<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Video Services Corporation
(formerly known as International Post Limited)
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
92656U 10 7
(CUSIP Number)
Keith L. Schaitkin, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 27, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box / /.
Check the following box if a fee is being paid with the statement
/ /. (A fee is not required only if the reporting person: (1) has
a previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (See
Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
Page 1 of Pages
List of Exhibits is on Page <PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 92656U 10 7 Page of Pages
1 NAME OF REPORTING PERSON
Louis H. Siracusano
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
3,352,882
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
3,352,882
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,352,882
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.33%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 92656U 10 7 Page of Pages
1 NAME OF REPORTING PERSON
Arnold P. Ferolito
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
3,350,382
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
3,350,382
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,350,382
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
/x/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.31%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 92656U 10 7 Page of Pages
1 NAME OF REPORTING PERSON
Donald H. Buck
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
525,681
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
525,681
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
525,681
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
/x/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.97%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
SCHEDULE 13D
Item 1. Security and Issuer
The initial filing on this Schedule 13D was filed with
the U.S. Securities and Exchange Commission ("SEC") on June 27,
1997, by Video Services Corporation, a New Jersey corporation
("Video"); Louis H. Siracusano, a citizen of the United States of
America ("LS"); Arnold P. Ferolito, a citizen of the United States
of America ("AF"); and Donald H. Buck, a citizen of the United
States of America ("DB") (LS, AF and DB collectively, the
"Reporting Persons") and the same is hereby amended to furnish the
additional information set forth herein. All capitalized terms
used herein but not otherwise defined shall have the meanings
ascribed to such terms in the Schedule 13D previously filed by the
Reporting Persons. On August 27, 1997, Video merged with and into
the Issuer, which has been renamed Video Services Corporation. As
a result of the Merger, Video is no longer a Reporting Person
hereunder. The resale by the Reporting Persons of the shares of
the Issuer issued pursuant to the Merger have been registered with
the SEC on Form S-3.
Item 4. Purpose of Transaction
Item 4 is hereby amended as follows:
In connection with the Merger, LS, AF and DB entered into
the Stock Resale Agreement, the Tag-Along Rights Agreement, the
Losses Escrow Agreement (as defined and more fully described in
Item 6), the Stockholders' Escrow Agreement (as defined and more
fully described in Item 6), the Stockholders' Agreement (as defined
and more fully described in Item 6), the Elkes Option (as defined
and more fully described in Item 6) and the Gorman Option(as
defined and more fully described in Item 6). In addition, the
Issuer entered into an employment agreement with Donald H. Buck
(the "Buck Employment Agreement") (as more fully described in Item
6) and an employment agreement with Louis H. Siracusano (the
"Siracusano Employment Agreement") (as more fully described in Item
6).
The Buck Employment Agreement, the Siracusano Employment
Agreement, the Losses Escrow Agreement, the Stockholders' Escrow
Agreement, the Stockholders' Agreement, the Elkes Option and the
Gorman Option referred to in this Item 4 and in Item 6 of this
Schedule 13D are incorporated herein by reference and the
descriptions of such agreements are qualified in their entirety by
the agreements themselves which are listed in Item 7 as Exhibits 8,
9, 10, 11, 12, 13 and 14 respectively.
Following the Merger, LS became the President and Chief
Executive Officer of the Issuer and DB became the Vice-President of
the Issuer. In connection with the Merger and related
transactions, LS may be deemed to have incurred liability for the
payment of taxes in the amount of approximately $300,000. LS
intends to dispose of a portion of the IPL Shares received in the
Merger in the near term in order to generate proceeds (together
with any taxes applicable to such sales transactions) to pay such
taxes. DB has no present intention to dispose of any of his IPL
Shares. AF intends to seek to dispose of a portion of his IPL
Shares from time to time following the date hereof at such time as
the opportunity exists to obtain prices for such IPL Shares as are
then deemed satisfactory to him.
Each Reporting Person reserves the right to acquire
additional IPL Shares from time to time (through open market or
privately negotiated transactions or otherwise) or to sell,
transfer, pledge or otherwise dispose of all or any portion of such
shares from time to time as such person deems appropriate. The
Reporting Persons intend to review on a regular basis their
investment in the Issuer and the Issuer's business affairs and
financial position, as well as price levels of the IPL Shares,
securities markets and general economic and industry conditions.
Each of the Reporting Persons reserves his respective right to act
in respect of his investment in the Issuer in accordance with his
best judgment in light of the circumstances existing at the time.
The Reporting Persons further reserve the right to act in concert
with any other person for a common purpose should they determine to
do so.
Item 5. Interest in Securities of the Issuer
Item 5 is hereby amended as follows:
(a) - (b) On the date hereof, the Reporting Persons may
be deemed to beneficially own, in the aggregate, 7,228,945 IPL
Shares, representing approximately 54.61% of the IPL Shares
outstanding. 7,223,445 IPL Shares were issued to the Reporting
Persons in connection with the Merger (which number included
212,096 IPL Shares which replaced an equal number of IPL Shares
owned by Video and canceled upon the Merger.)
LS has sole voting power and sole dispositive power of
3,352,882 IPL Shares. 322,294 of these IPL Shares are held in
escrow pursuant to the Stockholders Escrow Agreement, 878,186 of
these IPL Shares are held in escrow pursuant to the Losses Escrow
Agreement and 14,616 of these IPL Shares are held in escrow
pursuant to each of the Elkes Option and the Gorman Option,
respectively.
AF has sole voting power and sole dispositive power with
regard to 3,350,382 IPL Shares. 322,294 of these IPL Shares are
held in escrow pursuant to the Stockholders Escrow Agreement,
878,186 of these IPL Shares are held in escrow pursuant to the
Losses Escrow Agreement and 14,616 of these IPL Shares are held in
escrow pursuant to each of the Elkes Option and the Gorman Option,
respectively.
DB has sole voting and dispositive power with regard to
525,681 IPL Shares. 16,941 of these IPL Shares are held in escrow
pursuant to the Stockholders Escrow Agreement, 137,568 of these IPL
Shares are held in escrow pursuant to the Losses Escrow Agreement
and 768 of these IPL Shares are held in escrow pursuant to each of
the Elkes Option and the Gorman Option, respectively.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
LS entered into a four year employment agreement with the
Issuer dated as of August 26, 1997 (the "Siracusano Employment
Agreement") pursuant to which he has become the President and Chief
Executive Officer of the Issuer.
DB entered into a three year employment agreement with
the Company dated as of August 26, 1997 (the "Buck Employment
Agreement") pursuant to which he has become the Vice President of
the Issuer.
The Reporting Persons have entered into an escrow
agreement dated as of August 26, 1997 with IBJ Schroder Bank &
Trust Company (the "Losses Escrow Agreement") which provides that
878,186 IPL Shares owned by LS, 137,568 IPL Shares owned by DB and
878,186 IPL Shares owned by AF will be held in escrow to satisfy
the Reporting Persons' obligations to indemnify the Issuer for any
costs due to breaches, if any, of the representations and
warranties of Video or the Reporting Persons set forth in the
Merger Agreement.
The Reporting Persons have entered into an agreement
dated as of August 26, 1997 (the "Stockholders' Agreement")
pursuant to which they may from time to time grant options to
purchase 661,529 IPL Shares to management and certain employees of
Video (322,294 IPL Shares owned by LS, 322,294 IPL Shares owned by
AF and 16,941 IPL Shares owned by DB). In connection with the
Stockholders' Agreement, the Stockholders have entered into an
escrow agreement (the "Stockholders Escrow Agreement") pursuant to
which they have deposited all of these 661,529 IPL Shares in
escrow. The law firm of Gordon Altman Butowsky Weitzen Shalov &
Wein has agreed to act as escrow agent pursuant to a Stockholders'
Escrow Agreement dated as of August 26, 1997.
The Reporting Persons entered into an option agreement
dated as of August 26, 1997 with Terrence A. Elkes (the "Elkes
Option") and an option agreement dated as of August 26, 1997 with
Kenneth F. Gorman (the "Gorman Option") pursuant to which each of
Elkes and Gorman was granted an option to purchase an aggregate of
30,000 IPL Shares. The IPL Shares granted under these option
agreements are being held in escrow. 14,616 of the IPL Shares
subject to the Elkes Option and 14,616 of the IPL Shares subject to
the Gorman Option are owned by LS, 14,616 of the IPL Shares subject
to the Elkes Option and 14,616 of the IPL Shares subject to the
Gorman Option are owned by AF and 768 of the IPL Shares subject to
the Elkes Option and 768 of the IPL Shares subject to the Gorman
Option are owned by DB.
Item 7. Material To Be Filed As Exhibits.
Item 7 is hereby amended as follows:
Exhibit 8. Employment Agreement dated as of August 26, 1997
between Video Services Corporation and Donald H.
Buck.
Exhibit 9. Employment Agreement dated as of August 26, 1997
between Video Services Corporation and Louis H.
Siracusano.
Exhibit 10. Losses Escrow Agreement dated as of August 26, 1997
among International Post Limited, Louis H.
Siracusano, Arnold P. Ferolito, Donald H. Buck and
IBJ Schroder Bank & Trust Company.
Exhibit 11. Stockholders' Escrow Agreement dated as of August
26, 1997 among Louis H. Siracusano, Arnold P.
Ferolito, Donald H. Buck and Gordon Altman Butowsky
Weitzen Shalov & Wein.
Exhibit 12. Stockholders' Agreement dated as of August 26, 1997
among Louis H. Siracusano, Arnold P. Ferolito and
Donald H. Buck.
Exhibit 13. Option Agreement dated as of August 26, 1997
between Terrence A. Elkes, Louis H. Siracusano,
Arnold P. Ferolito and Donald H. Buck.
Exhibit 14. Option Agreement dated as of August 26, 1997
between Kenneth F. Gorman, Louis H. Siracusano,
Arnold P. Ferolito and Donald H. Buck.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: __________, 1997
/s/ Louis H. Siracusano
Louis H. Siracusano
/s/ Arnold P. Ferolito
Arnold P. Ferolito
/s/ Donald H. Buck
Donald H. Buck
Exhibit 8
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of August 26, 1997, by and between
Video Services Corporation, a Delaware corporation (formerly known
as International Post Limited), with its principal office at 545
Fifth Avenue, New York, New York 10017 (the "Company"), and Donald
H. Buck with an address at 2 Deerburn Court, Florham Park, New
Jersey 07932 (the "Employee").
INTRODUCTION
The parties hereto desire to provide for the employment
of the Employee with the Company. In order to accomplish such
purpose, and in consideration of the terms, covenants and
conditions hereinafter set forth, the parties hereby enter into
this employment agreement.
ARTICLE I
EMPLOYMENT; TERM; DUTIES
1.01 Employment. Upon the terms and conditions
hereinafter set forth, the Company hereby employs the Employee, and
the Employee hereby accepts employment, as Vice President of the
Company.
1.02 Term. Unless sooner terminated as provided in
Article IV hereof, the Employee's employment hereunder shall be for
a term commencing on the date hereof and ending on the later of (i)
the close of business on the third anniversary of the date hereof
and (ii) the date which is twelve months after either party hereto
gives written notice to the other that it desires to terminate this
Agreement. The actual term of employment hereunder, giving effect
to any early termination of employment under Article IV hereof, is
referred to as the "Term".
1.03 Duties. During the Term, the Employee shall
perform such executive duties for the Company and for its
subsidiaries, consistent with his position hereunder, as may be
assigned to him from time to time by the President or Chief
Executive Officer of the Company. The Employee shall perform his
duties hereunder on a full time basis, provided, however that he
shall not be prohibited from engaging in: (i) the activities
specified on Schedule B hereto; (ii) volunteer or charitable
activities; or (iii) management or ownership of passive
investments, so long as they do not interfere with the foregoing
obligations.
1.04 Exclusive Agreement. The Employee represents and
warrants to the Company that he is not a party to any agreement or
arrangement, whether written or oral, in effect which would prevent
the Employee from rendering service to the Company during the Term.
ARTICLE II
COMPENSATION
2.01 Base Salary. For all services rendered by the
Employee hereunder and all covenants and conditions undertaken by
him pursuant to this Agreement, the Company shall pay the Employee
an annual base salary ("Base Salary") during the Term or the
Scheduled Term (as defined in Section 4.02), as the case may be, in
equal bi-weekly installments, of $175,000 per year. The Base
Salary payable to the Employee hereunder shall be reviewed
annually, and may be increased but not decreased, by the
Compensation Committee of the Board of Directors of the Company.
In the event of any such increase, the salary so determined shall
thereafter constitute the Base Salary. In addition, the
Compensation Committee of the Board of Directors of the Company
shall consider, on an annual basis, the payment of a discretionary
bonus by the Company to the Employee in addition to the Incentive
Compensation referred to in Section 2.02 hereof..
If the first or last month of the Term or the Scheduled
Term, as the case may be, is not a full calendar month, then any
calculation of Base Salary for such period shall be prorated for
the number of days employed in such months.
2.02 Incentive Compensation. Promptly following the
date hereof, the parties hereto shall negotiate and agree to a
reasonable, equitable, incentive compensation arrangement
("Incentive Compensation") to apply during the Term.
2.03 Deductions. The Company shall deduct from the
compensation described in Sections 2.01 and 2.02 any Federal, state
or city withholding taxes, social security contributions and any
other amounts which may be required to be deducted or withheld by
the Company pursuant to any Federal, state or city laws, rules or
regulations.
2.04 Disability Adjustments. Any compensation otherwise
payable to the Employee pursuant to Section 2.01 in respect of any
period during which the Employee is disabled (as contemplated in
Section 4.03) shall be reduced by any amounts paid to the Employee
for loss of earnings or the like under any insurance plan or policy
the premiums for which are paid for in their entirety by the
Company. In addition, the Employee shall be entitled to
participate in, and the Company shall continue to maintain and pay
for at its expense, upon the same terms, the life insurance
policies specified on Schedule A attached hereto and the disability
insurance policies currently provided to him by Video Services
Corporation.
ARTICLE III
BENEFITS; EXPENSES
3.01 Benefits. During the Term, the Employee shall be
entitled to participate in and receive such benefits, services,
equipment, compensation and incentive plans and group life, health,
accident, disability and hospitalization insurance plans, pension
plans and retirement plans as the Company may make available to its
executive employees.
3.02 Expenses. The Company agrees that the Employee is
authorized to incur reasonable expenses in the performance of his
duties hereunder, and upon presentation of a reasonably itemized
account thereof, the Company shall promptly pay or reimburse the
Employee for such reasonable expenses so incurred by the Employee.
3.03 Vacations. During each full year of the Term, the
Employee shall be entitled to four (4) weeks of paid vacation to be
taken at times determined by the Employee which do not unreasonably
interfere with the performance of his duties hereunder, provided,
that any such vacation time not taken during any year shall be
forfeited and that no single vacation shall exceed two (2)
consecutive weeks.
3.04 Domicile. During the Term, the Employee (except
for reasonable business travel required by the Company) shall
conduct his activities hereunder at a Company office located in the
New York metropolitan area.
