SCHEDULE 14A INFORMATION
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
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Materials Pursuant to ss.240.14a-11(c) or ss.240.14a-12
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
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(Exact Name as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
|_| $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.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
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4) Proposed maximum aggregate value of transaction:
(1) Set for the amount on which the filing fee is calculated and state how it
was determined.
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|_| 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.
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<PAGE>
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
50 SPRING STREET
RAMSEY, NEW JERSEY 07446
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 2000
The Annual Meeting of Stockholders of Bogen Communications
International, Inc. ("Bogen" or the "Company") will be held at 50 Spring Street,
Ramsey, New Jersey 07446 on Friday, the 19th day of May, 2000, at 9:30 a.m.,
Eastern Daylight Savings Time, for the following purposes:
(1) to elect four Class II Directors to the Company's Board of
Directors to hold office until the 2002 Annual Meeting of Stockholders
or until their respective successors shall have been duly elected and
qualified;
(2) to consider and act upon a proposal to amend and restate
the Company's 1996 Stock Incentive Plan;
(3) to ratify the selection of KPMG PEAT MARWICK LLP,
independent public accountants, as the auditors of the Company for the
2000 fiscal year; and
(4) to transact such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on April 18,
2000, as the record date for the determination of the stockholders of the
Company entitled to notice of and to vote at the Annual Meeting of Stockholders.
Each share of the Company's Common Stock is entitled to one vote on all matters
presented at the Annual Meeting.
ALL HOLDERS OF THE COMPANY'S COMMON STOCK, WHETHER THEY EXPECT TO
ATTEND THE ANNUAL MEETING OR NOT, ARE REQUESTED TO COMPLETE, SIGN, DATE AND
RETURN PROMPTLY THE PROXY CARD ENCLOSED WITH THIS NOTICE.
By Order of the Board of Directors
MAUREEN A. FLOTARD
Assistant Secretary
April 28, 2000
<PAGE>
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
50 SPRING STREET
RAMSEY, NEW JERSEY 07446
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 2000
INTRODUCTION
This Proxy Statement is being furnished to stockholders of record of
Bogen Communications International, Inc. ("Bogen" or the "Company") as of April
18, 2000 (the "Record Date"), in connection with the solicitation by the Board
of Directors of the Company (the "Board of Directors") of proxies for the 2000
Annual Meeting of Stockholders (the "Annual Meeting") to be held at 50 Spring
Street, Ramsey, New Jersey 07446, on Friday, May 19, 2000 at 9:30 a.m., Eastern
Daylight Savings Time, or at any and all adjournments thereof, for the purposes
stated in the Notice of Annual Meeting. The approximate date of mailing of this
Proxy Statement, and the accompanying notice and form of proxy and the Company's
1999 Annual Report on Form 10-K, is April 28, 2000.
The Board of Directors has fixed the close of business on April 18,
2000, as the Record Date for the determination of stockholders entitled to
notice of this Annual Meeting, and only holders of record of the common stock,
par value $.001 per share ("Common Stock"), of the Company on that date will be
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
the Company had 8,546,005 shares of Common Stock issued and outstanding. Each
share of Common Stock is entitled to one vote on all matters presented at the
Annual Meeting.
The presence in person or by proxy of the holders of a majority of the
shares of Common Stock issued and outstanding and entitled to vote at the Annual
Meeting is necessary to constitute a quorum at the meeting. Abstentions and
broker non-votes will be counted to determine whether a quorum is present.
Abstentions and broker non-votes are not counted in the election of Class II
Directors. For all other items to be considered at the Annual Meeting, shares
represented by proxies which are marked "abstain" will be counted as part of the
total number of votes cast on such proposals, whereas broker non-votes will not
be counted as part of the total number of votes cast on such proposals. Thus,
abstentions will have the same effect as votes against any given proposal,
whereas broker non-votes will have no effect in determining whether any given
proposal has been approved by the stockholders.
If the enclosed proxy is signed and returned, it may, nevertheless, be
revoked at any time prior to the voting thereof at the pleasure of the
stockholder signing it, either by delivering written notice of revocation to the
Secretary of the Company, or by voting the shares covered thereby in person or
by another proxy dated subsequent to the date thereof.
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<PAGE>
Shares represented by duly executed proxies in the accompanying form
will be voted in accordance with the instructions indicated on such proxies,
and, if no such instructions are indicated thereon, will be voted in favor of
the nominees for election as Class II Directors named below and for the other
proposals referred to below.
PROPOSAL I
ELECTION OF DIRECTORS
INFORMATION CONCERNING NOMINEES AND CONTINUING DIRECTORS
The Company's Restated Certificate of Incorporation, as amended,
provides for the classification of directors into two classes, as nearly equal
in number as possible, with approximately one-half of the directors to be
elected annually for two-year terms. At the Annual Meeting, there will be four
(4) persons elected as Class II Directors for terms expiring in 2002. All of the
persons nominated for election as Class II Directors are presently serving as
Directors of the Company.
At each annual meeting subsequent to the Annual Meeting, one class of
directors will be elected for a two-year term, with Class I Directors to be
elected in 2001.
NOMINEES AND CONTINUING DIRECTORS
Set forth below is certain information with respect to each of the
nominees for election to the Board of Directors as well as each of the other
continuing directors, including name, age, the period during which such person
has served as a director of the Company, such person's principal occupation and
employment during the past five years and the percentage of the Company's Common
Stock beneficially owned (as determined in accordance with Rule 13d-3 of the
Exchange Act) by such person as of April 18, 2000. It is the intention of the
persons named in the accompanying form of proxy to vote for all of the nominees
listed below.
Each of the nominees listed below as a nominee has agreed to be named
as a nominee for Class II Director in this Proxy Statement and has consented to
serve as a director if elected. The Company expects all nominees to be willing
and able to serve. The Board of Directors may designate a substitute nominee to
replace any bona fide nominee who was nominated and who, for any reason, becomes
unavailable for election as a Class II Director. If any of the nominees shall
become unable to serve, the persons designated in the enclosed form of proxy
will vote for the election of such other person or persons as the Board of
Directors may recommend.
NOMINEES - CLASS II DIRECTORS
Jonathan Guss, age 40, has been the Chief Executive Officer and a
director of the Company since 1997 and is currently a member of the Executive
Committee of the Board of Directors. Since May 1990, Mr. Guss has been a
principal and President of Active Management Group, Inc. ("AMG"), a firm that
provides turnaround management services. Since August 1992, Mr. Guss has been a
principal and Chief Executive Officer of EK Management. Mr. Guss has been a
director of
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<PAGE>
Alliant Techsystems Inc., a publicly-held company and a leading developer of
munitions, marine systems and electronic systems ("Alliant"), since August 1994.
From September 1985 until May 1990, Mr. Guss was a consultant at Booz, Allen &
Hamilton. Mr. Guss is a 1985 graduate of the Harvard Business School and a 1981
graduate of Reed College.
Michael P. Fleischer, age 43, has been the President and a director of
the Company since 1997 and serves as an alternate to Mr. Guss on the Executive
Committee of the Board of Directors. Since August 1992, Mr. Fleischer has served
as President and director of EK Management. From 1994 to 1995, Mr. Fleischer was
a director of Alliant. Since May 1990, Mr. Fleischer has been a principal, the
Chief Executive Officer and a director of AMG. Prior to 1990, Mr. Fleischer was
a senior consultant with McKinsey & Co. He also served for four years as a
Foreign Service Officer and was Staff Assistant to the Undersecretary of State
of the United States. Mr. Fleischer is a 1985 graduate of the Harvard Business
School and a 1978 graduate of Colgate University.
Glenn R. Dubin, age 43, was appointed to the Board of Directors of the
Company in March 2000. Since 1984, Mr. Dubin has served as Co-Chairman of Dubin
& Swieca, an international asset management company ("D&S") and since 1997 as a
principal of Highbridge Capital Management, LLC, the trading manager for
Highbridge Capital Corporation, an asset management company and registered
broker-dealer. Mr. Dubin also is a founding board member of the Robin Hood
Foundation, an organization that applies investment principles to charitable
giving, and serves on the investment committee of two national not-for-profit
institutions. Mr. Dubin is a 1979 graduate of New York University at Stonybrook.
Daniel A. Schwartz, age 32, has served as a director of the Company
from 1997 and is currently a member of the Compensation and the Chairman of the
Audit Committees of the Board of Directors. Since 1993, Mr. Schwartz has been a
director of Research and Managing Director of York Capital Management, L.P.
("York Capital"), an investment limited partnership and a partner of Dinan
Management, LLC, the investment advisory firm to York Capital. From July 1990 to
March 1993, Mr. Schwartz was an associate at Morgan Stanley & Co., Inc. spending
two years in the Investment Banking Division and subsequently as a member of the
Global Equity Department. Mr. Schwartz received a Master of Science in
Engineering from Columbia University in 1990 and a Bachelor of Science from
Yeshiva University in 1988.
CONTINUING DIRECTORS - CLASS I DIRECTORS
Yoav Stern, age 46, has served as a director of the Company since 1995
and non-executive Co-Chairman of the Board of Directors since 1997 and is
currently a member of the Executive and Compensation Committees of the Board of
Directors. From March 1995 to August 1995, Mr. Stern served as Co-Chief
Executive Officer and Co-President of the Company. Mr. Stern served as
Co-Chairman and Chief Executive Officer of Kellstrom Industries, Inc, a
publicly-traded inventory management company in the aviation industry
("Kellstrom"), from its inception in December 1993 until June 1995 and is
currently the Chairman of the Board of Kellstrom. From January 1993 to September
1993, Mr. Stern was President and, from January 1992 until May 1995, a director
of WordStar International, Inc., which was engaged in research and development
and worldwide marketing and distribution of software for business and consumer
applications. Mr. Stern served in
4
<PAGE>
the Israeli Air Force as a fighter pilot, avionics systems officer, commander of
Operational Training Unit and a Deputy Squadron Commander. Mr. Stern earned a
Practical Engineering Diploma in advanced mechanics and automation from ORT
Technological College, Israel, in 1973, graduated from the Israel Air Force
Academy in 1975 and received a B.S. in Mathematics and Computer Science from Tel
Aviv University in 1985.
