment changes only the number of shares available under the 1992 Option
Plan; the other provisions of the 1992 Option Plan are not affected by the
proposed amendment.
Key Provisions
The key provisions of the 1992 Option Plan are as follows:
o Eligibility. All employees and directors of the Company and its
subsidiaries, and consultants and advisors thereto, are eligible to
receive options under the 1992 Option Plan. Options granted under the
1992 Option plan to employees may be designated as "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or may be designated as
options not intended to ISOs ("non-qualified stock options"). Options
granted to directors who are not employees of the Company or its
subsidiaries and to consultants and advisors will be non-qualified
stock options. Approximately 145 individuals were eligible to receive
options under the 1992 Option Plan as of May 31, 1996.
o Term of 1992 Option Plan. No option may be granted under the 1992
Option Plan after September 17, 2002.
o Administration. The 1992 Option Plan is administered by the Stock
Option Committee of the Board of Directors (the "Committee"). Among
other things, the Committee determines the persons to whom, the times
at which and the price at which options will be granted, the number of
shares subject to the option and whether the option is an ISO or a
non-qualified stock option.
o Term of Options. All options terminate on the earliest of: (a) the
expiration of the term specified in the option document,which may not
exceed ten years from the date of grant; (b) the expiration of three
months from the date an option holder's employment or service with the
Company or its subsidiaries terminates for any reason other than
disability, death or as set forth in clauses (d) and (e) below); (c)
the expiration of one year from the date an option holder's employment
or service with the Company or its subsidiaries terminates by reason of
such option holder's disability or death; (d) the date upon which a
determination is made by the Committee that the option holder has
breached his employment or service contract with the Company or its
subsidiaries, has been engaged in any sort of disloyalty to the Company
or its subsidiaries or has disclosed trade secrets or confidential
information of the Company or its subsidiaries; or (e) the date set by
the Committee to be an accelerated expiration date in the event of a
liquidation or dissolution of the Company or its subsidiaries. The
Committee, in its discretion, may provide for additional limitations on
the term of any option.
o Option Price. The option price for non-qualified options may be less
than, equal to or greater than the fair market value of the shares
subject to the option on the date that the option is granted, and for
ISOs will be at least 100% of the fair market value of the shares
subject to the option on the date that the option is granted.
o Certain Rules for Certain Stockholders. If an ISO is granted to an
employee who then owns, directly or by attribution under the Code,
shares possessing more than 10% of the total combined voting power of
all classes of shares of the Company's capital stock, the term of the
option may not exceed five years and the option price must be at least
110% of the fair market value of the shares on the date that the option
is granted.
o Payment. An option holder may pay for shares covered by an option
in cash or by certified check payable to the order of the Company, by
payment through a broker in accordance with
9
<PAGE>
Regulation T of the Federal Reserve Board or by such other mode of
payment as the Committee may approve, including payment in whole or in
part in shares of the Company's Common Stock, based on the fair market
value of such Common Stock at the time of payment.
o Option Document; Restriction on Transferability. All options will be
evidenced by a written option document containing provisions consistent
with the 1992 Option Plan and such other provisions as the Committee
deems appropriate. No option granted under the 1992 Option Plan may be
transferred, except by will, the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined by the
Code or in Title I of the Employee Retirement Income Security Act of
1974, as amended.
o Provisions Relating to a "Change of Control." Notwithstanding any
other provision of the 1992 Option Plan, upon the occurrence of a
"Change of Control," all options granted pursuant to the 1992 Option
Plan will become immediately exercisable.
A "Change of Control" will occur under the 1992 Option Plan
upon requisite approval by stockholders (or, if such approval is not
required, by the Board of Directors) of a plan of liquidation or
dissolution or the sale of substantially all of the assets of the
Company. Subject to certain exceptions, a "Change of Control" will also
occur upon requisite approval by the Company's and the other
constituent corporation's stockholders (or, if such approval is not
required, by the Board of Directors) of the merger or consolidation of
the Company with or into such other constituent corporation. In
addition, a Change of Control will occur if certain entities, persons
or groups specified in the 1992 Option Plan have become beneficial
owners of or have obtained voting control over more than 30% of the
outstanding shares of the Company's Common Stock or on the first day
upon which a majority of the Board of Directors consists of persons who
have been members of the Board for less than two years, unless the
nomination for election of each new director who was not a director at
the beginning of such period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at
the beginning of such period.