ARTICLE IV
TERMINATION; DEATH; DISABILITY
4.01 Termination of Employment With Cause. In addition
to any other remedies available to it at law, in equity or as set
forth in this Agreement, the Company shall have the right, upon
written notice to the Employee, to immediately terminate his
employment hereunder if the Employee (a) breaches in any material
respect any material provision of this Agreement and such breach is
not remedied within thirty (30) days after written notice thereof
from the Board of Directors of the Company setting forth in
reasonable detail the matters constituting such breach; or (b)
willfully fails or refuses in any material respect to perform such
duties as may be reasonably assigned to him, consistent with his
title and general area of responsibility, from time to time by the
Board of Directors of the Company and fails to cure such failure or
refusal within thirty (30) days after receipt of notice from the
Board of Directors of the Company stating with specificity the
nature of such failure or refusal; or (c) has been convicted of a
felony; or (d) has committed any act of fraud, misappropriation of
funds or embezzlement in connection with his employment hereunder
((a) through (d) above to mean "Cause", and termination as a result
of (a) through (d) above to mean "Termination With Cause"). The
date of any termination of employment under this Section 4.01 or
under Section 4.02, 4.03 or 4.04 is referred to herein as the
"Termination Date". In the event of a Termination With Cause, the
Company shall pay the Employee as follows:
(a) within ten (10) days following the
Termination Date, any accrued but unpaid Base Salary as of the
Termination Date;
(b) within ten (10) days following the
Termination Date, the Employee's Base Salary on a daily basis
(computed on a 365-day year) in effect on the Termination Date,
multiplied by the number of accrued and unused vacation days at the
Termination Date:
(c) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(d) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(e) within ten (10) days after the date of the
Company's receipt of its year end financial statements for the year
in which the Termination Date occurs, an amount equal to (x) the
amount of Incentive Compensation, if any, that would have been
payable to the Employee with respect to the fiscal year during
which the Termination Date occurred had the Termination Date not
occurred multiplied by (y) a fraction, the numerator of which is
the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
(f) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(g) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
4.02 Termination of Employment Without Cause.
Notwithstanding any provision to the contrary herein, the Company
may at any time upon written notice to the Employee, in its sole
and absolute discretion and for any or no reason, terminate the
employment of the Employee hereunder without Cause; provided, that
if such termination is not a Termination With Cause, the Company
shall pay the Employee as follows:
(a) within ten (10) days following the
Termination Date, any accrued but unpaid Base Salary as of the
Termination Date;
(b) the Employee's Base Salary until the end
of the Scheduled Term (as hereinafter defined) as and when such
Base Salary would have been paid had the termination of employment
not taken place;
(c) the Employee's Incentive Compensation
until the end of the Scheduled Term (if any would have been due and
payable to him under Section 2.02), as and when such Incentive
Compensation would have been paid had the termination of employment
not taken place;
(d) within ten (10) days following the
Termination Date, a cash payment equal to the Employee's Base
Salary on a daily basis (computed on a 365-day year) in effect on
the Termination Date, multiplied by the number of accrued and
unused vacation days at the Termination Date;
(e) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(f) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(g) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(h) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
For purposes of this Agreement, "Scheduled Term" shall
mean (x) if the employment of the Employee is terminated under any
provision of Article IV (other than Section 4.01) prior to the
close of business on the third anniversary of the date hereof, the
period ending at the close of business on the third anniversary of
the date hereof and (y) if the employment of the Employee is
terminated under any provision of Article IV (other than Section
4.01) on or after the close of business on the third anniversary of
the date hereof, the period ending at the close of business on the
date which is twelve months after the date on which the employment
of the Employee is so terminated.
In the event that the Employee terminates his employment
following an uncured material breach of this Agreement by the
Company, then such termination by the Employee shall be deemed for
all purposes (including, without limitation, the Plan) to be a
termination by the Company of the employment of the Employee
hereunder without Cause pursuant to this Section 4.02. The
Company shall have thirty (30) days following written notice by the
Employee to the Company of such breach, setting forth in reasonable
detail the matters constituting such breach, to cure such breach.
The Employee acknowledges that the payments referred to
in Section 4.01 and this Section 4.02 constitute the only payments
which the Employee shall be entitled to receive from the Company
under this Agreement in the event of any termination of his
employment pursuant to Section 4.01 and this Section 4.02, and that
except for such payments the Company shall have no further
liability or obligation to him under this Agreement.
4.03 Death; Disability. The Employee's employment
hereunder shall terminate upon his death or, at the election of the
Company by written notice to the Employee, if the Employee becomes
Disabled (as such term is hereinafter defined). In the event of a
termination of the Employee's employment for death or Disability,
the Company shall pay the Employee (or his legal representatives,
as the case may be), as follows:
(a) within ten (10) days following death or
such notice, any accrued but unpaid Base Salary as of the
Termination Date;
(b) the Employee's Base Salary until the
expiration of 12 months from the date of death or termination for
Disability (the "Extension Period"), such Base Salary to be paid as
and when such Base Salary would have been paid had the employment
of the Employee continued through the Extension Period;
(c) within ten (10) days after the next
Financial Statement Receipt Date to occur, an amount equal to (x)
the amount of Incentive Compensation, if any, that would have been
payable to the Employee with respect to the fiscal year during
which the Termination Date occurred had the Termination Date not
occurred multiplied by (y) a fraction, the numerator of which is
the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
(d) within ten (10) days following the
Termination Date, a cash payment equal to the Employee's Base
Salary on a daily basis (computed on a 365-day year) in effect on
the Termination Date, multiplied by the number of accrued and
unused vacation days at the Termination Date;
(e) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(f) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(g) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(h) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
For the purposes of this Agreement, the Employee shall be
deemed to be "Disabled" or have a "Disability" if as a result of
the occurrence of mental or physical disability during the Term he
has been unable to perform his duties hereunder for three (3)
consecutive months or ninety (90) days in any twelve (12)
consecutive month period, as determined in good faith by the Board
of Directors of the Company.
The Employee acknowledges that the payments referred to
in this Section 4.03 constitute the only payments to which the
Employee (or his legal representatives, as the case may be) shall
be entitled to receive from the Company under this Agreement in the
event of a termination of his employment for death or Disability,
and that except for such payments the Company shall have no further
liability or obligation to him (or his legal representatives, as
the case may be) under this Agreement.
4.04 Change of Control. The Employee may, at any time
during the six (6) month period following a Change of Control (as
defined in the International Post Limited 1993 Long Term Incentive
Plan), by delivery of written notice to the Company, terminate his
employment hereunder in the event that during such period the
compensation, benefits, authority, responsibilities, privileges,
duties and/or status or title of the Employee are materially
diminished (individually or in the aggregate). Any such permitted
termination by the Employee shall be deemed to constitute a
termination without Cause by the Company under Section 4.02 hereof
for all purposes.
ARTICLE V
INVENTIONS; NON-DISCLOSURE; NON-COMPETITION
5.01 Inventions. All processes, technologies and
inventions (collectively, "Inventions"), including new
contributions, improvements, discoveries, trademarks and trade
names, conceived, developed, invented, made or found by the
Employee, alone or with others, during his employment by the
Company or within six months after the termination thereof, whether
or not patentable and whether or not conceived, developed,
invented, made or found on the Company's time or with the use of
the Company's facilities or materials and which relate to the post-production
business, shall be the property of the Company and shall be promptly and
fully disclosed by the Employee to the Company. The Employee shall perform
all necessary acts (including, without limitation, executing and delivering
any confirmatory assignments, documents or instruments requested by the
Company) to vest title to any such Invention in the Company and to enable
the Company, at its expense, to secure and maintain domestic and/or foreign
patents or any other rights for such Inventions.
5.02 Non-Disclosure. The Employee shall not, at any
time during the Term or thereafter, directly or indirectly,
disclose or furnish to any other person, firm or corporation except
in the course of the proper performance of his duties hereunder (a)
any information relating to any process, technique or procedure
used by the Company: or (b) any information relating to the
operations or financial status of the Company (including, without
limitation, all financial data), which information is not
specifically a matter of public record; or (c) any information of
a confidential nature obtained as a result of his present or future
relationship with the Company, which information is not
specifically a matter of public record; or (d) the name, address or
other information relating to any customer or supplier of the
Company; or (e) any other trade secrets of the Company, except that
the Employee shall not be liable under the terms of this Section
5.02 for disclosing or furnishing any of the foregoing which (1)
are or become generally available to the public other than as a
result of a disclosure in violation of this Agreement, or (2) are
generally known in any industry in which the Company is or may
become involved or (3) is required to be disclosed by the Employee
pursuant to law or the order of a court of competent jurisdiction,
or other legal process or authority, it being understood, however,
that the Employee will provide the Company with prompt notice of
the requirement for such disclosure as soon as practical after the
Employee is notified thereof and prior to its disclosure thereof so
as to enable the Company to challenge the order compelling such
disclosure if the Company so desires. Promptly upon the expiration
or termination of the Employee's employment hereunder for any
reason, the Employee shall surrender to the Company all documents,
drawings, work papers, lists, V memoranda, records and other data
(including all copies) constituting or pertaining in any way to any
of the foregoing information.
5.03 Non-Competition. The Employee agrees that during
the Non-Competition Term (as hereinafter defined) he will not in
any manner, directly or indirectly, except where specifically
contemplated by the terms of his employment or this Employment
Agreement, (a) be employed by, engaged in or participate in the
ownership, management, operation or control of, or act in any
advisory or other capacity for, any Competing Entity which conducts
its business within the Territory (as the terms Competing Entity
and Territory are hereinafter defined); provided, however, that
notwithstanding the foregoing, the Employee may make solely passive
investments in any Competing Entity the common stock of which is
"publicly held" and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which
constitute 5% or more of the voting rights or equity ownership of
such Competing Entity; or (b) solicit or divert any business or any
customer from the Company or assist any person, firm or corporation
in doing so or attempting to do so; or (c) cause or seek to cause
any person, firm or corporation to refrain from dealing or doing
business with the Company or assist any person, firm or corporation
in doing so; or (d) hire or seek to hire any person who at the time
so hired, or within 12 months prior to such date, was an employee
of the Company on the date hereof or during such Non-Competition
Term or assist any person, firm or corporation in doing so or
attempting to do so; provided, however, that the foregoing shall
not prohibit the Employee from engaging in the activities and
investments set forth on Schedule B hereto both during and after
the Term.
For purposes of this Section 5.03, (i) the term "Non-Competition Term"
shall mean (x) the Term of this Agreement plus two (2) years, in the event
of a termination of employment pursuant to Section 4.01 and (y) the Scheduled
Term (as long as the Company is in compliance with its obligations under
Article IV), in the event of a termination of employment pursuant to any
provision of Article IV other than Section 4.01; (ii) the term "Competing
Entity" shall mean any entity which presently or hereafter during
the Non-Competition Term engages in any business activity in which
the Company or its successor is engaged during the Non-Competition
Term; and (iii) the term "Territory" shall mean any greater
metropolitan area in which the Company is engaged in business while
the Employee is employed by the Company or within six months of the
Termination Date.
5.04 Breach of Provisions. In the event that the
Employee shall breach any of the provisions of this Article V, or
in the event that any such breach is threatened by the Employee, in
addition to and without limiting or waiving any other remedies
available to the Company at law or in equity, the Company shall be
entitled to immediate injunctive relief in any court, domestic or
foreign, having the capacity to grant such relief, to restrain any
such breach or threatened breach and to enforce the provisions of
this Article V. The Employee acknowledges and agrees that there is
no adequate remedy at law for any such breach or threatened breach
and, in the event that any action or proceeding is brought seeking
injunctive relief, the Employee shall not use as a defense thereto
that there is an adequate remedy at law.
5.05 Reasonable Restrictions. The parties acknowledge
that (a) the agreements in this Article V are essential to protect
the business and goodwill of the Company, and (b) the foregoing
restrictions are under all of the circumstances reasonable and
necessary for the protection of the Company and its business.
5.06 Definitions. For purposes of this Agreement, the
term "Company" shall be deemed to include any subsidiary of the
Company.
ARTICLE VI
MISCELLANEOUS
6.01 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective legal representatives, heirs, distributees and
successors; provided, that the rights and obligations of the
Employee under this Agreement shall not be assignable by him.
6.02 Notices. All notices and other communications
hereunder and all legal process in regard hereto shall be validly
given, made or served if in writing, when delivered personally (by
courier service or otherwise), or when actually received when
mailed by first-class certified or registered United States mail,
postage-prepaid and return receipt requested, to the address of the
party to receive such notice or other communication set forth
below, or at such other address as any party hereto may from time
to time advise the other party pursuant to this Section:
If to the Company:
Video Services Corporation
545 Fifth Avenue
New York, New York 10017
Attention: Chairman of the Board of Directors
If to the Employee:
Donald H. Buck
2 Deerburn Court
Florham Park, New Jersey 07932
6.03 Severability. If any provision of this Agreement,
or portion thereof, shall be held invalid or unenforceable by a
court of competent jurisdiction, such invalidity or
unenforceability shall attach only to such provision or portion
thereof, and shall not in any manner affect or render invalid or
unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such
invalid or unenforceable provision or portion thereof were not
contained herein. In addition, any such invalid or unenforceable
provision or portion thereof shall be deemed, without further
action on the part of the parties hereto, modified, amended or
limited to the extent necessary to render the same valid and
enforceable.
6.04 Waiver. No waiver by a party hereto of a breach
or default hereunder by the other party shall be considered valid,
unless in writing signed by such first party, and no such waiver
shall be deemed a waiver of any subsequent breach or default of the
same or any other nature.
6.05 Entire Agreement. This Agreement sets forth the
entire agreement between the parties with respect to the subject
matter hereof, and supersedes any and all prior agreements between
the Company and the Employee, whether written or oral, relating to
any or all matters covered by and contained or otherwise dealt with
in this Agreement. No representation, warranty, undertaking or
covenant is made by either party hereto except as provided herein
and any representations, warranties, undertakings or covenants not
set forth herein are specifically disclaimed. This Agreement does
not constitute a commitment of the Company with regard to the
Employee's employment, express or implied, other than to the extent
expressly provided for herein.
6.06 Amendment. No modification, change or amendment
of this Agreement or any of its provisions shall be valid, unless
in writing and signed by the party against whom such claimed
modification, change or amendment is sought to be enforced.
6.07 Authority. The parties each represent and warrant
that they have the power, authority and right to enter into this
Agreement and to carry out and perform the terms, covenants and
conditions hereof.
6.08 Titles. The titles of the Articles and Sections
of this Agreement are inserted merely for convenience and ease of
reference and shall not affect or modify the meaning of any of the
terms, covenants or conditions of this Agreement.
6.09 Applicable Law. This Agreement, and all of the
rights and obligations of the parties in connection with the
employment relationship established hereby, shall be governed by
and construed in accordance with the internal laws of the State of
New York without giving effect to principles relating to conflicts
of law.
6.10 Directors' and Officers' Liability Coverage. The
Company will provide the Employee with appropriate directors and
officers liability insurance coverage throughout the Term. The
Employee shall be entitled to indemnification and advance of
expenses by the Company to the fullest extent available under
Delaware law.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
VIDEO SERVICES CORPORATION
/s/ Donald H. Buck
By: Donald H. Buck
<PAGE>
SCHEDULE A
Life Insurance Policies
Policy Number<F1> Issue Date
9741383 4/19/94
6196938 4/1/80
9756296 7/11/94
[FN] All of the above life insurance policies are with
Massachusetts Mutual Life Insurance Company.
<PAGE>
SCHEDULE B
The direct or indirect ownership and disposition of
investments in, and the exercise, as a stockholder, of the rights
of a stockholder with respect to: Cassette Dub, Inc., a New Jersey
corporation, VSC Post Production, Inc., a New York corporation,
Martin Audio/Video Corporation, a Delaware corporation, Nova
Manufacturing, Inc., a New Jersey corporation, Video Dub, Inc., a
New Jersey corporation, Videotape Distributors, Inc., a New Jersey
corporation, VSC Communications, Inc., a New Jersey corporation and
E-Magine, a New York limited liability company.
Exhibit 9
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of August 26, 1997, by and between
Video Services Corporation, a Delaware corporation (formerly known
as International Post Limited), with its principal office at 545
Fifth Avenue, New York, New York 10017 (the "Company"), and Louis
H. Siracusano, with an address at 13 Lexington Lane, Montvale, New
Jersey 07645 (the "Employee").
INTRODUCTION
The parties hereto desire to provide for the employment
of the Employee with the Company. In order to accomplish such
purpose, and in consideration of the terms, covenants and
conditions hereinafter set forth, the parties hereby enter into
this employment agreement.
ARTICLE I
EMPLOYMENT; TERM; DUTIES
1.01 Employment. Upon the terms and conditions
hereinafter set forth, the Company hereby employs the Employee, and
the Employee hereby accepts employment, as President and Chief
Executive Officer of the Company.
