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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______ Commission File
Number 0-23388
Commission File Number 0-23388
--------------------
VIDEO SERVICES CORPORATION
(Exact name of registrant as
specified in its charter)
DELAWARE 13-3735647
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
240 Pegasus Avenue
Northvale, New Jersey 07647
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (201) 767-1000
--------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Common Stock, par value $.0l per share
(Title of Class)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
--------------------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (ss.229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K [X].
--------------------
The aggregate market value of the registrant's common stock, par value $.0l per
share, held by persons other ,than affiliates of the registrant, as of October
23, 1998, was approximately $6,184,305.
--------------------
The number of outstanding shares of the registrant's common stock, par value
$.0l per share, as of October 23, 1998, was: 13,286,307.
DOCUMENTS INCORPORATED BY REFERENCE:
None
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<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors and Executive Officers
The following table sets forth certain information with respect to the
Directors and certain executive officers of the Company at October 14, 1998:
<TABLE>
<S> <C> <C>
Name Age Position
Robert H. Alter (l)(2) 69 Director
Terrence A. Elkes 64 Director and Chairman of the Board
Martin Irwin 62 Director and Vice Chairman of the Board
Louis H. Siracusano 56 Director, President and Chief Executive Officer
Raymond L. Steele (l)(2) 63 Director
Frank Stillo (1)(2) 64 Director
Donald H. Buck 59 Vice President
Steven G. Crane 42 Vice President and Chief Financial Officer
Michael E. Fairbourne 45 Vice President - Administration, Chief Accounting Officer and Secretary
Daniel Rosen 60 Vice President - Post Production
Gary R. Strack 46 Vice President - Planning
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Robert H. Alter became a director of the Company upon consummation of the
Merger and had been a director of IPL since October 1993. Mr. Alter is a
director of Source Media, Inc. and the Vice Chairman and a director of the
Cabletelevision Advertising Bureau ("CAB"), the national trade association of
the cable television industry devoted to marketing and advertising, a position
he has held since October 1991. From October 1991 to October 1992, Mr. Alter
served as the senior advisor to the Board of Directors of Star TV/Hong Kong.
Prior to October 1991, Mr. Alter, who founded the CAB, also served as its
President and Chief Executive Officer for ten years. In November 1992, Mr. Alter
was elected President of Alter Associates, Inc.
Terrence A. Elkes became a director and the Chairman of the Board of the
Company upon consummation of the Merger and had been a director and the Chairman
of the Board of IPL since October 1993. Mr. Elkes served on the partnership
committee of MTE Co. from July 1992 to February 1994, when it dissolved upon
consummation of IPL's initial public offering. Mr. Elkes is a Managing Director
of Apollo Partners, Ltd. ("Apollo"), a private investment firm involved in the
acquisition of companies in the media, communications, entertainment and
broadcasting fields, which he co-founded in 1987 with Mr. Gorman, a former
director of IPL. Prior to forming Apollo, Mr. Elkes was employed by Viacom
International, Inc. where he served as President from 1978-1982 and Chief
Executive Officer from 1983-1987. Mr. Elkes serves as director of IDC Services,
Inc., a private company based in Illinois ("IDC") and is an indirect owner of
IDC through his interest in Apollo. On December 29, 1993, IDC filed for relief
under Chapter 11 of the Bankruptcy Code. Its prepetition debts and liabilities
were discharged in January 1996.
<PAGE>
Martin Irwin became a director and the Vice-Chairman of the Board of the
Company upon consummation of the Merger and had been a director, President and
Chief Executive Officer of IPL since October 1993. Prior thereto, Mr. Irwin
served as President, Chief Executive Officer and was a member of the partnership
committee of MTE Co. from August 1992 to February 1994, when it dissolved upon
consummation of IPL's initial public offering. From September 1991 through June
1992, Mr. Irwin ran the post-production operations of Old Video, which he
co-founded in 1979. Mr. Irwin served as President, Chief Operating Officer and a
director of Old Video from 1979 to 1989 and then served as a director of and
Senior Consultant to Old Video from July 1989 until July 1992. Prior to
co-founding Old Video, Mr. Irwin was employed by EUE/Screen Gems, a division of
Columbia Pictures Industries, Inc., where he last served as Senior Vice
President and General Manager.
Louis H. Siracusano became a director, President and Chief Executive
Officer of the Company upon consummation of the Merger and had been a director
of IPL since October 1993. Prior thereto, Mr. Siracusano had been a member of
the partnership committee of MTE Co. from July 1992 to February 1994, when it
dissolved upon consummation of IPL's initial public offering. He served as the
Chairman, Chief Executive Officer and a director of Old Video since 1986 and
President since 1989. Mr. Siracusano also served as President of Audio Plus
Video from July 1989 to February 1994. Mr. Siracusano was a founder of Old Video
and served in various capacities with Old Video since its formation. Mr.
Siracusano was with Ampex Corporation and the American Broadcasting Company in
various sales and engineering management positions prior to Old Video's
formation in 1979.
Raymond L. Steele became a director of the Company upon consummation of the
Merger and currently serves as Chairman of the Compensation Committee. Prior
thereto, Mr. Steele had been a Principal of Pacholder Associates, Inc., an
institutional money manager and workout specialist, until his retirement in
1991. Since November 1993, he has been retained as a consultant for Emerson
Radio Corp., NUWAVE Technologies Inc., a distributor of video enhancement chips,
Home Holdings, Inc., an insurance holding company, and GFTA, a German software
developer. He served as a director of numerous companies, including Orion
Pictures Corporation and Webcraft Technologies, Inc., and currently serves as a
director of Emerson Radio Corp., ICH Corp., Pharmhouse, Inc., Modernfold, Inc.,
a manufacturer of movable walls, and GFTA.
Frank Stillo became a director of the Company upon consummation of the
Merger and currently serves as Chairman of the Audit Committee. He has been
active in the printing industry since 1950 and co-founded his own printing
company in 1968. Since 1989, Mr. Stillo has been the Chairman and Chief
Executive Officer of Sandy Alexander, Inc., a printing company and Chief
Executive Officer of MGA Printing Co., a subsidiary of Sandy Alexander, Inc. and
has served as its President since 1981. Mr. Stillo also currently serves as the
President of The Metropolitan Lithographers Association, director of Web Offset
ASS-PIA and trustee of ALA -S&A Fund and Pension Fund.
Donald Buck became the Company's Vice President and President of Audio Plus
Video International, Inc. upon consummation of the Merger. Prior thereto, Mr.
Buck served as a Senior Vice President of Old Video since August 1987, the
President of Atlantic Satellite Communications, Inc. since August 1992 and the
President of Waterfront Communications Corporation since April 1993. Mr. Buck
served as President of Video Dub, Inc. (formerly, a subsidiary of Old Video)
from 1980. During 1975-1980, he was an Executive Vice President of Sales for
E.U.E. Screen Gems Video Division of Columbia Pictures Industries.