o Amendments to the Option Document and the 1992 Option Plan. Subject
to the provisions of the 1992 Option Plan, the Committee may amend an
option document, subject to the option holder's consent, if the
amendment is not favorable to the option holder or is not being made
pursuant to provisions of the 1992 Option Plan relating to acceleration
of the expiration date in the event of liquidation or dissolution of
the Company. The Board of Directors may amend the 1992 Option Plan from
time to time in such manner as it may deem advisable. Nevertheless, the
Board of Directors may not, without obtaining stockholder approval
within twelve months before or after such action, change the class of
individuals eligible to receive an ISO or increase the maximum number
of shares as to which options may be granted.
o Tax Aspects of the 1992 Option Plan. The following discussion is
intended to briefly summarize the general principles of federal income
tax law applicable to options granted under the 1992 Option Plan. A
recipient of an ISO will not recognize taxable income upon either the
grant or exercise of an ISO. The option holder will recognize long-term
capital gain or loss on a disposition of the shares acquired upon
exercise of an ISO, provided the option holder does not dispose of
those shares within two years from the date the ISO was granted or
within one year after the shares were transferred to such option
holder. Currently, for regular federal income tax purposes, long-term
capital gain is taxed at a maximum rate of 28%, while ordinary income
may be subject to a maximum rate of 39.6%. If the option holder
satisfies both of the foregoing holding periods, then the Company will
not be allowed a deduction by reason of the grant or exercise of an
ISO.
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<PAGE>
As a general rule, if the option holder disposes of the shares before
satisfying both holding period requirements (a "disqualifying disposition"), the
gain recognized by the option holder on the disqualifying disposition will be
taxed as ordinary income to the extent of the difference between (i) the lesser
of the fair market value of the shares on the date of exercise or the amount
received for the shares in the disqualifying disposition; and (ii) the adjusted
basis of the shares, and the Company will be entitled to a deduction in that
amount. The gain (if any) in excess of the amount recognized as ordinary income
on a disqualifying disposition will be long-term or short-term capital gain,
depending on the length of time the option holder held the shares prior to the
disposition.
The amount by which the fair market value of a share at the time of
exercise exceeds the option price will be included in the computation of such
option holder's "alternative minimum taxable income" in the year the option
holder exercises the ISO. Currently, the alternative minimum tax rate is 24%. If
an option holder pays alternative minimum tax with respect to the exercise of an
ISO, then the amount of such tax paid will be allowed as a credit against
regular tax liability in subsequent years. The option holder's basis in the
shares for purposes of the alternative minimum tax will be adjusted when income
is included in alternative minimum taxable income.
A recipient of a non-qualified stock option will not recognize taxable
income at the time of grant, and the Company will not be allowed a deduction by
reason of the grant. Such an option holder will recognize ordinary income in the
taxable year in which the option holder exercises the non-qualified stock
option, in an amount equal to the excess of the fair market value of the shares
received upon exercise at the time of exercise of such options over the exercise
price of the option, and the Company will be allowed a deduction in that amount.
Upon disposition of the shares subject to the option, an option holder will
recognize long-term or short-term capital gain or loss, depending upon the
length of time the shares were held prior to disposition, equal to the
difference between the amount realized on disposition and the option holder's
basis in a share subject to the option (which basis ordinarily is the fair
market value of the shares subject to the option on the date the option was
exercised).
The following table sets forth certain information as of June 11, 1996
with respect to the Company's 1992 Option Plan as to (i) each named executive
officer of the Company, (ii) all current executive officers as a group, (iii)
all current directors who are not executive officers as a group, (iv) each
nominee for election as a director, and (iv) all employees, including all
current officers who are not executive officers, as a group.
11
<PAGE>
<TABLE>
<CAPTION>
Market Value of
Per Share Common Stock on Date
Name # of Options (1) Exercise Price Expiration Date (4) of Grant
- -------------------------------- ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Bruce A. Hahn, Chief Executive 118,437 $3.80 12/00 $3.80
Officer, President (2)
Lawrence Burstein, - - - -
former President
Jerome S. Baron (3) 25,000 $8.25 04/01 $8.25
Edgar Puthuff (3) 25,000 $8.25 04/01 $8.25
Salvatore T. DiMascio - - - -
All executive officers as a group 207,654 177,654/$3.80 12/00 $3.80
(three persons) 30,000/$7.25 04/02 $7.25
All current directors who are not 50,000 $8.25 04/01 $8.25
executive officers as a group (three
persons)
All employees, including all current 320,270 $4.43 - $10.125 07/96 - 06/06 $4.43 - $10.125
officers who are not executive
officers, as a group (16 persons)
<FN>
(1) All options were granted during the fiscal year ended December 31, 1995
or the fiscal year ending December 31, 1996.