Jeffrey E. Schwarz, age 41, has served as non-executive Co-Chairman of
the Board of Directors of the Company since 1997 and is currently a member of
the Executive and Compensation Committees of the Board of Directors. Since July
1992, Mr. Schwarz has been the Chief Executive Officer of Metropolitan Capital
Advisors, Inc. ("Metropolitan"), an investment management firm. Mr. Schwarz
serves as a director of two private companies that are affiliated with
Metropolitan, KJ Advisors Inc. and MCIII, Inc., and is Chairman of the Board of
EK Management Corp. ("EK Management"), the general partner of EK Associates,
L.P. (also known as Ekco/Glaco Ltd.). From 1997 to 1999, Mr. Schwarz served as a
Director of e-SIM Ltd. (formerly known as Emultek Ltd.), a NASDAQ traded
provider of simulation technology and web-based solutions to the consumer
electronics industry. Mr. Schwarz graduated summa cum laude from the University
of Pennsylvania's Wharton School, earning his B.S. in Economics in 1980 and his
M.B.A. in 1981.
Zivi R. Nedivi, age 41, has served as a director of the Company since
1997 and is currently a member of the Compensation and Audit Committees of the
Board of Directors. Since June 22, 1995, Mr. Nedivi has been the President and
Chief Executive Officer and a director of Kellstrom. Mr. Nedivi was the founder,
President and Chief Executive Officer of Kellstrom's predecessor company, an
indirect, wholly owned subsidiary of Rada Electronic Industries Ltd., from its
establishment in 1990 until June 1995. Mr. Nedivi is a founder of Helix
Management Company, LLC. A graduate of the Israel Air Force Academy, Mr. Nedivi
served in the Israeli Air Force as an F-15 fighter pilot for seven years and
held the rank of major.
Kasimir Arciszewski, age 50, is the Co-Founder and Co-Managing Director
of Speech Design GmbH ("Speech Design"), a wholly owned subsidiary of the
Company, since 1983 and has served as a director of the Company since May 20,
1998. Mr. Arciszewski is responsible for Speech Design's strategic planning,
sales and financial activities. From 1975 through 1982, Mr. Arciszewski was with
the Giesecke & Devrient Group ("G&D"), an international market leader in central
bank automation products. From 1979 through 1982, Mr. Arciszewski was
responsible for marketing support of G&D's sales to major central banks in
Europe. Mr. Arciszewski received his Bachelor of Science in Electronics
Engineering in 1975 from the Chalmers University of Technology in Goteborg,
Sweden.
OTHER EXECUTIVE OFFICERS
Yoav M. Cohen resigned from his positions of Chief Financial Officer
and Senior Vice-President-Business Development and Finance of the Company
effective March 31, 2000 and since that time has provided part-time services to
the Company as a consultant on certain matters. Prior to his resignation, Mr.
Cohen, age 42, served as the Chief Financial Officer and Secretary of the
Company beginning in August 1996 and was named Senior Vice-President-Business
Development and Finance of the Company on October 1, 1997. Prior to joining the
Company, Mr.
5
<PAGE>
Cohen was Chief Financial Officer of Target Capital Group LLC ("Target"), Garden
City, N.Y., and Managing Director of FEMI International Limited, a subsidiary of
Target. From 1993 to 1994, Mr. Cohen was Corporate Vice President, Chief
Financial Officer and Management Information Systems Director of Taro
Pharmaceuticals Ltd. From 1990 to 1993, Mr. Cohen was Vice President and
Controller of Global Investment Bank at Bankers Trust Company and from 1985 to
1990, Mr. Cohen was Assistant Vice President and Controller of
CitiCorp/Citibank. Mr. Cohen received an M.B.A. in Economics and Finance from
Baruch College in 1986 and a B.B.A. in Economics from Baruch College in 1983.
Hans Meiler, age 52, is the Co-Founder and Co-Managing Director of
Speech Design since 1983. Mr. Meiler is in charge of Speech Design's operations,
including engineering, manufacturing and quality assurance. From 1978 through
1982, Mr. Meiler led an electronics development team at G&D. Mr. Meiler received
an undergraduate degree in Electrical Engineering from Munich University in
1970.
Maureen A. Flotard, age 40, has served as the Company's Corporate
Controller since January 3, 2000, and was named as the Company's Vice-President
- - Finance and Acting Chief Financial Officer on April 11, 2000. Prior to joining
the Company, Ms. Flotard served as Vice President-Business Development at Russ
Berrie and Company, Inc. ("RB&C"), a publicly-traded company and manufacturer of
gift products, from December 1997 to November 1999, and as its Corporate
Controller and Director of Financial Planning during her 14 year tenure with
RB&C. Ms. Flotard is a certified public accountant and member of the American
Institute of Certified Public Accountants and Institute of Management
Accountants.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During 1999, the Board of Directors held four meetings and acted by
Unanimous Written Consent one time. Each member of the Board of Directors
attended over 80% of the meetings of the Board of Directors held during 1999.
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. The Board of Directors does not have a standing
nominating committee.
EXECUTIVE COMMITTEE
The Executive Committee of the Board of Directors was established in
August 1995 and currently consists of Messrs. Stern, Schwarz and Guss (or Mr.
Fleischer who serves as an alternate for Mr. Guss from time to time). The
Executive Committee is authorized to act on all matters regarding the
compensation of employees and directors of the Company, the finances of the
Company and such other matters as the Board of Directors may determine from time
to time. The Executive Committee held twelve meetings during 1999. Each member
of the Executive Committee attended each meeting of the Executive Committee held
during 1999.
AUDIT COMMITTEE
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The Audit Committee of the Board was established in August 1995 and
currently consists of Messrs. Nedivi and Schwartz. The Audit Committee provides
general financial oversight in financial reporting and the adequacy of the
Company's internal controls through periodic meetings with the Company's
management and its external auditors. The Audit Committee held three meetings
during 1999. Each member of the Audit Committee attended each meeting of the
Audit Committee held during 1999.
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors was established in
January 1998 and currently consists of Messrs. Stern, Schwarz, Nedivi and
Schwartz. The Compensation Committee administers the Company's Stock Option
Incentive Plan and provides general oversight in all employee personnel matters
through periodic meetings with management of the Company. The Compensation
Committee held two meetings during 1999, and each member of the Compensation
Committee attended each meeting of the Compensation Committee held during 1999.
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation of the Chief
Executive Officer of the Company and the Company's other four most highly
compensated executive officers for the fiscal years 1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Compensation
------------
Securities
Other Annual Underlying All Other
Name of Principal Position Year Salary($) Bonus($) Compensation Options Compensation
- -------------------------- ---- --------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Jonathan Guss 1999 200,000 --- $20,000(1) --- 8,512(2)
Chief Executive Officer 1998 200,000 --- * --- 198(3)
1997 11,538 --- * 162,942 ---
Michael P. Fleischer 1999 200,000 --- * --- 7,864(4)
President 1998 200,000 --- * --- 306(5)
1997 11,538 --- * 162,942 ---
Yoav M. Cohen(6) 1999 135,850 21,057 --- 13,240(7)
Senior Vice President-Business 1998 129,692 36,667 * --- 7,917(8)
Development and Finance, Chief 1997 116,139 40,069 * 150,000 6,328(9)
Financial Officer *
Kasimir Arciszewski(10) 1999 64,907 27,551 * --- ---
Co-Managing Director of Speech 1998 101,198 167,149 * 100,000 ---
Design 1997 127,805 114,334 * --- ---
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Hans Meiler(10) 1999 64,907 27,551 * --- ---
Co-Managing Director of Speech 1998 101,198 167,149 * 100,000 ---
Design 1997 127,805 114,334 * --- ---
</TABLE>
* The named executive officer did not receive perquisites or other
personal benefits, securities, or property having an aggregate value of
greater than the lower of $50,000 or 10% of the total salary and bonus
reported for such executive officer.
(1) Includes relocation expenses paid by the Company on behalf of Mr. Guss
in the amount of $20,000 during 1999.
(2) Represents term life insurance premiums paid by the Company on behalf
of Mr. Guss in the amount of $271 during 1999 and a $8,250 automobile
allowance paid by the Company on behalf of Mr. Guss during 1999.
(3) Represents term life insurance premiums paid by the Company on behalf
of Mr. Guss in the amount of $198 during 1998.
(4) Includes term life insurance premiums paid by the Company on behalf of
Mr. Fleischer in the amount of $271 during 1999 and a $7,593 automobile
allowance paid by the Company on behalf of Mr. Fleischer during 1999.
(5) Represents term life insurance premiums paid by the Company on behalf
of Mr. Fleischer in the amount of $306 during 1998.
(6) Mr. Cohen resigned from his positions as Chief Financial Officer and
Senior Vice President Business Development and Finance of the Company
effective March 31, 2000.
(7) Includes a 401(k) matching contribution made by the Company on behalf
of Mr. Cohen in the amount of $4,800, term life insurance premiums paid
by the Company on behalf of Mr. Cohen in the amount of $4,196 and a
$4,244 car allowance paid by the Company on behalf of Mr. Cohen during
1999.
(8) Includes a 401(k) matching contribution made by the Company of behalf
of Mr. Cohen in the amount of $5,093 and term life insurance premiums
paid by the Company on behalf of Mr. Cohen in the amount of $2,824
during 1998.
(9) Includes a 401(k) matching contribution made by the Company of behalf
of Mr. Cohen in the amount of $3,572 and term life insurance premiums
paid by the Company on behalf of Mr. Cohen in the amount of $2,756
during 1998.
(10) Payments to Messrs. Arciszewski and Meiler were made in Deutsche Marks
and, for purposes of this table, were converted into U.S. dollars based
upon the respective average exchange rates for the month in which any
such payment was made.
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No stock appreciation rights or stock options were granted in 1999 to
officers named in the Summary Compensation Table. On February 4, 2000, Jonathan
Guss and Michael Fleischer each were granted 100,000 non-qualified options under
the Company's 1996 Stock Incentive Plan. Such options were granted for a term of
ten (10) years with an exercise price of $7.09 and vest in full on October 31,
2001.