Steven G. Crane has been the Company's Vice President and the Chief
Financial Officer since October 27, 1997. Prior thereto, Mr. Crane started and
owned his own company, ATE, Inc., which supplies used, rebuilt and new packaging
relating equipment to the beverage industry worldwide, since February 1995. Mr.
Crane also currently serves as a director of ATE, Inc. From August 1990 to
February 1995, Mr. Crane served as a Division Chief Financial Officer of
Pepsi-Cola International, a subsidiary of PepsiCo, Inc.
Michael E. Fairbourne became the Company's Vice President-Administration,
Chief Accounting Officer and Secretary upon consummation of the Merger. Prior
thereto, Mr. Fairbourne served as the Senior Vice President-Administration of
Old Video since March 1994. Previously, Mr. Fairbourne was the Vice
President-Controller of Old Video from July 1987 to March 1994 and the
Controller of Old Video from September 1983 to July 1987. Prior to joining Old
Video, from 1976 to 1983, Mr. Fairbourne, a certified public accountant, was in
private practice.
Daniel Rosen was elected the Company's Vice President-Post Production in
May 1998 and was elected President of Manhattan Transfer in May 1994. Prior
thereto, Mr. Rosen served as the Vice President of IPL from May 1994 until
August 1997. Prior to that time, Mr. Rosen was President of Editel NY for twelve
years. During 1991-1992, Mr. Rosen also served as President of Editel LA and was
named President of the New York divisions of Unitel Video, namely Unitel NY,
Editel NY and Windsor Digital, which were acquired by Unitel Video in May 1992.
<PAGE>
Gary R. Strack was elected the Company's Vice President-Planning in
February 1998. Prior thereto, Mr. Strack served as the Vice President, Treasurer
and Secretary of IPL from January 1995 until August 1997. Mr. Strack was the
Vice President, Controller and Secretary of IPL from October 1993 until January
1995. He had served as Treasurer of Old Video from May 1989 until October 1993.
Prior to that time, he was Assistant Controller of Old Video for four years. Mr.
Strack, a certified public accountant, was the Assistant Controller of Damon
Creations, Inc., an apparel company, from 1981 to 1984.
There are no family relationships among the above directors and executive
officers.
Board of Directors
The Board of Directors of the Company consists of six members. Directors
serve for terms of one year and until their successors are duly elected and have
qualified.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who beneficially own
more than ten percent (10%) of the Company's common stock (the "Common Stock")
(collectively, the "Reporting Persons") to file with the Securities and Exchange
Commission initial reports of beneficial ownership and reports of changes in
beneficial ownership of the Common Stock. Reporting Persons are required to
furnish the Company with copies of all such reports. To the Company's knowledge,
based solely on a review of copies of such reports furnished to the Company and
certain representations of the Reporting Persons, the Company believes that
during the 1998 fiscal year all of the Reporting Persons complied with all
applicable Section 16(a) reporting requirements.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth all compensation paid or accrued by the Company
for the 1998 fiscal year with respect to (a) the Company's Chief Executive
Officer and (b) each of the four most highly compensated executive officers,
other than the Chief Executive Officer, of the Company at June 30, 1998, whose
salary and bonus from the Company in the 1998 fiscal year exceeded $100,000
(collectively, the "Named Executive Officers"):
<TABLE>
Long Term
Compensation
Annual Compensation
--------------------------------------------------------- -------------------
Number of
Other Annual Securities
Name and Principal Compensation Underlying All Other
Position Year Salary Bonus (1)(2) Options (3) Compensation
- --------------------------- ------- ---------- ---------- --------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Louis H. Siracusano
Chief Executive 1998 $191,775 $ 60,000 $ 3,095 --- $ 26,261 (7)
Officer, President 1997 144,000 20,000 2,160 --- 24,569 (7)
and Director 1996 144,000 75,000 2,310 --- 23,001 (7)
Steven G. Crane (4)
Vice President and 1998 $107,692 $ 38,500 --- 75,000 ---
Chief Financial Officer 1997 --- --- --- --- ---
1996 --- --- --- --- ---
Donald H. Buck
Vice President 1998 $173,394 $ 40,000 $ 2,190 --- ---
1997 144,000 20,000 2,292 --- ---
1996 144,000 100,000 2,310 --- ---
Michael E. Fairbourne
Vice President - 1998 $110,000 $ 27,500 $ 1,913 10,000 (6) ---
Administration , Chief 1997 90,000 17,500 1,650 --- ---
Accounting Officer and 1996 86,000 20,000 1,440 --- ---
Secretary
Daniel Rosen (5)
Vice President - 1998 $190,385 $ 25,000 $ 1,606 --- ---
Post Production, 1997 --- --- --- --- ---
President of Manhattan 1996 --- --- --- --- ---
Transfer/Edit, Inc.
</TABLE>
(1) The amounts set forth in this column represent matching contributions by
the Company on behalf of the Named Executive Officers under the Company's
401(k) plan.
(2) Excludes items, which are, in the aggregate, the lesser of either $50,000
or 10% of the executive's total annual salary and bonus.
(3) All options granted to the Named Executive Officers in the 1998 fiscal year
represent options granted under the 1997 Long Term Incentive Plan ("1997
Plan").
(4) Represents compensation from October 27, 1997 to June 30, 1998.
(5) Represents compensation from August 27, 1997 to June 30, 1998.
(6) Does not include options to acquire 60,000 shares of Common Stock from
Messrs. Siracusano, Ferolito and Buck at an exercise price of $2.00 per
share.
(7) Includes life and disability insurance paid by the Company.
<PAGE>
Option Grants in Last Fiscal Year
The following table provides information with respect to the grant of stock
options during the 1998 fiscal year to the Named Executive Officer. Only
information concerning those Named Executive Officers who received option grants
in fiscal 1998 is provided:
<TABLE>
Potential
Realizable
Value at Assumed
Number of Annual Rates of
Securities % of Total Stock Price
Underlying Options Granted Exercise Appreciation for
Options to Employees in Price Per Expiration Option Term (4)
--------------------
Name Granted (1) Fiscal Year 1998 Share ($) Date 5% ($) 10% ($)
- ---------------------- ------------- ------------------ ------------ ------------ --------------------
<S> <C> <C> <C> <C> <C>
Steven G. Crane 75,000 (2) 20.38 3.375 10/27/07 $143,925 $379,125
Michael E. Fairbourne 10,000 (3) 2.72 2.94 8/27/07 23,540 54,900
</TABLE>
(1) All options granted to the named Executive Officers in the 1998 fiscal year
represent options granted under the 1997 plan.
(2) Vests on October 27, 2000.
(3) Vests on August 27, 2000.
(4) Valuation is based upon the potential realizable dollar value of the
replacement option grants with assumed rates of appreciation of 5% and 10%
per annum from the date of grant to the end of the option term. These rates
are set by the Securities and Exchange Commission and are not intended to
forecast possible future appreciation of this Company's stock price.