1.02 Term. Unless sooner terminated as provided in
Article IV hereof, the Employee's employment hereunder shall be for
a term commencing on the date hereof and ending on the later of (i)
the close of business on the fourth anniversary of the date hereof;
or (ii) the date which is twenty-four months after either party
hereto gives written notice to the other that it desires to
terminate this Agreement. The actual term of employment hereunder,
giving effect to any early termination of employment under Article
IV hereof, is referred to as the "Term".
1.03 Duties. During the Term, the Employee shall
perform such executive duties for the Company and for its
subsidiaries, consistent with his position hereunder, as may be
assigned to him from time to time by the Board of Directors of the
Company. The Employee shall perform his duties hereunder on a full
time basis; provided, however, that he shall not be prohibited from
engaging in: (i) the activities specified on Schedule B hereto;
(ii) volunteer or charitable activities; or (iii) management or
ownership of passive investments so long as they do not interfere
with the foregoing obligations.
1.04 Exclusive Agreement. The Employee represents and
warrants to the Company that he is not a party to any agreement or
arrangement, whether written or oral, in effect which would prevent
the Employee from rendering service to the Company during the Term.
ARTICLE II
COMPENSATION
2.01 Base Salary. For all services rendered by the
Employee hereunder and all covenants and conditions undertaken by
him pursuant to this Agreement, the Company shall pay the Employee
an annual base salary ("Base Salary") during the Term or the
Scheduled Term (as defined in Section 4.02), as the case may be, in
equal bi-weekly installments, of $200,000 per year. The Base
Salary payable to the Employee hereunder shall be reviewed
annually, and may be increased but not decreased, by the
Compensation Committee of the Board of Directors of the Company
(the "Compensation Committee"). In the event of any such increase,
the salary so determined shall thereafter constitute the Base
Salary. In addition, the Compensation Committee shall consider, on
an annual basis, the payment of a discretionary bonus by the
Company to the Employee, in addition to the Incentive Compensation
referred to in Section 2.02 hereof.
If the first or last month of the Term or the Scheduled
Term, as the case may be, is not a full calendar month, then any
calculation of Base Salary for such period shall be prorated for
the number of days employed in such months.
2.02 Incentive Compensation. The parties agree to the
following incentive compensation arrangements ("Incentive
Compensation") which shall apply during the Term.
(A) Annual Bonus. For each fiscal year (or portion thereof)
during the Term, the Employee shall be eligible to receive an
annual bonus (the "Annual Bonus"), payable by the Company, of up to
40% of the Base Salary for such period (such bonus to be calculated
as contemplated in the following table), 50% of which will be based
upon achievement of certain Cash Flow (as defined herein) and 50%
of which will be based upon the achievement of certain Net Income
(as defined herein) (such criteria being hereinafter collectively
referred to as the "Annual Targets"). The Annual Targets shall be
agreed upon not less than 45 days prior to the beginning of each
fiscal year, by the Employee and the Compensation Committee
provided, however, that the Annual Targets for the period ending
June 30, 1998, will be agreed upon within 45 days following the
date hereof. The parties acknowledge that it is their intention
that the Annual Targets shall be set at levels that are reasonably
achievable. In the event that the Company does not achieve an
Annual Target in any period during the Term, the Compensation
Committee may (but shall have no obligation to) award the Employee
a bonus with respect to such period and, if the Compensation
Committee does so, such bonus shall be in such amount as the
Compensation Committee, in its sole, absolute and unrestricted
discretion, shall determine.
The Annual Bonus payable hereunder shall be payable in a
single installment within 30 days following the date (the "Delivery
Date") of delivery to the Board of Directors of the Company's
audited financial statements for the period to which such Annual
Bonus relates.
Upon achievement of the percentage of any Annual Target
specified below, the Employee shall be entitled to receive as an
Annual Bonus an amount equal to the percentage, specified below, of
his Base Salary (an aggregate of 40% of Base Salary if both such
Targets are fully achieved at the Maximum Annual Percentage):
% of Annual % of Base Pay
Target Achieved to be Paid
Less than 90% -0-
90 to 94.9 5
94.9+ to 99.9 10
99.9+ to 109.9 15
over 109.9 (the 20
"Maximum Annual
Percentage")<PAGE>
(B) Long-Term Bonus. For the period (the "Period") beginning
on July 1, 1997 and ending on June 30, 2001, the Employee shall be
eligible to receive a long-term bonus (the "Long-Term Bonus")
payable by the Company, of up to 100% of the aggregate of his entire
Base Salary during the initial four (4) year Term of this Agreement
(the "Cumulative Base Salary") (such bonus to be calculated as
contemplated in the following table), 75% of which will be based
upon the achievement of certain cumulative Net Income for the Period
and 25% of which will be based upon the achievement of certain
cumulative Cash Flow for the Period (such criteria being hereinafter
collectively referred to as the "Long-Term Targets"). The Long-Term
Targets shall be agreed upon not less than 90 days following the
date hereof. The parties acknowledge that it is their intention
that the Long-Term Targets shall be set at levels that are
reasonably achievable. In the event that the Company does not
achieve a Long-Term Target during the Period, the Compensation
Committee may (but shall have no obligation to) award the Employee
a bonus with respect to such period and, if the Compensation
Committee does so, such bonus shall be in such amount as the
Compensation Committee, in its sole, absolute and unrestricted
discretion, shall determine.
The Long-Term Bonus payable hereunder shall be payable in a
single installment within 30 days following the Delivery Date of the
Company's audited financial statements for the period ended June 30,
2001.
Any Long-Term Bonus otherwise payable hereunder shall be
reduced by amounts previously paid as Annual Bonus hereunder.
Upon the achievement of the percentage of any Long-Term Target
specified below during the Period, the Employee shall be entitled
to receive a Long-Term Bonus equal to the percentage specified
below, of his Cumulative Base Salary (an aggregate of 100% of
Cumulative Base Salary if both such Long-Term Targets are fully
achieved at the Maximum Long-Term Percentage):
% of Long-Term % of Cumulative Base
Target Cumulative Salary for the
Net Income Achieved Period to be Paid
Less than 90% 0%
90+ to 99.9 37.5
99.9+ to 109.9 56.25
over 109.9 (the 75
"Maximum Long-
Term Percentage")<PAGE>
% of Long-Term % of Cumulative
Target Cumulative Base Salary for the
Cash Flow Achieved period to be Paid
Less than 90% 0%
90+ to 99.9 12.5
99.9+ to 109.9 18.75
over 109.9 (the 25
"Maximum Long-
Term Percentage")
(C) Adjustments. If the Company should engage in any
acquisition, disposition or other extraordinary transaction during
the Term, the applicable Targets and Long-Term Targets shall be
appropriately and equitably adjusted, such adjustments to be
reflected in a writing signed by the Employee and the Company prior
to the occurrence of such event.
(D) Definitions. The following terms shall have the
meanings set forth below:
"Cash Flow" shall mean, with respect to any period, the
sum of
(i) the Company's consolidated Net Income, plus;
(ii) the Company's consolidated depreciation,
amortization and other non-cash charges for such
period or periods, plus;
(iii) any taxes accrued but not paid by the Company for
or in respect of such period to the extent
included in the calculation of Net Income, plus;
(iv) decreases in working capital for the Company for
such period or periods, less;
(v) the Company's or its subsidiaries' Capital
Expenditures for such period or periods (but only
to the extent of scheduled payments maturing and
required to be paid during the applicable period),
less;
(vi) increases in consolidated working capital for the
Company during such period, and less;
(vii) repayments by the Company or its subsidiaries of
principal under all Indebtedness (but only to the
extent of scheduled payments required to be made
during the applicable period), all as determined
in accordance with generally accepted accounting
principles ("GAAP").
"Capital Expenditures" shall mean all payments for any
fixed assets or improvements or for replacements, substitutions or
additions thereto, that have a useful life of more than one year
and which are required to be capitalized under GAAP, including,
without limitation, payments under capital leases.
"Indebtedness" shall mean indebtedness of the Company or
its subsidiaries for borrowed money.
"Net Income" shall mean, for any period, an amount equal
to the net income of the Company and its subsidiaries determined
on a consolidated basis in accordance with GAAP for such period.
2.03 Deductions. The Company shall deduct from the
compensation described in Sections 2.01 and 2.02 any Federal, state
or city withholding taxes, social security contributions and any
other amounts which may be required to be deducted or withheld by
the Company pursuant to any Federal, state or city laws, rules or
regulations.
2.04 Disability Adjustments. Any compensation
otherwise payable to the Employee pursuant to Section 2.01 in
respect of any period during which the Employee is disabled (as
contemplated in Section 4.03) shall be reduced by any amounts paid
to the Employee for loss of earnings or the like under any
insurance plan or policy the premiums for which are paid for in
their entirety by the Company.
ARTICLE III
BENEFITS; EXPENSES
3.01 Benefits. During the Term, the Employee shall be
entitled to participate in and receive such benefits, services,
equipment, compensation and incentive plans and group life, health,
accident, disability and hospitalization insurance plans, pension
plans and retirement plans as the Company may make available to its
executive employees. In addition, the Employee shall be entitled
to participate in, and the Company shall continue to maintain and
pay for at its expense, upon the same terms, the life insurance
policies specified on Schedule A attached hereto and the disability
insurance policies currently provided to him by Video Services
Corporation.
3.02 Expenses. The Company agrees that the Employee is
authorized to incur reasonable expenses in the performance of his
duties hereunder, and upon presentation of a reasonably itemized
account thereof, the Company shall promptly pay or reimburse the
Employee for such reasonable expenses so incurred by the Employee.
3.03 Vacations. During each full year of the Term, the
Employee shall be entitled to four (4) weeks of paid vacation to
be taken at times determined by the Employee which do not
unreasonably interfere with the performance of his duties
hereunder, provided, that any such vacation time not taken during
any year shall be forfeited and that no single vacation shall
exceed two (2) consecutive weeks.
3.04 Domicile. During the Term, the Employee (except
for reasonable business travel required by the Company) shall
conduct his activities hereunder at a Company office located in the
New York metropolitan area.
ARTICLE IV
TERMINATION; DEATH; DISABILITY
4.01 Termination of Employment With Cause. In addition
to any other remedies available to it at law, in equity or as set
forth in this Agreement, the Company shall have the right, upon
written notice to the Employee, to immediately terminate his
employment hereunder if the Employee (a) breaches in any material
respect any material provision of this Agreement and such breach
is not remedied within thirty (30) days after written notice
thereof from the Board of Directors of the Company setting forth
in reasonable detail the matters constituting such breach; or (b)
willfully fails or refuses in any material respect to perform such
duties as may be reasonably assigned to him, consistent with his
title and general areas of responsibility, from time to time by the
Board of Directors of the Company and fails to cure such failure
or refusal within thirty (30) days after receipt of notice from the
Board of Directors of the Company stating with specificity the
nature of such failure or refusal; or (c) has been convicted of a
felony; or (d) has committed any act of fraud, misappropriation of
funds or embezzlement in connection with his employment hereunder
((a) through (d) above to mean "Cause", and termination as a result
of (a) through (d) above to mean "Termination With Cause"). The
date of any termination of employment under this Section 4.01 or
under Section 4.02, 4.03 or 4.04 is referred to herein as the
"Termination Date". In the event of a Termination With Cause, the
Company shall pay the Employee as follows:
(a) within ten (10) days following the
Termination Date, any accrued but unpaid Base Salary as of the
Termination Date;
(b) within ten (10) days following the
Termination Date, the Employee's Base Salary on a daily basis
(computed on a 365-day year) in effect on the Termination Date,
multiplied by the number of accrued and unused vacation days at the
Termination Date;
(c) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(d) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(e) within ten (10) days after the date of
the Company's receipt of its year end financial statements for the
year in which the Termination Date occurs, an amount equal to (x)
the amount of Incentive Compensation, if any, that would have been
payable to the Employee with respect to the fiscal year during
which the Termination Date occurred had the Termination Date not
occurred multiplied by (y) a fraction, the numerator of which is
the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
(f) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(g) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
4.02 Termination of Employment Without Cause.
Notwithstanding any provision to the contrary herein, the Company
may at any time upon written notice to the Employee, in its sole
and absolute discretion and for any or no reason, terminate the
employment of the Employee hereunder without Cause; provided, that
if such termination is not a Termination With Cause, the Company
shall pay the Employee as follows:
(a) within ten (10) days following the
Termination Date, any accrued but unpaid Base Salary as of the
Termination Date;
(b) the Employee's Base Salary until the end
of the Scheduled Term (as hereinafter defined) as and when such
Base Salary would have been paid had the termination of employment
not taken place;
(c) the Employee's Incentive Compensation
until the end of the Scheduled Term (if any would have been due and
payable to him under Section 2.02), as and when such Incentive
Compensation would have been paid had the termination of employment
not taken place;
(d) within ten (10) days following the
Termination Date, a cash payment equal to the Employee's Base
Salary on a daily basis (computed on a 365-day year) in effect on
the Termination Date, multiplied by the number of accrued and
unused vacation days at the Termination Date;
(e) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(f) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(g) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(h) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
For purposes of this Agreement, "Scheduled Term" shall
mean (x) if the employment of the Employee is terminated under any
provision of Article IV (other than Section 4.01) prior to the
close of business on the fourth anniversary of the date hereof, the
period ending at the close of business on the fourth anniversary
of the date hereof and (y) if the employment of the Employee is
terminated under any provision of Article IV (other than Section
4.01) upon or after the close of business on the fourth anniversary
of the date hereof, the period ending at the close of business on
the date which is twenty-four (24) months after the date on which
the employment of the Employee is so terminated.
In the event that the Employee terminates his employment
following an uncured material breach of this Agreement by the
Company, then such termination by the Employee shall be deemed for
all purposes (including, without limitation, the Plan) to be a
termination by the Company of the employment of the Employee
hereunder without Cause pursuant to this Section 4.02. The
Company shall have thirty (30) days following written notice by the
Employee to the Company of such breach, setting forth in reasonable
detail the matters constituting such breach, to cure such breach.
The Employee acknowledges that the payments referred to
in Section 4.01 and this Section 4.02 constitute the only payments
which the Employee shall be entitled to receive from the Company
under this Agreement in the event of any termination of his
employment pursuant to Section 4.01 and this Section 4.02, and that
except for such payments the Company shall have no further
liability or obligation to him under this Agreement.
4.03 Death; Disability. The Employee's employment
hereunder shall terminate upon his death or, at the election of the
Company by written notice to the Employee, if the Employee becomes
Disabled (as such term is hereinafter defined). In the event of
a termination of the Employee's employment for death or Disability,
the Company shall pay the Employee (or his legal representatives,
as the case may be), as follows:
(a) within ten (10) days following death or
such notice, any accrued but unpaid Base Salary as of the
Termination Date;
(b) the Employee's Base Salary until the
expiration of 12 months from the date of death or termination for
Disability (the "Extension Period"), such Base Salary to be paid
as and when such Base Salary would have been paid had the
employment of the Employee continued through the Extension Period;
(c) within ten (10) days after the next
Financial Statement Receipt Date to occur, an amount equal to (x)
the amount of Incentive Compensation, if any, that would have been
payable to the Employee with respect to the fiscal year during
which the Termination Date occurred had the Termination Date not
occurred multiplied by (y) a fraction, the numerator of which is
the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
(d) within ten (10) days following the
Termination Date, a cash payment equal to the Employee's Base
Salary on a daily basis (computed on a 365-day year) in effect on
the Termination Date, multiplied by the number of accrued and
unused vacation days at the Termination Date;
(e) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(f) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(g) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(h) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
For the purposes of this Agreement, the Employee shall
be deemed to be "Disabled" or have a "Disability" if as a result
of the occurrence of mental or physical disability during the Term
he has been unable to perform his duties hereunder for three (3)
consecutive months or ninety (90) days in any twelve (12)
consecutive month period, as determined in good faith by the Board
of Directors of the Company.
The Employee acknowledges that the payments referred to
in this Section 4.03 constitute the only payments to which the
Employee (or his legal representatives, as the case may be) shall
be entitled to receive from the Company under this Agreement in the
event of a termination of his employment for death or Disability,
and that except for such payments the Company shall have no further
liability or obligation to him (or his legal representatives, as
the case may be) under this Agreement.
