No. 333-
--------------------------
Securities and Exchange Commission
Washington, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
VIDEO SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
13-3735647
(I.R.S. Employer
Identification Number)
-----------------------------
240 Pegasus Avenue
Northvale, New Jersey 07647
(201) 767-1000
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
Video Services Corporation 1997 Long Term Incentive Plan
Video Services Corporation 1999 Non-Employee Director Stock Plan
(Full title of the plan)
Louis H. Siracusano
Video Services Corporation
240 Pegasus Avenue
Northvale, New Jersey 07647
(201) 767-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------------
Copy to:
Javier Hernandez
Gordon Altman Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
(212) 626-0858
-----------------------------
Calculation of Registration Fee
<TABLE>
<S> <C>
Title of securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of
to be registered registered price per share(1) offering price(1) registration fee
Common Stock, $.01
par value . . . . . 855,000(2) $3.11 $2,659,050 $739.22
==================== ============== ========================== ========================== ===================
</TABLE>
<PAGE>
(1) Estimated solely for the purposes of calculating the registration fee and
based (a) pursuant to Rule 457(h), as to the 478,000 shares purchasable upon
exercise of outstanding options under the 1997 Plan, upon the average price at
which such options may be exercised, (b) as to the 22,000 shares granted under
the Director Stock Plan, upon the market value of the Registrant's Common Stock
at the time of grant, and (c) pursuant to Rule 457(c), as to the remaining
355,000 shares reserved for issuance under the Plans, upon the average of the
high and low prices for the Registrant's Common Stock as quoted on the American
Stock Exchange on July 23, 1999.
(2) Pursuant to Rule 416(c), there are also being registered additional shares
of Common Stock as may become issuable pursuant to the anti-dilution provisions
of the Plans.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
In accordance with Rule 428 under the Securities Act of 1933, as
amended (the "Act"), and the Note to Part I of Form S-8, the information
required by this item has been omitted from this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
In accordance with Rule 428 under the Act and the Note to Part I of
Form S-8, the information required by this item has been omitted from this
Registration Statement.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Video Services Corporation, a Delaware corporation formerly known as
International Post Limited (the "Company" or Registrant"), is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Incorporated by reference in this Registration Statement are the following
documents on file with the Commission:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1998, filed pursuant to Section 13(a) of the Exchange Act.
2. The Company's Annual Report on Form 10K/A for the fiscal year ended
June 30, 1998, filed pursuant to Section 13(a) of the Exchange Act.
3. The Company's Quarterly Report on Form 10-Q for each of the quarters
ended September 30, 1998, December 31, 1998 and March 31, 1999, filed pursuant
to Section 13(a) of the Exchange Act.
4. The Company's Proxy Statement filed on November 17, 1998 for the
annual meeting of stockholders held on December 18, 1998.
5. The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A of International Post Limited filed with the
Commission under the Exchange Act (Registration No. 0-233-88), including any
amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall hereby be
deemed to be incorporated in and to be a part of this Registration Statement by
reference from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for all purposes to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
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<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") provides, in summary, that directors and officers of Delaware
corporations are entitled, under certain circumstances, to be indemnified
against all expenses and liabilities (including attorneys' fees) incurred by
them as a result of suits brought against them in their capacity as a director
or officer, if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, if they had no reasonable cause to
believe their conduct was unlawful, provided, that no indemnification may be
made against expenses in respect of any claim, issue or matter as to which they
shall have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, they are fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Any such
indemnification may be made by the corporation only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Article 8 of the Company's Certificate of Incorporation entitles officers and
directors of the Company, their heirs, executors and administrators to
indemnification to the fullest extent permitted by Section 145 of the Delaware
Law, as the same may be supplemented from time to time.
Article 9 of the Company's Certificate of Incorporation, as amended, provides
that no director shall have any personal liability to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except that such provision does not limit or eliminate the liability of any
director (i) for breach of such director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware Law (involving certain unlawful dividends or stock purchases or
redemptions), or (iv) for any transaction from which such director derived an
improper personal benefit.
The Company maintains a primary directors and officers liability and company
reimbursement insurance policy (the "Policy") which, among other things,
provides for (i) payment on behalf of any of the Company's past, present or
future directors or officers against Loss (as defined in the Policy) as a result
of any Claim (as defined in the Policy) first made against the directors or
officers of the Company for any error, misstatement, misleading statement, act,
omission, neglect, or breach of duty committed or attempted, or allegedly
committed or attempted (each a "Wrongful Act"), occurring after August 1, 1992,
by one or more directors or officers of the Company, individually or
collectively, in their respective capacities as such, or for any matter claimed
against one or more directors or officers of the Company solely by reason of
their status as such, except for such Loss paid by the Company to any director
or officer of the Company as indemnification, and (ii) payment on behalf of the
Company against Loss for which the Company is required or permitted to pay as
indemnification to any director or officer of the Company as the result of any
Claim first made against any director or officer of the Company for any Wrongful
Act. The Policy does not cover Loss arising from any Claim made against the
Company or its directors or officers stemming from, among other things, a Claim
(a) brought about or contributed to by the fraudulent, dishonest or criminal act
or omission of a director or officer of the Company, provided that a judgment or
other final adjudication adverse to such director or officer establishes that
fraudulent, dishonest or criminal acts were committed by such director or
officer, or (b) based upon or attributable to any of the directors or officers
of the Company gaining in fact any personal profit or advantage to which they
were not legally entitled.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
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<PAGE>
ITEM 8. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
Exhibit
Number Description
4.1 Video Services Corporation 1997 Long Term Incentive Plan
4.2 Video Services Corporation 1999 Non-Employee Director Stock Plan
5 Opinion of Gordon Altman Weitzen Shalov & Wein
23.1 Consent of Gordon Altman Weitzen Shalov & Wein (included in Opinion filed
as Exhibit 5)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on the signature page of this Registration
Statement)
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section 10(a)
(3) of the Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement;
provided, however, that paragraphs (a)(l)(i) and (ii) shall
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
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<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Company's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Act, the Company certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-8 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Northvale,
State of New Jersey, on this 27th day of July, 1999.