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The following table provides information with respect to the exercise of
stock options during the 1998 fiscal year by the Named Executive Officers and
the value of unexercised options owned by the Named Executive Officers at June
30, 1998:
<TABLE>
Number of Securities
Number of Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired on Value June 30, 1998 June 30, 1998 (1) (2)
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ----------------------- -------------- ---------- -------------------------- ---------------------------
<S> <C> <C> <C> <C>
Louis H. Siracusano --- --- 0/0 0/0
Steven G. Crane --- --- 0/75,000 0/0
Donald H. Buck --- --- 0/0 0/0
Michael E. Fairbourne --- --- 0/10,000 (3) 0/600
Daniel Rosen --- --- 75,000/0 0/0
</TABLE>
(1) The value is based on the excess of the market price of the Common Stock at
June 30, 1998 over the exercise price of the unexercised options.
(2) At June 30, 1998, the closing bid price of the Common Stock on the American
Stock Exchange was $3.00 per share.
(3) Does not include options to acquire 60,000 shares of Common Stock from
Messrs. Siracusano, Ferolito and Buck at an exercise price of $2.00 per
share.
<PAGE>
Long-Term Incentive Plans - Awards in the Last Fiscal Year
The following table provides information with respect to each award made to
the Named Executive Officers under the Company's long-term incentive plan during
the last fiscal year. Only information concerning those Named Executive Officers
who received such awards in fiscal 1998 is provided.
<TABLE>
Number of Shares
Underlying
Name Options Granted (1) Vesting Period
- ------------------------------------------------------------------- ----------------------- --------------------
<S> <C> <C>
Steven G. Crane.................................................. 75,000 10/27/97-10/27/00
Michael E. Fairbourne............................................ 10,000 8/27/97-8/27/00
</TABLE>
(1) All options granted to the Named Executive Officers in the 1998 fiscal year
represent options granted under the 1997 plan.
Compensation of Directors
Each member of the Board who is not an officer of the Company receives
4,000 shares of the Company's Common Stock (6,000 shares in the case of the
Chairman of the Board) for serving on the Board plus $750 ($1,500 in the case of
the Chairman of the Board) and reimbursement of expenses for each Board or
committee meeting attended. Directors who chair committees receive $1,000 plus
reimbursement of expenses for each committee meeting attended.
The stockholders and directors of the Company adopted a restricted share
plan for directors who are not employees of the Company (the "Director Plan"). A
total of 50,000 shares of Common Stock is available for issuance under such
plan. During fiscal year 1998, 6,000 shares of common stock were awarded to Mr.
Stillo and Mr. Steele.
A special committee consisting of Messrs. Alter, Elkes and Gorman (a
director prior to the Merger) were appointed by the Board of Directors of IPL to
evaluate and negotiate the Merger Agreement on behalf of IPL. In connection with
this service, each of Messrs. Alter, Elkes and Gorman received $15,000.
Employment Contracts, Termination of Employment and Change-of-Control
Arrangements
At the time of the Merger, the Company entered into employment agreements
with Messrs. Louis H. Siracusano and Donald H. Buck. Under Mr. Siracusano's
employment agreement with the Company, he serves as the President and Chief
Executive Officer of the Company for a four (4) year period or twenty four (24)
months following notice of termination by the Company or by Mr. Siracusano,
whichever is later. Under Mr. Buck's employment agreement with the Company, he
serves as the Vice President of the Company for a three (3) year period or
twelve (12) months following notice of termination by either party, whichever is
later.
Mr. Siracusano's employment agreement provides for base compensation of
$200,000 per annum, and annual bonuses and a long-term bonus based on the
Company's achievement of certain cash flow and net income targets to be
determined by Mr. Siracusano and the Compensation Committee of the Board. Under
the terms of the employment agreement, Mr. Siracusano is entitled to receive an
annual bonus of between 5% and 40% of his base salary for the relevant year upon
the Company's achievement of a percentage (ranging from 90% to 109.9% or
greater) of the agreed upon cash flow and net income targets for such year,
which bonus is payable within thirty (30) days of delivery to the Board of the
Company's audited financial statements. In addition, the employment agreement
provides that Mr. Siracusano is entitled to receive a long-term bonus of between
12.5% and 100% of his cumulative base salary for the entire contract period if
the Company achieves a percentage (ranging from 90% to 109.9% or greater) of the
agreed upon cash flow and net income targets for such period. The long-term
bonus is payable in a single installment within thirty (30) days following the
delivery of the Company's audited financial statements for the period ended June
30, 2001 and is to be reduced by amounts previously paid to Mr. Siracusano as
annual bonuses. The employment agreement further provides that the Compensation
Committee of the Board may award Mr. Siracusano other bonus payments in its
discretion.
Mr. Buck's employment agreement provides for base compensation of $175,000
per annum and a bonus to be negotiated and agreed upon by the parties.
<PAGE>
Each of Messrs. Siracusano's and Buck's employment agreements provides that
(i) the Compensation Committee may award a discretionary bonus to him on an
annual basis, (ii) each is entitled to participate in such compensation plans,
incentive plans, group life, health, accident, disability and hospitalization
insurance plans, pension plans and retirement plans as the Company may make
available to its other executive employees, and (iii) upon termination without
cause, he is entitled to receive his annual base compensation and any incentive
compensation for the remainder of the originally scheduled term of the
employment agreement. Termination for cause includes termination for breach,
nonperformance, fraud or conviction of a felony. Additionally, each such
employment agreement provides that the employee is entitled to terminate his
employment at any time during the six-month period following any "Change in
Control" (as defined in the 1997 plan) that results in a material diminution in
the capacity and terms of his employment. Any such termination is to be treated
as a termination without cause.
Mr. Steven Crane's agreement with the Company provides for (i) base
compensation of $160,000 per annum, (ii) a bonus of 75% of the Chief Executive
Officer's bonus, (iii) stock options pursuant to the 1997 Plan of 75,000 shares,
(iv) a car allowance of $600 per month, (v) $25,000 for moving expenses and (vi)
a loan of $25,000 for use in facilitating his move.
IPL entered into an employment agreement with Daniel Rosen, with a term
commencing on May 23, 1994 and ending on May 22, 1997 or twelve months following
a notice of termination by either party, whichever is later. Mr. Rosen's
contract provided for base compensation of $200,000 per annum and a bonus equal
to two percent (2%) of his base salary for each one percent (1%) increase in the
profitability of MTE and its subsidiaries compared to the prior year or base
year, whichever is higher. Effective as of May 1, 1995, Mr. Rosen's base
compensation was increased to $225,000 per annum. The agreement further provides
that (i) the Compensation Committee may award a discretionary bonus to Mr. Rosen
under certain circumstances, (ii) he is entitled to participate in such
compensation plans, incentive plans, group life, health, accident, disability
and hospitalization insurance plans, pension plans and retirement plans as the
Company may make available to its other executive employees, and (iii) upon
termination without cause, Mr. Rosen is entitled to receive his annual base
compensation and any incentive compensation for the remainder of the originally
scheduled term of the agreement. Termination for cause includes termination for
breach, nonperformance, fraud or conviction of a felony. Additionally, the
agreement provides that Mr. Rosen is entitled to terminate his employment at any
time during the six-month period following any "change in control" (as defined
in the 1993 Long-Term Incentive Plan) that results in a material diminution in
the capacity and terms of his employment. Any such termination will be treated
as a termination without cause.