4.04 Change of Control. The Employee may, at any time
during the six (6) month period following a Change of Control (as
defined in the International Post Limited 1993 Long Term Incentive
Plan), by delivery of written notice to the Company, terminate his
employment hereunder in the event that during such period the
compensation, benefits, authority, responsibilities, privileges,
duties and/or status or title of the Employee are materially
diminished (individually or in the aggregate). Any such permitted
termination by the Employee shall be deemed to constitute a
termination without Cause by the Company under Section 4.02 hereof
for all purposes.
ARTICLE V
INVENTIONS; NON-DISCLOSURE; NON-COMPETITION
5.01 Inventions. All processes, technologies and
inventions (collectively, "Inventions"), including new
contributions, improvements, discoveries, trademarks and trade
names, conceived, developed, invented, made or found by the
Employee, alone or with others, during his employment by the
Company or within six months after the termination thereof, whether
or not patentable and whether or not conceived, developed,
invented, made or found on the Company's time or with the use of
the Company's facilities or materials and which relate to the
postproduction business, shall be the property of the Company and
shall be promptly and fully disclosed by the Employee to the
Company. The Employee shall perform all necessary acts (including,
without limitation, executing and delivering any confirmatory
assignments, documents or instruments requested by the Company) to
vest title to any such Invention in the Company and to enable the
Company, at its expense, to secure and maintain domestic and/or
foreign patents or any other rights for such Inventions.
5.02 Non-Disclosure. The Employee shall not, at any
time during the Term or thereafter, directly or indirectly,
disclose or furnish to any other person, firm or corporation except
in the course of the proper performance of his duties hereunder (a)
any information relating to any process, technique or procedure
used by the Company; or (b) any information relating to the
operations or financial status of the Company (including, without
limitation, all financial data), which information is not
specifically a matter of public record; or (c) any information of
a confidential nature obtained as a result of his present or future
relationship with the Company, which information is not
specifically a matter of public record; or (d) the name, address
or other information relating to any customer or supplier of the
Company; or (e) any other trade secrets of the Company, except that
the Employee shall not be liable under the terms of this Section
5.02 for disclosing or furnishing any of the foregoing which (1)
are or become generally available to the public other than as a
result of a disclosure in violation of this Agreement, or (2) are
generally known in any industry in which the Company is or may
become involved or (3) is required to be disclosed by the Employee
pursuant to law or the order of a court of competent jurisdiction,
or other legal process or authority, it being understood, however,
that the Employee will provide the Company with prompt notice of
the requirement for such disclosure as soon as practical after the
Employee is notified thereof and prior to its disclosure thereof
so as to enable the Company to challenge the order compelling such
disclosure if the Company so desires. Promptly upon the expiration
or termination of the Employee's employment hereunder for any
reason, the Employee shall surrender to the Company all documents,
drawings, work papers, lists, memoranda, records and other data
(including all copies) constituting or pertaining in any way to any
of the foregoing information.
5.03 Non-Competition. The Employee agrees that during
the Non-Competition Term (as hereinafter defined) he will not in
any manner, directly or indirectly, except where specifically
contemplated by the terms of his employment or this Employment
Agreement, (a) be employed by, engaged in or participate in the
ownership, management, operation or control of, or act in any
advisory or other capacity for, any Competing Entity which conducts
its business within the Territory (as the terms Competing Entity
and Territory are hereinafter defined); provided, however, that
notwithstanding the foregoing, the Employee may make solely passive
investments in any Competing Entity the common stock of which is
"publicly held" and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which
constitute 5% or more of the voting rights or equity ownership of
such Competing Entity; or (b) solicit or divert any business or any
customer from the Company or assist any person, firm or corporation
in doing so or attempting to do so; or (c) cause or seek to cause
any person, firm or corporation to refrain from dealing or doing
business with the Company or assist any person, firm or corporation
in doing so; or (d) hire or seek to hire any person who at the time
so hired, or within 12 months prior to such date, was an employee
of the Company on the date hereof or during such Non-Competition
Term or assist any person, firm or corporation in doing so or
attempting to do so; provided, however, the foregoing shall not
prohibit the Employee from engaging in the activities and
investments set forth on Schedule B hereto both during and after
the Term.
For purposes of this Section 5.03, (i) the term "Non-Competition Term"
shall mean (x) the Term of this Agreement plus two (2) years, in the event of
a termination of employment pursuant to Section 4.01 and (y) the Scheduled
Term (as long as the Company is in compliance with its obligations under
Article IV), in the event of a termination of employment pursuant to any
provision of Article IV other than Section 4.01; (ii) the term "Competing
Entity" shall mean any entity which presently or hereafter during
the Non-Competition Term engages in any business activity in which
the Company or its successor is engaged during the Non-Competition
Term; and (iii) the term "Territory" shall mean any greater
metropolitan area in which the Company is engaged in business while
the Employee is employed by the Company or within six months of the
Termination Date.
5.04 Breach of Provisions. In the event that the
Employee shall breach any of the provisions of this Article V, or
in the event that any such breach is threatened by the Employee,
in addition to and without limiting or waiving any other remedies
available to the Company at law or in equity, the Company shall be
entitled to immediate injunctive relief in any court, domestic or
foreign, having the capacity to grant such relief, to restrain any
such breach or threatened breach and to enforce the provisions of
this Article V. The Employee acknowledges and agrees that there
is no adequate remedy at law for any such breach or threatened
breach and, in the event that any action or proceeding is brought
seeking injunctive relief, the Employee shall not use as a defense
thereto that there is an adequate remedy at law.
5.05 Reasonable Restrictions. The parties acknowledge
that (a) the agreements in this Article V are essential to protect
the business and goodwill of the Company, and (b) the foregoing
restrictions are under all of the circumstances reasonable and
necessary for the protection of the Company and its business.
5.06 Definitions. For purposes of this Agreement, the
term "Company" shall be deemed to include any subsidiary of the
Company.
ARTICLE VI
MISCELLANEOUS
6.01 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective legal representatives, heirs, distributees and
successors; provided, that the rights and obligations of the
Employee under this Agreement shall not be assignable by him.
6.02 Notices. All notices and other communications
hereunder and all legal process in regard hereto shall be validly
given, made or served if in writing, when delivered personally (by
courier service or otherwise), or when actually received when
mailed by first-class certified or registered United States mail,
postage-prepaid and return receipt requested, to the address of the
party to receive such notice or other communication set forth
below, or at such other address as any party hereto may from time
to time advise the other party pursuant to this Section:
If to the Company:
Video Services Corporation
545 Fifth Avenue
New York, New York 10017
Attention: Chairman of the Board of Directors
If to the Employee:
Louis H. Siracusano
13 Lexington Lane
Montvale, New Jersey 07645
6.03 Severability. If any provision of this Agreement,
or portion thereof, shall be held invalid or unenforceable by a
court of competent jurisdiction, such invalidity or
unenforceability shall attach only to such provision or portion
thereof, and shall not in any manner affect or render invalid or
unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such
invalid or unenforceable provision or portion thereof were not
contained herein. In addition, any such invalid or unenforceable
provision or portion thereof shall be deemed, without further
action on the part of the parties hereto, modified, amended or
limited to the extent necessary to render the same valid and
enforceable.
6.04 Waiver. No waiver by a party hereto of a breach
or default hereunder by the other party shall be considered valid,
unless in writing signed by such first party, and no such waiver
shall be deemed a waiver of any subsequent breach or default of the
same or any other nature.
6.05 Entire Agreement. This Agreement sets forth the
entire agreement between the parties with respect to the subject
matter hereof, and supersedes any and all prior agreements between
the Company and the Employee, whether written or oral, relating to
any or all matters covered by and contained or otherwise dealt with
in this Agreement. No representation, warranty, undertaking or
covenant is made by either party hereto except as provided herein
and any representations, warranties, undertakings or covenants not
set forth herein are specifically disclaimed. This Agreement does
not constitute a commitment of the Company with regard to the
Employee's employment, express or implied, other than to the extent
expressly provided for herein.
6.06 Amendment. No modification, change or amendment
of this Agreement or any of its provisions shall be valid, unless
in writing and signed by the party against whom such claimed
modification, change or amendment is sought to be enforced.
6.07 Authority. The parties each represent and warrant
that they have the power, authority and right to enter into this
Agreement and to carry out and perform the terms, covenants and
conditions hereof.
6.08 Titles. The titles of the Articles and Sections
of this Agreement are inserted merely for convenience and ease of
reference and shall not affect or modify the meaning of any of the
terms, covenants or conditions of this Agreement.
6.09 Applicable Law. This Agreement, and all of the
rights and obligations of the parties in connection with the
employment relationship established hereby, shall be governed by
and construed in accordance with the internal laws of the State of
New York without giving effect to principles relating to conflicts
of law.
6.10 Directors' and Officers' Liability Coverage. The
Company will provide the Employee with appropriate directors and
officers liability insurance coverage throughout the Term. The
Employee shall be entitled to indemnification and advance of
expenses by the Company to the fullest extent available under
Delaware law.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
VIDEO SERVICES CORPORATION
/s/ Louis H. Siracusano
By: Louis H. Siracusano
<PAGE>
SCHEDULE A
LIFE INSURANCE POLICIES
Policy Number<F1> Issue Date
5390709 10/18/75
6099251 09/13/79
6197003 04/01/80
6256020 08/12/80
6433902 07/27/81
7216209 10/14/86
8602222 11/12/90
9754354 07/12/94
[FN]All of the above life insurance policies are with Massachusetts
Mutual Life Insurance Company.
<PAGE>
SCHEDULE B
The direct or indirect ownership and disposition of
investments in, and the exercise, as a stockholder, of the rights
of a stockholder with respect to: Cassette Dub, Inc., a New Jersey
corporation, VSC Post Production, Inc., a New York corporation,
Martin Audio/Video Corporation, a Delaware corporation, Nova
Manufacturing, Inc., a New Jersey corporation, Video Dub, Inc., a
New Jersey corporation, Videotape Distributors, Inc., a New Jersey
corporation, VSC Communications, Inc., a New Jersey corporation and
E-Magine, a New York limited liability company.
Exhibit 10
LOSSES ESCROW AGREEMENT
LOSSES ESCROW AGREEMENT (the "Agreement"), dated as of August
26, 1997, by and among International Post Limited, a Delaware
corporation ("IPL"), Louis H. Siracusano ("Siracusano"); Arnold P.
Ferolito ("Ferolito"); and Donald H. Buck ("Buck") (each a
"Stockholder" and collectively, the "Stockholders") and IBJ
Schroder Bank & Trust Company (the "Escrow Agent"). Any reference
herein to any Stockholder shall be deemed to also include a
reference to the heirs, estate and personal representatives of such
Stockholder. Unless otherwise indicated herein, each capitalized
term used herein shall have the meaning attributed to it in the
glossary set forth in Section 20 hereof.
W I T N E S S E T H:
WHEREAS, IPL, Video Services Corporation, a New Jersey
corporation ("Video") and the Stockholders are parties to an
Agreement and Plan of Merger (the "Merger Agreement"), dated the
date hereof, which, among other things, provides for the merger
(the "Merger") of Video with and into IPL; and
WHEREAS, as a condition to the closing of the Merger, IPL and
the Stockholders have agreed to execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the parties hereto, intending to be legally
bound, do hereby agree as follows:
Section 1. Appointment of Escrow Agent
IPL and the Stockholders hereby appoint the Escrow Agent as
their agent to hold and disburse all assets from time to time
deposited with the Escrow Agent pursuant hereto on the terms and
subject to the conditions set forth in this Agreement, and the
Escrow Agent hereby accepts such appointment. By their execution
of this Agreement, IPL and the Stockholders expressly authorize the
Escrow Agent to, and the Escrow Agent expressly agrees to, take the
actions contemplated by this Agreement in accordance with the
provisions of this Agreement.
Section 2. Escrow Accounts; Deposit of Funds.
(a) On the date hereof each of the Stockholders is delivering
to the Escrow Agent a stock certificate (duly endorsed in blank or
accompanied by a stock power duly endorsed in blank) representing
the number of shares of IPL Common Stock set forth opposite its
name below:
Name Number of Shares
Siracusano 878,186 (the "Siracusano Deposited Shares")
Ferolito 878,186 (the "Ferolito Deposited Shares")
Buck 16,941 (the "Buck Deposited Shares")
The shares represented by the certificates so deposited
(together with shares deposited pursuant to Section 4 hereof) are
referred to herein collectively as the "Deposited Shares". Each
Stockholder shall retain all voting rights in respect of the
Deposited Shares deposited by such Stockholder, as well as the
right to receive all cash dividends paid on such shares until such
time, if any, as they are transferred to IPL. All securities
received in respect of such shares as dividends and all other
shares of IPL Common Stock deposited pursuant to this Agreement
shall be added to the Deposited Shares and shall be deemed
Siracusano Deposited Shares, Ferolito Deposited Shares and Buck
Deposited Shares, as applicable.
(b) The Escrow Agent will, upon receipt of any funds from any
Stockholder as contemplated in Section 3 hereof, establish money-market escrow
accounts at the Escrow Agent's office, which accounts shall be designated in
the records of the Escrow Agent as follows: (i) Siracusano Escrow Account
(the "Siracusano Escrow Account"); (ii) Ferolito Escrow Account (the
"Ferolito Escrow Account"); (iii) Buck Escrow Account (the "Buck Escrow
Account"), in which the Escrow Agent shall deposit the funds submitted to it
in respect of such Stockholder. Each account listed in clauses (i) through
(iii) is referred to herein as an "Escrow Account" and the Siracusano
Escrow Account, the Ferolito Escrow Account and the Buck Escrow
Account are referred to collectively as the "Escrow Accounts".
Each Escrow Account shall be maintained by, and shall be under the
exclusive dominion and control of, the Escrow Agent. The Escrow
Accounts shall be maintained as separate accounts; funds deposited
in each Escrow Account shall not be co-mingled with the funds
deposited in any other Escrow Account; and the Escrow Agent shall
disburse the funds in the Escrow Accounts only in accordance with
the provisions of this Agreement; provided, however, that the
Escrow Agent also shall disburse funds from any of the Escrow
Accounts in accordance with written directions executed by all of
the Stockholders and IPL. Each Escrow Account may, upon the
written direction of the Stockholder depositing any funds therein,
be invested in one or more of the following: (i) securities issued
or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof, (ii) time
deposits and certificates of deposit and commercial paper issued by
any domestic commercial bank having capital and surplus in excess
of $50,000,000 (an "Approved Bank"), (iii) commercial paper issued
by any person incorporated under the laws of the United States, or
any State thereof, rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent
thereof by Moody's Investor's Service, Inc. and in each case
maturing within one year after the date of acquisition, (iv)
repurchase obligations with a term of not more than five days for
underlying securities of the type described in clauses (i) through
(iii) of this definition entered into with any Approved Bank, and
(v) investments in money market funds which have net assets of at
least $50 million, substantially all of whose assets comprise
securities of the types described in clauses (i) - (iv) above.
All amounts earned in each Escrow Account shall be paid over
to the appropriate Stockholder on a quarterly basis on each January
1, April 1, July 1 and October 1 (or the first Business Day
thereafter) upon the written request of such Stockholder to the
Escrow Agent and such interest shall be reported by such
Stockholder as income of such Stockholder for all income tax
purposes.
Section 3. Substitution of Cash.
(a) At any time and from time to time a Stockholder may, upon
compliance with the procedures set forth in this Section 3, obtain
possession of all or any portion of the Deposited Shares deposited
by such Stockholder in accordance with Section 2 or Section 4
hereof, by substituting therefor (a "Cash Substitution") cash in an
amount equal to the Determined Cash Amount and depositing such
amount with the Escrow Agent. At any time a Cash Substitution is
to be made pursuant hereto and upon compliance with the provisions
of this Section 3, any necessary certificates shall be delivered to
the Stockholder as soon as practicable after issuance by the
transfer agent. In connection therewith, the Escrow Agent is
authorized to submit certificates as necessary directly to the
transfer agent by FedEx or by messenger service and IPL and the
Stockholders agree and acknowledge that the Escrow Agent shall have
no duty, obligation or liability in connection with such delivery
or any action of the transfer agent.
