<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JULY 31, 1997
-------------------------------
Commission file number: 0-23598
---------------------------------------------
NATIONAL WIRELESS HOLDINGS INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3735316
-------------------------------------- ----------------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
249 ROYAL PALM WAY, SUITE 301, PALM BEACH, FLORIDA 33480
-------------------------------------------------- ---------------
(Address of principal executive offices) (Zip Code)
(407) 832-0981
----------------------------------------------------
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.01 par value: 3,283,000 shares as of September 12, 1997.
<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
<TABLE>
<CAPTION>
PAGE(S)
----------
<S> <C>
Condensed Consolidated Balance Sheets as of July 31, 1997
and October 31, 1996 3
Condensed Consolidated Statements of Operations for the three months and
nine months ended July 31, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows for the nine months ended
July 31, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6-8
</TABLE>
2
<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
July 31, October 31,
1997 1996
----------------- -----------------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 23,849,790 $ 14,788,765
Marketable securities 48,811,922 --
Trade and other receivables 995,128 119,707
Prepaid expenses and other current assets 34,015 47,777
Due from related parties 1,178,094 73,000
--------------- --------------
Total current assets 74,868,949 15,029,249
Notes receivable from EDSS -- 988,000
Wireless frequency license and acquisition costs, net of accumulated
amortization of $96,622 and $311,797, respectively 285,089 2,720,102
Transmission and related equipment, net of accumulated
amortization of $286,497 and $226,577, respectively 896,032 117,552
Leasehold improvements, office equipment and service vehicles, net
of accumulated depreciation of $540,356 and $282,813, respectively 402,236 394,088
Intangible assets, net of accumulated amortization
of $277,381 and $102,251, respectively 3,417,163 398,096
Investments 499,613 608,800
Deposits and other assets 187,291 269,696
--------------- --------------
Total Assets $ 80,556,373 $ 21,583,552
=============== ==============
LIABILITIES and STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and accrued expenses $ 1,353,519 $ 665,448
Due to related parties 423,700 50,000
Current maturities of long-term debt 341,410 443,369
Marketable securities - short sale 13,968,000 --
Deferred income taxes 16,900,000 --
--------------- --------------
Total current liabilities 32,986,629 1,158,817
Long-term debt 40,245 232,247
Due to related parties 400,000 --
--------------- --------------
Total liabilities 33,426,874 1,391,064
Commitments
Stockholders' equity:
Preferred stock -- --
Common Stock $.01 par value: 20,000,000 shares authorized;
3,283,000 and 3,253,000 shares issued and outstanding,
respectively 32,830 32,530
Additional paid-in capital 22,647,372 22,421,173
Retained earnings (accumulated deficit) 23,953,375 (2,261,215)
Unrealized gains on marketable securities, net 495,922 --
--------------- --------------
Total stockholders' equity 47,129,499 20,192,488
--------------- --------------
Total liabilities and stockholders' equity $ 80,556,373 $ 21,583,552
=============== ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended July 31, Ended July 31,
----------------------------------- ------------------------------------
1997 1996 1997 1996
---------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Revenue:
Services $ 964,862 $ 286,931 $ 2,310,260 $ 874,465
Interest income 194,830 337,137 547,455 900,659
Dividend income 269,396 -- 269,396 --
---------------- --------------- ----------------- ---------------
Total revenue 1,429,088 624,068 3,127,111 1,775,124
---------------- --------------- ----------------- ---------------
Expenses:
Cost of services 431,764 182,440 1,113,628 531,357
Market development 129,452 222,975 455,422 659,147
Professional fees 124,414 82,067 392,260 222,301
General and administrative 952,016 206,749 1,805,866 602,293
Depreciation and amortization 184,601 182,820 589,947 450,056
Interest 19,687 11,674 51,914 58,188
---------------- --------------- ----------------- ---------------
Total expenses 1,841,934 888,725 4,409,037 2,523,342
---------------- --------------- ----------------- ---------------
Loss from operations (412,846) (264,657) (1,281,926) (748,218)
Gain on sale of SFTV 44,396,516 -- 44,396,516 --
---------------- --------------- ----------------- ---------------
Income (loss) before
provision for income taxes 43,983,670 (264,657) 43,114,590 (748,218)
Provision for income taxes 16,900,000 -- 16,900,000 --
---------------- --------------- ----------------- ---------------
Net income (loss) $ 27,083,670 $ (264,657) $ 26,214,590 $ (748,218)
================ =============== ================= ===============
Net income (loss) per common share $ 8.33 $ (0.08) $ 8.06 $ (0.23)
================ =============== ================= ===============