The Company and Martin Irwin entered into a severance agreement dated as of
August 26, 1997. The agreement provides for Mr. Irwin to be paid severance of:
(i) $150,000 per year for one year, (ii) $100,000 per year for the one year
period thereafter and (iii) $75,000 per year for the one year period thereafter.
Mr. Irwin is also entitled, for a period of three years from the date of the
agreement, 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 employees of the Company at the expense of the
Company. In addition, as part of such severance package, Old Video's
stockholders agreed to grant to Mr. Irwin, on a pro rata basis, options to
purchase an aggregate of 75,000 shares of the Common Stock they received in the
Merger at an exercise price of $0.75 per share. Such options are fully vested.
The 1993 Long-Term Incentive Plan ("1993 Plan") provides that in the event
of a "change in control" (as defined in the 1993 Plan), (i) all stock
appreciation rights outstanding for at least six (6) months and all options
awarded under the 1993 Plan not previously vested and exercisable will
immediately become fully vested and exercisable, and (ii) the restrictions
applicable to any restricted shares awarded under the 1993 Plan will lapse and
such shares will be deemed fully vested. Consummation of the Merger was deemed a
change in control under the 1993 Plan, and, as a result of the Merger, the
50,000 stock options held by Daniel Rosen, who was the only Named Executive
Officer under the 1993 Plan, immediately vested and became exercisable. If an
employee's employment is terminated due to a Change in Control, his stock
options under the 1993 Plan remain exercisable for the shorter of five (5) years
or the remainder of the original term and shall thereafter terminate.
The 1997 Long Term Incentive Plan ("1997 Plan") was adopted by the Board
and approved by the Stockholders in connection with the consummation of the
Merger to replace IPL's 1993 Plan which would have expired in 2004. These plans
are similar in their terms except that, among other things, the aggregate number
of shares of Common Stock issuable under the 1997 Plan has been increased to
735,000 from the 84,200 which remained available for issuance under the 1993
Plan, stock options (other than incentive stock options) may be issued under the
1997 Plan below the fair market value of the underlying Common Stock on the date
of grant, awards may be granted under the 1997 Plan to consultants and
independent contractors performing services for the Company, and certain other
revisions in respect of recent changes in federal securities regulations
affecting equity compensation plans, as well as revisions in respect of Section
162(m) of the Internal Revenue Code of 1986, as amended, have been made to the
1997 Plan. The 1997 Plan shall continue in effect until July 9, 2007.
<PAGE>
Compensation Committee Interlocks and Insider Participation
During fiscal year 1998, the members of the Compensation Committee of the
Board were Messrs. Steele (Chairman), Stillo and Alter. During such time, none
of Messrs. Steele, Stillo and Alter were employees of the Company.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock at October 23, 1998 by (a) all persons known by
the Company who own beneficially more than five percent (5%) of the outstanding
Common Stock, (b) each Director of the Company, (c) each of the Named Executive
Officers and (d) all Directors and Named Executive Officers of the Company as a
group. Unless otherwise indicated, each of the persons or entities listed below
exercises sole voting and investment power over the shares that each of them
beneficially owns:
<TABLE>
Name Common Stock Percent of Class
- -------------------------------------------------------------------- ---------------------- ---------------------
<S> <C> <C>
5% Beneficial Owners:
The Equitable Companies Incorporated, The Equitable Life
Assurance Society of the United States, Equitable Deal Flow Fund,
L.P. and Equitable Capital Management Corporation................ 2,562,105 (1) 19.28%
Sandler Capital Management, Sandler
Associates and J.K. Media L.P.................................... 2,272,000 (2) 17.10%
Arnold P. Ferolito............................................... 3,050,382 (3)(19) 22.96%
Directors:
Robert H. Alter.................................................. 13,000 *
Terrence A. Elkes................................................ 522,012 (4)(5)(6)(7) 3.93%
Martin Irwin..................................................... 268,417 (8)(9) 2.02%
Louis H. Siracusano.............................................. 3,152,982 (3)(18)(19) 23.73%
Raymond L. Steele................................................ 14,000 *
Frank Stillo..................................................... 19,000 (10) *
Named Executive Officers:
Donald H. Buck................................................... 523,681 (3)(19) 3.94%
Steven G. Crane.................................................. 100,000 (11)(12) *
Michael E. Fairbourne............................................ 70,000 (13)(14) *
Daniel Rosen..................................................... 101,250 (15)(16)(17) *
All Directors and Named Executive Officers as a group, 4,730,498(20) 35.60%
consisting of 10 persons.
</TABLE>
* Less than 1%.
(1) Based on Amendment No. 1 dated July 8, 1997 to Schedule 13D filed on
November 8, 1996. The business address of The Equitable Companies
Incorporated ("Equitable"), The Equitable Life Assurance Society of the
United States ("ELAS"), Equitable Deal Flow Fund, L.P. ("EDFF") and
Equitable Capital Management Corporation ("ECMC") is 787 Seventh Avenue,
New York, New York 10019. ELAS is a wholly owned subsidiary of Equitable
and is the general partner of the general partner of EDFF. ECMC is the
investment manager of EDFF. EDFF is the record holder of 1,633,758 shares
of Common Stock (approximately 26% prior to the Merger) and ELAS is the
record holder of 928,347 shares of Common Stock (approximately 15% prior to
the Merger). ELAS also beneficially owns indirectly the 1,633,758 shares
held by EDFF through its control of EDFF. Because of its ownership of ELAS,
Equitable may be deemed to beneficially own indirectly the 2,562,105 shares
of Common Stock held by ELAS and EDFF. Certain other persons and entities
(AXA Assurances I.A.R.D. Mutuelle; AXA Assurances Vie Mutuelle; Alpha
Assurances I.A.R.D. Mutuelle; Alpha Assurances Vie Mutuelle; AXA Courtage
Assurance Mutuelle; Finaxa; AXA; Claude Bebear, Patrice Gamier and Henri de
<PAGE>
Clermont-Tonnerre) may also be deemed to beneficially own indirectly such
2,562,105 shares because of their relationships to Equitable; however, all
of these parties expressly disclaim any beneficial ownership of these
shares. Messrs. Terrence A. Elkes and Kenneth F. Gorman each has an option
to purchase 149,512 shares of such Common Stock. Such options were granted
by Holdings in connection with IPL's Initial Public Offering and
Acquisition (and assumed by Equitable as a result of its acquisition of the
underlying shares of Common Stock from Holdings). These non-transferable
options are exercisable at $2.06 per share and terminate in February 2000.