(b) In the event that a Stockholder desires to engage in a
Cash Substitution, the Stockholder shall deliver a written notice
signed by the Stockholder to the Escrow Agent, who shall deliver
such notice to the other Stockholders and to IPL no later than one
Business Day after receipt thereof (the "Cash Substitution Notice")
which notice shall state: (i) that the Stockholder desires to
engage in such Cash Substitution; and (ii) the Determined Cash
Amount in respect thereof together with a statement setting forth
in reasonable detail the computation thereof.
(c) Within 5 Business Days (the "Section 3 Acceptance
Period") of receipt of the Cash Substitution Notice by IPL, IPL may
object to the Cash Substitution on the basis (and only on the
basis) that it disagrees with the computation of the Determined
Cash Amount by sending written notice of such objection (a "Section
3 Objection") to the Escrow Agent, who shall deliver such notice to
the Stockholders no later than one Business Day after receipt
thereof , which shall set forth the reasons therefor and the date
of IPL's receipt of the Cash Substitution Notice. Failure by IPL
to deliver a Section 3 Objection to the Escrow Agent, prior to the
end of the Section 3 Acceptance Period, shall be deemed an
acceptance of the Cash Substitution Notice and the Determined Cash
Amount. In the event that the Escrow Agent receives a Cash
Substitution Notice and fails to receive a Section 3 Objection
prior to the end of the related Section 3 Acceptance Period, the
Escrow Agent shall complete the Cash Substitution in accordance
with the terms hereof and as contemplated in the Cash Substitution
Notice.
(d) In the event that IPL timely delivers a Section 3
Objection to the Escrow Agent; who shall deliver a copy to the
Stockholders no later than one Business Day after receipt thereof:
(i) the Stockholder may submit the matter to dispute resolution
pursuant to Section 11 hereof; and (ii) the Escrow Agent shall not
complete the Cash Substitution until: (A) directed to do so
pursuant to a written instruction signed by IPL; or (B) directed to
do so pursuant to a certificate signed by the Stockholders and IPL
stating that pursuant to the dispute resolution procedures set
forth in Section 11 hereof, it has been resolved that the
Determined Cash Amount, as stated in the Cash Substitution Notice,
is correct and that the requested Cash Substitution should be
completed.
(e) In engaging in a Cash Substitution, a Stockholder shall
be entitled to substitute cash proceeds to be derived from the sale
of all or a portion of the Deposited Shares to be received in such
Cash Substitution. The Stockholders and IPL shall take such
action as is reasonably necessary to permit and facilitate any such
sale and substitution. In connection therewith, the Escrow Agent
shall only be required to act upon joint instructions signed by the
Stockholders and IPL.
Section 4. Substitution of Stock.
(a) At any time and from time to time, a Stockholder may,
upon compliance with the procedures set forth in this Section 4,
obtain possession of all or any portion of the cash held in the
Escrow Account applicable to such Stockholder, by substituting
therefore (a "Stock Substitution") certificates representing shares
of IPL Common Stock in an amount equal to the Determined Stock
Amount and depositing such certificates with the Escrow Agent. At
any time a Stock Substitution is to be made pursuant hereto and
upon compliance with the provisions of this Section 4, any
necessary certificates shall be delivered to the Stockholder as
soon as practicable after issuance by the transfer agent. In
connection therewith, the Escrow Agent is authorized to submit
certificates as necessary directly to the transfer agent by FedEx
or by messenger service and IPL and the Stockholders agree and
acknowledge that the Escrow Agent shall have no duty, obligation or
liability in connection with such delivery or any action of the
transfer agent.
(b) In the event that a Stockholder desires to engage in a
Stock Substitution, the Stockholder shall deliver a written notice
signed by the Stockholder to the Escrow Agent, who shall deliver
such notice to the other Stockholders and to IPL no later than one
Business Day after receipt thereof (the "Stock Substitution
Notice") which notice shall state: (i) that the Stockholder desires
to engage in such Stock Substitution; and (ii) the Determined Stock
Amount in respect thereof together with a statement setting forth
in reasonable detail the computation thereof.
(c) Within 5 Business Days (the "Section 4 Acceptance
Period") of receipt of the Stock Substitution Notice by IPL, IPL
may object to the Stock Substitution on the basis (and only on the
basis) that it disagrees with the computation of the Determined
Stock Amount by sending written notice of such objection (a
"Section 4 Objection") to the Escrow Agent, who shall deliver such
notice to the Stockholders no later than one Business Day after
receipt thereof, which shall set forth the reasons therefor and the
date of IPL's receipt of the Stock Substitution Notice. Failure by
IPL to deliver a Section 4 Objection to the Stockholders and the
Escrow Agent, prior to the end of the Section 4 Acceptance Period,
shall be deemed an acceptance of the Stock Substitution Notice and
the Determined Amount. In the event that the Escrow Agent receives
a Stock Substitution Notice and fails to receive a Section 4
Objection prior to the end of the related Section 4 Acceptance
Period, the Escrow Agent shall complete the Stock Substitution in
accordance with the terms hereof and as contemplated in the Stock
Substitution Notice.
(d) In the event that IPL timely delivers a Section 4
Objection to the Escrow Agent, who shall deliver a copy to the
Stockholders no later than one Business Day after receipt thereof:
(i) the Stockholder may submit the matter to dispute resolution
pursuant to Section 11 hereof; and (ii) the Escrow Agent shall not
complete the Stock Substitution until: (a) directed to do so
pursuant to a written instruction signed by IPL; or (B) directed to
do so pursuant to a certificate signed by the Stockholders and IPL
stating that pursuant to the dispute resolution procedures set
forth in Section 11 hereof, it has been resolved that the
Determined Stock Amount, as stated in the Stock Substitution
Notice, is correct and that the requested Stock Substitution should
be completed.
Section 5. Indemnification Claims.
(a) The Stockholders and IPL agree that in the event and to
the extent that any Stockholder has any liability or obligation to
provide indemnification or contribution (collectively,
"Indemnification") for any losses of IPL, its successors or assigns
(each an "Indemnified Person") pursuant to the terms of the Merger
Agreement:
(i) the claims of an Indemnified Person in respect
of such Stockholder shall be limited to the Deposited Shares and
the Escrow Account in respect of such Stockholder and no
Indemnified Person shall have any other right, claim or recourse to
such Stockholder or the assets of such Stockholder;
(ii) to the extent that such losses arise from any
obligation for which such Stockholders are jointly and severally
liable under the Merger Agreement, and in respect of which an
Indemnified Person is entitled to Indemnification under the Merger
Agreement, the right of the Indemnified Person to receive such
Indemnification in respect of any particular Stockholder regarding
any such loss and to assert any claim against the Deposited Shares
and the Escrow Account attributable to such Stockholder hereunder,
shall be limited to an amount determined by multiplying: (A) the
amount of such loss for which such Indemnification is required to
be provided under the Merger Agreement; by (B) the Stockholder
Percentage of such Stockholder; and
(iii) to the extent that such losses arise from
any obligation for which such Stockholders are not jointly or
severally liable under the Merger Agreement, and in respect of
which an Indemnified Person is entitled to Indemnification under
the Merger Agreement, the right of an Indemnified Person to receive
such Indemnification in respect of any particular Stockholder
regarding any such loss and to assert any claim against the
Deposited Shares and the Escrow Account attributable to such
Stockholder hereunder, shall be limited solely to the Deposited
Shares and the Escrow Account attributable to the particular
Stockholder having an Indemnification obligation in respect of such
loss and no Indemnified Person shall have recourse to, or have any
right to make any claim against, receive any payment from, or
receive all or any portion of the Deposited Shares or the Escrow
Account attributable to, any other Stockholder or any other assets
of any Stockholder.
(b) In the event that an Indemnified Person believes that it
is entitled to the payment of money for Indemnification from a
Stockholder pursuant to the provisions of Article X of the Merger
Agreement, such Indemnified Person shall proceed to assert any such
claim (an "Indemnification Claim") in the manner set forth in the
Merger Agreement.
(c) The Escrow Agent shall not disburse any amount with
respect to any claim for Indemnification made by any Indemnified
Person until directed to make a payment pursuant to either: (i) a
written instruction signed by the Stockholder against which such
claim is asserted (the "Subject Stockholder") and the Indemnified
Person (it being understood and agreed that, in the event that a
Stockholder agrees in writing, or it is determined by a final,
binding non-appealable order or judgment of a court of competent
jurisdiction, that he is obligated to provide a specified amount as
Indemnification to an Indemnified Person pursuant to the terms of
Article X of the Merger Agreement, then such Stockholder shall also
provide the notice contemplated herein); or (ii) a certificate
signed by the Stockholders and IPL stating that the claim has been
resolved pursuant to a final, binding non-appealable order or
judgment of a court of competent jurisdiction.
(d) In the event that the Escrow Agent is required to make
any payment in respect of a Subject Stockholder to any Indemnified
Person pursuant to the terms of Section 5(c) above, then such
payment shall be made by the Escrow Agent subject to and in
accordance with the following procedure:
(i) the Escrow Agent shall make such payment on the
fifth (5th) Business Day (provided that in the event of a Cash
Substitution or Stock Substitution during such period with respect
to which a Section 3 Objection or Section 4 Objection is given,
then the date will be the fifth day following the date such
objection is resolved or as soon as thereafter practicable pursuant
to Section 11 hereof) following the occurrence of the first to
occur of the events contemplated in Section 5(c)(i) or (ii), (the
"Payment Date");
(ii) during the four (4) Business Days prior to the
Payment Date the Subject Stockholder may, at its option, engage in
a Cash Substitution or Stock Substitution by giving a Cash
Substitution Notice or a Stock Substitution Notice pursuant to
Section 3 or 4 hereof and the Payment Date will be appropriately
extended to the minimum extent necessary to permit such Cash
Substitution or Stock Substitution to occur;
(iii) the Subject Stockholder may, at its option
by written notice to the Escrow Agent, who shall deliver a copy to
the Indemnified Person no later than one Business Day after receipt
thereof, given not less than four (4) Business Days prior to the
Payment Date, elect to have any amount to be paid hereunder, paid
in either cash from the Escrow Account, Deposited Shares, or a
combination thereof (provided that in the event of the failure of
the Escrow Agent to receive any such notice prior to the fifth day
preceding the Payment Date, such payment will be made first in cash
from the Escrow Account and then from the Deposited Shares);
(iv) for the purpose of making any payment in
Deposited Shares, the same shall be valued at Market Value
determined as of the close of business on the fourth day preceding
the Payment Date; and
(v) in executing funds transfers, the Escrow Agent
will rely upon account numbers or other identifying numbers of a
Stockholder or Indemnified Person or its bank, rather than names.
The Escrow Agent shall not be liable for any loss, liability or
expense resulting from any error made by a Stockholder or
Indemnified Person with respect to an account number or other
identifying number provided it has accurately followed written
instructions from the Stockholder or Indemnified Person in
accordance with the disbursement provisions set forth above. The
Escrow Agent will confirm the instructions set forth in such
written instructions with the authorized individuals making such
request at the authorized telephone numbers appearing above each
such individual's name. The Escrow Agent will verify by telephone
all payment orders unless they call for a transfer to a pre-identified account.
(e) Notwithstanding anything to the contrary contained
herein, the Stockholders and IPL will not take any action pursuant
to this Agreement which would constitute or result in any
assignment of a Federal Communications Commission ("FCC") license
or any change of control of any FCC licensee, whether de facto or
de jure, if such assignment of license or change of control would
require under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC,
without first obtaining such approval of the FCC. The parties
hereto hereby agree that voting rights in the Deposited Shares
transferred to IPL hereunder will remain in each Stockholder unless
any required approval of the FCC shall be obtained to the transfer
of voting rights. The Stockholders hereby agree to take such
action as IPL may reasonably request in order to complete any
transfer of Deposited Shares contemplated hereby, including
specifically, at IPL's cost and expense, the use of each
Stockholders reasonable efforts to assist in obtaining the approval
of the FCC for any action or transaction contemplated hereby which
is then required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or
transferor's portion of any application or applications for consent
to the assignment of license or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of
(a) any sale or sales of Deposited Shares by or on behalf of the
Escrow Agent pursuant hereto, or (b) any assumption by IPL of
voting rights or management rights in the Deposited Shares effected
in accordance herewith.
Section 6. Final Distribution.
(a) Promptly following the date (the "Final Date") which is
the later of: (i) three (3) years following the date hereof; and
(ii) the Section 6 Date, the Escrow Agent shall, not less than five
(5) Business Days following the giving of written notice to IPL and
each Stockholder of its intention to do so, distribute all
Deposited Shares and all funds on deposit in the Escrow Accounts to
the applicable Stockholder who has deposited such funds or shares
hereunder; provided, however, that if, prior to the Final Date, an
Indemnified Person has delivered to the Escrow Agent a written
notice (a "Claim Notice") that it has asserted an Indemnification
Claim pursuant to the terms of the Merger Agreement and the amount
of such claim (the "Indemnification Claimed Amount") in respect of
any Subject Stockholder and there has been no disposition of the
Indemnification Claim covered thereby either: (A) as a result of a
final, binding, non-appealable order or judgment of a court of
competent jurisdiction resulting in an order of such court to the
Escrow Agent regarding the payment of such Indemnification Claim;
or (B) a written agreement of the Subject Stockholder resulting in
written instructions to the Escrow Agent signed by the Indemnified
Person and the Subject Stockholder: (i) the Escrow Agent shall
continue to hold an aggregate amount (determined in the manner set
forth in Section 6(c)) through the retention of Deposited Shares
and of funds in the Escrow Account, in each case applicable to such
Stockholder, equal to the Indemnification Claimed Amount until such
Indemnification Claim is so disposed of; and (ii) shall deliver to
each Stockholder the balance of the Deposited Shares or the funds
held in the applicable Escrow Account, in excess of the amounts
required to be retained pursuant to the preceding clause (i) (such
distribution pursuant to this clause (ii) and retention pursuant to
clause (i), to be made from Deposited Shares, cash in Escrow
Accounts, or a combination thereof, as shall be designated by each
Stockholder by written notice to the Escrow Agent and IPL within
five (5) Business Days following the Final Date); provided that if
such notice has not been received by the Escrow Agent at least
three (3) days prior to the Final Date, then the Escrow Agent shall
make such distribution on the third Business Day following its
receipt of such notice. The Escrow Agent shall not make any
distribution of Deposited Shares or funds on deposit in the Escrow
Accounts until it has received written notice from the
Stockholders.
(b) Any amount or portion thereof retained pursuant to
Section 6(a), shall be: (i) applied pursuant to Section 5 hereof;
or (ii) applied pursuant to written instructions to the Escrow
Agent executed by the Indemnified Person and the Subject
Stockholder; or (iii) in the event that the Escrow Agent receives
a certificate from a Subject Stockholder and the Indemnified Person
which states that the matters set forth in the Claim Notice have
been determined by a final, binding, non-appealable order of a
court of competent jurisdiction, and the amount retained in respect
of such Indemnification Claim, pursuant to this Section 6, exceeds
the amount required to be paid pursuant to Section 5 hereof in
respect of such Indemnification Claim, then the excess shall be
paid over to the Subject Stockholder (and, in the event of any
dispute with respect to the foregoing, the same may be submitted
for resolution pursuant to the dispute resolution procedures set
forth in Section 11 hereof and the Escrow Agent shall thereafter
release amounts in the applicable Escrow Account and the applicable
Deposited Shares, in accordance with the determination resulting
therefrom).