Shown below is information with respect to the exercise of options to
purchase Common Stock exercised by the officers named in the Summary
Compensation Table and unexercised options held by such person at December 31,
1999.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
At FY-End
FY-End(#) ($)
Exercisable/ Exercisable/(1)
Name Unexercisable Unexercisable
- ---- ------------- -------------
- ---------------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C>
Jonathan Guss 92,000/70,942 $253,000/$195,091
- ---------------------------------------- ------------------------------------- -------------------------------------
Michael P. Fleischer 92,000/70,942 $253,000/$195,091
- ---------------------------------------- ------------------------------------- -------------------------------------
Yoav M. Cohen(2) 87,500/62,500 $221,875/$165,625
- ---------------------------------------- ------------------------------------- -------------------------------------
Kasimir Arciszewski 20,000/80,000 0/0
- ---------------------------------------- ------------------------------------- -------------------------------------
Hans Meiler 20,000/80,000 0/0
- ---------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
(1) Value is calculated on the basis of the positive difference between the
option exercise price and $7.75, the closing price for the Company's
Common Stock on December 31, 1999, multiplied by the number of option
shares. Because the exercise price for each Option granted to Messrs.
Arciszewski and Meiler exceeds the closing price of the Company's
Common Stock on December 31, 1999, the value is expressed as zero.
(2) Mr. Yoav M. Cohen resigned from his positions as Chief Financial
Officer and Senior Vice President-Business Development and Finance of
the Company effective March 31, 2000.
None of the named executive officers exercised any stock options during
1999.
The Company does not offer its employees any long-term incentive plans,
other than stock options, nor does it provide any defined benefit or actuarial
plans.
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<PAGE>
COMPENSATION OF DIRECTORS
During 1999, the Company did not provide cash or other compensation to
its directors for serving as directors of the Company and has no outstanding
arrangements for such compensation. On February 4, 2000, Mr. Jeffrey E. Schwarz,
Co-Chairman of the Company's Board of Directors, was granted 100,000
non-qualified options under the Company's 1996 Stock Incentive Plan. Such
options were granted for a term of ten (10) years with an exercise price of
$7.09 and vested in full on the date of grant.
EMPLOYMENT CONTRACTS
On November 26, 1997, the Company entered into a three-year employment
agreement with Mr. Jonathan Guss setting forth the terms and provisions of his
employment as Chief Executive Officer of the Company. Mr. Guss' base salary
currently is $200,000 per annum. Pursuant to the agreement, Mr. Guss was granted
a ten-year option to acquire 162,942 shares of Common Stock. Commencing on June
1, 1999 and ending on September 1, 2000, this option vests in equal quarterly
installments of 23,000 shares of Common Stock, on each March 1, June 1,
September 1 and December 1. The remaining portion of this option vests on the
conclusion of the term of the employment agreement. Any unvested portion of the
option vests immediately upon a Change of Control (as defined in the agreement).
Upon an involuntary termination of Mr. Guss, the unvested portion of the option
shall vest, but not with respect to more than 47,990 shares of Common Stock. If
Mr. Guss is terminated by the Company, other than in the event of his death or
disability or for cause, he is entitled to receive a severance payment equal to
four months salary if the termination occurs during the first year of the term,
six months salary if the termination occurs during the second year of the term,
and the balance of the base salary payable to him pursuant to the agreement, but
in no event more than eight months salary, if the termination occurs during the
last year of the term. Pursuant to the agreement, Mr. Guss is entitled to
participate in any employee benefit programs which may be available to the other
executives of the Company. In addition, the Company has agreed to establish a
deferred compensation program for Mr. Guss. In 1999, the Company made a $20,000
relocation payment in connection with his relocation to the Ramsey, New Jersey,
area in 1998. As part of his employment agreement, Mr. Guss agreed to a
non-competition agreement extending for two years following the termination of
the employment agreement. Mr. Guss' employment agreement was amended as of March
29, 2000, to increase Mr. Guss' base salary to $225,000 effective December 1,
2000, and to extend the term of his employment agreement through November 30,
2001. In addition, in connection with his agreement to extend the term of his
employment, on February 4, 2000, Mr. Guss was granted a ten-year option to
acquire 100,000 shares of Common Stock. This option vests in full on October 31,
2001, and otherwise has the terms and conditions as set forth in the option
previously granted under his employment agreement and described above. All other
terms of the employment agreement remained the same.
On November 26, 1997, the Company entered into a three-year employment
agreement with Mr. Michael P. Fleischer setting forth the terms and provisions
of his employment as President of the Company. Mr. Fleischer's base salary
currently is $200,000 per annum. Pursuant to the agreement, Mr. Fleischer was
granted a ten-year option to acquire 162,942 shares of Common Stock.
10
<PAGE>
Commencing on June 1, 1999 and ending on September 1, 2000, this option vests in
equal quarterly installments of 23,000 shares of Common Stock, on each March 1,
June 1, September 1 and December 1. The remaining portion of this option vests
on the conclusion of the term of the employment agreement. Any unvested portion
of the option vests immediately upon a Change of Control (as defined in the
agreement). Upon an involuntary termination of Mr. Fleischer, the unvested
portion of the option shall vest, but not with respect to more than 47,990
shares of Common Stock. If Mr. Fleischer is terminated by the Company, other
than in the event of his death or disability or for cause, he is entitled to
receive a severance payment equal to four months salary if the termination
occurs during the first year of the term, six months salary if the termination
occurs during the second year of the term, and the balance of the base salary
payable to him pursuant to the agreement, but in no event more than eight months
salary, if the termination occurs during the last year of the term. Pursuant to
the agreement, Mr. Fleischer is entitled to participate in any employee benefit
programs which may be available to the other executives of the Company. In
addition, the Company has agreed to establish a deferred compensation program
for Mr. Fleischer. As part of his employment agreement, Mr. Fleischer agreed to
a non-competition agreement extending for two years following the termination of
the employment agreement. Mr. Fleischer's employment agreement was amended as of
March 29, 2000, to increase Mr. Fleischer's base salary to $225,000 effective
December 1, 2000, and to extend the term of his employment agreement through
November 30, 2001. In addition, in connection with his agreement to extend the
term of his employment, on February 4, 2000, Mr. Fleischer was granted a
ten-year option to acquire 100,000 shares of Common Stock. This option vests in
full on October 31, 2001, and otherwise has the terms and conditions as set
forth in the option previously granted under his employment agreement and
described above. All other terms of the employment agreement remain the same.
The Company also had a written agreement with Mr. Yoav M. Cohen, dated
August 1, 1996, as amended as of December 5, 1997, setting forth the terms and
provisions of his employment as Chief Financial Officer of the Company and,
effective October 1, 1997, as Senior Vice-President - Business Development and
Finance. Mr. Cohen resigned from such positions effective March 31, 2000, at
which time his employment agreement terminated with no severance benefits being
owed him. Mr. Cohen's annual base salary of $120,000 in fiscal 1997, was
increased to $130,000 for 1998 and $135,850 for 1999. Pursuant to the agreement,
in 1996, the Company granted Mr. Cohen a stock option, in accordance with the
terms and provisions of the Company's Stock Incentive Plan, to purchase 50,000
shares of the Common Stock at $5.50 per share. As of November 26, 1997, the
Board of Directors authorized an amendment to that option so that it would vest
over four years, rather than over five years, commencing August 1, 1997, and
granted Mr. Cohen an additional option under the Company's Stock Incentive Plan
to purchase 100,000 shares of Common Stock at $5.00 per share, which option
shall vest in four equal annual installments, commencing November 26, 1998. In
September 1998, the Company adopted the Bogen Communications International, Inc.
Annual Bonus Plan (the "Bonus Plan"), which superceded any prior agreements
between the Company and its employees regarding bonuses. Pursuant to the Bonus
Plan, Mr. Cohen's target bonus for each year was equal to 31% of his base
salary.
In connection with the Company's acquisition of the 33% interest in
Speech Design it did not previously own, each of Messrs. Arciszewski and Meiler
entered into a management agreement with Speech Design with a three-year term
commencing on July 1, 1998. Pursuant to each management
11
<PAGE>
agreement, each of Messrs. Arciszewski and Meiler will continue to serve as
co-managing director of Speech Design with a base annual salary of DM 120,000.
At least three months prior to the end of each calendar year, the base salary
payable pursuant to the management agreements is subject to upward adjustment
upon the mutual agreement of the parties. In addition, each of Messrs.
Arciszewski and Meiler are guaranteed a bonus of DM 13,028 for 1999. Bonuses
payable in 2000 and subsequent years will be based upon a formula negotiated at
the beginning of each year. Each of Messrs. Arciszewski and Meiler has agreed
not to compete with Speech Design during the term of each management agreement
and for three years thereafter. In consideration for the non-compete agreement,
for three years following the termination of the respective management
agreements, each of Messrs. Arciszewski and Meiler is entitled to an additional
payment equal to 50% of his average base salary in the last twelve months prior
to the termination of his management agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Compensation Committee of the Board of Directors
participated with the Board of Directors in administering the Company's Stock
Incentive Plan and in providing general oversight in all employee personnel
matters. The Compensation Committee of the Board of Directors consists of
Messrs. Yoav Stern, Jeffrey Schwarz, Zivi R. Nedivi and Daniel Schwartz. None of
the members of the Compensation Committee is an operating officer or employee of
the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
Until the Compensation Committee was established in January 1998, the
full Board of Directors or the Executive Committee was responsible for, among
other things, developing and making recommendations with respect to the
Company's executive compensation policies.
The Company's executive compensation program is based on guiding
principles designed to align executive compensation with the values and
objectives, business strategy, management initiatives, and the business and
financial performance of the Company. In applying these principles the Board of
Directors and the Compensation Committee have focused on establishing criteria
designed to:
o Reward executives for enhancing stockholder value.
o Attract and retain key executives critical to the long-term success of
the Company and each of its business groups.
o Integrate compensation programs with both the Company's annual and
long-term strategic planning and measuring processes.
o Support a performance-oriented environment that rewards achievement
with respect to the Company's goals and also as compared to others in
the industry.
12
<PAGE>
In making compensation decisions, the Board of Directors and the
Compensation Committee focused on the individual contributions of executive
officers to the Company's strategic goals, and used their discretion to set
executive compensation where, in their judgment, external, internal or an
individual's circumstances warrant it.
EXECUTIVE OFFICERS COMPENSATION
The Company's executive officers compensation has been comprised of
base salary, bonus, long-term incentive compensation in the form of stock
options and various benefits, including medical and pension plans generally
available to employees of the Company.