Weighted average number of common
shares outstanding 3,253,000 3,253,000 3,253,000 3,253,000
================ =============== ================= ===============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
4
<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended July 31,
------------------------------------
1997 1996
--------------- --------------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 26,214,590 $ (748,218)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 589,947 450,056
Deferred income taxes 16,900,000 --
Gain on sale of SFTV (44,396,516) --
Accretion of interest income (306,100) --
Gain on sale of vehicles -- (1,352)
Changes in operating assets and liabilities (700,096) (246,484)
--------------- --------------
Net cash used in operating activities (1,698,175) (545,998)
--------------- --------------
Cash flows from investing activities:
Wireless frequency license and acquisition costs (170,190) (280,035)
Acquisition of transmission and related equipment (40,900) (269,500)
Acquisition of leasehold improvements, office equipment and
service vehicles (192,718) (69,684)
Proceeds on sale of vehicles -- 41,130
Purchases of U.S. treasury securities (15,693,040) --
Proceeds from redemption of U.S. treasury securities 15,999,140 --
Increase in investments (78,786) --
Proceeds from marketable securities - short sale 13,652,000 --
Acquisition of EDSS (1,543,700) (215,000)
Other (1,105,094) --
--------------- --------------
Net cash provided by (used in) investing activities 10,826,712 (793,089)
--------------- --------------
Cash flows from financing activities:
Principal payments of long-term debt (293,961) (332,744)
Exercise of stock options 226,449
--------------- --------------
Net cash used in financing activities (67,512) (332,744)
--------------- --------------
Net increase (decrease) in cash and cash equivalents 9,061,025 (1,671,831)
Cash and cash equivalents, beginning of period 14,788,765 4,888,240
--------------- --------------
Cash and cash equivalents, end of period $ 23,849,790 $ 3,216,409
=============== ==============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 51,914 $ 58,188
=============== ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
1. BASIS OF PRESENTATION:
The accompanying unaudited condensed consolidated financial statements
of National Wireless Holdings, Inc. (the "Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments, consisting solely of normal recurring
accruals necessary for a fair presentation of the financial statements
for these interim periods, have been included. Operating results for the
interim period are not necessarily indicative of the results that may be
expected for a full year. For further information, refer to the
financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1996
(File No. 0-23598) and filed with the Securities and Exchange Commission.
2. NET INCOME (LOSS) PER SHARE DATA:
Net income (loss) per share is computed based on the income (loss) for
the period divided by the weighted average number of common shares
outstanding during the period. Common Stock equivalents are not
reflected in the calculation since they are anti-dilutive.
3. ACQUISITION OF EDSS:
On December 13, 1996, the Company exercised a warrant and an option to
purchase shares of the common stock of Electronic Data Submission
Systems, Inc. ("EDSS"), which when combined with its existing share
ownership represents 50% of the outstanding common stock and, pursuant
to the EDSS Shareholders Agreement dated as of July 25, 1996, control of
EDSS. The aggregate purchase price for the purchase of EDSS shares was
$1,887,500 of which an aggregate of $887,500 was paid to EDSS and
$1,000,000 was paid to Joseph D. Truscelli, a principal stockholder of
EDSS and President of EDSS. With the proceeds received from the Company,
EDSS acquired a non-interest-bearing $1,000,000 note payable to a former
stockholder for $775,000. The acquisition has been accounted for under
the purchase method of accounting and the results of operations from the
date of purchase have been reflected in the consolidated statement of
operations. The purchase price has been allocated principally to
intangible assets (goodwill) and is being amortized over 15 years.
On September 10, 1997 the Company purchased an additional 5% of the common
stock of EDSS from the President of EDSS for $750,000.
Continued
6
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
The unaudited consolidated results of operations on a pro forma basis as
though EDSS had been acquired as of the beginning of fiscal year 1996
are as follows:
<TABLE>
<CAPTION>
Nine months ended
July 31,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Revenues $ 3,243,000 $ 2,461,000
Net income (loss) 27,062,000 (930,000)
Net income (loss) per weighted average number of
common shares outstanding 8.31 (0.29)
</TABLE>
The pro forma financial information is presented for informational
purposes only and is not necessarily indicative of the operating results
that would have occurred had the acquisition been consummated as of the
above date, nor are they necessarily indicative of future operating
results.