VIDEO SERVICES CORPORATION
By: /s/ Louis H. Siracusano
Louis H. Siracusano
President & Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Louis H. Siracusano and Steven
G. Crane, and each of them, acting individually, as his attorney-in-fact, with
full power of substitution, to sign for him and in any and all capacities any
and all amendments to this Registration Statement (including post-effective
amendments) on Form S-8, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming his signature as it may be signed by
said attorney to any and all amendments to the Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<S> <C>
Name and Signature Title Date
/s/ Louis H. Siracusano President, July 27, 1999
- ------------------------- Chief Executive Officer
Louis H. Siracusano and Director
/s/ Steven G. Crane Vice President and July 27, 1999
- ------------------------- Chief Financial Officer
Steven G. Crane
/s/ Michael E. Fairbourne Vice President - July 27, 1999
- -------------------------- Administration
Michael E. Fairbourne (Principal Accounting Officer)
/s/ Terrence A. Elkes Chairman of the Board of July 27, 1999
- ------------------------- Directors
Terrence A. Elkes
/s/ Robert H. Alter Director July 27, 1999
- ------------------------
Robert H. Alter
/s/ Martin Irwin Director July 27, 1999
- ------------------------
Martin Irwin
/s/ Frank Stillo Director July 27, 1999
- -------------------------
Frank Stillo
/s/ Raymond L. Steele Director July 27, 1999
- -------------------------
Raymond L. Steele
</TABLE>
8
<PAGE>
VIDEO SERVICES CORPORATION
FORM S-8
REGISTRATION STATEMENT
EXHIBIT INDEX
Sequentially
Numbered
Exhibit Page
4.1 Video Services Corporation 1997 Long Term Incentive Plan
4.2 Video Services Corporation 1999 Non-Employee Director Stock Plan
5 Opinion of Gordon Altman Weitzen Shalov & Wein
23.1 Consent of Gordon Altman Weitzen Shalov & Wein (included in Opinion
filed as Exhibit 5)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on the signature page of this Registration
Statement)
9
Exhibit 4.1
VIDEO SERVICES CORPORATION
1997 LONG TERM INCENTIVE PLAN
<PAGE>
<TABLE>
<S> <C>
1997 LONG TERM INCENTIVE PLAN
1. PURPOSES; DEFINITIONS....................................................................................1
2. ADMINISTRATION...........................................................................................6
2.1 Compensation Committee..........................................................................6
2.2 Duties and Powers of Committee..................................................................6
2.3 Majority Rule...................................................................................7
2.4 Compensation; Professional Assistance; Good Faith Actions.......................................7
2.5 Designated Beneficiaries........................................................................7
3. SHARES SUBJECT TO THE PLAN...............................................................................8
3.1 Shares Subject to the Plan......................................................................8
3.2 Changes in Company's Shares.....................................................................8
4. ELIGIBILITY..............................................................................................9
5. STOCK OPTIONS...........................................................................................10
5.1 Grants.........................................................................................10
5.2 Terms..........................................................................................10
(a) Price.................................................................................11
(b) Term..................................................................................11
(c) Vesting...............................................................................11
(d) Termination of Employment.............................................................11
5.3 Nontransferability.............................................................................12
5.4 Exercise of Options............................................................................13
(a) Method of Exercise....................................................................13
(b) Deferred Transfers....................................................................14
6. STOCK APPRECIATION RIGHTS...............................................................................14
6.1 Grants.........................................................................................14
6.2 Terms..........................................................................................15
(a) Price/Amount Paid on Exercise.........................................................15
(b) Term..................................................................................16
(c) Vesting. .............................................................................16
(d) Termination of Employment.............................................................16
6.3 Nontransferability.............................................................................17
6.4 Method of Exercise.............................................................................17
6.5 Effects of Exercise............................................................................18
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7. RESTRICTED SHARES.......................................................................................18
7.1 Grants.........................................................................................18
7.2 Terms..........................................................................................19
(a) Acceptance of Award. ................................................................19
(b) Price. ..............................................................................19
(c) Restrictions and Conditions...........................................................19
7.3 Stock Certificates.............................................................................20
8. CHANGE IN CONTROL PROVISIONS............................................................................21
8.1 Impact of Event................................................................................21
8.2 Definition of Change in Control................................................................22
9. MISCELLANEOUS...........................................................................................24
9.1 Effective Date.................................................................................24
9.2 Amendment, Suspension or Termination of the Plan...............................................24
9.3 Amendment of Award.............................................................................24
9.4 No Rights as Stockholder.......................................................................25
9.5 Effect of Plan Upon Other Compensation and Incentive Plans.....................................25
9.6 Regulations and Other Approvals; Governing Law.................................................25
9.7 Governing Law..................................................................................27
9.8 Withholding of Taxes...........................................................................27
9.9 No Right to Continued Employment...............................................................28
9.10 Titles; Constructions..........................................................................28
</TABLE>
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<PAGE>
VIDEO SERVICES CORPORATION
1997 LONG TERM INCENTIVE PLAN
1. PURPOSES; DEFINITIONS.
The purposes of the Plan are to further the growth,
development and financial success of the Company by providing incentives to
those officers and other key employees who have the capacity for contributing in
substantial measure toward the growth and profitability of the Company and to
assist the Company in attracting and retaining employees with the ability to
make such contributions. To accomplish such purposes, the Plan provides that the
Company may grant Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights and Restricted Stock.
Whenever the following terms are used in the Plan, they shall
have the meaning specified below unless the context clearly indicates to the
contrary.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean the willful failure by an Employee,
consultant or independent contractor to perform his duties or services with the
Company or a Subsidiary or the willful engaging in conduct which is injurious to
the Company or a Subsidiary, monetarily or otherwise, as determined by the
Committee in its sole discretion, provided that, if the Employee, consultant or
independent contractor has entered into an employment or other agreement with
the Company or a Subsidiary, then the word "Cause" shall have the meaning
attributed to it in such agreement.
"Change in Control" shall have the meaning set forth in
Section 8.2.
"Change in Control Date" shall have the meaning set forth in
Section 8.2.
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"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean the Compensation Committee of the
Board, appointed as provided in Section 2.1.
"Company" shall mean Video Services Corporation, a Delaware
corporation, and any successor corporation.
"Designated Beneficiary" shall have the meaning set forth in
Section 2.5.
"Early Retirement" shall mean retirement from active
employment with the Company or a Subsidiary (a) on or after attainment of age
fifty-five (55) and the completion of fifteen (15) years of service, or (b) in
accordance with the early retirement provisions of a pension plan maintained
by the Company or a Subsidiary.
"Effective Date" shall have the meaning set forth in Section
9.1.
"Employee" shall mean any employee (including any officer
whether or not a director) of the Company, or of any corporation which is then
a Subsidiary that has been designated by the Committee to participate in the
Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fair Market Value" per Share as of a particular date shall
mean:
(a) the closing sales price per Share on a
national securities exchange or other stock market (e.g., The Nasdaq Stock
Market) for the last preceding date on which there was a sale of Shares on such
exchange; or
(b) if clause (a) does not apply and the Shares
are then quoted on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), the
2
<PAGE>
closing price per Share as reported on NASDAQ for the last preceding date on
which a sale was reported; or
(c) if clause (a) or (b) does not apply and the
Shares are then traded on an over-the-counter market, the average of the
closing bid and asked prices for the Shares in such over-the-counter market for
the last preceding date on which such bid and asked prices were quoted; or
(d) if clause (a), (b) or (c) does not apply,
such value as the Committee, in good faith, shall determine to equal the fair
market value of a Share.