(2) Based on Amendment No. 6 dated June 11, 1998 to Schedule 13D dated December
21, 1994. The Reporting Persons are Sandler Capital Management, a
registered investment adviser and a New York general partnership ("SCM"),
and Harvey Sandler, Barry Lewis (through June 30, 1997), John Kornreich,
Michael Marocco and Andrew Sandler (each, a "Individual", and collectively,
the "Individuals"). SCM shares are held through 21st Century Communications
Partners, L.P. ("21st Century"), 21st Century Communicatio,ns T.E.
Partners, L.P. ("T-E") and 21st Century Communications Foreign Partners,
L.P. ("Foreign"), each of which is a Delaware limited partnership
(collectively, the "Partnerships"). SCM also hold shares on behalf of
certain managed accounts with respect to which SCM exercises investment
discretion. Each Individual, through a Delaware corporation that is
controlled by such Individual and that serves as a general partner of SCM,
may be deemed to be a beneficial owner of the shares of Common Stock held
by the Partnerships and such managed accounts. Of the 2,272,000 shares of
Common Stock, 1,752,000 of such shares are held by Sandler Capital
Management, Sandler Associates, a New York limited partnership, owns
400,000 shares of Common Stock (each Individual is a general partner of
Sandler Associates) and J.K. Media L.P., a New York limited partnership
controlled by John Kornreich, owns 120,000 shares of Common Stock. The
business address of these entities is 767 Fifth Avenue, New York, New York
10153.
(3) Messrs. Elkes and Gorman each has an option to purchase 14,616, 14,616 and
768 of Messrs. Siracusano's, Ferolito's and Buck's shares, respectively.
See footnote (5). Mr. Irwin received, upon the consummation of the Merger,
an option to purchase 36,540, 36,540 and 1,920 of Messrs. Siracusano's,
Ferolito's and Buck's shares, respectively. See footnote (9). Mr.
Fairbourne has an option to purchase 29,232, 29,232 and 1,536 of Messrs.
Siracusano's, Ferolito's and Buck's shares, respectively. See footnote
(13).
(4) Includes five-year, non-qualified options to purchase 30,000 shares of
Common Stock at an exercise price of $11.00 per share granted by IPL as of
February 15, 1994 to each of Messrs. Elkes and Gorman in connection with
IPL's Initial Public Offering and the Acquisition. Such options vested
three (3) months after the consummation of IPL's Initial Public Offering
and are non-transferable.
(5) Includes five-year options to purchase 30,000 shares of Common Stock at an
exercise price of $11.00 per share granted by Old Video as of the date of
the consummation of IPL's Initial Public Offering to each of Messrs. Elkes
and Gorman in connection with IPL's Initial Public Offering and the
Acquisition. Such options vested three (3) months after the consummation of
IPL's Initial Public Offering and are non-transferable. Such options were
canceled upon consummation of the Merger and replaced with options to
purchase the same number of shares of Common Stock on the same terms and
conditions from the Old Video stockholders.
(6) Includes six-year, non-qualified options to purchase 149,512 shares of
Common Stock at an exercise price of $2.06 per share granted by Holdings
(and assumed by Equitable) as of the date of the consummation of IPL's
Initial Public Offering to each of Messrs. Elkes and Gorman in connection
with IPL's Initial Public Offering and the Acquisition, and in settlement
of Apollo's rights under a certain contract with Holdings. Such options are
non-transferable and vested after January 1, 1995. See footnote (1).
(7) Includes 10,000 shares owned by Mr. Elkes' children. Mr. Elkes disclaims
beneficial ownership of all such shares.
(8) Includes options to purchase 40,000 shares of Common Stock granted to Mr.
Irwin under the 1993 Plan, exercisable at prices ranging from $4.00 to
$6.00 per share.
(9) Includes options to purchase an additional 80,000 shares of Common Stock
granted to Mr. Irwin under the 1993 Plan, exercisable at prices ranging
from $4.00 to $6.00 per share, which vested upon consummation of the
Merger. Also includes options to purchase an aggregate of 75,000 shares of
Common Stock at an exercise price of $0.75 per share granted by
Messrs. Siracusano, Ferolito and Buck.
<PAGE>
(10) Includes 14,000 shares of Common Stock owned by the Frank Stillo Children's
Trust, of which Mr. Stillo's wife is the trustee. Mr. Stillo disclaims
beneficial ownership of such shares.
(11) Includes options to purchase 75,000 shares of Common Stock under the 1997
Plan, granted to Mr. Crane under his letter agreement with the Company,
exercisable at $3.375 per share.
(12) Includes options dated September 14, 1998 to purchase 25,000 shares of
Common Stock, granted to Mr. Crane under the 1997 Plan, exercisable at
$3.0625.
(13) Includes options granted in June 1997 to purchase 60,000 shares of Common
Stock from Messrs. Siracusano, Ferolito and Buck at an exercise price of
$2.00 per share in replacement of options to purchase approximately 22,245
shares of Old Video common stock at an exercise price of $5.39 per share
which were cancelled upon consummation of the Merger.
(14) Includes options to purchase 10,000 shares of Common Stock granted to Mr.
Fairbourne under the 1997 Plan, exercisable at $2.94.
(15) Includes (i) options to purchase 25,000 shares of Common Stock granted to
Mr. Rosen under the 1993 Plan, exercisable at prices ranging from $4.00 to
$6.00 per share, and (ii) shares of Common Stock owned by Mr. Rosen's son
and the Ned Rosen Trust, of which Mr. Rosen is the trustee, in the amounts
of 1,250 and 5,000, respectively. Mr. Rosen disclaims beneficial ownership
of all shares of Common Stock owned by his son and the Ned Rosen Trust.
(16) Includes options to purchase 25,000 shares of Common Stock granted to Mr.
Rosen under the 1997 Plan, exercisable at $3.0625.
(17) Includes options to purchase an additional 50,000 shares of Common Stock
granted to Mr. Rosen under the 1993 Plan, exercisable at prices ranging
from $4.00 to $6.00 per share, which vested upon consummation of the
Merger.
(18) Includes 39,900 shares of Common Stock transferred by Mr. Siracusano to
seven trusts for the benefit of his family members on September 25, 1998.
Mr. Siracusano did not retain voting power, investment power or other
control of or interest in the 39,900 shares of Common Stock.
(19) Includes options to various employees, consultants and independent
contractors to purchase 182,700, 182,700 and 9,600 of Messrs. Siracusano's,
Ferolito's and Buck's shares, respectively, exercisable at prices ranging
from $0.25 to $6.00 per share.
(20) Does not include options to purchase stock from Messrs. Siracusano and Buck
granted to Messrs. Elkes and Irwin. See footnotes above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
The Company has entered into employment, termination of employment and
consulting arrangements with certain directors and officers. See "Item 11.
Employment Contracts, Termination of Employment and Change-of-Control
Arrangements."