(2) Exercisable in installments as follows: to the extent of 39,479 shares
commencing in each of December 31, 1995, December 31, 1996 and
December 31, 1997.
(3) These options vest in April 1997.
</FN>
</TABLE>
Board Recommendation
The affirmative vote of the holders of a majority of shares entitled to
vote thereon present in person or represented by proxy at the Annual Meeting
when a quorum is present is required to adopt the proposed Amendment to the 1992
Option Plan.
The Board of Directors recommends that stockholders vote for the
Amendment to the 1992 Option Plan. Unless instructed to the contrary, the
enclosed proxy will be voted in favor or the proposed Amendment.
PROPOSAL 3:
RATIFICATION OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS
The Board of Directors has concluded that the continued employment of
Arthur Andersen LLP will be in the Company's best interest and recommends that
the appointment of Arthur Andersen LLP as the Company's independent public
accountants for the fiscal year ending December 31, 1996 be ratified and
approved.
Representatives of Arthur Andersen LLP are expected to be present at
the Annual Meeting and will have the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.
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<PAGE>
The Company has been advised by Arthur Andersen LLP that neither the
firm nor any of its partners has any material direct or any indirect financial
interest in the Company.
Board Recommendation
The Board of Directors unanimously recommends that the Stockholders
vote FOR approval of the appointment of Arthur Andersen LLP as independent
public accountants. Unless instructed to the contrary, the enclosed proxy will
be voted for the appointment of such accountants. Approval of such appointment
will require the affirmative votes of a majority of shares entitled to vote
thereon present in person or represented by proxy at the Annual Meeting when a
quorum is present.
EXPENSE OF SOLICITATION
All costs connected with the solicitation of Proxies will be borne by
the Company. Brokers and other persons holding stock for the benefit of others
will be reimbursed for their expenses in forwarding Proxies and accompanying
material to the beneficial owners of such stock and obtaining their Proxies.
Solicitation will be made by mail, telephone, telegraph or otherwise, and some
of the directors, officers and regular employees of the Company may assist in
the solicitation without additional compensation.
STOCKHOLDERS' PROPOSALS
If a stockholder wishes to present a proposal to be voted on at the
1997 Annual Meeting, the proponent must, at the time the proposal is submitted,
be a record or beneficial owner of at least one (1%) percent or One Thousand
($1,000.00) Dollars in market value of the class of securities entitled to vote
at the meeting and have held such securities for at least one (1) year, and such
stockholder must continue to own such securities through the date on which the
1997 Annual Meeting is held. The proposal, in order to be included in the
management proxy statement, must be received at the Company's executive offices
no later than February 20, 1997. In order to remove any question as to the date
on which a proposal was received by the Board of Directors, it is suggested that
proposals be submitted by certified mail, return receipt requested.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The Board of Directors knows of no other matters which may be presented
at the Annual Meeting, but if other matters do properly come before the Annual
Meeting, it is intended that the persons named in the Proxy will vote according
to their best judgment.
Stockholders are requested to date, sign and return the Proxy in the
enclosed envelope, to which no postage need be affixed if mailed in the United
States. If you attend the Annual Meeting, you may revoke your Proxy at that time
and vote in person if you so desire, otherwise your Proxy will be voted for you.
By Order of the Board of Directors
Bruce A. Hahn, Chairman
June 20, 1996
Norcross, Georgia
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<PAGE>
APPENDIX A
USCI, INC.
formerly
TRINITY SIX INC.
AMENDED AND RESTATED 1992 STOCK OPTION PLAN
Trinity Six Inc. (the "Company") hereby amends and restates the Trinity
Six Inc. 1992 Stock Option Plan in its entirety (the Company's 1992 Stock Option
Plan, as amended and restated, is hereinafter referred to as the "Plan").