(c) For purposes of withholding assets pursuant to Section
6(a), any Deposited Shares shall be valued at Market Value
determined in good faith by the Board of Directors of IPL as of the
Final Date and all amounts held in any Escrow Account shall be
valued at the amount of cash held in such account. For the
purposes of this Agreement, the Escrow Agent may assume, without
inquiry or responsibility, that all actions taken by the Board of
Directors of IPL shall be in good faith. In the event that any
amounts held in any Escrow Account in cash are withheld from
distribution pursuant to this Section 6, due to the existence of
any Indemnification Claim pending as of such date, then to the
extent that the amount so withheld (the "Retained Amount") exceeds
150% of the amount specified in a certificate signed by the
Stockholders and IPL as the amount finally determined by a court of
competent jurisdiction pursuant to a final, binding, non-appealable
order to be the actual amount to be paid in respect of the
Indemnification Claim, IPL shall pay to the Subject Stockholders in
respect of such Indemnification Claim, an amount (reduced by any
other earnings received by the Subject Stockholder pursuant to this
Agreement in respect of such amounts during such period) equal to
interest on such excess calculated from the Final Date until the
date of such payment, at a rate equal to 2% in excess of the
average annual interest rate paid by IPL to its then current
lending bank during each annual period (or part thereof) that such
amounts are retained (or, in the event there is no such bank during
any such period, 15% per annum), but not in excess of the maximum
rate of interest permitted by law.
Section 7. Duties and Obligations.
(a) It is agreed that the duties and obligations of the
Escrow Agent are those herein specifically provided and no other.
The Escrow Agent shall not have any liability under, or duty to
inquire into, the terms and provisions of any agreement, other than
this Agreement. The Escrow Agent's duties are ministerial in
nature and the Escrow Agent shall not incur any liability whatso-
ever so long as it has acted in good faith, except for willful
misconduct or gross negligence. In the event that, at any time,
the Escrow Agent has any question as to the interpretation or
application of any provision of this Agreement, or requests written
instructions or confirmation of any action or inaction to be taken
or not to be taken by the Escrow Agent hereunder, the Escrow Agent
may, in its discretion, refrain from taking any action or engaging
in any activity, until it has received such instruction or
confirmation as it may reasonably request and the parties hereto
will provide the same as reasonably requested by the Escrow Agent
from time to time.
(b) The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted
by it in accordance with the advice of such counsel. The Escrow
Agent shall not be bound by any modification, amendment, termina-
tion, cancellation, rescission or supersession of this Agreement
unless the same shall be in writing and signed by all of the
parties hereto.
(c) In the event that the Escrow Agent shall be uncertain as
to its duties or rights hereunder or shall receive instructions,
claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall be
entitled to commence an action in interpleader and to pay the funds
and property then held in the Escrow Accounts into court, whereupon
its sole obligation shall be to take such action as is ordered by
a final, binding, non-appealable order or judgment of a court of
competent jurisdiction.
(d) The Escrow Agent shall not incur any liability for fol-
lowing the instructions herein contained or expressly provided for.
(e) The Escrow Agent shall not have any responsibility for
the genuineness or validity of any document or other item deposited
with it or any liability for action in accordance with any written
instructions or certificates given to it hereunder and reasonably
believed by it to be signed by the proper parties.
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to initiate or
defend any legal proceedings (including interpleader) which may be
instituted against it in respect of the subject matter of this
Agreement. If it does elect to act, it will do so only if it is
indemnified against the reasonable cost and expense of such defense
or initiation.
(g) This Agreement shall terminate when all funds and
property on deposit pursuant hereto have been disbursed as provided
in this Agreement.
Section 8. Resignation. The Escrow Agent may at any time
resign hereunder by giving written notice of its resignation to the
parties hereto, at least thirty days prior to the date specified
for such resignation to take effect, and, upon the effective date
of such resignation, all funds and property then held by the Escrow
Agent hereunder shall be delivered by it to such person as may be
designated in writing by all of IPL and the Stockholders, whereupon
all of the Escrow Agent's obligations hereunder shall cease and
terminate. If no such person shall have been designated by such
date, all obligations of the Escrow Agent hereunder shall
nevertheless cease and terminate except that the Escrow Agent's
sole responsibility thereafter shall be to continue to hold all the
funds and property then held by it and to deliver the same to a
person designated in writing by all of IPL and the Stockholders or
in accordance with the directions of a final, binding, non-appealable order or
judgment of a court of competent jurisdiction.
Section 9. Indemnification. IPL agrees to indemnify, defend
and hold the Escrow Agent harmless from and against any and all
loss, damage, tax, liability and expense, including, without
limitation, reasonable attorneys' fees, that may be incurred by the
Escrow Agent arising out of or in connection with its acceptance of
appointment as Escrow Agent hereunder, except as caused by its
gross negligence or willful misconduct, including, without
limitation, the legal costs and expenses of defending itself
against any claim or liability in connection with its performance
hereunder. Each Stockholder agrees to indemnify, defend and hold
the Escrow Agent harmless from and against any and all loss,
damage, tax, liability and expense, including, without limitation,
reasonable attorneys' fees, that may be incurred by the Escrow
Agent arising out of any wrongful act or omission by such
Stockholder hereunder, except as caused by the Escrow Agent's gross
negligence or willful misconduct, including, without limitation,
the legal costs and expenses of defending itself against any claim
or liability in connection with its performance hereunder.
Section 10. Expenses. IPL shall reimburse the Escrow Agent
for all expenses and disbursements incurred by the Escrow Agent
including, without limitation, fees and expenses, of counsel of the
Escrow Agent incurred in connection with this Agreement.
Section 11. Arbitration. Disputes that arise under this
Agreement, between the Stockholders and IPL will be resolved as
follows:
(i) except as set forth in the penultimate
paragraph of this Section 11, neither IPL nor any of the
Stockholders shall bring a civil action arising under or with
respect to this Agreement;
(ii) at any time IPL or any of the Stockholders may
demand arbitration of any dispute, arising under or with respect to
this Agreement by delivering written notice thereof to: (x) the
parties hereto; and (y) an office of JAMS/Endispute located in New
York City (or, if none, then the office of JAMS/Endispute located
closest to New York City); and
(iii) any such arbitration shall be conducted in
New York City according to JAMS/Endispute's Arbitration Rules then
in effect applicable to disputes of the types submitted to
arbitration and the results of such arbitration shall be final and
binding on the parties.
In the event that JAMS/Endispute is not available to provide such
arbitration services with respect to any such dispute, then that
dispute shall be resolved by final, binding arbitration in New York
City by three arbitrators pursuant to the rules then prevailing of
the American Arbitration Association applicable to disputes of the
type submitted to arbitration. Judgement on the award rendered by
any of the above referenced arbitrators may be confirmed and
entered in and by any court having jurisdiction.
Notwithstanding the foregoing, each party specifically
reserves the right to seek equitable remedies in a court of
competent jurisdiction.
It is understood and agreed by IPL and the Stockholders that
the purpose of this Agreement is to provide a mechanism to fund the
payment of certain indemnification obligations that may arise
pursuant to the terms of Article X of the Merger Agreement. This
Section 11 is to be utilized solely to resolve disputes under this
Agreement. The determination of the right of any party to be
indemnified or to receive any payment under Section X of the Merger
Agreement in respect of any matter is not within the subject matter
of this Agreement and is not subject to the provisions of this
Section 11.
Section 12. Fees. The fees and expenses of the Escrow Agent
are to be paid by IPL pursuant to the terms of a letter agreement
between Escrow Agent and IPL dated April 7, 1997 and the Escrow
Agent shall not collect any such fees from the amounts or property
escrowed hereunder.
Section 13. Notices. All notices, requests, demands,
waivers, consents, approvals or other communications to any party
hereunder shall be in writing and shall be deemed to have been duly
given if: (i) delivered personally to such party; or (ii) sent to
such party by telegram or telecopy, with a copy sent on the same
day via overnight delivery to the following addresses:
If to IPL, to:
International Post Limited
545 Fifth Avenue
New York, New York 10017
Attention: Martin Irwin
Fax # (212) 986-1364
with a copy to:
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
Attention: Jeffry S. Hoffman, Esq.
(212) 758-9500
Fax # (212) 758-9526
If to Siracusano, to:
Louis H. Siracusano
13 Lexington Lane
Montvale, New Jersey 07645
(201) 573-8660
Fax # (201) 573-8665
If to Ferolito, to:
Arnold P. Ferolito
c/o Video Services Corporation
240 Pegasus Avenue
Northvale, New Jersey 07647-1904
(201) 767-1000
Fax # (201) 784-2878
If to Buck, to:
Donald H. Buck
2 Deerburn Court
Florham Park, NJ 07932
(201) 593-8478
Fax # (201) 593-9283
All notices to the Stockholders shall also be sent to:
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036-1510
Attention: Keith L. Schaitkin
Fax # (212) 626-0799
If to Escrow Agent, to it at:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust
Fax # (212) 858-2952
or to such other address as the addressee may have specified in
notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communications
shall be deemed to have been given and received as of the date so
delivered, telegraphed or telecopied, provided that any notice,
request, demand, waiver, consent, approval or other communications
sent to the Escrow Agent shall be deemed to have been given and
received as of the date received by the Escrow Agent.
Section 14. Assignment. A party hereto may assign its rights
under this Agreement upon notice to all other parties hereto,
provided that in connection with any assignment by the Escrow
Agent, the Escrow Agent shall comply with the terms of Section 8
hereof.
Section 15. Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, heirs and personal
representatives.
Section 16. Governing Law. This Agreement shall be governed
by and interpreted under the laws of the State of New York
applicable to contracts made and performed therein without giving
effect to the principles of conflict of laws thereof.
Section 17. Amendment; Waiver. No amendment, modification or
waiver of the provisions of this Agreement shall be effective
unless in a writing executed by the party against whom such
amendment or modification is sought to be enforced (or in the case
of a waiver by the party waiving one or more of its rights
hereunder).
Section 18. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, but collectively all of such counterparts shall
constitute one and the same agreement.
Section 19. Adjustments. For purposes of this Agreement all
references to numbers of shares or calculations based thereon or
relating thereto, shall be appropriately adjusted for any stock
dividend, stock split, reverse stock split, combination,
recapitalization or other similar event.
Section 20. Glossary. The following terms as used in this
Agreement shall have the meanings indicated below.
"Business Day" shall mean any day other than (i) a
Saturday or Sunday; or (ii) a day on which banks in the State
of New York are required or permitted to be closed.
"Cash Substitution Percentage" shall mean, with respect
to any Cash Substitution being sought by any Stockholder, a
percentage determined by dividing the Shares to be Removed
pursuant to such Cash Substitution, by the number of Initial
Deposited Shares in respect of such Stockholder.
"Cash to be Removed" shall mean, with respect to each
Stockholder, the amount of cash it is seeking to obtain
possession of through a Stock Substitution pursuant to this
Section 4.
"Determined Cash Amount" shall mean an amount in U.S.
dollars determined, from time to time, with respect to any
Stockholder seeking to engage in a Cash Substitution, by
multiplying the Total Cash Amount in respect of such
Stockholder, by the applicable Cash Substitution Percentage.
"Determined Stock Amount" shall mean a certificate
representing a number of shares of IPL Common Stock
determined, from time to time, with respect to any Stockholder
seeking to engage in a Stock Substitution, by multiplying the
Initial Deposited Shares in respect of such Stockholder, by
the applicable Stock Substitution Percentage.
"Initial Deposited Shares" shall mean, with respect to
each of Siracusano, Ferolito and Buck, respectively, a number
of shares equal to the Siracusano Deposited Shares, the
Ferolito Deposited Shares and the Buck Deposited Shares (in
each case including only those shares deposited in escrow
pursuant to this Agreement on the date hereof), appropriately
adjusted for any stock dividend, stock split, reverse stock
split, combination, recapitalization or other similar event.
"IPL Common Stock" shall mean the authorized common
stock, $.01 par value per share, of IPL.
"Market Value" shall mean the average of the closing bid
and asked prices of a share of IPL Common Stock on The Nasdaq
Stock Market during the five (5) trading days immediately
prior to the date such calculation is made, appropriately
adjusted for stock dividends, splits, combinations,
subdivisions, recapitalizations and similar events.
"Section 6 Date" in the event that the Escrow Agent and
each Stockholder have received written notice from IPL of an
extension of the applicable statute of limitations relating to
any matter contemplated in Sections 4.8, 4.9 or 4.14 of the
Merger Agreement by agreement of IPL and any Governmental
Entity entered into prior to the expiration of three (3) years
from the date of the Closing, the date of expiration of the
last such extension.
"Shares to be Removed" shall mean, with respect to each
Stockholder, the number of Deposited Shares it is seeking to
obtain possession of through a Cash Substitution pursuant to
this Section 3.
"Stock Substitution Percentage" shall mean, with respect
to any Stock Substitution being sought by any Stockholder, a
percentage determined by dividing the Cash to be Removed
pursuant to such Stock Substitution, by the Total Cash Amount
in respect of such Stockholder.
"Stockholder Percentage" shall mean: (i) with respect to
Louis H. Siracusano, 46.062%; (ii) with respect to Arnold P.
Ferolito, 46.02%; and (iii) with respect to Donald H. Buck,
7.876%.
"Total Cash Amount" shall mean, with respect to: (i)
Siracusano, $2.3 million; (ii) Ferolito, $2.3 million, and
(iii) Buck, $400,000.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
INTERNATIONAL POST LIMITED
/s/
STOCKHOLDERS:
/s/ Louis H. Siracusano
Louis H. Siracusano
/s/ Arnold P. Ferolito
Arnold P. Ferolito
/s/ Donald H. Buck
Donald H. Buck
IBJ SCHRODER BANK & TRUST COMPANY
/s/
By:
Exhibit 11
STOCKHOLDERS' ESCROW AGREEMENT
STOCKHOLDERS' ESCROW AGREEMENT (the "Agreement"), dated as of
August 26, 1997, by and among Louis H. Siracusano ("Siracusano");
Arnold P. Ferolito ("Ferolito"); and Donald H. Buck ("Buck") (each
a "Stockholder" and collectively, the "Stockholders") and Gordon
Altman Butowsky Weitzen Shalov & Wein (the "Escrow Agent"). Any
reference herein to any Stockholder shall be deemed to also include
a reference to the heirs, estate and personal representatives of
such Stockholder.
W I T N E S S E T H:
WHEREAS, the Stockholders have executed an Agreement dated
August 26, 1997, (the "Stockholders' Agreement") a copy of which is
attached hereto as Exhibit A in connection with the proposed merger
(the "Merger") of International Post Limited, a Delaware
corporation ("IPL") and Video Services Corporation, a New Jersey
corporation ("Video") with IPL to be the surviving corporation of
the Merger (to be known as "Video Services Corporation");
WHEREAS, the Stockholders have agreed pursuant to the
Stockholders' Agreement to grant stock options ("Options") to
employees of or consultants to Video or IPL or their respective
subsidiaries (the "Optionees") to purchase shares of IPL Common
Stock, par value $.01 per share ("IPL Common Stock") and have
caused Exhibit B to be attached hereto, which contains a list and
brief description of all Options granted prior to the date hereof.
The list will be updated from time to time by written notice given
by any Stockholder to the Escrow Agent and all other Stockholders.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the parties hereto, intending to be legally
bound, do hereby agree as follows:
Section 1. Appointment of Escrow Agent
The Stockholders hereby appoint the Escrow Agent as their
agent to hold and disburse all assets from time to time deposited
with the Escrow Agent pursuant hereto on the terms and subject to
the conditions set forth in this Agreement, and the Escrow Agent
hereby accepts such appointment. By their execution of this
Agreement, the Stockholders expressly authorize the Escrow Agent
to, and the Escrow Agent expressly agrees to, take the actions
contemplated by this Agreement in accordance with the provisions of
this Agreement.
Section 2. Escrow Accounts; Deposit of Stock Certificates.