"Incentive Stock Option" shall mean an Option intended to
be and designated as an "incentive stock option" within the meaning of Section
422 of the Code.
"Nonqualified Stock Option" shall mean an Option that is not
an Incentive Stock Option.
"Normal Retirement" shall mean retirement from active
employment with the Company or a Subsidiary (a) on or after attainment of age
sixty-five (65), or (b) in accordance with the normal retirement provisions of a
pension plan maintained by the Company or a Subsidiary.
"Option" shall mean an option to purchase Shares (including
Restricted Shares, if the Committee so determines) granted pursuant to Section
5.1.
"Optionee" shall mean an Employee, consultant or independent
contractor to whom an Option has been granted pursuant to the Plan.
"Parent" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if each of the
corporations (other than the
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Company), or if each group of commonly controlled corporations, then owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
"Participant" shall mean an Employee, consultant or
independent contractor to whom an award is granted pursuant to the Plan.
"Permanent Disability" shall mean that the Employee has
suffered physical or mental incapacity of such nature as to prevent him from
engaging in or performing the principal duties of his customary employment or
occupation on a continuing or sustained basis, provided that, if an Employee has
entered into an employment agreement with the Company or a Subsidiary, then the
term "Permanent Disability" shall have the meaning attributed to it in such
employment agreement. All determinations as to the date and extent of disability
of any Employee shall be made by the Committee upon the basis of such evidence
as it deems necessary or desirable.
"Plan" shall mean this Video Services Corporation 1997 Long
Term Incentive Plan, as hereinafter amended from time to time.
"Restricted Shares" shall mean Shares which are awarded to a
Participant that are subject to the restrictions described in Section 7.1.
"Restriction Period" shall mean the period during which
Restricted Shares are subject to the restrictions set forth in Section 7.2.
"Retirement" shall mean a Participant's (a) Early Retirement
that the Committee, in its sole discretion, has determined should be treated as
a Retirement for purposes of the Plan, or (b) Normal Retirement.
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<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Share" shall mean a share of the Company's Common Stock,
$0.01 par value.
"Stock Appreciation Right" shall mean a right granted pursuant
to Section 6.1.
"Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company, if each such corporation,
other than the last corporation in the unbroken chain, then owns fifty percent
(50%) or more of the total combined voting power in one of the other
corporations in such chain.
"Ten-Percent Stockholder" shall mean an Employee, who, at the
time an Incentive Stock Option is to be granted to him, owns (within the meaning
of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company, a
Parent or a Subsidiary.
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Employee and the Company, the Parent
or a Subsidiary, or the consulting or independent contractor relationship
between the consultant or independent contractor and the Company, the Parent or
a Subsidiary, terminates for any reason whatsoever, but excluding any
termination where there is a simultaneous reemployment by either the Company,
the Parent or a Subsidiary, provided that, if a corporation that is a Subsidiary
ceases to be a Subsidiary as a result of a sale of stock, such sale shall be
deemed to be a Termination of Employment of the Participants who were employed
by such corporation immediately prior to such date.
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2. ADMINISTRATION.
2.1 Compensation Committee
The Plan shall be administered by the Committee which shall
consist of at least two individuals appointed by the Board and holding office at
the pleasure of the Board. All Committee members shall be members of the Board,
and must be both "Non-Employee Directors," as such term is described in Rule
16b-3 adopted by the Securities and Exchange Commission under the Exchange Act,
if and as such Rule is in effect, and "Outside Directors," as such term is used
in Code Section 162(m) and described in the Treasury Regulations thereunder.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee shall be filled by the Board.
2.2 Duties and Powers of Committee
It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its terms and provisions. The
Committee shall have the power to interpret the Plan and to adopt such rules for
the administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. All actions taken
and all interpretations and determinations made by the Committee shall be
binding upon all persons, including the Company, its stockholders, all
Subsidiaries, Employees, Participants and Designated Beneficiaries.
6
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2.3 Majority Rule
The Committee shall act by a majority of its members in
office. The Committee may act either by vote at a telephonic or other meeting or
by a memorandum or other written instrument signed by a majority of the
Committee.
2.4 Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall receive such compensation for
their services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers or other persons. The Committee, the Company and its officers and
directors shall be entitled to rely upon the advice, opinions or valuations of
any such persons. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or the awards hereunder, and all members of the Committee shall be fully
protected by the Company in respect to any such action, determination or
interpretation.
2.5 Designated Beneficiaries
If a Participant dies prior to receiving any payment due under
the Plan, such payment shall be made to his Designated Beneficiary. A
Participant's Designated Beneficiary shall be the beneficiary designated by a
Participant, in a manner determined by the Committee, to receive amounts due the
Participant in the event of the Participant's death. In the absence of an
effective designation by the Participant, Designated Beneficiary shall mean the
Participant's estate.
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3. SHARES SUBJECT TO THE PLAN.
3.1 Shares Subject to the Plan
The maximum number of Shares that may be the subject of or
related to awards under this Plan is 735,000. The maximum number of Shares that
may be the subject of or related to awards to any Participant during any fiscal
year under the Plan is 100,000, subject to the aforementioned maximum number of
Shares that may be granted in all fiscal years under the Plan. The Company shall
reserve such number of Shares for the purposes of the Plan, out of its
authorized but unissued Shares or out of Shares held in the Company's treasury,
or partly out of each. In the event that (a) an Option or Stock Appreciation
Right is settled for cash or expires or is terminated unexercised as to any
Shares covered thereby, or (b) an Option or Stock Appreciation Right is canceled
or forfeited for any reason under the Plan without the delivery of Shares or any
Restricted Shares are forfeited for any reason, such Shares shall thereafter be
again available for award pursuant to the Plan; provided, however, that for
purposes of determining the maximum number of Options or Stock Appreciation
Rights that may be granted to any one Participant under the Plan in any fiscal
year, an Option or Stock Appreciation Right canceled in the same fiscal year in
which it is granted shall continue to be counted as outstanding during such
fiscal year. In the event that any Participant delivers Shares to pay the
exercise price of an Option or any other award granted hereunder, the number of
Shares available for awards under the Plan shall be increased by the number of
Shares so surrendered, to the extent permissible under Rule 16b-3 adopted by the
Securities Exchange Commission under the Exchange Act, if and as such Rule is in
effect.
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3.2 Changes in Company's Shares
In the event that the Committee shall determine that any stock
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off or other similar corporate event of a type described in Treasury
Regulation Section 1.162-27(e)(2)(iii)(C) affects the Shares such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under this Plan, then the Committee shall, in such
manner as the Committee may deem equitable, adjust any or all of (a) the number
and kind of shares which thereafter may be awarded or optioned and sold or made
the subject of Stock Appreciation Rights under the Plan, (b) the number and kind
of shares subject to outstanding Options and other awards, and (c) the grant,
exercise or conversion price with respect to any of the foregoing and/or, if
deemed appropriate, make provision for a cash payment to a Participant or a
person who has an outstanding Option or other award; provided, however, that the
number of Shares subject to any Option or other award shall always be a whole
number.