4. SALE OF SFTV:
On February 26, 1997, the registrant and its wholly-owned subsidiary,
South Florida Television, Inc. ("SFTV") entered into an Agreement and
Plan of Reorganization, as amended, (the "Merger Agreement") which
became effective on June 27, 997 with BellSouth Corporation
("BellSouth") and its wholly-owned subsidiary, Bell South South Florida
Merger Subsidiary, Inc. ("BellSouth Sub"), pursuant to which BellSouth
Sub merged into SFTV. SFTV became a wholly-owned subsidiary of BellSouth
and the registrant received an aggregate of $48 million in BellSouth
common stock (the "Merger") which resulted in a gain of approximately
$44.4 million. The Merger has been treated as a tax-free reorganization.
5. CONSULTING AGREEMENTS:
On April 1, 1997, the Company entered into a one year consulting
agreement with BellSouth to provide expertise in the wireless
communication industry for a monthly fee of $50,000.
On February 28, 1997, the Company entered into a consulting agreement
with Michael J. Specchio, Inc. ("MJS Inc.") which is owned and managed
by Michael J. Specchio, Chairman of the registrant, and simultaneously
terminated its employment agreement, as amended, with Mr. Specchio.
Under said consulting agreement, MJS Inc. is retained as a consultant
and is obliged to provide the services of Mr. Specchio on substantially
a full-time basis for a term ending September 2001 for annual
compensation of $180,000, on substantially the same terms as Mr.
Specchio was previously employed under such employment agreement. Under
the consulting agreement, MJS Inc. also has the same severance benefits
as previously provided to Mr. Specchio.
7
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED), CONTINUED
6. DUE FROM RELATED PARTIES:
On July 9, 1997 the Company loaned $1.1 million to an officer of the
Company under a note receivable which bears interest at 8% and is due on
July 9, 1998. The officer pledged 100,000 shares of the Company's
common stock as collateral.
7. EQUITY INCENTIVE PLAN AND BONUSES:
On July 14, 1997, the Company adopted the 1997 Equity Incentive Plan
covering 200,000 shares of Common Stock and approved the grant of five
year options pursuant to the Company's 1993 Stock Option Plan and 1997
Equity Incentive Plan to purchase 50,000 shares of Common Stock,
exercisable at $17.05 per share, and $200,000 cash bonuses to each of
Terrence S. Cassidy, President and CEO of the Company, and Michael J.
Specchio, Chairman of the Company.
8
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
National Wireless Holdings Inc. (the "Company") is a strategic holding
company which generally seeks to invest in and operate wireless
telecommunications and media companies in the United States and in emerging
markets. The Company recently sold its rights to build and operate a wireless
cable system in Miami, Florida, its principal wireless cable asset. The Company
currently controls an electronic healthcare data interchange (EDI) company, a
satellite programming uplink facility and an educational programming
distribution business and may acquire or invest in other businesses. The
Company also seeks to support, finance and acquire new technologies for the
wireless telecommunications industry.
The Company was incorporated in Delaware on August 31, 1993. The Company's
fiscal year ends on October 31.
Certain statements contained in this Quarterly Report on Form 10-Q
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such forward-looking statements.
RESULTS OF OPERATIONS
NINE MONTHS ENDED JULY 31, 1997 AS COMPARED TO NINE MONTHS ENDED JULY 31, 1996:
SERVICE REVENUE:
Service revenue increased from $874,465 for the nine months ended July 31, 1996
to $2,310,260 for the nine months ended July 31, 1997 as a result of increased
revenues from TLC Communications, Inc. ("TLC"), a subsidiary acquired in August
1995, the addition of revenues of EDSS (as described below), a majority owned
subsidiary acquired in December 1996, and commencement of a consulting agreement
with a subsidiary of BellSouth Corporation.
INTEREST AND DIVIDEND INCOME:
Interest income decreased from $900,659 for the nine months ended July 31, 1996
to $547,455 for the nine months ended July 31, 1997 primarily as a result of
changes in cash and treasury securities balances and interest rates, and
dividend income increased from $0 for the nine months ended July 31, 1996 to
$269,396 for the nine months ended July 31, 1997 as a result of dividends
paid on BellSouth common stock acquired in June 1997.