1. Purpose. The Plan is intended to amend and restate in its entirety
the Company's 1992 Stock Option Plan. The Plan is intended to recognize the
contributions made to the Company or an Affiliate by employees of the Company or
any Affiliate (as hereinafter defined), members of the Board of Directors of the
Company or an Affiliate, and certain consultants and advisors to the Company or
any Affiliate, to provide such persons with additional incentive to devote
themselves to the future success of the Company or an Affiliate, and to improve
the ability of the Company or an Affiliate to attract, retain, and motivate
individuals upon whom the Company's sustained growth and financial success
depend, by providing such persons with an opportunity to acquire or increase
their proprietary interest in the Company through receipt of rights to acquire
the Company's Common Stock, $.0001 par value (the "Common Stock").
2. Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a parent corporation
or a subsidiary corporation with respect to the Company within the meaning of
Section 424(e) or (f) of the Code.
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) "Change of Control" shall have the meaning as set forth in
Section 9 of the Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Board of Directors or the committee
designated by the Board of Directors in accordance with the provisions set forth
in Section 3 of the Plan.
(f) "Company" means Trinity Six Inc., a Delaware corporation.
<PAGE>
(g) "Disability" shall have the meaning set forth in Section
22(e)(3) of the Code.
(h) "Fair Market Value" shall have the meaning set forth in
Subsection 8(b) of the Plan.
(i) "ISO" means an Option granted under the Plan which is intended
to qualify as an "incentive stock option" within the meaning of Section 422(b)
of the Code.
(j) "Merger" means the merger contemplated by that certain
Agreement and Plan of Merger and Reorganization, dated as of December 14, 1994,
by and among the Company and U.S. Communications, Inc.
(k) "Non-qualified Stock Option" means an Option granted under the
Plan which is not intended to qualify, or otherwise does not qualify, as an
"incentive stock option" within the meaning of Section 422(b) of the Code.
(l) "Option" means either an ISO or a Non-qualified Stock Option
granted under the Plan.
(m) "Optionee" means a person to whom an Option has been granted
under the Plan, which Option has not been exercised and has not expired or
terminated.
(n) "Option Document" means the document described in Section 8 of
the Plan which sets forth the terms and conditions of each grant of Options.
(o) "Option Price" means the price at which Shares may be purchased
upon exercise of an Option, as calculated pursuant to Subsection 8(b) of the
Plan.
(p) "Rule 16b-3" means Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended.
(q) "Shares" means the shares of Common Stock of the Company which
are the subject of Options.
3. Administration of the Plan.
(a) Committee. The Plan shall be administered by a committee
composed of two or more of the members of the Company's Board of Directors who
are not eligible to receive Options under the Plan; however, the Board may
designate two committees to operate and administer the Plan in its stead, one of
such committees composed of two or more of its directors who are not eligible to
receive Options under the Plan to operate and administer the Plan with respect
to each person who is a "Principal Officer" (as defined below), and the other
such
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<PAGE>
committee composed of two or more directors (which may include directors who are
also employees, consultants or advisors of the Company) to operate and
administer the Plan with respect to each person other than a "Principal
Officer." Any of such committees designated by the Board of Directors is
referred to as the "Committee." As used herein, the term "Principal Officer"
means a person who is an "officer" of the Company, within the meaning of Rule
16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor regulation.
(b) Meetings. The Committee shall hold meetings at such times and
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.
(c) Grants. The Committee shall from time to time, in its
discretion, direct the Company to grant Options pursuant to the terms of the
Plan. The Committee shall have plenary authority to (i) determine the Optionees
to whom, the times at which, and the price at which Options shall be granted,
(ii) determine the type of Option to be granted and the number of Shares subject
thereto, and (iii) approve the form and terms and conditions of the Option
Documents; all subject, however, to the express provisions of the Plan. In
making such determinations, the Committee may take into account the nature of
the Optionee's services and responsibilities, the Optionee's present and
potential contribution to the Company's success and such other factors as it may
deem relevant. The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted under it shall be final, binding
and conclusive.
(d) Exculpation. No member of the Board of Directors shall be
personally liable for monetary damages for any action taken or any failure to
take any action in connection with the administration of the Plan or the
granting of Options under the Plan, provided that this Subsection 3(c) shall not
apply to (i) any breach of such member's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, (iii) acts or omissions that would
result in liability under Section 174 of the General Corporation Law of the
State of Delaware, as amended, and (iv) any transaction from which the member
derived an improper personal benefit.