4. ELIGIBILITY.
Any Employee who is an officer of the Company and/or a
Subsidiary or who is designated by the Committee as a key Employee, and any
individual determined by the Committee to be rendering substantial services as a
consultant or independent contractor to the Company and/or a Subsidiary, shall
be eligible to receive awards under this Plan. In general, an Employee may be
designated as a key Employee if such Employee is responsible for or contributes
to the management, growth, and/or profitability of the business of the Company
and/or a Subsidiary.
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5. STOCK OPTIONS.
5.1 Grants
Subject to the provisions of the Plan, the Committee shall
have the sole and complete authority to determine the eligible Employees,
consultants or independent contractors to whom Options shall be granted, the
number of Shares to be covered by each Option, the exercise price therefor and
the terms and conditions applicable to the exercise of the Option; provided,
however, that Incentive Stock Options shall be granted only to eligible
Employees. The Committee shall have the authority to grant Incentive Stock
Options, Nonqualified Stock Options or both. In the case of Incentive Stock
Options, the terms and conditions of such grants shall be subject to and comply
with Section 422 of the Code and any rules or regulations promulgated
thereunder, including the requirement that the aggregate Fair Market Value
(determined as of the date of grant) of the Shares with respect to which
Incentive Stock Options granted under this Plan and all other option plans of
the Company, the Parent and any Subsidiary become exercisable by an Optionee
during any calendar year shall not exceed $100,000. To the extent that the
limitation set forth in the preceding sentence is exceeded for any reason
(including the acceleration of the time for exercise of an Option), the Options
with respect to such excess amount shall be treated as Nonqualified Stock
Options.
5.2 Terms
Options shall be granted only pursuant to a written Option
Agreement (the "Option Agreement"), which shall be executed by the Optionee and
an authorized officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with the Plan, including
the following:
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(a) Price. The exercise price for the Shares subject to an
Option, or the manner in which such exercise price is to be determined, shall be
determined by the Committee, provided that the exercise price per Share for an
Incentive Stock Option shall not be less than 100% of the Fair Market Value of a
Share as of the date the Incentive Stock Option is granted (110% in the case of
an Incentive Stock Option granted to a Ten-Percent Stockholder).
(b) Term. Options shall be for such term as the Committee
shall determine, provided that no Option shall be exercisable after the
expiration of ten years from the date it is granted (five years in the case of
an Incentive Stock Option granted to a Ten-Percent Stockholder).
(c) Vesting. Options shall be exercisable in such installments
(which need not be equal) and at such times as may be designated by the
Committee and set forth in the Option Agreement. To the extent not exercised,
installments shall accumulate and may be exercised, in whole or in part, at any
time after becoming exercisable, but not later than the date the Option expires.
The Committee may accelerate the exercisability of any Option or portion thereof
at any time. Notwithstanding the foregoing, the Committee may, in its sole
discretion, provide that all or a part of the Shares received by an Optionee
upon the exercise of a Nonqualified Stock Option shall be Restricted Shares
subject to any or all of the restrictions or conditions set forth in Section
7.2(c).
(d) Termination of Employment. In the event of the Termination
of Employment of an Optionee, any outstanding Options held by such Optionee
shall, unless the Option Agreement evidencing such Option provides otherwise,
terminate as follows:
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(i) If (x) the Optionee's Termination of Employment
is due to his death, Permanent Disability or Retirement, or (y) such
Termination of Employment occurs after the occurrence of a Change in
Control but on or before the second anniversary of a Change in Control
and either (A) is an involuntary termination not for Cause or (B) is
deemed to be a Termination of Employment as a result of the sale of
stock of a Subsidiary (as provided in the definition of "Termination of
Employment" in Section 1), all Options shall vest and become
immediately exercisable for a period of one year following such
Termination of Employment or until the expiration of their original
terms, whichever is shorter, and shall thereafter terminate, unless
such Options are earlier terminated in accordance with Section 8.1(c).
(ii) In all other cases, including Termination of
Employment by an Optionee and Termination of Employment by the Company
(whether with or without Cause), all Options (to the extent exercisable
at the time of such Termination) shall be exercisable for a period of
thirty (30) days following the Optionee's Termination of Employment or
until the expiration of their original term, whichever is shorter, and
shall thereafter terminate.
Notwithstanding the foregoing, the Committee may provide,
either at the time an Option is granted or, in connection with an Option other
than an Incentive Stock Option, thereafter, that the Option may be exercised
after the periods provided in this Section 5.2(d), but in no event beyond the
original term of the Option.
5.3 Nontransferability
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No Option granted hereunder shall be transferable by the
Optionee to whom granted (or any permitted transferee of an Option) otherwise
than by will or the laws of descent and distribution, and an Option may be
exercised during the lifetime of such Optionee only by the Optionee or his
guardian or legal representative. Notwithstanding the foregoing, the Committee
may permit, pursuant to the express terms and conditions of an Option Agreement,
the transfer by an Optionee of any Option, other than an Incentive Stock Option,
(a) to such Optionee's spouse or any lineal ancestor or descendant of such
Optionee, (b) to any trust, the sole beneficiaries of which are any one or all
of such Optionee or his/her spouse or lineal ancestor or descendant and (c) to
such other persons as the Committee may approve. No right or interest hereunder
shall be subject to any lien, obligation or liability of any holder of an award
hereunder. The terms and conditions of such Option and any additional terms and
conditions deemed necessary or appropriate by the Committee, shall be binding
upon the beneficiaries, executors, administrators, heirs, successors and other
permitted transferees of the Optionee.
5.4 Exercise of Options
(a) Method of Exercise. The exercise of an Option shall be
made only by a written notice delivered in person or by first class mail to the
Secretary of the Company at the Company's principal executive office, specifying
the number of Shares to be purchased and accompanied by full payment therefor
and otherwise in accordance with the Option Agreement pursuant to which the
Option was granted. The purchase price for any Shares purchased pursuant to the
exercise of an Option shall be paid in full upon such exercise in cash, by check
or, at the discretion of the Committee and upon such terms and conditions as the
Committee shall approve, by transferring previously owned Shares to the Company,
having Shares withheld or exercising
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pursuant to a "cashless exercise" procedure, or any combination thereof. Any
Shares transferred to the Company as payment of the purchase price under an
Option shall be valued at their Fair Market Value on the date of exercise of
such Option. If requested by the Committee, the Optionee shall deliver the
Option Agreement evidencing the Option to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Option Agreement to
the Optionee. Not less than one hundred (100) Shares may be purchased at any
time upon the exercise of an Option unless the number of Shares so purchased
constitutes the total number of Shares then purchasable under the Option or the
Committee determines otherwise, in its sole discretion.