COST OF SERVICES:
Cost of services increased from $531,357 for the nine months ended July 31, 1996
to $1,113,628 for the nine months ended July 31, 1997 as a result of increased
operating costs and the acquisitions referred to above.
9
<PAGE>
MARKET DEVELOPMENT: Market development expenses decreased from $659,147 for
the nine months ended July 31, 1996 to $455,422 for the nine months ended
July 31, 1997 as a result of less activity in the development of the Miami
market due to the sale of its South Florida wireless cable subsidiary as
described below.
PROFESSIONAL FEES:
Professional fees increased from $222,301 in the nine months ended July 31, 1996
to $392,260 in the nine months ended July 31, 1997 as a result of additional
activity relating to subsidiaries and corporate actions.
GENERAL AND ADMINISTRATIVE: General and administrative expense increased from
$602,293 in the nine months ended July 31, 1996 to $1,805,866 in the nine
months ended July 31, 1997 primarily as a result of increased business levels
resulting from the acquisitions, the sale of its South Florida wireless cable
subsidiary, an aggregate of $400,000 in bonuses to senior executives and
other costs.
DEPRECIATION AND AMORTIZATION:
Depreciation and amortization increased from $450,056 in the nine months ended
July 31, 1996 to $589,947 in the nine months ended July 31, 1997 primarily as a
result of the EDSS acquisition and acquisition of equipment for TLC.
INTEREST EXPENSE:
Interest expense decreased from $58,188 in the nine months ended July 31, 1996
to $51,914 in the nine months ended July 31, 1997 due to principal repayment of
long-term debt.
NET LOSS FROM OPERATIONS: As a result of the foregoing events, loss from
operations increased from $748,218 in the nine months ended July 31, 1996 to
$1,281,926 in the nine months ended July 31, 1997.
NET INCOME:
Net income increased from a loss of ($748,216) for the nine months ended July
31, 1996 to $26,214,590 for the nine months ended July 31, 1997 as a result
of the foregoing events and a $44,396,516 gain on the sale of the Company's
South Florida wireless cable subsidiary, less a $16,900,000 provision for
income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company funds its operations with the net proceeds from its initial
public offering in 1994 of 2,000,000 shares of Common Stock aggregating, after
payment of offering costs, approximately $22,000,000 and the recent sale of its
South Florida wireless cable subsidiary for $48 million in BellSouth Common
Stock. The proceeds have been used and are currently reserved to fund
acquisitions of wireless telecommunications assets, additional EDI (electronic
data interchange) investments, media businesses, development of its other
businesses and development and acquisition of new technologies and businesses in
other areas. Such amount, with interest thereon, is expected to be sufficient
to implement this business plan through October 1999, or for a shorter period if
the Company determines to invest a substantial portion of its assets in major
acquisitions or equity investments. Following completion of the sale of its
wireless cable assets in the Miami market, the Company has allocated its capital
to development of its other businesses and to acquisitions.
As of July 31, 1997, the Company had approximately $60 million in net cash
and marketable BellSouth common stock (of which $4,267,900 is reserved for
payment in October 1997 of a $1.30 per share dividend to common stock holders of
record on September 12, 1997), as well as its full-service teleport and
satellite uplink facility in Miami; its interest in EDSS (as described below), a
provider of software which enables physicians to transmit electronically health
care claims to over 350 insurance companies; its investment in an educational
video programming distributor; and its strategic alliance with Spike
Technologies, which has developed bidirectional point-to-multipoint
10
<PAGE>
microwave antenna technology. The Company has not yet determined whether it
will sell such BellSouth securities in the near future or how it will invest the
proceeds of any such sale. Prior to completion of the sale of its South Florida
subsidiary to BellSouth, the Company sold 300,000 shares of BellSouth common
stock short as a hedge and received approximately $13.8 million in cash proceeds
from such sale.
On September 10, 1997, the Company purchased for $750,000 from a
stockholder an additional 5% of the common stock of Electronic Data Submission
Systems, Inc. ("EDSS"), which when combined with its existing share ownership
represents 55% of the outstanding common stock and control of EDSS. In
addition, pursuant to a loan agreement between EDSS and the Company, dated June
19, 1995, the Company has outstanding loans to EDSS of approximately $988,000,
which have been eliminated from the balance sheet in consolidation. The Company
may invest additional amounts in EDSS to finance its sales growth.