Base Salary, Options and Bonus. Base salary levels for the Company's
executive officers are competitively set relative to companies in the
electronics industries and other comparable companies. In determining salaries,
the Board of Directors and the Compensation Committee also have taken into
account individual experience and performance and specific issues particular to
the Company. Historically, the Board of Directors and the Compensation Committee
have set the base salary for executive officers at the median to low end of the
range at which comparable companies compensate their executive officers. A
significant portion of compensation for executive officers of the Company has
been in the form of discretionary bonuses and stock options as these types of
compensation awards provide a better incentive to executive officers to achieve
long-term value for the Company and its stockholders. With the employment of
Messrs. Guss and Fleischer, the Board of Directors provided for a high base
salary level and no guaranteed bonus and also provided that a significant
portion of the compensation of Messrs. Guss and Fleischer would be in the form
of stock options. The Compensation Committee believes they have achieved a
proper balance between providing enough immediate cash compensation to attract
and retain top quality managers and providing long term incentives to promote
long-term growth for the Company's stockholders.
Benefits. The Company provides medical and pension benefits to its
executive officers that are generally available to the Company's employees. The
Compensation Committee does not consider benefits and perquisites to be a
significant portion of the Company's executive officer compensation.
Section 162(m) of the Internal Revenue Code. In general, Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), limits the
ability of public corporations to deduct remuneration in excess of certain
thresholds paid to certain executive officers. The Compensation Committee
continuously monitors and reviews the compensation of the Company's highest paid
executive officers to ensure that the Company's deduction for remuneration is
not subject to the limitations imposed by Section 162(m) of the Code. For
example, remuneration to executive officers in the form of stock options is
intended to qualify as performance-based compensation within the meaning of
Section 162(m) of the Code and, thus, would not be subject to deduction
limitations imposed thereunder.
CHIEF EXECUTIVE OFFICER AND PRESIDENT COMPENSATION
13
<PAGE>
The Compensation Committee believes that Messrs. Guss' and Fleischer's
total compensation package is reasonable in light of the demands which were, and
will continue to be, placed on them during the coming years. In addition, this
compensation level reflects the Compensation Committee's confidence in Messrs.
Guss and Fleischer and the Company's desire to attract and retain their talents,
as the Chief Executive Officer and President of the Company.
The foregoing report has been furnished by the Compensation Committee
of the Board of Directors.
Members of the Compensation Committee:
Yoav Stern
Jeffrey Schwarz
Zivi R. Nedivi
Daniel Schwartz
PERFORMANCE COMPARISON GRAPH
The following graph compares the cumulative total stockholder return on
the Company's Common Stock since August 1995 (the first day of trading in the
Company's Common Stock on the American Stock Exchange) with the cumulative
return on the S&P Smallcap 600 Index and the S&P Telephone Index over the same
period (assuming the investment of $100 in the Company's Common Stock, the S&P
Smallcap 600 Index and the S&P Telephone Index since August 1995 and
reinvestment of all dividends). On August 5, 1998, the Company's Common Stock
commenced trading on the NASDAQ National Market System under the symbol "BOGN".
The cumulative total of stockholder return represents the value that such
investments would have had on December 31, 1999.
(GRAPHIC OMITTED)
14
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Bogen S&P Smallcap 600 S&P Telephone
----- ---------------- -------------
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aug-95 100 100 100
Sep-95 100 102 106
Dec-95 59 106 112
Mar-96 70 112 104
Jun-96 80 117 109
Sep-96 82 121 101
Dec-96 70 129 113
Mar-97 66 120 116
Jun-97 87 143 130
Sep-97 99 166 134
Dec-97 133 161 158
Mar-98 153 179 188
Jun-98 147 171 175
Sep-98 108 135 189
Dec-98 140 159 233
Mar-99 130 144 212
Jun-99 124 167 258
Sep-99 107 159 249
Dec-99 149 178 246
- ------------------------------------------------------------------------------------------------
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
initial reports of ownership and reports of changes in ownership of the
Company's securities with the Securities and Exchange Commission and any
national securities exchange on which the Common Stock is traded. Executive
officers and directors and greater than ten percent stockholders are required by
the SEC regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on a review of the copies of such forms furnished to the
Company, or written representations from certain persons, the Company believes
that during the fiscal year ended December 31, 1999, no directors, officers or
beneficial owners of more than 10% the Company's Common Stock failed to file on
a timely basis, reports required by Section 16(a) of the Securities Exchange Act
of 1934.
15
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL
OWNERS
The following table sets forth certain information regarding beneficial
ownership (as determined in accordance with Rule 13d-3 promulgated under the
Exchange Act) of the Common Stock as of April 18, 2000, for (a) directors and
executive officers of the Company, (b) all directors and executive officers of
the Company, as a group, and (c) certain persons known to the Company to be the
beneficial owners of more than five percent of the Common Stock of the Company.
Except as otherwise noted, each person listed below has sole voting and
dispositive power with respect to the shares of Common Stock listed next to such
person's name.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES
OF COMMON STOCK PERCENT OF
NAME BENEFICIALLY OWNED (1) COMMON STOCK
- ---- ---------------------- ------------
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jonathan Guss 444,795(2) 5.20%
Michael P. Fleischer 448,962(3) 5.25%
Yoav M. Cohen(4) 89,596(5) 1.05%
Kasimir Arciszewski 314,800(6) 3.68%
Hans Meiler 223,200(7) 2.61%
Zivi R. Nedivi 318,212(8) 3.72%
Daniel A. Schwartz -- *
Jeffrey E. Schwarz 1,243,039(9) 14.55%
Yoav Stern 349,876(10) 4.09%
Mr. Glenn R. Dubin(11) 790,673(12) 9.25%
Dinan Management, L.L.C. 1,090,643(13) 12.76%
350 Park Avenue, 25th Floor
New York, New York 10022
All Directors and Executive Officers 3,973,154(14) 46.49%
as a group (10 persons)(4)
- ------------------------------------------------- ----------------------------- --------------------------
</TABLE>
* Less than 1%.
(1) For purposes of this table, a person or group of persons is deemed to
be the "beneficial owner" of any shares that such person has the right
to acquire within 60 days. For purposes of computing the percentage of
outstanding shares held by each person or group of persons named above
on a given date, any security that such person or persons has the right
to acquire within 60 days is deemed to be outstanding, but is not
deemed to be outstanding for purpose of computing the percentage
ownership of any other person.
(2) Includes 6,500 shares of Common Stock held directly by Mr. Guss and all
73,295 shares held by D&S Capital, LLC and all 250,000 shares of Common
Stock issuable to D&S Capital, LLC upon the exercise of warrants which
are currently exercisable. Mr. Guss owns a 50% equity interest in D&S
Capital, LLC. Also includes 92,000 shares of Common Stock subject
16
<PAGE>
to currently exercisable options and 23,000 shares of Common Stock
subject to option which become exercisable on June 1, 2000.
(3) Includes 10,667 shares of Common Stock held directly by Mr. Fleischer
and all 73,295 shares held by D&S Capital, LLC and all 250,000 shares
of Common Stock issuable to D&S Capital, LLC upon the exercise of
warrants which are currently exercisable. Mr. Fleischer owns a 50%
equity interest in D&S Capital, LLC. Also includes 92,000 shares of
Common Stock subject to currently exercisable options and 23,000 shares
of Common Stock subject to option which become exercisable on June 1,
2000.
(4) Mr. Yoav M. Cohen resigned from his position as the Company's Chief
Financial Officer and Senior Vice President-Business Development and
Finance effective March 31, 2000.
(5) Includes 1,000 shares owned directly by Mr. Cohen's spouse and also
includes 87,500 shares of Common Stock subject to currently exercisable
options and 1,096 shares of Common Stock held in Mr. Cohen's 401(k)
account. Mr. Cohen disclaims beneficial ownership of the shares held by
his spouse.
(6) Includes 274,800 restricted shares of Common Stock granted to Mr.
Arciszewski in connection with the Company's acquisition of the
remaining interest in Speech Design it did not previously own. See
"Certain Relationships and Related Transactions". Also includes 20,000
shares of Common Stock subject to currently exercisable options and
20,000 shares of Common Stock subject to option which become
exercisable on June 1, 2000.
(7) Includes 183,200 restricted shares of Common Stock granted to Mr.
Meiler in connection with the Company's acquisition of the remaining
interest in Speech Design it did not previously own. See "Certain
Relationships and Related Transactions". Also includes 20,000 shares of
Common Stock subject to currently exercisable options and 20,000 shares
of Common Stock subject to option which become exercisable on June 1,
2000.
(8) Includes 59,063 shares of Common Stock held by Mr. Nedivi directly and
259,149 shares of Common Stock issuable to Mr. Nedivi upon the exercise
of warrants which are currently exercisable.
(9) Includes 942,043 shares of Common Stock which Mr. Schwarz may be deemed
to beneficially own as a result of being a director, executive officer
and controlling stockholder of (i) Metropolitan Capital Advisors, Inc.,
the general partner Metropolitan Capital Advisors, L.P. the general
partner of Bedford Falls Investors, L.P. ("Bedford Falls"), the holder
of 825,043 shares of Common Stock, and (ii) Metropolitan Capital III,
Inc., the general partner of Metropolitan Capital Advisors III, L.P.,
which serves as the investment advisor for Metropolitan Capital
Advisors International Ltd. ("Metropolitan International"), which holds
117,000 shares of Common Stock. Also includes 147,056 shares held by
BGN Investors, LLC ("BGN"). Mr. Schwarz serves as the managing member
of BGN. Mr. Schwarz disclaims beneficial ownership of the shares
beneficially owned by Bedford Falls, Metropolitan International and
BGN, other than through his positions with such entities. Also
17
<PAGE>
includes 10,000 shares of Common Stock held by a trust established for
certain of Mr. Schwarz's family members and 5,000 shares of Common
Stock held by a charitable foundation established by Mr. Schwarz. Mr.
Schwarz disclaims beneficial ownership of the shares held by the trust
and the charitable foundation. Also includes 38,940 shares of Common
Stock held directly by Mr. Schwarz and 100,000 shares of Common Stock
subject to currently exercisable options.