(b) Deferred Transfers. Installment or deferred transfer of
Shares, or cash in lieu thereof, upon exercise of an Option, may be required by
the Committee (subject to Section 9.3 of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Option not
provided for in the original Option Agreement) or permitted at the election of
the Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest or earnings on installment or deferred payments or the grant
or crediting of dividend equivalents or other amounts in respect of installment
or deferred payments denominated in Shares.
6. STOCK APPRECIATION RIGHTS.
6.1 Grants
Subject to the provisions of the Plan, the Committee shall
have the sole and complete authority to determine the eligible Employees,
consultants or independent contractors to whom Stock Appreciation Rights shall
be granted, the number of Shares to be covered, and the
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terms and conditions applicable to the exercise of such rights. Stock
Appreciation Rights may be granted in tandem with an Option, in addition to an
Option, or freestanding and unrelated to an Option. In the case of a
Nonqualified Stock Option, a tandem Stock Appreciation Right may be granted
either at or after the time of the grant of such Option. In the case of an
Incentive Stock Option, a tandem Stock Appreciation Right may be granted only at
the time of the grant of such Option, may be exercised only if and when the Fair
Market Value of the Shares subject to the Incentive Stock Option exceeds the
exercise price of such Option, and shall contain such other terms and conditions
required to comply with Section 422 of the Code and any rules or regulations
promulgated thereunder.
6.2 Terms
Stock Appreciation Rights shall be granted only pursuant to a
written agreement, which shall be executed by the Participant and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with the Plan, including the following:
(a) Price/Amount Paid on Exercise. The exercise price for a
Stock Appreciation Right shall be determined by the Committee, in its sole
discretion, provided that the exercise price per Share for a Stock Appreciation
Right granted in tandem with an Incentive Stock Option shall not be less than
one hundred percent (100%) of the Fair Market Value of a Share as of the date
such Stock Appreciation Right is granted (110% in the case of a Stock
Appreciation Right granted in tandem with an Incentive Stock Option granted to a
Ten-Percent Stockholder). Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount in cash and/or Shares equal
in value to the excess of the Fair Market Value of
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one Share on the date of exercise over the exercise price per Share for such
Stock Appreciation Right, multiplied by the number of Shares in respect of which
the Stock Appreciation Right shall have been exercised. The Committee shall
determine whether the Stock Appreciation Right shall be settled in cash, Shares
or a combination of cash and Shares. Notwithstanding the foregoing, the
Committee may provide for the deferral of the payment of a Stock Appreciation
Right in the same manner described in Section 5.4(b) for Options.
(b) Term. Stock Appreciation Rights shall be for such term as
the Committee shall determine and shall be set forth in each award agreement,
provided that no Stock Appreciation Right shall be exercisable after the
expiration of ten years from the date it is granted (five years in the case of a
Stock Appreciation Right granted in tandem with an Incentive Stock Option
granted to a Ten-Percent Stockholder).
(c) Vesting. Stock Appreciation Rights shall be exercisable in
such installments (which need not be equal) and at such times as may be
designated by the Committee and set forth in the award agreement, provided that
Stock Appreciation Rights granted in tandem with an Option shall be exercisable
only at such time or times and to the extent that the Option to which they
relate is exercisable in accordance with the provisions of the Plan and the
Option Agreement. Any Stock Appreciation Right granted subsequent to the grant
of a tandem Option, or freestanding and unrelated to an Option, shall not be
exercisable during the first six months of its term, except that this special
limitation shall not apply in the event of the death or Permanent Disability of
the Participant prior to the expiration of the six-month period.
(d) Termination of Employment. In the event of a Termination
of Employment of a Participant, any outstanding Stock Appreciation Rights
granted in tandem with
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an Option shall terminate when such Option terminates, and any other outstanding
Stock Appreciation Rights held by such Participant shall, unless the award
agreement provides otherwise, terminate at the time and in the manner described
in Section 5.2(d) for Options.
6.3 Nontransferability
No Stock Appreciation Right granted hereunder shall be
transferable by the Participant to whom granted (or any permitted transferee of
a Stock Appreciation Right) otherwise than by will or the laws of descent and
distribution, and a Stock Appreciation Right may be exercised during the
lifetime of such Participant only by the Participant or his guardian or legal
representative. Notwithstanding the foregoing, the Committee may permit,
pursuant to the express terms and conditions of the award agreement, the
transfer by a Participant of any Stock Appreciation Right (other than a Stock
Appreciation Right granted in tandem with an Incentive Stock Option) (a) to such
Participant's spouse or any lineal ancestor or descendant of such Participant,
(b) to any trust, the sole beneficiaries of which are any one or all of such
Participant or his/her spouse or lineal ancestor or descendant and (c) to such
other persons as the Committee may approve. No right or interest hereunder shall
be subject to any lien, obligation or liability of any holder of an award
hereunder. The terms of such Stock Appreciation Right shall be binding upon the
beneficiaries, executors, administrators, heirs, successors and other permitted
transferees of the Participant.
6.4 Method of Exercise
The exercise of a Stock Appreciation Right shall be made only
by a written notice delivered in person or by first class mail to the Secretary
of the Company at the Company's principal executive office, specifying the
number of Shares with respect to which the Stock
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Appreciation Right is being exercised and otherwise in accordance with the award
agreement pursuant to which the Stock Appreciation Right was granted. A Stock
Appreciation Right may not be exercised with respect to less than one hundred
(100) Shares, unless the number of Shares with respect to which it is exercised
constitutes the total number of Shares then subject to such right or the
Committee determines otherwise, in its sole discretion.
6.5 Effects of Exercise
Upon the exercise of a Stock Appreciation Right that was
granted in tandem with an Option, such Option (a) shall be surrendered and
deemed to have been exercised for the purpose of the limitation set forth in
Section 3.1 on the number of Shares to be issued under the Plan to the extent of
the number of Shares issued under the Stock Appreciation Right at such time, and
(b) shall no longer be exercisable to the extent the tandem Stock Appreciation
Rights have been exercised. If requested by the Committee, the Participant shall
deliver the award agreement evidencing the Stock Appreciation Right to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and return such agreement to the Participant.
7. RESTRICTED SHARES.
7.1 Grants
Subject to the provisions of the Plan, the Committee shall
have the sole and complete authority to determine the eligible Employees,
consultants and independent contractors to whom, and the time or times at which,
grants of Restricted Shares will be made, the number of Shares to be awarded,
the price (if any) to be paid by the recipient of Restricted Shares, the time or
times within which such awards may be subject to forfeiture, and all other
conditions of the awards. Awards of Restricted Shares may be granted either
alone or in addition to other awards
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granted under the Plan. The Committee may condition the grant of Restricted
Shares upon the attainment of specified performance goals or such other factors
as the Committee may determine, in its sole discretion and, in such case, may
take such action as may be necessary for such awards to qualify as
performance-based compensation as described in Code Section 162(m). The
provisions of Restricted Share awards need not be the same with respect to each
recipient.