The Company may, when and if the opportunity arises, acquire or invest in
other businesses in the wireless telecommunications industry, media businesses
or in unrelated areas. If such an opportunity arises, the Company may use a
portion of its funds for that purpose. The Company has no specific arrangements
with respect to any such acquisitions or investments at the present time and is
not currently involved in any negotiations with respect to any such acquisition.
There can be no assurance that any such acquisitions or investments will be
made.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
ITEM 5. OTHER INFORMATION.
On June 23, 1997, the Company entered into indemnification agreements with
each director providing for indemnification of the directors against certain
liabilities arising out of their services to the Company.
11
<PAGE>
On July 9, 1997, the Company loaned $1.1 million to Michael J. Specchio
pursuant to a one-year term note secured by the pledge of 100,000 shares of the
registrant's Common Stock.
On July 14, 1997, the Company adopted the 1997 Equity Incentive Plan
covering 200,000 shares of Common Stock and approved the grant of five year
options pursuant to the Company's 1993 Stock Option Plan and 1997 Equity
Incentive Plan to purchase 50,000 shares of Common Stock, exercisable at $17.05
per share, and $200,000 cash bonuses to each of Terrence S. Cassidy, President
and CEO of the Company, and Michael J. Specchio, Chairman of the Company.
On September 10, 1997, the Company purchased for $750,000 from Joseph D.
Truscelli, President of EDSS, an additional 5% of EDSS common stock, which when
combined with its existing share ownership represents 55% of the outstanding
common stock and control of EDSS. In addition, the Company entered into a
Restated Stockholders Agreement with EDSS and Joseph D. Truscelli.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 40 - Form of Director Indemnification Agreement
Exhibit 41 - (a) Secured Term Note
(b) Pledge Agreement, dated July 9, 1997
Exhibit 42 - 1997 Equity Incentive Plan
Exhibit 43 -Restated Stockholders Agreement, dated September
10, 1997, between the Company, Joseph D. Truscelli and
Electronic Data Submission Systems, Inc.
(b) Reports on Form 8-K:
Form 8-K dated June 27, 1997, as amended.
12
<PAGE>
SIGNATURES
Pursuant to the requirements 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: September 15, 1997
NATIONAL WIRELESS HOLDINGS INC.
-------------------------------------
(Registrant)
By: /s/ Terrence S. Cassidy
--------------------------------
Terrence S. Cassidy, President and
Principal Accounting Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> JUL-31-1997
<CASH> 23,849,790
<SECURITIES> 48,811,922
<RECEIVABLES> 995,128
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 74,868,949
<PP&E> 2,125,121
<DEPRECIATION> 826,853
<TOTAL-ASSETS> 80,556,373
<CURRENT-LIABILITIES> 32,986,629
<BONDS> 0
0
0
<COMMON> 32,830
<OTHER-SE> 47,096,669
<TOTAL-LIABILITY-AND-EQUITY> 80,556,373
<SALES> 2,310,260
<TOTAL-REVENUES> 3,127,111
<CGS> 1,113,628
<TOTAL-COSTS> 4,357,123
<OTHER-EXPENSES> (44,396,516)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,914
<INCOME-PRETAX> 43,114,590
<INCOME-TAX> 16,900,000
<INCOME-CONTINUING> 28,214,590
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,214,590
<EPS-PRIMARY> 8.06
<EPS-DILUTED> 8.06
</TABLE>
<PAGE>
EXHIBIT 40
Form of Director Indemnification Agreement
<PAGE>
INDEMNIFICATION AGREEMENT
This Agreement is made as of the 23rd day of June, 1997 by and between
National Wireless Holdings Inc., a Delaware corporation (the "Corporation"), and
________________________, (the "Indemnitee").
The Indemnitee has in the past, is currently, and may in the future serve
as a director or officer of the Corporation or has, is or may serve at the
request of the Corporation as an officer, employee or agent or in other
capacities for the Corporation, or as a director, officer, employee or agent or
in other capacities for other corporations or entities as designated by the
Corporation.
The Certificate of Incorporation of the Corporation provides for the
indemnification of the officers, directors, employees and agents of the
Corporation to the fullest extent authorized by law, including Section 145(f) of
the General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended or supplemented (the "Delaware Corporation Law"). Section
145(f) of the Delaware Corporation Law specifically provides that the
indemnification provisions contained therein are not exclusive, and thereby
contemplates that contracts may be entered into between the Corporation and the
members of its Board of Directors with respect to indemnification of such
directors.