Old Video leased a facility from a partnership, whose partners, one of whom
was Mr. Siracusano, then owned a majority interest in Old Video, under a lease
accounted for as an operating lease. In August 1997, immediately prior to the
Merger, the principal stockholders of Old Video contributed the stock of two S
Corporations holding all of the general and limited partnership interest in the
partnership. The rental expense under the lease for the fiscal year 1998
amounted to $130,000.
The Company leases a building from an entity owned by certain principal
stockholders of the Company, one of whom is Mr. Siracusano, under a lease
accounted for as an operating lease. The rental expense under the lease for the
fiscal year 1998 amounted to $270,000.
<PAGE>
Mr. Fairbourne was granted options in June 1997 to purchase 60,000
shares of Common Stock from Messrs. Siracusano, Ferolito and Buck at an exercise
price of $2.00 per share in replacement of options to purchase approximately
22,245 shares of Old Video common stock at an exercise price of $5.39 per share
which were cancelled upon consummation of the Merger.
Video Dub, Inc., a former subsidiary of Old Video which is owned by Messrs.
Siracusano, Ferolito and Buck, leased space at 240 Pegasus Avenue, Northvale,
New Jersey, in accordance with past practice, on a month-to-month basis at a
rate of approximately $11,000 per month. This lease was terminated on September
30, 1997. Further, the Company agreed to provide office services to certain
former subsidiaries of Old Video which are owned by Messrs. Siracusano, Ferolito
and Buck following the Merger for a monthly fee of $1,000, provided such
services are reasonably proportionate to such fee.
Certain Business Relationships
On August 27, 1997, IPL's stockholders voted to approve the Agreement and
Plan of Merger among Video, IPL and Messrs. Louis Siracusano, Arnold Ferolito
and Donald Buck (the "Merger Agreement") pursuant to which Old Video merged with
and into IPL,with IPL being the surviving corporation. As a result of the Merger
the separate corporate existence of Old Video ceased. At the effective time of
the Merger, IPL's name was changed to Video Services Corporation and the Nasdaq
National Market symbol was changed to "VSCX". On February 12, 1998, the
Company's shares of Common Stock began trading on the American Stock Exchange
("AMEX") under the symbol "VS". Messrs. Louis Siracusano, Arnold Ferolito and
Donald Buck collectively owned all of the stock of Old Video. As a result of the
Merger, they received in the aggregate 7,011,349 shares of Common Stock (plus an
additional 212,096 shares of Common Stock which replaced an equal number of
shares of IPL's common stock then owned by Old Video which were canceled upon
the Merger). Individually, each of Messrs. Siracusano, Ferolito and Buck
received 3,350,382, 3,350,382 and 525,681 shares of Common Stock, respectively,
which accounted for approximately 25.33%, 25.33% and 3.97%, respectively, of the
total number of shares of Common Stock outstanding. Approval of the Merger was
sought by solicitation of the IPL stockholders through a proxy statement dated
July 25, 1997.
The representations, warranties and agreements of the parties contained in
the Merger Agreement survive for a period of fifteen (15) months following the
closing of the Merger; provided, however, that the representations and
warranties relating to environmental, employee benefit and tax matters and title
to Video common stock survive the closing for a period of three (3) years, plus
any extension of time with respect to employee benefit and/or tax matters agreed
to with the applicable governmental authorities. The indemnification obligations
of each of IPL on the one hand and Old Video and its stockholders on the other
hand as a result of a breach of their respective representations, warranties or
agreements generally will not exceed $5,000,000. No indemnification claim may be
made against any party unless and until the aggregate claims against such party
equals $350,000 and then only for claims in excess of such amount. The Merger
Agreement also provides for certain rights of set-off with respect to
indemnification claims. Old Video's stockholders have deposited in escrow
$6,250,000 in Common Stock (valued as of the closing of the Merger) under the
terms of the Losses Escrow Agreement in connection with their indemnification
obligations to the Company under, the Merger Agreement and their indemnification
obligations to the Company are limited to the rights the Company has under this
escrow. Each stockholder of Old Video has the right to substitute cash for any
shares of Common Stock such stockholder so deposited in escrow based upon the
value of such deposited shares as of the closing of the Merger. No additional
deposit is required by Old Video's stockholders in the event of any decrease in
the value of the Common Stock so deposited in escrow. IBJ Schroder Bank & Trust
Company acts as the escrow agent in connection with this escrow. In addition,
the Company has agreed to indemnify Old Video's stockholders in connection with
the lease between the Company and a partnership owned by the Old Video
stockholders, which indemnification obligations are not subject to any of the
foregoing limitations.
The Merger Agreement also provides that, from time to time after the
consummation of the Merger, and in any event at least semi-annually, the Audit
Committee of the Board will review the compliance of the Company and Old Video
with their respective representations and warranties contained in the Merger
Agreement and will report the results of such review to the Board, and, in
connection therewith, will seek such advice and retain such advisors (including,
without limitation, legal counsel and accountants) as it will determine to be
appropriate. Moreover, the Audit Committee of the Board will be responsible for
authorizing any action to be taken by the Company in respect of indemnification
claims by and against the Company.
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (3) The exhibit list as originally filed in the Form 10-K for the
fiscal year ended June 30, 1998 is amended to replace the exhibit
list with the one that follows:
Exhibits
Exhibit Number
3.1 Certificate of incorporation of the Company.
3.2+ By-Laws of the Company.
4.1 Form of 4% Convertible Subordinated Note of the Company (incorporated by
reference to the exhibit of the same number contained in the Company's
Current Report on Form 8-K, dated May 18, 1995).
10.1(M) Form of International Post Group Inc. Long-term Incentive Plan, together
with form of International Post Group Inc. Stock Option Agreement.
(incorporated by reference to the exhibit 10.4 contained in Amendment No. 4
of Video's (formerly IPL's) Registration Statement on Form S-1 (the
"Registration Statement, filed with the Securities and Exchange Commission
(the "SEC") on February 4, 1994.)
10.2(M) Form of International Post Group Inc. Restricted Share Plan for
Directors, together with form of Restricted Share Agreement. (incorporated
by reference to the exhibit 10.5 contained in Amendment No. 4 of Video's
(formerly IPL's) Registration Statement on Form S-1 (the "Registration
Statement"), filed with the Securities and Exchange Commission (the "SEC")
on February 4, 1994.)
10.3 Form of Lease Agreements between Audio Plus Video and L.I.M.A. Partners.
(Incorporated by reference to the exhibit 10.7 contained in Amendment No. 3
to Video's (formerly IPL's) Registration Statement filed with the SEC on
January 10, 1994.)
10.4 Lease Agreements, dated as of June 30, 1993, between MTE Co. and Nineteen
New York Properties Limited Partnership. (incorporated by reference to
exhibit 10.9 contained in Amendment No. 1 to Video's (formerly IPL's)
Registration Statement filed with the SEC on October 21, 1993.)
10.5(M) Form of Stock Option Agreement between the Company and Jeffrey J.
Kaplan. (incorporated by reference to the exhibit 10.23 contained in
Amendment No. 3 to Video's (formerly IPL's) Registration Statement filed
with the SEC on January 10, 1994.)