(10) Includes 259,148 shares of Common Stock issuable to Mr. Stern upon the
exercise of warrants which are currently exercisable and 90,728 shares
of Common Stock held by a separate family trust established by Mr.
Stern.
(11) Mr. Glenn R. Dubin was appointed to the Company's Board of Directors on
March 29, 2000.
(12) Includes 725,473 shares of Common Stock which Mr. Dubin may be deemed
to beneficially own as a result of being an officer, director and
shareholder of Highbridge Capital Corporation. Highbridge Capital
Management, LLC serves as the trading manager for Highbridge Capital
Corporation and, as a result, may be deemed to beneficially own the
shares of Common Stock held by Highbridge Capital Corporation. Also
includes 65,200 shares of Common Stock held by C.J. Partners L.P. to
which Mr. Dubin serves as general partner.
(13) Includes 344,015 shares of Common Stock held directly by York Capital
Management, L.P. ("York Capital"), 44,116 shares of Common Stock held
directly by York Select, L.P. ("York Select"), and 592,612 shares of
Common Stock held by York Investment Limited ("York Investment"). Also
includes 89,900 shares held by accounts managed by an affiliate of
Dinan Management, L.L.C. ("Dinan Management"). James G. Dinan is the
Senior Managing Director, Member and holder of 99% of the equity
interests in Dinan Management, the general partner of York Capital and
York Select and the Sub-manager for York Investment. Mr. Dinan and
Dinan Management disclaim beneficial ownership of the shares held by
York Capital, York Select and York Investment and the other accounts
managed by Dinan Management and its affiliates. Also includes 16,000
shares of Common Stock held by a charitable foundation established by
Mr. Dinan and 4,000 shares held by trusts established by Mr. Dinan for
certain of his family members. Mr. Dinan disclaims beneficial ownership
of the shares held by the foundation and the trusts.
(14) For purposes of calculating the shares of Common Stock held by all
directors and executive officers of the Company as group, shares of
Common Stock held by, or issuable within 60 days to, D&S Capital,
L.L.C. were only counted once, even though beneficial ownership of such
shares may have been reported by more than one member of the group.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the Mergers & Acquisition Engagement Agreement, dated
August, 1997, as amended on November 29, 1997, and the Amended and Restated
Mergers & Acquisition Engagement Agreement, effective as of October 1, 1998,
between the Company and Helix Capital
18
<PAGE>
Services, Inc. ("Helix Services"), the Company paid Helix Services approximately
$305,750 in 1999 including an aggregate of $160,000 in monthly retainer fees,
$100,000 for services rendered in connection with the Apogee Sound Inc.
acquisition and $45,750 for services rendered in connection with the Digitronics
acquisition under the agreement between Helix Services and Speech Design
described below. This Agreement was terminated by the parties effective as of
August 31, 1999. Pursuant to the Amended and Restated Mergers & Acquisition
Agreement, Helix Services acted as the principal financial advisor and, subject
to certain exceptions, the exclusive mergers and acquisition advisor for the
Company and all of its domestic subsidiaries. In exchange for such services, the
Company paid Helix Services a $10,000 monthly retainer fee (prior to October 1,
1998, the monthly retainer fee was $20,000) and, in the event the Company
consummated a financing or other extraordinary corporate transaction, an
additional fee equal to a minimum of 2% of the acquisition price, subject to
reduction in certain circumstances.
Effective as of October 1, 1998, Speech Design entered into a Mergers &
Acquisition Engagement Agreement with Helix Services pursuant to which Helix
Services acts as the principal financial advisor and, subject to certain
exceptions, the exclusive mergers and acquisition advisor for Speech Design. In
exchange for such services, the Company paid Helix Services a $10,000 monthly
retainer fee and, in the event the Company consummated a financing or other
extraordinary corporate transaction, an additional fee equal to a minimum 2% of
the acquisition price, subject to reduction in certain circumstances. The
Agreement was terminated by the parties effective as of September 1, 1999.
Messrs. Yoav Stern and Zivi R. Nedivi, directors of the Company, are
principals of Helix.
PROPOSAL 2
PROPOSAL TO AMEND AND RESTATE THE 1996 STOCK INCENTIVE PLAN
The 1996 Stock Incentive Plan (the "Plan") currently provides for the
award of up to 1,000,000 shares of Common Stock in the form of incentive stock
options and non-qualified stock options.
The Board of Directors has approved an amendment and restatement to the
Plan (the "Plan Amendment"), subject to shareholder approval, increasing the
maximum number of shares of Common Stock which may be issued under the Plan by
500,000 shares. The Board believes that increasing the shares available under
the Plan is a necessary factor in allowing the Company to attract and retain
those highly competent individuals upon whose judgment, initiative and
leadership the Company's continuing success in large measure depends.
In addition, the Plan Amendment further amends the Plan by authorizing
the Compensation Committee to grant awards of restricted stock and clarifying
certain other provisions which currently are contained in the Plan including but
not limited to the ability of the Compensation Committee to award incentive
stock options under the Plan and to accept forms of consideration in payment of
options other than cash.
19
<PAGE>
Future issuances under the Amended Plan are subject to the discretion
of the Compensation Committee. Therefore, it is impossible to indicate the
specific awards that will be granted to or benefits that will be received by any
individual participant or any group of participants under the Amended Plan. No
options were issued to any of the Company's executive officers or directors
during the fiscal year ended December 31, 1999.
The following is a summary of the material provisions of the Amended
Plan and is qualified in its entirety by reference to the complete text of the
Amended Plan which has been filed with the SEC and is available from the Company
upon request to the Secretary of the Company:
General. The Plan, as proposed to be amended, provides for the issuance
of options to purchase up to 1,500,000 shares of Common Stock. Persons eligible
for participation in the Plan include key employees (including employees who
also serve as directors), non-employee directors and independent contractors or
consultants (collectively, "Participants"). The Plan provides for the granting
of nonqualified stock options ("Nonqualified Options" or "NQSOs"), incentive
stock options as defined in Section 422 of the Code (the "Incentive Stock
Options") and restricted share awards ("Restricted Share Awards").
Administration. The Plan Amendment would be administered and
interpreted by a committee of the Board (the "Committee") consisting of two or
more persons designated by the Board (the "Compensation Committee"). The
Compensation Committee has the full power to administer and interpret the
Amended Plan. Yoav Stern, Jeffrey Schwarz, Zivi Nedivi and Daniel Schwartz
currently serve as members of the Committee.
Stock Options. The exercise price of all Incentive Stock Options and
Nonqualified Stock Options (collectively, "Stock Options") granted will be
determined by the Committee but will not be less than the fair market value of
such shares on the date of the grant. Stock Options may be granted for a term of
up to ten years from the date of grant, subject to earlier termination on the
optionee's death, disability or termination of employment or relationship with
the Company. In addition, in the event that the capital structure of the Company
changes by reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, reclassification, stock split-up, spin off, combination of
shares, exchange of shares or the like, then appropriate adjustments will be
made by the Company's Board of Directors to the number and kind of shares
reserved for issuance under the Plan Amendment upon the grant and to be
delivered upon exercise of Stock Options. Further, in the event that the Company
adopts a plan of reorganization pursuant to which it would merge into,
consolidate with or sell its assets to any other corporation or entity the
Participant would (i) be required to exercise all such Stock Options or (ii)
consent to the conversion of such Stock Options into options to purchase shares
of the acquiring entity's shares or (iii) receive the same consideration as
received by other holders of the Company's Common Stock reduced by an amount
equal to the exercise price of such Stock Options. Stock Options would not be
assignable or otherwise transferable except by gift, will, the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
under the Code or Title I of the Employee Retirement Income Security Act of 1974
("ERISA"). The exercise price of an option would be payable in cash or by such
other method as the Committee may approve. Shares subject to Stock Options
granted under the Plan which have lapsed or terminated may be regranted under
the Plan. The Committee may
20
<PAGE>
offer to exchange new options for existing options, with the shares subject to
the existing options being again available for grant under the Plan. The
Committee may also determine circumstances upon which Stock Options would become
immediately exercisable and to accelerate the exercisability of any Stock
Options.
Restricted Share Awards. Restricted Share Awards entitle the recipient
to purchase for a nominal price Common Stock from the Company under terms which
provide for vesting and other conditions determined by the Board from time to
time. The Compensation Committee selects the recipients of Restricted Share
Awards and determines (i) the number of shares of Common Stock to be issued and
sold to the recipient, (ii) the price of the stock, and (iii) the vesting
schedule for such shares. The recipient may not sell, transfer or otherwise
dispose of such stock until it vests. Upon termination of the recipient's
relationship with the Company, the Company will be entitled to repurchase those
shares which are not vested on the termination date.
Amendments. The Compensation Committee has the full authority to amend
the Plan Amendment, subject to the consent of the Participant in certain
instances.
Federal Income Tax Consequences. The federal income tax consequences of
an employee's participation in the Plan are complex and subject to change. The
following discussion is only a summary of the general rules and participants in
the Amended Plan Amendment should consult their own tax advisors regarding their
particular situation.
Non-statutory Stock Options. There are no federal income tax
consequences to the optionee or the Company upon the grant of NQSOs. Upon the
exercise of NQSOs, the optionee will realize ordinary income in the amount by
which the fair market value of the option stock exceeds the exercise price of
the option. The Company is allowed a deduction for federal income tax purposes
equal to the amount of ordinary income recognized by the optionee at the time of
exercise of NQSOs. The optionee's holding period for purposes of determining
whether any subsequently realized gain or loss will be long-term or short-term
will begin at the time the optionee recognizes ordinary income. If, at the time
of issuance of the shares, the optionee is subject to the restrictions of
Section 16(b) of the Exchange Act, then the optionee generally will recognize
ordinary income as the later of (i) the date of exercise or (ii) the expiration
of six months from the date of option grant, based upon the difference between
the fair market value of the option shares at such time and the exercise price.
Incentive Stock Options. As in the case of non-statutory options, no
taxable income is recognized by the optionee upon the grant of an incentive
stock option. However, unlike non-statutory options, no taxable income is
recognized by the optionee upon the exercise of an incentive stock option, and
no corresponding expense deduction is available to the Company. Generally, if an
optionee holds shares acquired upon the exercise of an incentive stock option
until the later of (i) two years from the grant of the option or (ii) one year
from the date of transfer of the purchased shares to him or her (the "Statutory
Holding Period"), any gain recognized by the optionee on a subsequent sale of
the shares will be treated as long-term capital gain. Effective for tax years
beginning after December 31, 1997, any long-term capital gain will be taxed at a
rate of 20%. The federal income tax effect on the holder of incentive stock
options is to defer, until the purchased
21
<PAGE>
shares are sold, taxation of any increase in the shares' value from the time of
grant to the time of exercise.