The Indemnitee has indicated his concern that the indemnities available
under the Corporation's Certificate of Incorporation may not be adequate to
protect him against the risks associated with his service to the Corporation,
and the Indemnitee may not be willing to serve or to continue to serve in office
unless the Corporation is otherwise able to indemnify the Indemnitee.
In order to induce the Indemnitee to agree to continue to serve as a
director in any other capacities as requested by the Corporation and in
consideration of the Indemnitee's continued service after the date hereof, the
parties hereby agree as follows:
1. If the Indemnitee was or is made a party or is threatened to be made a
party or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (the "proceeding"), by reason of the fact that
he or a person for whom he is the legal representative or was a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is an alleged action in an official capacity as a director,
officer, employee or agent the Corporation shall indemnify and hold harmless the
Indemnitee to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended, against all costs,
expenses,
<PAGE>
liabilities, judgments and losses (including attorneys' fees, judgments, fines,
excise taxes or penalties under the Employee Retirement Income Security Act of
1974, as amended) and amounts paid or to be paid in settlement of any
proceeding, reasonably incurred or suffered by the Indemnitee in connection
therewith.
2. The Corporation shall (within 15 days of written request therefor by
the Indemnitee) pay to the Indemnitee all costs and expenses (including, but not
limited to, attorneys, accountants, investment or other advisor and expert
witness fees) incurred by the Indemnitee or reasonably anticipated to be
incurred by the Indemnitee in defending any such proceeding in advance of its
final disposition; provided, however that the payment of such expenses in
advance of the final disposition of such proceeding shall be made only if the
request therefor by the Indemnitee is accompanied by a written undertaking,
signed by him, in favor of the Corporation to repay all amounts so advanced if
it should be ultimately determined by a court of competent jurisdiction that the
Indemnitee is not entitled to be indemnified under Section 145 of the Delaware
General Corporation Law.
3. If the Corporation does not respond to a written claim for any payment
(including advancement of expenses) under this Agreement within fifteen days of
having received such a claim, it shall be deemed to have waived any right to
refuse to pay such claim under this Agreement. In addition, if a claim under
this Agreement is not paid by the Corporation, or on its behalf, within thirty
days after a written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation and the
Corporation shall have the burden of proving that the Indemnitee is not entitled
to payment under this Agreement. If successful in whole or in part, the
claimant shall be entitled to be paid also all expenses (including attorneys'
fees and expenses) of prosecuting such claim together with interest at the rate
of 12% per annum from the date the expenses were paid by the Indemnitee.
4. In the event of payment to the Indemnitee under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee (and his executors, administrators, and
heirs), who shall execute all documents and take all actions reasonably
requested by the Corporation to implement such right of subrogation.
5. The Corporation shall not be liable under this Agreement to make any
payment in satisfaction of adjudged liabilities assessed against the Indemnitee:
(a) for which payment is actually made to the Indemnitee under a
valid and collectible insurance policy maintained by the Corporation,
except in respect of any excess beyond the amount of payment under such
insurance;
(b) based upon liability for a claim arising from a
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<PAGE>
final adjudication by a court of competent jurisdiction that the
Indemnitee is liable to the Corporation; provided that if and to the extent
that the Court of Chancery of the State of Delaware or the court in which
such action or suit giving rise to such adjudication of liability was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the Indemnitee
is fairly and reasonably entitled to indemnity for such expenses as such
court shall deem proper, the Corporation shall indemnify the Indemnitee for
such expenses;
(c) based upon or attributable to the Indemnitee or any member of his
immediate family having been finally adjudged to have gained in fact any
personal profit or advantage to which he was not legally entitled;
(d) for an accounting for profits made from the purchase or sale by
the Indemnitee of securities of the Corporation within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any state statutory law or common law;
(e) on account of the Indemnitee's conduct which is finally adjudged
to have been knowingly fraudulent, deliberately dishonest or willful
misconduct; or
(f) for which indemnification under this Agreement is determined by a
final adjudication of a court of competent jurisdiction to be unlawful and
violative of public policy.