7.2 Terms
Restricted Share awards shall be granted only pursuant to a
written agreement, which shall be executed by the Participant and a duly
authorized officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with the Plan, including
the following:
(a) Acceptance of Award. An award of Restricted Shares must be
accepted by the Participant within a period of sixty (60) days (or such shorter
period as the Committee may specify at grant) after the award date by the
execution of a Restricted Share award agreement in the form provided by the
Committee and, if applicable, the payment of the purchase price for such Shares.
(b) Price. The purchase price of Restricted Shares shall be
determined by the Committee, in its sole discretion, and may be zero.
(c) Restrictions and Conditions. The Restricted Shares awarded
to a Participant pursuant to this Section 7 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of the Plan and the
award agreement, during a period set by the Committee commencing with
the date of such award, which in no event shall exceed five years (the
"Restriction Period"), the Participant shall not be
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permitted to sell, transfer, pledge, assign or otherwise encumber
Restricted Shares awarded under the Plan. Within these limits, the
Committee may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or
in part, based on service, performance and/or such other factors or
criteria as the Committee may determine, in its sole discretion.
(ii) Except as provided in clause (i) and this clause
(ii), the Participant shall have, with respect to the Restricted
Shares, all of the rights of a stockholder of the Company, including
the right to vote the Shares and to receive any cash dividends. Stock
dividends, if any, issued with respect to Restricted Shares shall be
treated as additional Restricted Shares that are subject to the same
restrictions and other terms and conditions that apply with respect to
the Shares with respect to which such dividends are issued.
(iii) Subject to the applicable provisions of the
award agreement and this Section, upon the Participant's Termination of
Employment during the Restriction Period, all Restricted Shares in
respect of which the Restriction Period has not lapsed, shall be
forfeited. Notwithstanding the foregoing, the Committee may, in its
sole discretion, at the time of grant or thereafter, waive in whole or
in part any or all restrictions with respect to a Participant's
Restricted Shares, based on such factors as the Committee may deem
appropriate.
7.3 Stock Certificates
Each Participant receiving a Restricted Share award shall be
issued a stock certificate in respect of such Shares. Such certificate shall be
registered in the name of such Participant, and shall bear whatever appropriate
legend referring to the terms, conditions, and
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restrictions applicable to such award as the Committee shall determine. The
Committee may, in its sole discretion, require that the stock certificates
evidencing Restricted Shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Share award, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Shares covered by such award. If, and to the
extent, the Restriction Period expires without a prior forfeiture of the
Restricted Stock subject to such Restriction Period, certificates for an
appropriate number of unrestricted Shares shall be delivered to the Participant
promptly upon his request.
8. CHANGE IN CONTROL PROVISIONS.
8.1 Impact of Event
In the event of a Change in Control, as defined in Section
8.2, the following provisions shall apply:
(a) Any Stock Appreciation Rights outstanding for at
least six months and any Options awarded under the Plan not previously
vested and exercisable shall become fully vested and exercisable
immediately prior to such Change in Control.
(b) The restrictions applicable to any Restricted
Shares shall lapse and such Shares shall be deemed fully vested as of
the Change in Control.
(c) Unless otherwise determined by the Committee at
the time of grant or at the time of a Change in Control and
notwithstanding any other provision of this Plan to the contrary, all
outstanding Options and Stock Appreciation Rights shall terminate and
cease to be outstanding immediately following the Change of Control.
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8.2 Definition of Change in Control
For purposes of the Plan, a Change in Control shall be deemed
to occur on the earliest date any of the following events occur, as determined
by the Committee in its sole discretion:
(a) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than the Company or any
Subsidiary, or any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any Subsidiary, or The
Equitable Life Assurance Society of the United States ("ELAS") and the
Equitable Deal Flow Fund, L.P. ("EDFF"), or any affiliate thereof, or
Louis H. Siracusano or Arnold P. Ferolito or any affiliate thereof) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing twenty five percent (25%) or more of the combined voting
power of the Company's then outstanding securities, and none of ELAS,
EDFF, Mr. Siracusano or Mr. Ferolito or their affiliates, individually
or collectively, is the sole "beneficial owner," directly or
indirectly, of securities of the Company representing the largest
percentage of the combined voting power of the Company's then
outstanding securities;
(b) the merger or consolidation of the Company with
any other corporation, other than (i) a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting
power of the
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voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a capitalization of the Company (or
similar transaction) in which no "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company or
any Subsidiary of the Company, or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
Subsidiary, or ELAS or EDFF or any affiliate thereof, or Louis H.
Siracusano or Arnold P. Ferolito or any affiliate thereof) becomes the
beneficial owner, directly or indirectly, of twenty five percent (25%)
or more of the combined voting power of the Company's then outstanding
securities and none of ELAS, EDFF, Mr. Siracusano, Mr. Ferolito or
their affiliates, individually or collectively, is the sole beneficial
owner, directly or indirectly, of securities of the Company
representing the largest percentage of the combined voting power of the
Company's then outstanding securities;
(c) the consummation of an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets or any transaction having a similar effect or the stockholders
of the Company approve a plan of complete liquidation of the Company;
or
(d) the sale of all or substantially all of the
assets or outstanding stock of a Subsidiary (or a transaction having a
similar effect), in which event a Change in Control shall be deemed to
have occurred with respect to those Participants who are then employed
by such Subsidiary.
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9. MISCELLANEOUS.
9.1 Effective Date
The Plan shall become effective as of the date of Board
approval (the "Effective Date") and shall continue in effect until the tenth
anniversary of such approval; provided, however, that no Option or Stock
Appreciation Right shall be exercisable or Restricted Share shall vest prior to
the approval of the Plan by the stockholders of the Company, which approval will
be sought by the Company within 12 months of the Effective Date.
9.2 Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the Board
without the approval of the stockholders of the Company except as otherwise
required pursuant to applicable law, rule or regulation (including applicable
federal and state securities laws, and the Code).
Notwithstanding the foregoing, neither the amendment,
suspension nor termination of the Plan shall, without the consent of the
Participant, alter or impair any rights or obligations under any award
theretofore granted. No awards may be granted during any period of suspension
nor after termination of the Plan, and in no event may any awards be granted
under the Plan after ten years from the Effective Date.
9.3 Amendment of Award
The Committee may amend, modify or terminate any outstanding
award with the Participant's consent at any time prior to payment or exercise in
any manner not inconsistent with the terms of the Plan, including without
limitation, (a) to change the date or dates as of which an Option or Stock
Appreciation Right becomes exercisable or Restricted Shares become vested, or
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(b) to cancel and reissue an award under such different terms and conditions as
it determines appropriate.