(e) Indemnification. Service on the Committee shall constitute
service as a member of the Board of Directors of the Company. Each member of the
Committee shall be entitled without further act on his part to indemnity from
the Company to the fullest extent provided by applicable law and the Company's
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<PAGE>
Certificate of Incorporation and/or By-laws in connection with or arising out of
any action, suit or proceeding with respect to the administration of the Plan or
the granting of Options thereunder in which he or she may be involved by reason
of his or her being or having been a member of the Committee, whether or not he
or she continues to be a member of the Committee at the time of the action, suit
or proceeding.
(f) Limitation on Grants of Options to Consultants and Advisors.
With respect to the grant of Options to consultants and advisors, bona fide
services shall be rendered by consultants and advisors, and such services must
not be in connection with a capital raising transaction.
4. Grants under the Plan. Grants under the Plan may be in the form of
a Non-qualified Stock Option, an ISO or a combination thereof, at the discretion
of the Committee.
5. Eligibility. All employees and members of the Board of Directors
of, and (subject to Section 4) consultants and advisors to, the Company or an
Affiliate shall be eligible to receive Options hereunder. The Committee, in its
sole discretion, shall determine whether an individual qualifies as an employee,
consultant or advisor.
6. Shares Subject to Plan. The aggregate maximum number of Shares for
which Options may be granted pursuant to the Plan is five hundred thousand
(500,000), subject to adjustment as provided in Section 10 of the Plan. The
Shares shall be issued from authorized and unissued Common Stock or Common Stock
held in or hereafter acquired for the treasury of the Company. If an Option
terminates or expires without having been fully exercised for any reason, the
Shares for which the Option was not exercised may again be the subject of one or
more Options granted pursuant to the Plan.
7. Term of the Plan. The Plan (as amended and restated) was approved
by the Board of Directors on December 13, 1994, and, provided it is approved on
or before December 12, 1995 by a majority of the votes cast at a duly called
meeting of the stockholders at which a quorum representing a majority of all
outstanding voting stock of the Company is, either in person or by proxy,
present and voting, shall be effective as of the date of consummation of the
Merger Agreement. No Option may be granted under the Plan after September 17,
2002.
8. Option Documents and Terms. Each Option granted under the Plan
shall be a Non-qualified Stock Option unless the Option shall be specifically
designated at the time of grant to be an ISO for federal income tax purposes. If
any Option designated as an ISO is determined for any reason not to qualify as
an incentive stock option within the meaning of Section 422 of the
4
<PAGE>
Code, such Option shall be treated as a Nonqualified Stock Option for all
purposes under the provisions of the Plan. Options granted pursuant to the Plan
shall be evidenced by the Option Documents in such form as the Committee shall
from time to time approve, which Option Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which are not
inconsistent with the terms of the Plan.
(a) Number of Option Shares. Each Option Document shall state
the number of Shares to which it pertains. An Optionee may receive more than one
Option, which may include Options which are intended to be ISO's and Options
which are not intended to be ISO's, but only on the terms and subject to the
conditions and restrictions of the Plan.
(b) Option Price. Each Option Document shall state the Option
Price which, for a Nonqualified Stock Option, may be less than, equal to, or
greater than the Fair Market Value of the Shares on the date the Option is
granted and, for an ISO, shall be at least 100% of the Fair Market Value of the
Shares on the date the Option is granted as determined by the Committee in
accordance with this Subsection 8(b); provided, however, that if an ISO is
granted to an Optionee who then owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or an Affiliate,
then the Option Price shall be at least 110% of the Fair Market Value of the
Shares on the date the Option is granted. If the Common Stock is traded in a
public market, then the Fair Market Value per share shall be, if the Common
Stock is listed on a national securities exchange or included in the NASDAQ
National Market System, the last reported sale price thereof on the relevant
date, or, if the Common Stock is not so listed or included, the mean between the
last reported "bid" and "asked" prices thereof on the relevant date, as reported
on NASDAQ or, if not so reported, as reported by the National Daily Quotation
Bureau, Inc. or as reported in a customary financial reporting service, as
applicable and as the Committee determines.