6. Within a reasonable time after receipt by the Indemnitee of notice of
the commencement of any proceeding, the Indemnitee will, if a claim in respect
thereof is to be made against the Corporation under this Agreement, notify the
Corporation of the commencement thereof; but the omission so to notify the
Corporation will not relive the Corporation from any liability which it may have
to the Indemnitee otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which the Indemnitee notifies the corporation
of the commencement thereof;
(a) the Corporation will be entitled to participate therein at its
own expense;
(b) Except as otherwise provided below, to the extent that it may
wish, the Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnitee. After notice from the Corporation to the
Indemnitee of its election so to assume the defense thereof, the
Corporation will not be liable to the Indemnitee under this Agreement for
any legal or other expenses subsequently incurred by the Indemnitee in
connection with the defense thereof other than reasonably costs of
investigation or as otherwise provided below. The Indemnitee shall have
the right
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<PAGE>
to employ his counsel in such action, suit or proceeding, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized
by the Corporation, (ii) the Indemnitee shall have concluded, in his sole
discretion, that there may be a conflict of interest between the
Corporation and the Indemnitee in the conduct of the defense of such action
or (iii) the Corporation shall not in fact have employed counsel to assume
the defense of such action, in each of which cases the fees and expense of
the Corporation. The Corporation shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on behalf of the
Corporation or as to which the Indemniteee shall have made the conclusion
provided for in (ii) above; and
(c) the Corporation shall not be liable to indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of any action or
claim effected without its written consent. The Corporation shall not
settle any action or claim without the Indemnitee's written consent.
Neither the Corporation nor the Indemnitee shall unreasonably withhold its
or his consent to any proposed settlement.
7. All agreements and obligation of the Corporation contained herein
shall continue during the period the Indemnitee is servicing in any of the
capacities referred to in Section 1 hereof and shall continue thereafter so long
as the Indemnitee or his executors, administrators, or heirs could be subject to
any possible claim or threatened, pending or completed proceeding by reason of
the fact that the Indemnitee was serving in any of such capacities.
8. (a) Any notice or other communication under this Agreement shall be
in writing and shall deemed given when delivered personally or mailed by
certified mail, return receipt requested, to the parties as follows:
IF TO THE CORPORATION:
National Wireless Holdings Inc.
249 Royal Palm Way, Suite 301
Palm Beach, Florida 33480
WITH A COPY TO:
Hahn & Hessen LLP
350 Fifth Avenue
New York, New York 10118
Attn: James Kardon
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<PAGE>
IF TO THE INDEMNITEE:
or to such other address or person as any party hereto may specify by notice to
the other.
(b) The waiver by any party and the breach of any of the provisions of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach hereof.
(c) This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors assigns, legal representatives,
executors, administrators and heirs.
(d) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware without regard to conflict of law
provisions.
(e) Each of the parties hereto submits to the jurisdiction of a United
States District Court of the Southern District of New York or, if such Court
lacks subject matter jurisdiction, to the jurisdiction of the Chancery Court of
the State of Delaware with respect to any disputes, directly or indirectly, to
any matter of interpretation of this Agreement or the respective rights or
obligations of each of the parties hereto (whether or not any such party is
otherwise subject to the jurisdiction or venue of any such Courts and
acknowledges that service or process may be made by mailing a copy thereof in
accordance with the provisions of subsection (a) above.
(f) Each of the provisions of this Agreement is a separate and distinct
agreement and independent of all others, so that if any provision hereof shall
be held to be invalid or unenforceable for any reason, such invalidity or
enforceability shall not affect the validity or enforceability of any other
provisions hereof. This Agreement is being entered into pursuant to Section
145(f) of the Delaware Corporation Law and as such is intended to be
supplemental to any other rights to indemnification available to the Indemnitee
and is not intended to be restricted by the previsions of clauses (a) and (b) of
such Section 145. Nothing herein shall be deemed to diminish or otherwise
restrict the indemnitee's right to indemnification under any provision of the
Certificate of incorporation of By-laws of the Corporation.
(g) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing and signed by both parties
hereto.
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<PAGE>
9. The Indemnitee agrees that he will reimburse the Corporation for all
reasonable expenses paid by the Corporation in defending any civil or criminal
action, suit or proceeding against him in the event and only to the extent that
it shall ultimately be determined by a court of competent jurisdiction or in
arbitration between the Corporation and the Indemnitee in accordance with rules
of the American Arbitration Association that he was not entitled to be
indemnified by the Corporation for such expenses under the provisions of the
Delaware the Corporation law, this Agreement or otherwise at the time the
expenses were advanced.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
NATIONAL WIRELESS HOLDINGS INC.