10.6 Form of Services and Option Agreement between Holdings and Kenneth F.
Gorman. (incorporated by reference to the exhibit 10.25 contained in
Amendment No. 3 to Video's (formerly IPL's) Registration Statement filed
with the SEC on January 10, 1994.)
10.7 Form of Services and Option Agreement between Holdings and Terrence A.
Elkes. (incorporated by reference to the exhibit 10.26 contained in
Amendment No. 3 to Video's (formerly IPL's) Registration Statement filed
with the SEC on January 10, 1994.)
10.8 Form of Stock Option Agreement between VSC and Kenneth F. Gorman.
(incorporated by reference to the exhibit 10.27 contained in Amendment No.
3 to Video's (formerly IPL's) Registration Statement filed with the SEC on
January 10, 1994.)
10.9 Form of Stock Option Agreement between VSC and Terrence A. Elkes.
(incorporated by reference to the exhibit 10.28 contained in Amendment No.
3 to Video's (formerly IPL's) Registration Statement filed with the SEC on
January 10, 1994.)
10.10(M) Form of Stock Option Agreement between the Company and Kenneth F.
Gorman. (incorporated by reference to the exhibit 10.29 contained in
Amendment No. 3 to Video's (formerly IPL's) Registration Statement filed
with the SEC on January 10, 1994.)
10.11(M) Form of Stock Option Agreement between the Company and Terrence A.
Elkes. (incorporated by reference to the exhibit 10.30 contained in
Amendment No. 3 to Video's (formerly IPL's) Registration Statement filed
with the SEC on January 10, 1994.)
10.12(M) Employment Agreement dated as of April 21, 1994, between the Company
and Daniel Rosen. (incorporated by reference to the exhibit 10.32 contained
in Video's (formerly IPL's) Annual Report on Form 10-K for the fiscal year
ended July 31, 1994.)
10.13(M) Stock Option Agreement, dated as of April 21, 1994, between the Company
and Daniel Rosen. (incorporated by reference to the exhibit 10.33 contained
in Video's (formerly IPL's) Annual report on Form 10-K for the fiscal year
ended July 31, 1994.)
<PAGE>
10.14(M) Employment Agreement dated as of May 4, 1995, among Big Picture/Even
Time Limited, the Company and Barbara D'Ambrogio (incorporated by reference
to exhibit number 10.2 contained in the Company's Current Report on Form
8-K, dated May 18, 1995).
10.15(M) Employment Agreement dated as of May 4, 1995, among Big Picture/Even
Time Limited, the Company and David D'Ambrogio (incorporated by reference
to exhibit number 10.3 contained in the Company's Current Report on Form
8-K, dated May 18, 1995).
10.16(M) Employment Agreement dated as of May 4,1995, among Big Picture/Even
Time Limited, the Company and Gregory Letson (incorporated by reference to
exhibit number 10.4 contained in the Company's Current Report on Form 8-K,
dated May 18, 1995).
10.17(M) Employment Agreement dated as of May 4, 1995, among Big Picture/Even
Time Limited, the Company and Michael Schenkein (incorporated by reference
to exhibit number 10.5 contained in the Company's Current Report Form 8-K,
dated May 18, 1995).
10.18(M) Employment Agreement dated as of May 4, 1995, among Big Picture/Even
Time Limited, the Company and Leonard Smalheiser (incorporated by reference
to exhibit number 10.6 contained in the Company's Current Report on Form
8-K, dated May 18, 1995).
10.19(M) Employment Agreement dated as of May 4, 1995, among Big Picture/Even
Time Limited, the Company and Jane Stuart (incorporated by reference to
exhibit number 10.7 contained in the Company's Current Report on Form 8-K,
dated May 18, 1995).
10.20Put/Call Agreement dated as of May 4, 1995, between Gregory Letson and the
Company (incorporated by reference to exhibit number 10.8 contained in the
Company's Current Report on Form 8-K, dated May 18,1995).
10.21Pledge Agreement, dated as of May 4, 1995, by and among BP Partnership, ET
Partnership, Barbara D'Ambrogio, David D'Ambrogio, Michael Schenkein,
Leonard Smalheiser, Jane Stuart and the Company (incorporated by reference
to exhibit number 10.9 contained in the Company's Current Report on Form
8-K, dated May 18, 1995).
10.22Pledge Agreement, dated as of May 4, 1995, by and between Gregory Letson
and the Company (incorporated by reference to exhibit number 10.10
contained in the Company's Current Report on Form 8-K, dated May 18, 1995).
10.23Escrow Agreement dated as of May 4,1995, by and among ET Partnership,
David D'Ambrogio, Barbara D'Ambrogio, the Company and Cowan, Gold, DeBaets,
Abrahams & Sheppard, as Escrow Agent (incorporated by reference to exhibit
number 10.11 contained in the Company's Current Report on Form 8-K, dated
May 18, 1995).
10.24Escrow Agreement dated as of May 4, 1995, by and among BP Partnership,
Michael Schenkein, Leonard Smalheiser, Jane Stuart, Gregory Letson, the
Company and Cowan, Gold, DeBaets, Abrahams & Sheppard, as Escrow Agent
(incorporated by reference to exhibit number 10.12 contained in the
Company's Current Report on Form 8-K, dated May 18,1995).
10.25Agreement dated as of June 7,1993, by and between MTV Latin America, Inc.
and The Post Edge, Inc. (incorporated by reference to the exhibit 10.51
contained in Video's (formerly IPL's) Annual Report on Form 10-K for the
fiscal year ended July 31, 1995.)
10.26Agreement, dated as of December 9, 1993, by and between Discovery
Communications, Inc. and The Post Edge, Inc., and Amendment No. 1 thereto.
(incorporated by reference to the exhibit 10.52 contained in Video's
(formerly IPL's) Annual Report on Form 10-K for the fiscal year ended July
31, 1995.)
10.27Amendment No. 1, dated as of September 15, 1995, to the Agreement, dated
as of June 7, 1993, by and between MTV Latin America, Inc. and The Post
Edge, Inc. (incorporated by reference to the exhibit 10.55 contained in
Video's (formerly IPL's) Annual Report on Form 10-K for the fiscal year
ended July 31, 1996.)
10.28Voting Agreement, dated as of June 27, 1997, by and among International
Post Limited, Video Services Corporation, Terrence A. Elkes, The Equitable
Life Assurance Society of the United States, Equitable Deal Flow Fund,
L.P., Louis H. Siracusano, Arnold P. Ferolito and Donald H. Buck
(incorporated by reference to exhibit number 10.58 contained in the
Company's Current Report on Form 8-K, dated July 7, 1997).
10.29Asset Purchase Agreement dated as of January 22, 1997, by and among
Cognitive Communications, Inc., Susan Wiener, Michael Rudnick and Cognitive
Communications, LLC (incorporated by reference to exhibit number 10.1
contained in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended January 31, 1997).