9.4 No Rights as Stockholder
Subject to the provisions of the applicable award, no
Participant shall be deemed for any purpose to be or to have the rights and
privileges of the owner of any Shares subject to any Option or otherwise to be
distributed under the Plan until such Participant shall have become the holder
thereof. Notwithstanding the foregoing, in connection with each grant of
Restricted Shares, the applicable award agreement shall specify if and to what
extent the Participant shall not be entitled to the rights of a stockholder in
respect of such Restricted Shares.
9.5 Effect of Plan Upon Other Compensation and Incentive Plans
The adoption of the Plan shall not affect any other
compensation or incentive plans in effect for the Company or any Subsidiary
except that after the date of approval by the Company's stockholders, no more
awards may be granted under the Company's 1993 Long Term Incentive Plan. Nothing
in the Plan shall be construed to limit the right of the Company or any
Subsidiary to establish any other forms of incentives or compensation for
Employees, consultants or independent contractors of the Company or any
Subsidiary.
9.6 Regulations and Other Approvals; Governing Law
(a) The obligation of the Company to sell or deliver Shares
with respect to Options or any other award granted under the Plan shall be
subject to all applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Committee.
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(b) The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government authority
or to obtain the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder for Employees granted Incentive Stock
Options.
(c) Each Option and any other award payable in Shares is
subject to the requirement that, if at any time the Committee determines, in its
sole discretion, that the listing, registration or qualification of Shares
issuable pursuant to the Plan is required by any securities exchange or under
any state or federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the grant of an Option or the issuance of Shares, no Options shall be
granted or payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
(d) Within one year after the Effective Date of this Plan, the
Company will, if eligible, file a registration statement on Form S-8 under the
Securities Act to register the Shares reserved for issuance hereunder. In the
event that the disposition of Shares acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act, and
is not otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required by the Securities Act, applicable state
securities laws or regulations thereunder, and the Committee may require any
individual receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that the Shares
acquired by such individual are acquired for investment only and not with a view
to
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distribution. The certificate for any Shares acquired pursuant to the Plan shall
include any legend that the Committee deems appropriate to reflect any
restrictions on transfer.
(e) At the time of grant of any award, the Committee may
provide in the award agreement that any Shares received as a result of such
grant shall be subject to a right of first refusal in favor of the Company,
pursuant to which the Participant shall be required to offer to the Company any
Shares that he wishes to sell, with the price being the then Fair Market Value
of such Shares, subject to such other terms and conditions as the Committee may
specify in the award agreement.
9.7 Governing Law
The Plan and the rights of all persons claiming hereunder
shall be construed and determined in accordance with the laws of the State of
Delaware without giving effect to the choice of law principles thereof.
9.8 Withholding of Taxes
No later than the date as to which an amount first becomes
includible in the gross income of a Participant for federal income tax purposes
with respect to any award granted under the Plan, the Participant shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, or local taxes of any kind required by law or
the Company to be withheld with respect to such amount. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements and
the Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant. In its discretion, the Committee may
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permit Participants to satisfy withholding obligations by delivering previously
owned Shares or by electing to have Shares withheld.
9.9 No Right to Continued Employment
Nothing in the Plan or in any award agreement shall confer
upon any Employee, consultant or independent contractor any right to continue as
an Employee, consultant or independent contractor of the Company or any
Subsidiary or shall interfere with or restrict in any way the right of the
Company and its Subsidiaries, which are hereby expressly reserved, to remove,
terminate or discharge any Employee, consultant or independent contractor at any
time for any reason whatsoever, with or without Cause, subject to the terms of
any separate agreement with the Employee, consultant or independent contractor.
9.10 Titles; Constructions
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan. The masculine
pronoun shall include the feminine and neuter and the singular shall include the
plural, when the context so indicates.
28
Exhibit 4.2
VIDEO SERVICES CORPORATION
1999 NON-EMPLOYEE DIRECTOR STOCK PLAN
1. PURPOSE.
The purpose of this 1999 Non-Employee Director Stock Plan (the "Plan")
is to assist Video Services Corporation, a Delaware Corporation (the "Company"),
in attracting and retaining highly qualified persons to serve as non-employee
directors and to more closely align such directors' interests with the interests
of stockholders of the Company by providing them compensation in the form of
Company stock.
2. DEFINITIONS.
Whenever the following terms are used in the Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
"Board" shall mean the Board of Directors of the Company.
"Chairman" shall mean a Non-Employee Director who is Chairman of the
Board.
"Company" shall mean Video Services Corporation, a Delaware
corporation, and any successor corporation.
"Designated Beneficiary" shall have the meaning set forth in Section
5.3.
"Effective Date" shall have the meaning set forth in Section 5.1.
"Non-Employee Director" shall mean a director of the Company who is not
an employee of the Company or a parent or subsidiary of the Company.
"Plan" shall mean this Video Services Corporation 1999 Non-Employee
Director Stock Plan, as may be amended from time to time.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Share" shall mean a share of the Company's Common Stock, $0.01 par
value.
3. ADMINISTRATION.
The Plan shall be administered by the Board, which shall have the power
to interpret the Plan and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent with its terms and
provisions and to interpret, amend or revoke any such rules. All actions taken
and all interpretations and determinations made by the Board shall be binding
upon all persons, including the Company, stockholders, directors, Non-Employee
Directors and Designated Beneficiaries. The Secretary of the Company shall be
authorized to implement the Plan in
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accordance with its terms, and to take such actions of a ministerial nature as
shall be necessary to effectuate the intent and purposes thereof. No member of
the Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the grants
hereunder, and all members of the Board shall be fully protected by the Company
in respect to any such action, determination or interpretation.
3. SHARES SUBJECT TO THE PLAN.
3.1 Shares Subject to the Plan
The maximum number of Shares that may be the subject of grants
under this Plan shall be 120,000. The Company shall reserve such number of
Shares for the purposes of the Plan, out of its authorized but unissued Shares
or out of Shares held in the Company's treasury, or partly out of each.
3.2 Changes in Company's Shares
In the event that the Board shall determine that any
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, or exchange of Shares, or other similar corporate event affects the
Shares such that an adjustment is required in order to preserve the benefits or
potential benefits intended under this Plan, the Board shall, in its sole
discretion, and in such manner as it may deem equitable, adjust any or all of
the number and kind of Shares which thereafter may be granted under the Plan, or
the number and kind of Shares subject to outstanding grants; provided, however,
that the number of Shares subject to any grant shall always be a whole number.
4. GRANT OF SHARES.
4.1 Automatic Grants
(a) On the Effective Date, (i) each Non-Employee Director
(other than the Chairman) shall be granted 4000 Shares and (ii) the Chairman
shall be granted 6000 Shares, in consideration of services previously rendered
to the Company.