On the date hereof each of the Stockholders is delivering to
the Escrow Agent a stock certificate (duly endorsed in blank or
accompanied by stock powers duly endorsed in blank) representing
the number of shares of IPL Common Stock set forth opposite his
name below:
Name Number of Shares
Siracusano 322,294 (the "Siracusano Deposited Shares")
Ferolito 322,294 (the "Ferolito Deposited Shares")
Buck 16,941 (the "Buck Deposited Shares")
The shares represented by the certificates so deposited are
referred to herein collectively as the "Deposited Shares". Each
Stockholder shall retain all voting rights in respect of the
Deposited Shares deposited by such Stockholder, as well as the
right to receive all cash dividends paid on such shares until such
time, if any, as they are transferred to the Optionees. All
securities received in respect of such shares as dividends shall be
distributed to the applicable Stockholder in accordance with the
following percentages: (i) with respect to Louis H. Siracusano,
46.062%; (ii) with respect to Arnold P. Ferolito, 46.062%; and
(iii) with respect to Donald H. Buck, 7.876%.
Section 3. Procedure for Disbursement.
(a) After any Optionee has exercised its Option pursuant to
the agreement between the Optionee and the Stockholders (the
"Option Agreement") by providing written notice to each Stockholder
and otherwise complying with the terms of such Option Agreement
(including all payment terms), the Optionee or any Stockholder may
provide written notice to the Escrow Agent of such exercise of
the Option specifying the number of shares of IPL Common Stock to
be purchased through such exercise from each Stockholder (the
"Option Exercise Notice"). The Escrow Agent shall notify each
Stockholder of its receipt of the Option Exercise Notice and of
the number of Deposited Shares of each Stockholder to be disbursed
to the Optionee (the "Disbursement Notice") within five (5)
Business Days of its receipt of the Option Exercise Notice. Within
five (5) Business Days of receipt of the Disbursement Notice by a
Stockholder (the "Objection Period"), a Stockholder may object to
the disbursement of the applicable Deposited Shares by sending
written notice of such objection (the "Objection Notice") to the
Escrow Agent and to the other Stockholders. Failure by a
Stockholder to deliver the Objection Notice to the Escrow Agent
prior to the end of the Objection Period shall be deemed an
acceptance of the exercise of the Option in the amount set forth in
the Disbursement Notice and: (i) acknowledgment, as between the
Stockholder and the Escrow Agent, that all terms of the Option
Agreement in connection with such exercise have been complied with;
and (ii) authorization of the Escrow Agent, by and on behalf of and
as attorney-in-fact, for each Stockholder, to take all necessary
action to cause the transfer on the books and records of IPL, of
the number of shares of IPL Common Stock specified in the Option
Exercise Notice, from the Stockholder to the Optionee, out of the
Deposited Shares deposited hereunder by such Stockholder.
(b) In the event that a Stockholder timely delivers an
Objection Notice to the Escrow Agent, the Escrow Agent shall not
complete the disbursement until directed to do so: (i) pursuant to
a written instruction signed by each of the Stockholders and the
Optionee; or (ii) by final, binding order of a court of competent
jurisdiction.
(c) Upon the expiration of five (5) years from the date of
this Agreement, the Escrow Agent shall disburse the Deposited
Shares in accordance with the provisions and percentages set forth
in Section 1 of the Stockholder's Agreement; it being understood
and agreed that this Agreement and the Stockholder's Agreement have
been established on the assumption that shares will be deposited,
transferred to Optionees and returned to the Stockholders in
accordance with the percentages contemplated in such document and
that, in the event of any failure of the same to occur, the
Stockholders agree that the number of Deposited Shares disbursed by
the Escrow Agent to each Stockholder shall be appropriately and
equitably adjusted to achieve the result referenced to above in
this paragraph as closely as possible.
Section 4. Duties and Obligations.
(a) It is agreed that the duties and obligations of the
Escrow Agent are those herein specifically provided and no other.
The Escrow Agent shall not have any liability under, or duty to
inquire into, the terms and provisions of any agreement, other than
this Agreement. The Escrow Agent's duties are ministerial in
nature and the Escrow Agent shall not incur any liability whatso-
ever so long as it has acted in good faith, except for willful
misconduct. In the event that, at any time, the Escrow Agent has
any question as to the interpretation or application of any
provision of this Agreement, or requests written instructions or
confirmation of any action or inaction to be taken or not to be
taken by the Escrow Agent hereunder, the Escrow Agent may, in its
discretion, refrain from taking any action or engaging in any
activity, until it has received such instruction or confirmation as
it may reasonably request and the parties hereto will provide the
same as reasonably requested by the Escrow Agent from time to time.
(b) The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted
by it in accordance with the advice of such counsel. The Escrow
Agent shall not be bound by any modification, amendment, termina-
tion, cancellation, rescission or supersession of this Agreement
unless the same shall be in writing and signed by all of the
parties hereto.
(c) In the event that the Escrow Agent shall be uncertain as
to its duties or rights hereunder or shall receive instructions,
claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall be
entitled to commence an action in interpleader and to deliver the
property then held in the Escrow Accounts into court, whereupon its
sole obligation shall be to take such action as is ordered by a
final, binding, non-appealable order or judgment of a court of
competent jurisdiction.
(d) The Escrow Agent shall not incur any liability for fol-
lowing the instructions herein contained or expressly provided for.
(e) The Escrow Agent shall not have any responsibility for
the genuineness or validity of any document or other item deposited
with it or any liability for action in accordance with any written
instructions or certificates given to it hereunder and reasonably
believed by it to be signed by the proper parties.
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to initiate or
defend any legal proceedings (including interpleader) which may be
instituted against it in respect of the subject matter of this
Agreement. If it does elect to act, it will do so only if it is
indemnified against the reasonable cost and expense of such defense
or initiation.
(g) This Agreement shall terminate when all property on
deposit pursuant hereto has been disbursed as provided in this
Agreement.
Section 5. Resignation. The Escrow Agent may at any time
resign hereunder by giving written notice of its resignation to the
Stockholders, at least thirty days prior to the date specified for
such resignation to take effect, and, upon the effective date of
such resignation, all funds and property then held by the Escrow
Agent hereunder shall be delivered by it to such person as may be
designated in writing by all the Stockholders, whereupon all of the
Escrow Agent's obligations hereunder shall cease and terminate. If
no such person shall have been designated by such date, all obliga-
tions of the Escrow Agent hereunder shall nevertheless cease and
terminate except that the Escrow Agent's sole responsibility
thereafter shall be to continue to hold all the property then held
by it and to deliver the same to a person designated in writing by
all of the Stockholders or in accordance with the directions of a
final, binding, non-appealable order or judgment of a court of
competent jurisdiction.
Section 6. Indemnification. The Stockholders agree to
indemnify, defend and hold the Escrow Agent harmless from and
against any and all loss, damage, tax, liability and expense,
including, without limitation, reasonable attorneys' fees, that may
be incurred by the Escrow Agent arising out of or in connection
with its acceptance of appointment as Escrow Agent hereunder,
except as caused by its gross negligence or willful misconduct,
including, without limitation, the legal costs and expenses of
defending itself against any claim or liability in connection with
its performance hereunder. Each Stockholder agrees to indemnify,
defend and hold the Escrow Agent harmless from and against any and
all loss, damage, tax, liability and expense, including, without
limitation, reasonable attorneys' fees, that may be incurred by the
Escrow Agent arising out of any wrongful act or omission by such
Stockholder hereunder, except as caused by the Escrow Agent's gross
negligence or willful misconduct, including, without limitation,
the legal costs and expenses of defending itself against any claim
or liability in connection with its performance hereunder.
Section 7. Expenses. The Stockholders shall reimburse the
Escrow Agent for all expenses and disbursements incurred by the
Escrow Agent including, without limitation, fees and expenses, of
counsel of the Escrow Agent incurred in connection with this
Agreement.
Section 8. Notices. All notices, requests, demands, waivers,
consents, approvals or other communications to any party hereunder
shall be in writing and shall be deemed to have been duly given if:
(i) delivered personally to such party; or (ii) sent to such party
by telegram or telecopy, with a copy sent on the same day via
overnight delivery to the following addresses:
If to Siracusano, to:
Louis H. Siracusano
13 Lexington Lane
Montvale, New Jersey 07645
(201) 573-8660
Fax # (201) 573-8665
If to Ferolito, to:
Arnold P. Ferolito
c/o Video Services Corporation
240 Pegasus Avenue
Northvale, New Jersey 07647-1904
(201) 767-1000
Fax # (201) 784-2878
If to Buck, to:
Donald H. Buck
2 Deerburn Court
Florham Park, NJ 07932
(201) 593-8478
Fax # (201) 593-9283
All notices to the Escrow Agent shall be sent to:
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036-1510
Attention: Keith L. Schaitkin
Fax # (212) 626-0799
or to such other address as the addressee may have specified in
notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communications
shall be deemed to have been given and received as of the date so
delivered, telegraphed or telecopied.
Section 9. Assignment. A party hereto may assign its rights
under this Agreement upon notice to all other parties hereto.
Section 10. Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, heirs and personal
representatives.
Section 11. Governing Law. This Agreement shall be governed
by and interpreted under the laws of the State of New York
applicable to contracts made and performed therein without giving
effect to the principles of conflict of laws thereof.
Section 12. Amendment; Waiver. No amendment, modification or
waiver of the provisions of this Agreement shall be effective
unless in a writing executed by the party against whom such
amendment or modification is sought to be enforced (or in the case
of a waiver by the party waiving one or more of its rights
hereunder).
Section 13. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, but collectively all of such counterparts shall
constitute one and the same agreement.
Section 14. Adjustments. For purposes of this Agreement all
references to numbers of shares or calculations based thereon or
relating thereto, shall be appropriately adjusted for any stock
dividend, stock split, reverse stock split, combination,
recapitalization or other similar event.
Section 15. Third Party Beneficiaries. This Agreement is
made solely for the benefit of the parties hereto and may be
amended by them in their sole and absolute discretion without
consent of or notice to, any Optionee or any other person or
entity; provided, however, that upon written notice by any two
Stockholders to: (i) the Escrow Agent; and (ii) all of the other
Stockholders, any two Stockholders may, from time to time,
designate one or more Optionees as a third party beneficiary of
this Agreement to the extent expressed in such notice.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
/s/ Louis H. Siracusano
Louis H. Siracusano
/s/ Arnold P. Ferolito
Arnold P. Ferolito
/s/ Donald H. Buck
Donald H. Buck
GORDON ALTMAN BUTOWSKY
WEITZEN SHALOV & WEIN
/s/
By:
<PAGE>
EXHIBIT B
Holder Issued Date IPL Shares
Adizes Institute, Inc. June 13, 1997 70,000
Julius Barnathan June 13, 1997 35,000
Francis Luperella June 13, 1997 50,000
Barry W. Ridings June 13, 1997 30,000
Alan Schneider June 13, 1997 40,000
Edward Shendell June 13, 1997 25,000
Exhibit 12
AGREEMENT
Agreement dated this 26th day of August, 1997 by and among Louis H.
Siracusano ("Siracusano"), Arnold P. Ferolito ("Ferolito"), and
Donald H. Buck ("Buck").
BACKGROUND
This agreement (the "Agreement") sets forth the agreement among
Siracusano, Ferolito and Buck, (each, a "Stockholder" and
collectively, the "Stockholders"), the three stockholders of Video
Services Corporation ("Video"), regarding, among other things,
shares of Common Stock of Video ("Video Shares") and shares of
Common Stock ("IPL Shares") of International Post Limited ("IPL").
Reference is made to the Agreement and Plan of Merger among Video,
IPL and the Stockholders dated as of June 27, 1997 (the "Merger
Agreement") relating to the proposed merger (the "Merger") of IPL
and Video and the Stock Resale Agreement (the "Stock Resale
Agreement") among the Stockholders, The Equitable Life Assurance
Society of the United States ("ELAS"), Equitable Deal Flow Fund,
L.P. ("EDFF"), Terrence A. Elkes ("Elkes") and Kenneth F. Gorman
("Gorman") attached as Exhibit 7.16(a) to the Merger Agreement.
Each capitalized term not defined in this letter shall have the
meaning attributed to it in the Merger Agreement.
NOW THEREFORE, the parties hereto desiring to be legally bound, do
hereby agree as follows:
1. 509 Plan/212 Plan. From time to time following notice by
Siracusano, the Stockholders agree to grant stock options
to employees of or consultants to Video or IPL or their
respective subsidiaries to purchase up to 721,529 IPL
Shares. The options ("Options") will be on terms
(including, without limitation, exercise price) as shall
be determined by Siracusano provided that the same terms
and provisions shall be applicable to all of the
Stockholders, and will be granted by the Stockholders in
a ratio of 48.720% (with respect to Siracusano), 48.720%
(with respect to Ferolito), and 2.560% (with respect to
Buck) (the "Ratio"). In order to facilitate the grant of
options and to secure the availability of the underlying
shares in connection with the exercise of any such
option, certificates representing 661,529 shares (721,529
less any shares deposited with counsel to Elkes and
Gorman in replacement of existing options) will be
deposited with the law firm of Gordon Altman Butowsky
Weitzen Shalov & Wein pursuant to an escrow agreement to
be entered into by the Stockholders and that law firm.
Such shares will be held for five years (or as otherwise
directed in a writing signed by all such Stockholders)
but released to an option holder on exercise thereof.
The deposit of such shares will be made by the
Stockholders as follows: 322,294 by each of Siracusano
and Ferolito and 16,941 by Buck. Shares remaining after
the expiration of the five year period (or as otherwise
directed in a writing signed by all such Stockholders)
will be released in a ratio of 46.062% (with respect to
Siracusano), 46.062% (with respect to Ferolito) and
7.876% (with respect to Buck) (the "Release Ratio"). All
amounts paid to the Stockholders pursuant to the exercise
of any option will be shared by the Stockholders pro rata
in accordance with the Release Ratio and the Stockholders
shall make such payments to one another as is necessary
to achieve that result. References herein to numbers of
shares shall be appropriately adjusted for stock
dividends, stock splits and other appropriate
extraordinary transactions.
2. Existing Stockholder Agreement. Effective upon
completion of the Merger, the stockholders agreement with
respect to Video, among Siracusano, Ferolito and Buck, as
amended on April 26, 1994, will be, and hereby is,
terminated and will have no further force or effect.
3. Lock-Up. The Stockholders agree that, unless otherwise
agreed among themselves, for a period of six-months
following the Effective Time of the Merger (as
contemplated in the Merger Agreement) they shall not
transfer any of the IPL Shares that they obtain in the
Merger other than pursuant to: (i) the Losses Escrow
Agreement, (ii) the granting of Options and the issuance
of IPL Shares thereunder, or (iii) a transfer to a
Permitted Transferee in accordance with the terms of the
Stock Resale Agreement. Notwithstanding the foregoing,
the Stockholders agree that Siracusano may sell IPL
Shares as permitted in Section 6 of the Stock Resale
Agreement (Taxes) and Ferolito may sell up to 305,000 IPL
Shares (but not in excess of an amount that would result
in a breach of Section 7 of the Stock Resale Agreement),
pursuant to the terms of Section 7 of the Stock Resale
Agreement during the six-month period after the Effective
Time of the Merger. The provisions of this Section 3
shall, as among the Stockholders, constitute a limitation
of their rights under Section 7 of the Stock Resale
Agreement so that any transfer proposed to be made by LS
under Section 6 of the Stock Resale Agreement or of any
of them under Section 7 of the Stock Resale Agreement,
shall be subject to and limited by, the terms of this
Section 3.
4. Spin Co. Following the Effective Time of the Merger, the
Stockholders agree on behalf of the corporations included
in such transaction (and with recourse only to those
corporations) that such corporations will pay to
Ferolito, in the aggregate, the sum of $7,000 per month
(subject to withholding) in exchange for reasonable
consulting services until the earlier of: (i) the one (1)
year period following the closing of the Merger; and (ii)
the date on which Ferolito has sold any shares of IPL.
5. Credit Cards. Prior to the closing of the Merger, Video
will cause Video and its subsidiaries to pay in full all
amounts owing under and to cancel the following charge
card accounts:
American Express Account #3782-638498-51009
American Express Account #3782-601037-92202
6. Resignation. In connection with the closing of the
Merger, Ferolito will, and hereby does, resign all of his
positions, offices and directorships with Video and its
subsidiaries (other than those corporations to be spun
off pursuant to the Spin-Off Transaction ("Spin Co."))
and agrees that he will have no further rights or claims
against: (i) Video or any of its subsidiaries (other than
Spin Co.); or (ii) IPL or any of its subsidiaries (other
than the consulting agreement to be entered into pursuant
to the Merger Agreement and any rights to indemnification
contemplated in Section 7.9 of the Merger Agreement).