(c) Exercise. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and of
payment in full of the Option Price for the Shares to be purchased. Each such
notice shall specify the number of Shares to be purchased and shall (unless the
Shares are covered by a then current and effective registration statement or
qualified Offering Statement under Regulation A under the Securities Act of
1933, as amended (the "Act")), contain the Optionee's acknowledgment in form and
substance satisfactory to the Company that (a) such Shares are being purchased
for investment and not for distribution or resale (other than a distribution or
resale which, in the opinion of counsel
5
<PAGE>
satisfactory to the Company, may be made without violating the registration
provisions of the Act), (b) the Optionee has been advised and understands that
(i) the 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 (ii) the Company is under no obligation to register
the Shares under the Act or to take any action which would make available to the
Optionee any exemption from such registration, (c) such Shares may not be
transferred without compliance with all applicable federal and state securities
laws, and (d) an appropriate legend referring to the foregoing restrictions on
transfer and any other restrictions imposed under the Option Documents may be
endorsed on the certificates. Notwithstanding the foregoing, if the Company
determines that issuance of Shares should be delayed pending (A) registration
under federal or state securities laws, (B) the receipt of an opinion of counsel
satisfactory to the Company that an appropriate exemption from such registration
is available, (C) the listing or inclusion of the Shares on any securities
exchange or an automated quotation system or (D) the consent or approval of any
governmental regulatory body whose consent or approval is necessary in
connection with the issuance of such Shares, the Company may defer exercise of
any Option granted hereunder until any of the events described in this sentence
has occurred.
(d) Medium of Payment. An Optionee shall pay for Shares (i) in
cash, (ii) by certified or cashier's check payable to the order of the Company,
(iii) by payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board or (iv) by such other mode of payment
as the Committee may approve. Furthermore, the Committee may provide in an
Option Document that payment may be made in whole or in part in shares of the
Company's Common Stock held by the Optionee for at least six months. If payment
is made in whole or in part in shares of the Company's Common Stock, then the
Optionee shall deliver to the Company certificates registered in the name of
such Optionee representing the shares owned by such Optionee, free of all liens,
claims and encumbrances of every kind and having an aggregate Fair Market Value
on the date of delivery that is at least as great as the Option Price of the
Shares (or relevant portion thereof) with respect to which such Option is to be
exercised by the payment in shares of Common Stock, endorsed in blank or
accompanied by stock powers duly endorsed in blank by the Optionee. In the event
that certificates for shares of the Company's Common Stock delivered to the
Company represent a number of shares in excess of the number of shares required
to make payment for the Option Price of the Shares (or relevant portion thereof)
with respect to which such Option is to be exercised by payment in shares of
Common Stock, the stock certificate issued to the Optionee shall represent (i)
the Shares in respect of which payment is made, and (ii) such excess number of
shares. Notwithstanding the
6
<PAGE>
foregoing, the Committee may impose from time to time such limitations and
prohibitions on the use of shares of the Common Stock to exercise an Option as
it deems appropriate.
(e) Termination of Options.
(i) No option shall be exercisable after the first to
occur of the following:
(A) Expiration of the Option term specified in
the Option Document, which shall occur on or before (1) ten years from the date
of grant, or (2) five years from the date of grant of an ISO if the Optionee on
the date of grant owns, directly or by attribution under Section 424(d) of the
Code, shares possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of an Affiliate;
(B) Expiration of three months from the date the
Optionee's employment or service with the Company or its Affiliates terminates
for any reason other than disability or death or as otherwise specified in
Subsection 8(e)(i)(D) or 8(e)(i)(E) below;
(C) Expiration of one year from the date such
employment or service with the Company or its Affiliates terminates due to the
Optionee's Disability or death;
(D) A finding by the Committee, after full
consideration of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has breached his employment or service contract with
the Company or an Affiliate, or has been engaged in disloyalty to the Company or
an Affiliate, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his employment or
service, or has disclosed trade secrets or confidential information of the
Company or an Affiliate. In such event, in addition to immediate termination of
the Option, the Optionee shall automatically forfeit all Shares for which the
Company has not yet delivered the share certificates upon refund by the Company
of the Option Price. Notwithstanding anything herein to the contrary, the
Company may withhold delivery of share certificates pending the resolution of
any inquiry that could lead to a finding resulting in a forfeiture.
(E) The date, if any, set by the Board of
Directors as an accelerated expiration date in the event of the liquidation or
dissolution of the Company.