(b) Following the Effective Date, (i) each Non-Employee
Director (other than the Chairman) shall be granted 4000 Shares on January 1 of
each fiscal year of the Company during which the Non-Employee Director serves as
such, and (ii) the Chairman shall be granted 6000 Shares on January 1 of each
fiscal year of the Company during which the Chairman serves as such, in each
case in consideration of services that have been rendered during such fiscal
year.
(c) Notwithstanding the foregoing, the Board may, in its sole
discretion, (i) cancel, restrict or reduce the grant of Shares to any
Non-Employee Director who is no longer a Non- Employee Director as of January 1
of the fiscal year of the Company with respect to which the Shares are granted,
or (ii) grant all or part of an automatic annual grant to a Non-Employee
Director who first becomes a Non-Employee Director after January 1 of a fiscal
year.
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4.2 Discretionary Awards
Subject to Section 3.1, the Board may, in its sole discretion,
grant additional Shares to Non-Employee Directors under the Plan at such times
and in such amounts as the Board may determine from time to time. Such authority
to make discretionary grants of Shares under the Plan shall include the
authority to (i) determine the Non-Employee Directors to whom Shares shall be
granted; (ii) the number of Shares to be granted; (iii) the price, if any, to be
paid for such Shares; and (iv) the terms and conditions applicable to the grant
of such Shares.
4.3 Vesting
Subject to Section 4.1(c), the grant of Shares to a
Non-Employee Director pursuant to Section 4.1 shall be immediately vested and
nonforfeitable.
4.4 Stock Certificates
A stock certificate registered in the name of each
Non-Employee Director granted Shares shall be issued and delivered to such
Non-Employee Director as soon as practicable, or at such other time as
determined by the Board in its sole discretion, following each grant of Shares
under the Plan.
5. MISCELLANEOUS.
5.1 Effective Date
The Plan shall become effective as of the date the Board
adopts the Plan (the "Effective Date") and shall continue in effect until the
fourth anniversary of such adoption. The Plan will be presented for ratification
no later than the next annual meeting of the shareholders of the Company
following the adoption of the Plan by the Board.
5.2 Amendment, Suspension or Termination of the Plan
(a) The Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the Board.
(b) Notwithstanding the foregoing, from and after the
Effective Date, neither the amendment, suspension nor termination of the Plan
shall, without the consent of the Non-Employee Director, alter or impair any
rights or obligations with respect to any Shares theretofore granted under the
Plan. No Shares may be granted during any period of suspension nor after
termination or expiration of the Plan.
5.3 Designated Beneficiaries
If a Non-Employee Director dies prior to receiving any grant
of Shares due under the Plan, such grant shall be made to his Designated
Beneficiary. A Non-Employee Director's
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Designated Beneficiary shall be the beneficiary specifically designated by a
Non-Employee Director in writing to receive grants of Shares due the
Non-Employee Director in the event of the Non- Employee Director's death. In the
absence of an effective designation by the Non-Employee Director, Designated
Beneficiary shall mean the Non-Employee Director's estate.
5.4 No Shareholder Rights Conferred
Nothing contained in the Plan will confer upon any
Non-Employee Director (or Designated Beneficiary) any rights of a shareholder of
the Company until stock certificates for the Shares with respect to a grant
under the Plan are in fact issued and delivered to such Non-Employee Director
(or his or her Designated Beneficiary).
5.5 Compliance with Laws
(a) The obligation of the Company to deliver Shares with
respect to any grant under the Plan shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state securities
laws, and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Board.
(b) Each grant of Shares is subject to the requirement that,
if at any time the Board determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, issuance of Shares, no
Shares shall be issued, in whole or in part, unless listing, registration,
qualification, consent or approval has been effected or obtained free of any
conditions as acceptable to the Board.
(c) In the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act, and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder or applicable state securities laws,
and the Board may require any individual receiving Shares pursuant to the Plan,
as a condition precedent to receipt of such Shares, to represent to the Company
in writing that the Shares acquired by such individual are acquired for
investment only and not with a view to distribution. The certificate for any
Shares granted pursuant to the Plan shall include any legend that the Board
deems appropriate to reflect any restrictions on transfer.
5.6 No Right to Continue as a Director
Nothing contained in the Plan will confer upon any
Non-Employee Director any right to serve as a director of the Company. Nothing
in the Plan shall be construed to limit the right of the Company to establish
any other forms of compensation or incentives for the Non-Employee Directors.
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5.7 Governing Law
The Plan and the rights of all persons claiming hereunder
shall be construed and determined in accordance with the laws of the State of
Delaware without giving effect to the choice of law principles thereof.
5.8 Titles; Construction
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan. The masculine
pronoun shall include the feminine and neuter and the singular shall include the
plural, when the context so indicates.
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GORDON ALTMAN WEITZEN SHALOV & WEIN Exhibit 5
114 West 47th Street
New York, New York 10036
July 27, 1999
Video Services Corporation
240 Pegasus Avenue
Northvale, New Jersey 07647
Re: Video Services Corporation
Registration Statement on Form S-8
Ladies and Gentlemen:
This opinion is being furnished in connection with the filing by
Video Services Corporation, a Delaware corporation (the "Company"), of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the issuance of up to 855,000 shares of the Company's
common stock, par value $.01 per share ("Common Stock"), issuable pursuant to
either the Company's 1997 Long Term Incentive Plan (the "1997 Plan") or the
Company's 1999 Non-Employee Director Stock Plan (the "1999 Plan," together with
the 1997 Plan, the "Plans").
In connection with this opinion, we have examined such documents
and made such other investigations as we have deemed necessary or advisable for
purposes of this opinion. In our examination, we have assumed the genuineness of
all signatories, the legal capacity of natural persons, the authenticity of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon and subject to the foregoing, it is our opinion that
(i) when the Registration Statement has become effective under the Act and (ii)
the Common Stock has been issued in accordance with the terms of the Plans, the
Common Stock will be validly issued, fully paid and non-assessable.
We are members of the Bar of the State of New York and are not
licensed or admitted to practice law in any other jurisdiction, and we express
no opinion with respect to the laws of any jurisdiction other than New York, the
federal law of the United States of America and the Delaware General Corporation
Law.
We are furnishing this opinion to you solely in connection with
the Registration Statement. This opinion is solely for your benefit and is not
to be used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person without our express written permission. This
opinion is based and relies on the current status of the law, and is subject in
all respects to, and may be limited by, further rules, regulations and
legislation, as well as developing case law. We do not undertake to notify any
person of changes in facts or law occurring or coming to our attention after the
delivery of this opinion.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Gordon Altman Weitzen Shalov & Wein
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 pertaining to the 1997 Long Term Incentive Plan and the 1999
Non-Employee Director Stock Plan of our report dated September 15, 1998, with
respect to the consolidated financial statements and schedule of Video Services
Corporation included in the Annual Report (Form 10-K) for the year ended June
30, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
White Plains, New York
July 27, 1999