If the optionee sells shares acquired upon the exercise of an incentive
stock option prior to the expiration of the Statutory Holding Period, he or she
will recognize taxable income at ordinary income tax rates in an amount equal to
the lesser of (i) the fair market value of the shares on the date of exercise
less the option price or (ii) the amount realized on the date of sale less the
option price. Subject to Section 162(m) of the Code, the Company will be
entitled to a corresponding business expense deduction. The excess of amount
realized by the optionee on disposition over the fair market value of the shares
at the time of exercise, if any, will be treated as short-term capital gain, and
taxed at ordinary rates.
For purposes of the "alternative minimum tax" applicable to
individuals, the exercise of an incentive stock option is treated in the same
manner as the exercise of a non-statutory stock option. Thus, in the year of
option exercise an optionee must generally include in his or her alternative
minimum taxable income the difference between the exercise price and the fair
market value of the purchased shares on the date of exercise. The alternative
minimum tax is imposed upon an individual's alternative minimum taxable income
at rates of 26% to 28%, but only to the extent that such tax exceeds the
taxpayer's regular income tax liability for the taxable year. However, the
amount of adjusted net alternative minimum tax paid in any taxable year is
available as a credit against regular tax in future years.
Restricted Share Awards. If a Restricted Share Award is subject to
forfeiture provisions and restrictions on transfers, neither the Company nor the
recipient of the award will realize any federal tax consequences at the time
such award is made under the Incentive Plan unless the recipient makes an
election under Section 83(b) of the Code. If the recipient of a Restricted Share
Award makes a Section 83(b) election within 30 days of the date of the award, or
if the recipient receives an award that is not subject to forfeiture provisions
and restrictions on transfer, he or she will recognize ordinary income, for the
year in which the award is received, in an amount equal to the difference
between the fair market value of the Common Stock at the time the award is made
and the purchase price paid for the Common Stock. If such election is made and
the recipient subsequently forfeits some or all of the Common Stock, he or she
will not be entitled to any tax refund. However, the recipient is allowed a
capital loss if the amount paid for the Common Stock is not fully restored on
forfeiture. If a Section 83(b) election is not made with respect to a Restricted
Share Award, the recipient will recognize ordinary income in the first taxable
year in which the rights of the recipient are either transferable or are not
subject to a substantial risk of forfeiture, in an amount equal to the
difference between the fair market value of the Common Stock at that time and
the original purchase price for the shares. Subject to Section 162(m) of the
Code and satisfaction of the applicable reporting requirements, the Company will
be entitled to deduct, as compensation expense, the same amount as the recipient
must include as ordinary income. Such deduction will be allowed in the Company's
tax year which includes the last day of the recipient's tax year in which the
recipient is required to include the amount in income. When the recipient sells
the shares, he or she will recognize capital gain or loss at the time of sale
equal to the difference between his or her basis (the price paid for the shares
plus any taxed amount) and the sale price. The capital gain recognized on the
disposition of such shares by the recipient will be short-term capital
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gain or loss to the extent such shares are held by the recipient for 12 months
or less and long-term capital gain or loss to the extent such shares are held by
the recipient for more than 12 months. Any long-term capital gain will be taxed
at a rate of 20%.
Section 162(m). Under Section 162(m) of the Code, the Company may be
precluded from claiming a federal income tax deduction for total remuneration in
excess of $1,000,000 paid to the chief executive officer or to any of the other
four most highly compensated officers in any one taxable year. Total
remuneration would include amounts received upon the exercise of Stock Options.
Voting Required For Approval. Approval of this Proposal, the amendment
and restatement of the Plan, requires the affirmative vote of a majority of the
shares of the Company's Common Stock, in person or by proxy, at the Annual
Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT SHAREHOLDERS VOTE
IN FAVOR OF THIS PROPOSAL.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors will appoint the firm of KPMG PEAT MARWICK, LLP
("KPMG"), independent public accountants, as the auditors of the Company for the
2000 fiscal year, subject to the ratification of such appointment by the
stockholders at the Annual Meeting.
If the foregoing appointment of KPMG is not ratified by the
stockholders, the Board of Directors will appoint other independent accountants
whose appointment for any period subsequent to the next Annual Meeting of
Stockholders will be subject to the approval of stockholders at that meeting. A
representative of KPMG is expected to be present at the Annual Meeting and will
have an opportunity to make a statement should the representative so desire and
to respond to appropriate questions.
Ratification of the selection of KPMG as independent public accountants
will require the affirmative vote of holders of a majority of the shares of the
Common Stock present in person or represented by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF KPMG.
GENERAL
OTHER MATTERS
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The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting other than those stated in the Notice of Annual
Meeting and referred to in this Proxy Statement. If any other matters should
properly come before the Annual Meeting, it is intended that the proxies in the
accompanying form will be voted as the persons named therein may determine in
their discretion.
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, is being mailed to stockholders together with this Proxy
Statement.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the accompanying form will be
borne by the Company, including expenses in connection with preparing and
mailing this Proxy Statement. In addition to solicitation of proxies by mail,
directors, officers and employees of the Company (who will receive no additional
compensation therefore) may solicit the return of proxies by telephone, or
personal interview. Arrangements have also been made with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of stock held of record by such persons, and
the Company will reimburse them for reasonable out-of-pocket expenses incurred
by them in connection therewith.
Each holder of the Company's Common Stock who does not expect to be
present at the Annual Meeting or who plans to attend but who does not wish to
vote in person is urged to fill in, date and sign the proxy and return it
promptly in the enclosed return envelope.
STOCKHOLDER PROPOSALS
If any stockholder of the Company intends to present a proposal for
consideration at the next Annual Meeting of Stockholders and desires to have
such proposal included in the proxy statement and form of proxy distributed by
the Board of Directors with respect to such meeting, pursuant to Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended, such proposal
must be received at the Company's principal executive offices, 50 Spring Street,
Ramsey, New Jersey 07446, Attention: Maureen A. Flotard, not later than December
29, 2000. If a stockholder wishes to present a matter at the next Annual Meeting
of Stockholders that is outside of the processes of Rule 14a-8, notice must be
received at the Company's executive offices not later than March 14, 2001. After
that date, the proposal will be considered untimely and the Company's proxies
will have discretionary voting authority with respect to such matter.
By Order of the Board of Directors
MAUREEN A. FLOTARD
Assistant Secretary
APPENDIX I
BOGEN COMMUNICATIONS INTERNATIONAL INC.
AMENDED AND RESTATED STOCK INCENTIVE PLAN
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AS OF MARCH 29, 2000
1. Purpose of the Plan. The purpose of this Stock Incentive Plan
("Plan") of Bogen Communications International Inc. (the "Company"), is to
promote the interests of the Company by providing incentives to enable the
Company to attract and retain employees and executives of high quality and to
encourage them to acquire or increase their proprietary interest in the Company
and to maximize the Company's performance during the term of their employment or
period of service with the Company.
2. Definitions. As used in the Plan, unless the context requires
otherwise, the following terms shall have the following meanings:
(a) "Award" shall mean the grant of any Option or Restricted Share
Award made hereunder.
(b) "Board" shall mean the Board of Directors of the Company.
(c) The "Committee" shall mean a committee composed of two or more
members of the Board at least of majority of whom shall be "Outside Directors"
for the purpose of any regulatory requirements then applicable to the attain any
desired beneficial tax or securities trading treatment available to the
optionee, including Section 162 (m) of the Code.
(d) "Common Stock" shall mean the common stock, par value $.001 per
share, of the Company, or if, pursuant to the adjustment provisions set forth in
Section 11 hereof, another security is substituted for, or issuable in
connection with ownership of the Common Stock, such other additional security.
(e) "Fair Market Value" shall mean the fair market value of the
Common Stock on the Grant Date (as hereinafter defined) or other relevant date.
If on such date the Common Stock is listed on a stock exchange or is quoted on
the National Market segment of the Nasdaq Stock Market (the "National Market"),
the Fair Market Value shall be the closing sale price (or if such price is
unavailable, the average of the high bid price and the low asked price) on such
date. If on such date the Common Stock is traded in the over the counter market
(but not on the National Market), the Fair Market Value shall be the average of
the high bid and the low asked price on such date (or if there are no reported
bid and asked prices on the Grant Date, then the average between the high bid
price and the low asked price on the next preceding day for which such
quotations exist). If the Common Stock is neither listed or admitted to trading
on any stock exchange, quoted on the National Market or traded in the over the
counter market, the Fair Market Value shall be determined in good faith by the
Committee in accordance with generally accepted valuation principles and such
other factors as the Committee reasonably deems relevant.
(f) "Grant Date" shall mean the date on which an Award is granted.
(g) "Option" shall mean the right, granted pursuant to the Plan, to
purchase one or more shares of Common Stock. "Incentive Stock Option" shall mean
an Option granted pursuant to Section 6(I) hereof and intended to be qualified
for incentive stock option treatment under the Internal Revenue Code of 1986, as
amended (the "Code"). "Nonqualified Stock Option" shall mean all other Options
granted under the Plan, including any Options granted under Section 6 which do
not qualify for treatment as incentive stock options under the Code.
(h) "Optionee" or "Grantee" shall mean a person to whom an Option
has been granted, or an Award has been made, under the Plan, as the case may be.
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(i) "Participant" shall mean (i) designated officers and other key
employees of the Company or a Subsidiary Corporation (as such term is defined
under Section 424(f) of the Internal Revenue Code of 1986 as amended (the
"Code")) and (ii) members of the Company's Board of Directors, and (iii)
independent contractors and consultants (who may be individuals or entities) who
perform services for the Company.
3. Stock Subject to the Plan. There will be reserved for issuance upon
the exercise of Awards granted from time to time under the Plan an aggregate of
1,500,000 shares of Common Stock and other securities or property to be
delivered upon exercise of Options (as may be required under Section 11 hereof.)