(ii) Notwithstanding the foregoing, the Committee may
extend the period during which all or any portion of an Option may be exercised
to a date no later than the Option term
7
<PAGE>
specified in the Option Document pursuant to Subsection 8(e)(i)(A), provided
that any change pursuant to this Subsection 8(e)(ii) which would cause an ISO to
become a Non-qualified Stock Option may be made only with the consent of the
Optionee.
(f) Transfers. No Option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution. During
the lifetime of the person to whom an Option is granted, such Option may be
exercised only by him. Notwithstanding the foregoing, a Non-qualified Stock
Option may be transferred pursuant to the terms of a "qualified domestic
relations order," within the meaning of Sections 401(a)(13) and 414(p) of the
Code or within the meaning of Title I of the Employee Retirement Income Security
Act of 1974, as amended.
(g) Limitation on ISO Grants. In no event shall the aggregate
fair market value of the shares of Common Stock (determined at the time the ISO
is granted) with respect to which incentive stock options under all incentive
stock option plans of the Company or its Affiliates are exercisable for the
first time by the Optionee during any calendar year exceed $100,000.
(h) Other Provisions. Subject to the provisions of the Plan,
the Option Documents shall contain such other provisions including, without
limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall deem advisable.
(i) Amendment. Subject to the provisions of the Plan, the
Committee shall have the right to amend Option Documents issued to an Optionee,
subject to the Optionee's consent if such amendment is not favorable to the
Optionee, except that the consent of the Optionee shall not be required for any
amendment made pursuant to Subsection 8(e)(i)(E) or Section 9 of the Plan, as
applicable.
9. Change of Control. In the event of a Change of Control, all Options
then outstanding under the Plan shall become immediately exercisable in full.
Any amendment to this Section 9 which diminishes the rights of Optionees shall
not be effective with respect to Options outstanding at the time of adoption of
such amendment, whether or not such outstanding Options are then exercisable.
A "Change of Control" shall be deemed to have occurred upon the
earliest to occur of the following events: (i) the date the stockholders of the
Company (or the Board of Directors, if stockholder action is not required)
approve a plan or other arrangement pursuant to which the Company will be
dissolved or
8
<PAGE>
liquidated, or (ii) the date the stockholders of the Company (or the Board of
Directors, if stockholder action is not required) approve a definitive agreement
to sell or otherwise dispose of substantially all of the assets of the Company,
or (iii) the date the stockholders of the Company (or the Board of Directors, if
stockholder action is not required) and the stockholders of the other
constituent corporation (or its board of directors if stockholder action is not
required) have approved a definitive agreement to merge or consolidate the
Company with or into such other corporation, other than, in either case, a
merger or consolidation of the Company in which holders of shares of the
Company's Common Stock immediately prior to the merger or consolidation will
have at least a majority of the voting power of the surviving corporation's
voting securities immediately after the merger or consolidation, which voting
securities are to be held in the same proportion as such holders' ownership of
Common Stock of the Company immediately before the merger or consolidation, or
(iv) the date any entity, person or group, within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
(other than (A) the Company or any of its subsidiaries or any employee benefit
plan (or related trust) sponsored or maintained by the Company or any of its
subsidiaries, or (B) any other person who, on the date the Plan is effective,
shall have been the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of more than
thirty percent (30%) of outstanding shares of the Company's Common Stock), shall
have become the beneficial owner of, or shall have obtained voting control over,
more than thirty percent (30%) of the outstanding shares of the Company's Common
Stock, or (v) the first day after the date this Plan is effective when directors
are elected such that a majority of the Board of Directors shall have been
members of the Board of Directors for less than two (2) years, unless the
nomination for election of each new director who was not a director at the
beginning of such two (2) year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period.
10. Adjustments on Changes in Capitalization. The aggregate number of
Shares and class of shares as to which Options may be granted hereunder, the
number and class or classes of shares covered by each outstanding Option and the
Option Price thereof shall be appropriately adjusted in the event of a stock
dividend, stock split, recapitalization or other change in the number or class
of issued and outstanding equity securities of the Company resulting from a
subdivision or consolidation of the Common Stock and/or, if appropriate, other
outstanding equity securities or a recapitalization or other capital adjustment
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common Stock) affecting the
Common Stock which is effected without
9
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receipt of consideration by the Company. The Committee shall have authority to
determine the adjustments to be made under this Section, and any such
determination by the Committee shall be final, binding and conclusive.