7. Further Actions. Each of the parties hereto will take
such action and enter into such documents, instruments
and agreements as are necessary to complete and carry out
the terms and intentions of this Agreement.
8. Miscellaneous. This Agreement constitutes the entire
agreement between the parties with respect to the subject
matter hereof and supersedes all previous written, and
all previous or contemporaneous oral, negotiations,
understandings, arrangements, and agreements.
The headings in this Agreement are for convenience of
reference only and are not part of the substance of this
letter.
This Agreement will be binding upon and inure to the
benefit of the parties and their respective successors
and assigns.
<PAGE>
This letter has been executed, delivered, and accepted by the
parties in New Jersey, will be deemed to have been made in New
Jersey, and will be interpreted and the rights of the parties
determined in accordance with the laws of the United States
applicable thereto and the internal laws of the State of New Jersey
applicable to an agreement executed, delivered and performed
therein without giving effect to the choice-of-law rules thereof or
any other principle that could require the application of the
substantive law of any other jurisdiction.
/s/ Louis H. Siracusano
Louis H. Siracusano
/s Arnold P. Ferolito
Arnold P. Ferolito
/s/ Donald H. Buck
Donald H. Buck
EXHIBIT 13
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of August __, 1997 is made by and
between Louis H. Siracusano, Arnold P. Ferolito and Donald H. Buck
(each, a "Stockholder and collectively, the "Stockholders") and
Terrence A. Elkes (the "Optionee").
WHEREAS, Video Services Corporation ("VSC") (an entity in
which the Stockholders are the sole stockholders) has entered into
a Merger Agreement (the "Merger Agreement") with International Post
Limited (the "Company") dated June 27, 1997, pursuant to which such
corporations will be merged (the "Merger");
WHEREAS, VSC has previously granted an option to the Optionee
to acquire 30,000 shares of the common stock ("Common Stock") of
the Company, which option was on this day terminated pursuant to
the terms of the Merger Agreement and is being replaced by this
Agreement; and
WHEREAS, the Stockholders desire to grant an option to
Optionee to purchase shares of the Common Stock and Optionee
desires to accept such stock option;
NOW, THEREFORE, the Stockholders and Optionee agree as
follows:
Section 1. Grant of Option.
Section 1.1 Grant; Grant Date
Each Stockholder hereby grants to Optionee the right to
purchase from such Stockholder all or any part of the number of
shares of Common Stock set forth opposite his name in the table
below (the "Option"), comprising an aggregate of 30,000 shares of
the Company's Common Stock, $.01 par value per share, (the
"Shares") upon the terms and conditions set forth in this
Agreement. The grant date of the Option shall be the date of this
Agreement. Optionee hereby accepts the Option, and agrees to be
bound by all the terms and provisions of this Agreement.
Name Number of Shares
Louis H. Siracusano 14,616
Arnold P. Ferolito 14,616
Donald H. Buck 768
Section 1.2 Adjustments in Option
In the event that the outstanding Shares subject to the Option
are changed into or exchanged for a different number or kind of
shares or securities of the Company, or of another corporation, by
reason of reorganization, merger or other subdivision,
consolidation, recapitalization, reclassification, stock split,
stock dividend or combination of shares or similar event, the
Stockholders shall make an appropriate and equitable adjustment in
the Option so that Optionee's proportionate interest shall be
maintained as before the occurrence of such event to the maximum
extent possible. Any adjustment made by the Stockholders shall be
final and binding upon Optionee and all other interested parties.
Section 1.3 Option Terms
The Option granted under this Agreement shall be subject
to the following terms and conditions:
(a) Price. The exercise price for the Shares subject to the
Option shall be $11.00 per Share.
(b) Term. The Option shall expire on February 15, 1999.
(c) Vesting. At the effective time of the Merger, the Option
shall become fully vested and exercisable immediately.
(d) Exercise. To the extent that the Option has become
exercisable in accordance with this Agreement, it may be exercised
in whole or in part at any time prior to its expiration or
termination, by providing written notice to each Stockholder of the
number of Shares as to which the Option is being exercised, and
enclosing payment for the Shares with respect to which the Option
is being exercised. Such payment shall be in cash. Partial
exercise shall be for whole Shares only and shall not be for less
than five thousand (5,000) Shares in the aggregate unless the
number of Shares purchased constitutes the total number of Shares
then remaining subject to the Option or the Stockholders permit
such smaller exercise in their sole discretion. Notation of any
partial exercise shall be made by the Stockholders on Schedule I
hereto. Any exercise shall be allotted among the Stockholders in
the following ratios:
Percentage of Exercise
Stockholder Applied to his Shares
Louis H. Siracusano 48.720%
Arnold P. Ferolito 48.720%
Donald H. Buck 2.560%
Section 1.4 Nontransferability
The Option shall not be transferable other than by will or the
applicable laws of descent and distribution, and no transfer so
effected shall be effective to bind the Stockholders unless the
Stockholders have been furnished with written notice thereof and
such evidence as the Stockholders may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Option.
Section 1.5 Conditions to Issuance of Stock Certificates
(a) If required, the stock certificates evidencing the Shares
shall bear legends restricting transferability; in substantially
the form indicated below:
"These Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and
may not be resold, pledged or otherwise transferred unless
they have been registered under the Securities Act or unless
an exemption from registration is available."
(b) The Stockholders shall not be required to deliver any
certificate or certificates for Shares deliverable upon any
exercise of the Option prior to fulfillment of all of the following
conditions:
(i) The completion of any registration or other
qualification of such Shares under any state or federal law or
under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, or the
obtaining of approval or other clearance from any state or federal
governmental agency which the Stockholders shall, in their sole
discretion, deem necessary or advisable.
(ii) In the event that the Shares have not been
registered under the Securities Act, if the Stockholders shall, in
their sole discretion, deem it necessary or advisable, the
execution by Optionee of a written representation and agreement, in
a form satisfactory to the Stockholders, in which Optionee
represents that the Shares acquired by him upon exercise are being
acquired for investment and not with a view to distribution
thereof.
The parties to this Agreement understand, acknowledge and
agree that any transfer of all or any part of the Shares, or any
change in the ownership of the Company, shall be subject to the
requirements of the Communications Act of 1934, as amended, and the
rules and regulations of the Federal Communications Commission
("FCC") as may be in effect at the time of such transfer, and that
before certain rights provided for in this Agreement are exercised,
it may be necessary to obtain any approval of the FCC required
under applicable law.
Section 2. Miscellaneous.
Section 2.1 Entire Agreement: Amendment
This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof. Any term or
provision of this Agreement may be waived at any time by the party
which is entitled to the benefit thereof, and any term or provision
of this Agreement may be amended or supplemented at any time by the
mutual consent of the parties hereto, except that any waiver of
any term or condition, or any amendment, of this Agreement must be
in writing.
Section 2.2 Governing Law
The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this
Agreement regardless of the law that might be applied under
principles of conflict of laws.
Section 2.3 Successors
This Agreement shall be binding upon and inure to the benefit
of the successors, assigns and heirs of the respective parties.
Section 2.4 Notices
All notices or other communications made or given in
connection with this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by
registered or certified mail, return receipt requested, to those
listed below at their following respective addresses or at such
other address as each may specify by notice to the others:
To Optionee:
c/o Apollo Partners LLC
One Stamford Plaza, 12th Floor
Stamford, CT 06901
To the Stockholders:
c/o International Post Limited
545 Fifth Avenue
New York, New York 10017
Attention: Louis H. Siracusano
With a copy to each of the Stockholders at the following
addresses:
Louis H. Siracusano
13 Lexington Lane
Montvale, New Jersey 07645
(201) 573-8660
Arnold P. Ferolito
c/o Video Services Corporation
240 Pegasus Avenue
Northvale, New Jersey 07647-1904
Donald H. Buck
2 Deerburn Court
Florham Park, New Jersey 07932
All notices to the Stockholders shall also be sent to:
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036-1510
Attention: Keith L. Schaitkin, Esq.
Fax Number: (212) 626-0799
Section 2.5 Waiver
The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a
waiver thereof or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
Section 2.6 Titles; Construction
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this
Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
/s/ Louis H. Siracusano
Louis H. Siracusano
/s/ Arnold P. Ferolito
Arnold P. Ferolito
/s/ Donald H. Buck
Donald H. Buck
Optionee:
/s/ Terremce A. Elkes
Terrence A. Elkes<PAGE>
SCHEDULE I
Notations As to Partial Exercise
Number of Balance of
Date of Purchased Shares on Authorized Notation
Exercise Shares Option Signature Date
EXHIBIT 14
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of August __, 1997 is made by and
between Louis H. Siracusano, Arnold P. Ferolito and Donald H. Buck
(each, a "Stockholder" and collectively, the "Stockholders") and
Kenneth F. Gorman (the "Optionee").
WHEREAS, Video Services Corporation ("VSC") (an entity in
which the Stockholders are the sole stockholders) has entered into
a Merger Agreement (the "Merger Agreement") with International Post
Limited (the "Company") dated June 27, 1997, pursuant to which such
corporations will be merged (the "Merger");
WHEREAS, VSC has previously granted an option to the Optionee
to acquire 30,000 shares of the common stock ("Common Stock") of
the Company, which option was on this day terminated pursuant to
the terms of the Merger Agreement and is being replaced by this
Agreement; and
WHEREAS, the Stockholders desire to grant an option to
Optionee to purchase shares of the Common Stock and Optionee
desires to accept such stock option;
NOW, THEREFORE, the Stockholders and Optionee agree as
follows:
Section 1. Grant of Option.
Section 1.1 Grant; Grant Date
Each Stockholder hereby grants to Optionee the right to
purchase from such Stockholder all or any part of the number of
shares of Common Stock set forth opposite his name in the table
below (the "Option"), comprising an aggregate of 30,000 shares of
the Company's Common Stock, $.01 par value per share, (the
"Shares") upon the terms and conditions set forth in this
Agreement. The grant date of the Option shall be the date of this
Agreement. Optionee hereby accepts the Option, and agrees to be
bound by all the terms and provisions of this Agreement.
Name Number of Shares
Louis H. Siracusano 14,616
Arnold P. Ferolito 14,616
Donald H. Buck 768
Section 1.2 Adjustments in Option
In the event that the outstanding Shares subject to the Option
are changed into or exchanged for a different number or kind of
shares or securities of the Company, or of another corporation, by
reason of reorganization, merger or other subdivision,
consolidation, recapitalization, reclassification, stock split,
stock dividend or combination of shares or similar event, the
Stockholders shall make an appropriate and equitable adjustment in
the Option so that Optionee's proportionate interest shall be
maintained as before the occurrence of such event to the maximum
extent possible. Any adjustment made by the Stockholders shall be
final and binding upon Optionee and all other interested parties.
Section 1.3 Option Terms
The Option granted under this Agreement shall be subject
to the following terms and conditions:
(a) Price. The exercise price for the Shares subject to the
Option shall be $11.00 per Share.
(b) Term. The Option shall expire on February 15, 1999.
(c) Vesting. At the effective time of the Merger, the Option
shall become fully vested and exercisable immediately.
(d) Exercise. To the extent that the Option has become
exercisable in accordance with this Agreement, it may be exercised
in whole or in part at any time prior to its expiration or
termination, by providing written notice to each Stockholder of the
number of Shares as to which the Option is being exercised, and
enclosing payment for the Shares with respect to which the Option
is being exercised. Such payment shall be in cash. Partial
exercise shall be for whole Shares only and shall not be for less
than five thousand (5,000) Shares in the aggregate unless the
number of Shares purchased constitutes the total number of Shares
then remaining subject to the Option or the Stockholders permit
such smaller exercise in their sole discretion. Notation of any
partial exercise shall be made by the Stockholders on Schedule I
hereto. Any exercise shall be allotted among the Stockholders in
the following ratios:
Percentage of Exercise
Stockholder Applied to his Shares
Louis H. Siracusano 48.720%
Arnold P. Ferolito 48.720%
Donald H. Buck 2.560%
Section 1.4 Nontransferability
The Option shall not be transferable other than by will or the
applicable laws of descent and distribution, and no transfer so
effected shall be effective to bind the Stockholders unless the
Stockholders have been furnished with written notice thereof and
such evidence as the Stockholders may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Option.
Section 1.5 Conditions to Issuance of Stock Certificates
(a) If required, the stock certificates evidencing the Shares
shall bear legends restricting transferability; in substantially
the form indicated below:
"These Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and
may not be resold, pledged or otherwise transferred unless
they have been registered under the Securities Act or unless
an exemption from registration is available."
(b) The Stockholders shall not be required to deliver any
certificate or certificates for Shares deliverable upon any
exercise of the Option prior to fulfillment of all of the following
conditions:
(i) The completion of any registration or other
qualification of such Shares under any state or federal law or
under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, or the
obtaining of approval or other clearance from any state or federal
governmental agency which the Stockholders shall, in their sole
discretion, deem necessary or advisable.
(ii) In the event that the Shares have not been
registered under the Securities Act, if the Stockholders shall, in
their sole discretion, deem it necessary or advisable, the
execution by Optionee of a written representation and agreement, in
a form satisfactory to the Stockholders, in which Optionee
represents that the Shares acquired by him upon exercise are being
acquired for investment and not with a view to distribution
thereof.
The parties to this Agreement understand, acknowledge and
agree that any transfer of all or any part of the Shares, or any
change in the ownership of the Company, shall be subject to the
requirements of the Communications Act of 1934, as amended, and the
rules and regulations of the Federal Communications Commission
("FCC") as may be in effect at the time of such transfer, and that
before certain rights provided for in this Agreement are exercised,
it may be necessary to obtain any approval of the FCC required
under applicable law.
Section 2. Miscellaneous.
Section 2.1 Entire Agreement: Amendment
This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof. Any term or
provision of this Agreement may be waived at any time by the party
which is entitled to the benefit thereof, and any term or provision
of this Agreement may be amended or supplemented at any time by the
mutual consent of the parties hereto, except that any waiver of
any term or condition, or any amendment, of this Agreement must be
in writing.
Section 2.2 Governing Law
The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this
Agreement regardless of the law that might be applied under
principles of conflict of laws.
Section 2.3 Successors
This Agreement shall be binding upon and inure to the benefit
of the successors, assigns and heirs of the respective parties.
Section 2.4 Notices
All notices or other communications made or given in
connection with this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by
registered or certified mail, return receipt requested, to those
listed below at their following respective addresses or at such
other address as each may specify by notice to the others:
To Optionee:
c/o Apollo Partners LLC
One Stamford Plaza, 12th Floor
Stamford, CT 06901
To the Stockholders:
c/o International Post Limited
545 Fifth Avenue
New York, New York 10017
Attention: Louis H. Siracusano
With a copy to each of the Stockholders at the following
addresses:
Louis H. Siracusano
13 Lexington Lane
Montvale, New Jersey 07645
(201) 573-8660
Arnold P. Ferolito
c/o Video Services Corporation
240 Pegasus Avenue
Northvale, New Jersey 07647-1904
Donald H. Buck
2 Deerburn Court
Florham Park, New Jersey 07932
All notices to the Stockholders shall also be sent to:
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036-1510
Attention: Keith L. Schaitkin, Esq.
Fax Number: (212) 626-0799
Section 2.5 Waiver
The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a
waiver thereof or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
Section 2.6 Titles; Construction
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this
Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
/s/ Louis H. Siracusano
Louis H. Siracusano
/s/ Arnold P. Ferolito
Arnold P. Ferolito
/s/ Donald H. Buck
Donald H. Buck
Optionee:
/s/ Kenneth F. Gorman
Kenneth F. Gorman<PAGE>
SCHEDULE I
Notations As to Partial Exercise
Number of Balance of
Date of Purchased Shares on Authorized Notation
Exercise Shares Option Signature Date