<PAGE>
10.30Agreement, dated as of January 22,1997, by and among the Company, Susan
Wiener, Michael Rudnick, Cognitive Communications, Inc. and David Leveen
(incorporated by reference to exhibit number 10.2 contained in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
January 31, 1997).
10.31(M) Employment Agreement, dated as of January 22, 1997, by and among
Cognitive Communications, LLC and Susan Wiener (incorporated by reference
to exhibit number 10.3 contained in the Company's Quarterly Report on Form
10-Q for the quarterly period ended January 31, 1997).
10.32(M) Employment Agreement, dated as of January 22, 1997, by and among
Cognitive Communications, LLC and Michael Rudnick (incorporated by
reference to exhibit number 10.4 contained in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended January 31, 1997).
10.33(M) Employment Agreement, dated as of January 22,1997, by and among
Cognitive Communications, LLC and David Leveen (incorporated by reference
to exhibit number 10.5 contained in the Company's Quarterly Report on Form
10-Q for the quarterly period ended January 31, 1997).
10.34Put Agreement, dated as of January 22, 1997, by and among Cognitive
Communications, LLC, the Company, Susan Wiener, Michael Rudnick and David
Leveen (incorporated by reference to exhibit number 10.6 contained in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
January 31, 1997).
10.35Sale Option Agreement, dated as of January 22, 1997, by and among
Cognitive Communications, LLC and Susan Wiener (incorporated by reference
to exhibit number 10.7 contained in the Company's Quarterly Report on Form
10-Q for the quarterly period ended January 31, 1997).
10.36Sale Option Agreement, dated as of January 22, 1997, by and among
Cognitive Communications, LLC and Michael Rudnick (incorporated by
reference to exhibit number 10.8 contained in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended January 31, 1997).
10.37Sale Option Agreement, dated as of January 22, 1997, by and among
Cognitive Communications, LLC and David Leveen (incorporated by reference
to exhibit number 10.9 contained in the Company's Quarterly Report on Form
10-Q for the quarterly period ended January 31, 1997).
10.38(M) Incentive Compensation Agreement, dated as of January 22, 1997, by and
among Cognitive Communications, LLC, Susan Wiener, Michael Rudnick and
David Leveen (incorporated by reference to exhibit number 10.10. contained
in the Company's Quarterly Report on Form 10-Q for the quarterly period
ended January 31, 1997).
10.39(M) Form of Incentive Option Agreement, undated, by and between Cognitive
Communications, LLC and Optionee (incorporated by reference to exhibit
number 10.11 contained in the Company's Quarterly Report on Form I O-Q for
the quarterly period ended January 31, 1997).
10.40(M) Consulting Agreement, dated February 15, 1997, by and among the Company
and Jeffrey J. Kaplan (incorporated by reference to exhibit number 10. 12
contained in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended January 31, 1997).
10.41Stock Resale Agreement, dated as of August 27, 1997 by and among the
Company. Louis H. Siracusano, Donald H. Buck and Arnold P. Ferolito
(incorporated by reference to exhibit 10.70 contained in the Company's
Annual Report on Form 10-K for the fiscal year ended July 31, 1997.)
10.42Registration Rights Agreements, dated as of August 26, 1997, by and among
the Company, Louis H. Siracusano, Donald H. Buck and Arnold P. Ferolito
(incorporated by reference to exhibit 10.71 contained in the Company's
Annual Report on Form 10-K for the fiscal year ended July 31, 1997).
10.43(M) Employment Agreement, dated as of August 26, 1997, by and between the
Company and Louis H. Siracusano (incorporated by reference to exhibit 10.72
contained in the Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997).
10.44(M) Employment Agreement, dated as of August 26, 1997, by and between the
Company and Donald H. Buck (incorporated by reference to exhibit 10.73
contained in the Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997).
10.45Losses Escrow Agreement, dated as of August 26, 1997 by and among the
company, Louis H. Siracusano, Donald H. Buck, Arnold P. Ferolito and IBJ
Schroder Bank & Trust Company (incorporated by reference to exhibit 10.74
contained in the Company's Annual Report on Form 10-K for the fiscal year
July 31, 1997).
10.46(M) Agreement, dated as of August 26, 1997, by and between the Company and
Martin Irwin (incorporated by reference to exhibit 10.75 contained in the
Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1997).
10.47(M) Agreement, dated of August 26, 1997, by and between the Company and
Arnold P. Ferolito (incorporated by reference to exhibit 10.76 contained in
the Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1997).
10.48(M) Agreement dated as of October 17, 1997, by and between the Company and
Steven G. Crane. (incorporated by reference to exhibit 10.78 contained in
the Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1997.)
10.49Credit Agreement, dated as of August 27, 1997, by and among Video Services
Corporation, VSC MAL Corp., the Lenders party thereto and KeyBank National
Association. (incorporated by reference to exhibit 10.79 contained in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1997.)
10.50Security Agreement dated as of August 27, 1997, by and among Video
Services Corporation and KeyBank National Association. Guaranty and
Security Agreement, dated as of August 27, 1997 by and among the Guarantors
and KeyBank National Association. (incorporated by reference to exhibit
10.80 contained in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1997.)
10.51Amendment No.1 and Waiver No.1, dated July 21, 1998 to the Credit
Agreement, dated as of August 27, 1997 by and among the Company, the
Lenders party thereto and KeyBank National Association, as the Issuer and
as Agent. (incorporated by reference to exhibit 10.59 contained in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1998.)
21.1 Subsidiaries of the Company.
23 Consent of Ernst & Young LLP. (Previously filed with Form 10-K for the
fiscal year ended June 30, 1998).
27 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information purposes only and not
filed. (See Form 10-K for the fiscal year ended June 30, 1998).
- -----------------
+ Incorporated by reference to the exhibit of the same number contained in
Amendment No. 1 to IPL's Registration Statement filed with the SEC on
October 21, 1993.
(M) Management contract or compensatory plan or arrangement.
- -----------------
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: October 28, 1998 VIDEO SERVICES CORPORATION,
By: /s/ Louis H. Siracusano
Name: Louis H. Siracusano
Title:President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Name and Signature Title Date
/s/ Louis H. Siracusano President, Chief Executive Officer 10/28/98
Louis H. Siracusano and Director (Principal Executive
Officer)
/s/ Steven G. Crane Vice President and 10/28/98
Steven G. Crane Chief Financial Officer
(Principal Financial Officer)
/s/ Michael E. Fairbourne Vice President-Administration 10/28/98
Michael E. Fairbourne (Principal Accounting Officer)
/s/ Terrence A. Elkes Chairman of the Board of Directors 10/28/98
Terrence A. Elkes
/s/ Robert H. Alter Director 10/28/98
Robert H. Alter
/s/ Martin Irwin Director 10/28/98
Martin Irwin
/s/ Frank Stillo Director 10/28/98
Frank Stillo
/s/ Raymond L. Steele Director 10/28/98
Raymond L. Steele
</TABLE>