The Board shall determine from time to time whether all or part of such
1,500,000 shares shall be authorized but unissued shares of Common Stock or
issued shares of Common Stock which shall have been reacquired by the Company
and which are held in its treasury. If any Award granted under the Plan should
expire or terminate for any reason without having been exercised in full, the
Common Stock or other securities or property subject to such Award shall again
become available for the grant of Award under the Plan, other than as may be
prohibited by the Code or other applicable statute or regulation.
4. Administration of the Plan. The Plan shall be administered by the
Committee.
(a) Subject to the provisions of the Plan, the Committee shall have
full discretion and sole authority:
(i) To designate the Participants to whom Awards shall be
granted, to determine whether individual Grantees shall be granted Incentive
Stock Options or Nonqualified Stock Options or Restricted Share Awards, to
designate the number of shares to be covered by each of the Awards, and to
determine the time or times at which Awards shall be granted;
(ii) To determine the exercise price of Options granted
hereunder, subject to Section 6 hereof;
(iii) To interpret the Plan;
(iv) To promulgate, amend and rescind rules, regulations,
agreements and instruments relating to the Plan, provided, however, that no such
rules or regulations shall be inconsistent with any of the material terms of the
Plan;
(v) To subject any Award to such additional terms and
conditions (not inconsistent with the Plan) as may be specified when granting
the Award, including without limitation additional restriction or conditions on
the exercise of an Option or receipt of an Award;
(vi) To determine circumstances upon which Options shall
become immediately exercisable, or a Restricted Share Award earned, and to
accelerate the exercisability of any Option, or the vesting of a Restricted
Share Award; and
(vii) To make all other determinations in connection with the
administration and application of the Plan.
(b) The Committee's interpretations of the Plan and all
determinations made by the Committee pursuant to the powers vested in it
hereunder shall be conclusive and binding on all persons having interests in the
Plan or in any Award granted under the Plan.
(c) Each member of the Committee shall be indemnified and held
harmless by the Company against any cost or expense (including counsel fees)
reasonably incurred by him or her, or liability (including any sum paid in
settlement of a claim with the approval of the Company) arising out of any act
or omission to act in connection with the Plan, unless arising out of such
member's own fraud or bad faith, to the extent permitted by applicable law. Such
indemnification shall be in addition to any rights of indemnification the
members may have as directors or otherwise
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under the Certificate of Incorporation, as amended, or By-Laws of the Company,
any agreement of shareholders or disinterested directors or otherwise.
5. Eligibility. Officers and other employees of the Company or a
Subsidiary Corporation, including persons who have accepted written offers of
employment with the Company, non-employee members of the Board, and independent
contractors and consultants who perform services for the Company shall be
eligible to participate in the Plan. Only Participants who are officers or other
employees of the Company or a Subsidiary Corporation shall be eligible to
receive Incentive Stock Options pursuant to Section 6(I) hereof. All
Participants shall be eligible to receive Nonqualified Stock Options or
Restricted Share Awards.
6. Types of Options.
(I) Incentive Stock Options. The following provisions shall apply
solely with respect to Options which are designated by the Committee as
"Incentive Stock Options" at the time of grant:
(a) Option Exercise Price. The price at which shares of Common
Stock shall be purchased upon exercise of any Incentive Stock Option shall be
not less than the Fair Market Value of such shares on the Grant Date, except
that if on the Grant Date an Optionee owns Common Stock (as determined under
section 424(d) of the Code) possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of the Company's Parent
Corporation (as such term is defined under Section 424(e) of the Code), if any,
or any Subsidiary Corporations, then the price at which shares of Common Stock
shall be purchased upon exercise of an Incentive Stock Option granted to such
Optionee shall not be less than 110% of the Fair Market Value of such shares on
the Grant Date and, notwithstanding Section 6(I)(b) hereof, such Incentive Stock
Option shall cease to be exercisable five (5) years after the Grant Date.
(b) Expiration. Except as otherwise provided in Section 6(I)(a) and
Section 11 hereof, each Incentive Stock Option granted hereunder shall cease to
be exercisable ten years after the date on which it is granted.
(c) Restriction on Exercise. The Fair Market Value (as determined
on the Grant Date) of Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by any person during any calendar year (under
this Plan and all other plans of the Company and its Subsidiary Corporations)
cannot be greater than $100,000.
(II) Nonqualified Stock Options. The following provision shall apply
with respect to Options which are designated by the Committee as "Nonqualified
Stock Options" at the time of grant:
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(a) Option Exercise Price. The price at which shares of Common
Stock shall be purchased upon exercise of a Nonqualified Stock Option shall be
determined by the Committee but shall be not less than Fair Market Value of such
shares on the Grant Date.
(b) Expiration. Except as otherwise provided in Section 11 hereof,
each Nonqualified Stock Option granted hereunder shall cease to be exercisable
ten years after the Grant Date.
(c) Designation. Any Option which is not designated by the
Committee as an Incentive Stock Option under Section 6(I) shall automatically be
deemed to be a Nonqualified Stock Option.
7. Restricted Share Awards.
(a) Time, Amount and Form of Award. The Committee shall be
authorized to grant to any Participant an Award of Restricted Shares of Common
Stock, on such terms and conditions as it shall determine. Each grant of
Restricted Shares under the Plan shall be evidenced by a Restricted Share
Agreement between the recipient and the Company. Such Restricted Shares shall be
subject to all applicable terms of the Plan and may be subject to any other
terms that are consistent with the Plan. The provisions of the various
Restricted Share Agreements need not be identical.
(b) Payment for Award. To the extent that an Award is granted in
the form of Restricted Shares, the Award recipient, as a condition to the grant
of such Award, may be required to pay the Company in cash or cash equivalents an
amount equal to the par value of such Restricted Shares.
(c) Vesting Conditions. Each Award of Restricted Shares may or may
not be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Share Agreement. The
Committee may include among such conditions the requirement that the performance
of the Company or a business unit of the Company for a specified period equal or
exceed a target or performance standard determined by the Committee. A
Restricted Share Agreement may provide for accelerated vesting in the event of
the Participant's death, disability or retirement or other events. The Committee
may determine, at the time of granting Restricted Shares or thereafter, that all
or part of such Restricted Shares shall become vested in the event that a change
in control, as may be defined by the Committee, occurs with respect to the
Company.
(d) Voting and Dividends. The holders of Restricted Shares awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other stockholders. A Restricted Stock Agreement, however, may require
that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject
to the same conditions and restrictions as the Award with respect to which the
dividends were paid.
8. Vesting of Option. The vesting period, if any, for all Options
granted hereunder shall commence on the Grant Date and shall end on the date or
dates, determined by the Committee.
9. Method of Exercise. Optionees may exercise their Options from time
to time by giving written notice to the Company. The date of exercise shall be
the date on which the Company receives such notice, or such later date as may be
set forth in such notice, so long as the Option is still then outstanding. Such
notice shall be on a form furnished by the Company and shall state the number of
shares to be purchased and the exercise date. Upon exercise, or as soon
thereafter as is practicable, the Company shall deliver to the Optionee (or
other person entitled to exercise the
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Option) at the principal office of the Company, or such other place as shall be
mutually acceptable, a certificate or certificates for such shares against
payment in full of the Option price for the number of shares to be delivered,
such payment to be by a certified or bank cashier's check and/or, if permitted
by the Committee in its discretion, by delivery of such other form of
consideration, including capital stock of the Company, promissory notes or other
property, and may permit the cashless exercise of Options based upon the value
of the Common Stock subject to Options, either pursuant to terms then determined
in the discretion of the Committee or pursuant to any plan for such exercise
then available to the Optionee, or made available to the Optionee in the
Committee's discretion. If the Optionee (or other person entitled to exercise
the Option) shall fail to accept delivery of and pay for all or any part of the
shares specified in his notice when the Company shall tender such shares to him,
his right to exercise the Option with respect to such unpurchased shares may be
terminated.
10. Termination of Employment. Except as set forth below or otherwise
set forth in an Option Grant approved by the Committee, in the event that an
Optionee's employment terminates for any reason, any Options then exercisable
shall automatically terminate sixty days after the date on which such employment
terminates.
(a) In the event that an Optionee's employment terminates by reason
of retirement, the Committee shall have the right to extend such Optionee's
Options until the earlier of (x) three months after the date of retirement or
(y) the date on which such Options would terminate pursuant to Section 6.
(b) In the event that an Optionee's employment terminates by reason
of disability, an Option exercisable by him shall terminate one year after the
date of disability of the Optionee, but in any event not later than the date on
which such Options would terminate pursuant to Section 6 hereof.
(c) In the event that an Optionee's employment terminates by reason
of death, an Option exercisable by him shall terminate one year after the date
of death, but in any event not later than the date on which such Options would
terminate pursuant to Section 6 hereof.
During such time after death, an Option may only be exercised by the
Optionee's personal representative, executor or administrator, as the case may
be. Unless vesting on an Option is otherwise provided for by the terms of an
Option or the Committee, no exercise permitted by this Section 10 shall entitle
an Optionee or his personal representative, executor or administrator to
exercise any Option which is not (on the date of exercise) then exercisable.
11. Changes in Capital Structure. In the event that, by reason of a
stock dividend, recapitalization, reorganization, merger, consolidation,
reclassification, stock split-up, spin off, combination of shares, exchange of
shares, or the like, the outstanding shares of Common Stock of the Company are
hereafter increased or decreased, or changed into or exchanged for, or entitle
the holder to a different number or kind of shares or other securities of the
Company or of any other corporation, then appropriate adjustments shall be made
by the Board to the number and kind of shares reserved for issuance under the
Plan upon the grant and to be delivered upon exercise of Options or receipt of
other Awards. In addition, the Board shall make appropriate adjustments to the
number and kind of shares subject to outstanding Options or other Awards, and
the purchase price per share or Options shall be appropriately adjusted
consistent with such change. Unless otherwise determined by the Committee, in no
event shall fractional shares be issued or issuable pursuant to any adjustment
made under this Section 11. The determination of the Board as to any adjustment
shall be final and conclusive.