11. Amendment of the Plan. The Board of Directors of the Company may
amend the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Directors of the Company may not change the class of
individuals eligible to receive an ISO or increase the maximum number of shares
as to which Options may be granted without obtaining approval, within twelve
months before or after such action, by vote of a majority of the votes cast at a
duly called meeting of the stockholders at which a quorum representing a
majority of all outstanding voting stock of the Company is, either in person or
by proxy, present and voting on the matter. No amendment to the Plan shall
adversely affect any outstanding Option, however, without the consent of the
Optionee.
12. No Commitment to Retain. The grant of an Option pursuant to the
Plan shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any date to retain the
Optionee in the employ of the Company or an date and/or as a member of the
Company's Board of Directors or in any other capacity.
13. Withholding of Taxes. Whenever the Company proposes or is required
to deliver or transfer Shares in connection with the exercise of an Option, the
Company shall have the right to (a) require the recipient to remit or otherwise
make available to the Company an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or transfer of
any certificate or certificates for such Shares or (b) take whatever other
action it deems necessary to protect its interests with respect to tax
liabilities. The Company's obligation to make any delivery or transfer of Shares
shall be conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.
14. Interpretation. It is the intent of the Company that transactions
under the Plan with respect to directors and officers (within the meaning of
Section 16(a) under the Securities Exchange Act of 1934, as amended) satisfy the
conditions of Rule 16b-3. To the extent that any provision of the Plan would
result in a conflict with such conditions, such provision shall be deemed null
and void. This Section shall not be applicable if no class of the Company's
equity securities is then registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended.
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PROXY USCI, INC.
1996 ANNUAL MEETING OF STOCKHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Leonard R. Glass and Robert J.
Kostrinsky and each of them, the true and lawful attorneys and agents for the
undersigned, with full power of substitution, for and in the name of the
undersigned, to act for the undersigned and vote all stock the undersigned is
entitled to vote at the 1996 Annual Meeting of Stockholders of USCI, Inc. to be
held on Wednesday, July 10, 1996 at 9:00 a.m., local time, at Hotel Nikko, 3300
Peachtree Rd., Atlanta, Georgia and at any and all adjournments thereof, on the
matters listed on the reverse side of this card.
The undersigned hereby acknowledges receipt of the Annual Report to
Stockholders for the Fiscal Year ended December 31, 1995, Proxy Statement and
Notice of Annual Meeting dated June 20, 1996.
PLEASE VOTE AND SIGN ON OTHER SIDE
AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
(Please sign exactly as your name appears on your stock certificate. If stock is
registered in more than one name, each holder should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your title as
such. If executed by a corporation or partnership, the Proxy should be signed in
full corporate or partnership name by a duly authorized officer or partner as
applicable.)
Has your address changed? Do you have any comments?
- ------------------------------ -------------------------------
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<PAGE>
[x] PLEASE MARK YOUR VOTES USCI, INC.
AS IN THIS EXAMPLE
(1) Election of the following nominees for the Board of Directors to serve until
the Annual Meeting of Stockholders in 1997 and until each successor is duly
elected and qualified.
FOR [ ] WITHHOLD [ ] Nominees: BRUCE A. HAHN
EDGAR PUTHUFF
JEROME S. BARON
LAWRENCE BURSTEIN
SALVATORE T. DIMASCIO
Instruction: To withhold authority to vote for any individual nominee,
check the "Withhold" box and strike a line through the nominee's name in the
list at right. Unless authority to vote for all foregoing nominees is withheld,
this proxy will be deemed to confer authority to vote for every nominee whose
name is not struck.
(2) Proposal to approve an amendment to the Company's Amended and Restated 1992
Stock Option Plan to increase the authorized shares of Common Stock that may be
issued pursuant to that plan from 500,000 shares to 750,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) Ratify the appointment of Arthur Andersen LLP as the independent accountants
of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) In their discretion, on any other matters which may properly come before the
meeting or any adjournment thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Mark the box at right if comments or address change have been noted on the
reverse side of this card. [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ITEMS 1, 2 AND 3.
Please be sure to sign and date this Proxy. Date________________
Stockholder sign here_____________________________
Co-owner sign here________________________________