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12. Mandatory Exercise. Notwithstanding anything to the contrary set
forth in the Plan, in the event that:
(a) the Company should adopt a plan of reorganization pursuant to
which it shall merge into, consolidate with, or sell its assets to, any other
corporation or entity (an "Acquiring Entity"), the Company may give an Optionee
written notice thereof:
(i) requiring such Optionee to exercise his or her Options
within thirty days after receipt of such notice, (including any unvested Options
which would, except for this Section 12, otherwise be unexercisable at that
date); or
(ii) requiring such Optionee to consent to the conversion of
such Options into an option to purchase the same number of shares of the
Acquiring Entity's common stock as would have been received by the Optionee if
the Optionee had exercised such Option; or
(iii) deeming such Options to have been exercised, in which
case the Optionee shall be entitled to receive the same consideration per share
as received by other holders of the Company's stock but reduced by an amount
equal to the Fair Market Value on the Grant Date.
(b) the Company should adopt a plan of complete liquidation, the
Company shall give an Optionee written notice thereof requiring such Optionee to
exercise his or her Options within thirty days after receipt of such notice,
(including any invested Options which would, except for this Section 12,
otherwise be unexercisable at that date).
Those Options which the Company requests to be exercised and which
shall not have been exercised in accordance with the provisions of the Plan by
the end of such 30 day period shall automatically lapse irrevocably and the
Optionee shall have no further rights with respect to such Options.
13. Option Grant. Each grant of an Option under the Plan will be
evidenced by a document in such form as the Committee may from time to time
approve. Such document will contain such provisions as the Committee may in its
discretion deem advisable, including without limitation additional restrictions
or conditions upon the exercise of an Option. The Committee may require an
Optionee, as a condition to the grant or exercise of an Option or the issuance
or delivery of shares upon the exercise of an Option or the payment therefor, to
make such representations and warranties and to execute and deliver such notices
of exercise and other documents as the Committee may deem consistent with the
Plan or the terms and conditions of the Option Agreement. Not in limitation of
any of the foregoing, in any such case referred to in the preceding sentence the
Committee may also require the Optionee to execute and deliver documents
(including the investment letter described in Section 14), containing such
representations, warranties and agreements as the Committee or counsel to the
Company shall deem necessary or advisable to comply with any exemption from
registration under the Securities Act of 1933, as amended, the (the "Securities
Act") any applicable State securities laws, and any other applicable law,
regulation or rule.
14. Investment Letter. If required by the Committee, each Optionee
shall agree to execute a statement directed to the Company, upon each and every
exercise by such Optionee of any Options, that shares issued thereby are being
acquired for investment purposes only and not with a view to the redistribution
thereof, and containing an agreement that such shares will not be sold or
transferred unless either (i) registered under the Securities Act or (ii) exempt
from such registration in the opinion of Company counsel. If required by the
Committee, certificates representing shares of Common Stock issued upon exercise
of Options shall bear a restrictive legend summarizing the restrictions on
transferability applicable thereof.
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15. Requirement of Law. The granting of Awards, the issuance of shares
upon the exercise of an Option, and the delivery of shares upon the payment
therefore shall be subject to compliance with all applicable laws, rules, and
regulations. Without limiting the generality of the foregoing, the Company shall
not be obligated to sell, issue or deliver any shares unless all required
approvals from governmental authorities and stock exchanges shall have been
obtained and all applicable requirements of governmental authorities and stock
exchanges shall have been complied with.
16. Tax Withholding. The Company, as and when appropriate, shall have
the right to require each Grantee purchasing or receiving shares of Common Stock
under the Plan to pay any Federal, state, or local taxes required by law to be
withheld or to take whatever action it deems necessary to protect the interests
of the Company in respect to such tax obligations.
17. Nonassignability. A Grantee may transfer the rights granted
hereunder by (i) bona fide gift, (ii) will or by the laws of descent and
distribution or, (iii) pursuant to a qualified domestic relations order as
defined under the Code or Title I of ERISA or the rules thereunder. Upon the
death of an Optionee, the personal representative or other person entitled to
succeed to the rights of the Optionee ("Successor Optionee") may exercise such
rights. A Successor Optionee shall furnish proof satisfactory to the Company of
such person's right to receive the Option under the Optionee's will or under the
applicable laws of descent and distribution.
18. Optionee's Rights as Shareholder and Employee. An Optionee shall
have no rights as a shareholder of the Company with respect to any shares
subject to an Option until the Option has been exercised and the certificate
with respect to the shares purchased upon exercise of the Option has been duly
issued and registered in the name of the Optionee. Nothing in the Plan shall be
deemed to give an employee any right to continued employment nor shall it be
deemed to give any employee any other right not specifically and expressly
provided in the Plan.
19. Termination and Amendment.
(a) Amendment. (i) The Board may amend or terminate the Plan at any
time, subject to the limitation that the approval by the shareholders of the
Company shall be required in respect of any amendment that (A) materially
increases the benefits accruing to Participants under the Plan, (B) increases
the aggregate number of shares of Common Stock that may be issued or transferred
under the Plan (other than by operation of Section 11 above), (C) increases the
maximum number of shares of Common Stock for which any Optionee may be granted
options under this Plan or (D) materially modifies the requirements as to
eligibility for participation in the Plan; (E) materially modifies the
provisions for determining the Fair Market Value; and (ii) the Board may not
amend the Plan if such amendment would cause the Plan, or any Award of an
Incentive Stock Option under Section 6(I) to fail to comply with the
requirements of Section 422 of the Code including, without limitation, a
reduction of the option price or an extension of the period during which an
Incentive Stock Option may be exercised.
(b) Termination of Plan. The Plan shall terminate on the tenth
anniversary of its effective date (as set forth in Section 20 below) unless
earlier terminated by the Board or unless extended by the Board with approval of
the stockholders.
(c) Termination and Amendment of Outstanding Grants. Except as
otherwise provided in Section 12 hereof or in any document evidencing the grant
of an Award hereunder, a termination or amendment of the Plan that occurs after
an Award has been granted shall not result in the termination or amendment of
the Award unless the Grantee consents or unless the Committee acts under Section
21(b) below. The termination of the Plan shall not impair the power
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and authority of the Committee with respect to an outstanding Award. Whether or
not the Plan has terminated, an outstanding Option may be terminated or amended
under Section 21(b) below or may be amended by agreement of the Company and the
Grantee which is consistent with the Plan.
20. Shareholder Approval. This Amended and Restated Plan is subject to
approval by the holders of a majority of the shares of stock of the Company
present or represented in proxy in a vote at a duly held meeting of the
shareholders of the Company. If the Plan is not so approved by shareholders, the
original Plan, as hereinbefore in place, shall remain in full force and effect.
Subsequent to such approval, the effective date of the Amended and Restated Plan
shall be March 29, 2000.
21. Miscellaneous.
(a) Substitute Grants. The Committee may grant an Award to an
employee or a non-employee director of another corporation, if such person shall
become an employee or non-employee director of the Company, or a Subsidiary
Corporation, by reason of a corporate merger, consolidation, acquisition of
stock or property, reorganization or liquidation involving the Company or a
Subsidiary Corporation and such other corporation. Any Award so granted shall be
made in substitution for a stock option granted by the other corporation, but
the terms and conditions of the Award so granted may vary from the terms and
conditions required by the Plan and from those of the Award granted by the other
corporation. The Committee shall prescribe the provisions of the Award so
granted.
(b) Compliance with Law. The Plan, the grant of Awards and the
obligations of the Company to issue shares of Common Stock upon exercise of
Options shall be subject to all applicable laws and required approvals by any
governmental or regulatory agencies. With respect to persons subject to Section
16 of the Securities Exchange Act of 1934 ("Exchange Act"), it is the intent of
the Company that the Plan and all transactions under the Plan shall comply with
all applicable conditions of Rule 16b-3 or any successor provisions under the
Exchange Act. The Committee may revoke the grant of any Award if it is contrary
to law or modify any Award to bring it into compliance with any valid and
mandatory government regulations. The Committee may also adopt rules regarding
the withholding of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this section.
(c) Sunday or Holiday. In the event that the time for the
performance of any action or the giving of any notice is called for under the
Plan within a period of time which ends or falls on a Sunday or legal holiday,
such period shall be deemed to end or fall on the next date following such
Sunday or legal holiday which is not a Sunday or legal holiday.
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PROXY CARD
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BOGEN
COMMUNICATIONS INTERNATIONAL, INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON FRIDAY, MAY 19, 2000. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
FOLLOWING PROPOSALS:
1. Election of Directors:
Jonathan Guss, Michael P. Fleischer, Glenn R. Dubin and Daniel A. Schwartz.
/ / FOR all of the nominees. / / WITHHOLD for all nominees
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED:
- --------------------------------------------------------------------------------
2. Approval of the Company's Amended and Restated Stock Incentive Plan:
/ / FOR / / AGAINST / / ABSTAIN
3. Ratification of appointment of KPMG Peat Marwick LLP as auditors for the
fiscal year ending December 31, 2000:
/ / FOR / / AGAINST / / ABSTAIN
(See reverse side)
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The undersigned hereby appoints Maureen A. Flotard and Richard S. Schmedel
and each of them, proxies, with full power of substitution, to vote all shares
of Common Stock of Bogen Communications International, Inc. that the undersigned
is entitled to vote at the Annual Meeting of Stockholders to be held on May 19,
2000, and at any adjournment thereof, upon all subjects that may properly come
before the meeting. IF SPECIFIC DIRECTIONS ARE NOT GIVEN WITH RESPECT TO THE
PROPOSALS OR ANY OTHER MATTERS TO BE ACTED UPON AT THE ANNUAL MEETING AND THIS
PROXY CARD IS SIGNED AND RETURNED, THE PROXIES WILL VOTE IN ACCORDANCE WITH THE
BOARD'S RECOMMENDATION (I.E., FOR THE PROPOSALS) AND ON ANY OTHER MATTER(S) THAT
MAY PROPERLY COME BEFORE THE MEETING.
Please date and sign exactly as
your name(s) appear on this proxy
card. If shares are held jointly,
each stockholder should sign. If
signing as an executor, trustee,
administrator, custodian, guardian,
corporate officer, or pursuant to a
power of attorney, please indicate
below.
Dated: ____________________________
By: _______________________________
___________________________________
/ / CHECK THIS BOX IF YOU HAVE EITHER A CHANGE OF ADDRESS OR COMMENTS, AND
PLEASE NOTE THE SAME ON THIS PROXY CARD.