By:_________________________________
Name:
Title:
___________________________________
, Indemnitee
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<PAGE>
EXHIBIT 41
(a) Secured Term Note and (b) Pledge Agreement, dated July 9, 1997
<PAGE>
SECURED TERM NOTE
$1,100,000.00 New York, New York
July 9, 1997
FOR VALUE RECEIVED, the undersigned, an individual having an address at 233
No. Garrard Drive, Rantoul, IL 61866, hereby promises to pay on July 9, 1998 to
the order of NATIONAL WIRELESS HOLDINGS INC., ("Lender") at its offices located
at 249 Royal Palm Way, Suite 301, Palm Beach, Florida 33480 or at such other
place as the Lender may from time to time designate to the undersigned in
writing the principal sum of ONE MILLION ONE HUNDRED THOUSAND and 00/100 DOLLARS
($1,100,000.00) or such other amount as may be due and owing from time to time
with interest at a rate per annum equal to eight percent (8%). In no event,
however, shall interest hereunder be in excess of the maximum interest rate
permitted by law.
A. PREPAYMENT: This Note may be prepaid without premium or penalty, in
whole or in part, upon not less than five days prior written notice.
B. DEFAULT; REMEDY. If any one or more of the following events of default
shall occur, that is to say:
1. default shall be made in the payment of any principal or interest
of this Note when the same shall become due and payable whether at
maturity, by acceleration, by notice of intention to prepay or otherwise;
2. any obligation of the undersigned other than its obligations to
Lender hereunder becomes or is declared to be due and payable and shall not
have been paid within thirty (30) days thereto;
3. the undersigned shall become unable to pay its debts as they
mature, make a general assignment for the benefit of creditors, commence or
cause to be commenced a meeting of its creditors or take advantage of any
of the insolvency laws, or a case is commenced or a petition in bankruptcy
or for an arrangement or reorganization under the Federal Bankruptcy Code
(i) is filed against the undersigned, or (ii) is filed by the undersigned,
or a custodian or receiver (or other court designee performing the
functions of a receiver) is appointed for or takes possession of the
undersigned's assets or affairs, or an order for relief in a case commenced
under the Federal Bankruptcy Code is entered;
4. any judgment or judgments against the undersigned or its property
for any amount remains unpaid, undischarged, unsatisfied, unbonded or
undismissed for a period of ten (10) days, or a levy, sequestration or
attachment against the undersigned or its property for any amount remains
unpaid, undischarged, unstayed, unsatisfied or undismissed for a period of
ten (10) days;
<PAGE>
5. any guaranty of the obligations of the undersigned to Lender is
terminated or breached, or if any guarantor of the obligations of the
undersigned to the Lender attempts to terminate, challenge the validity of,
or its liability under, any such guaranty or similar agreement, or the
undersigned terminates any guaranty which it has given to Lender to secure
the indebtedness of any third party; or
6. any event of default shall occur under any agreement between
Lender and the undersigned which is not cured within any applicable grace
period.
then this Note (x)(i) upon the occurrence of an event of default pursuant to
subsection 3 of this Section (B) shall immediately become due and payable,
without notice, together with reasonable attorneys' fee and (ii) upon the
occurrence of any other event of default, which is not cured within five (5)
days after receipt of written notice of such default, shall at the option of the
Lender, immediately become due and payable, without notice, together with
reasonable attorneys' fees if the collection hereof is placed in the hands of an
attorney to obtain or enforce payment hereof, and (y) shall bear interest at a
rate of interest per annum equal to fifteen percent (15%).
C. GOVERNING LAW. This Note is being delivered in the State of New York,
and shall be construed and enforced in accordance with the laws of such State.
Any judicial proceeding by the undersigned against Lender involving, directly
or indirectly, any matter or claim in any way arising out of, related to or
connected with this Note, shall be brought only in federal or state court
located in the City of New York, State of New York. Any judicial proceeding
brought against the undersigned with respect to this Note may be brought in any
court of competent jurisdiction in the City of New York, State of New York,
United States of America, and, by execution and delivery of this Note, the
undersigned accepts, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Note or any related agreement.
Nothing herein shall affect the right to serve process in any manner permitted
by law or shall limit the right of Lender to bring proceedings against the
undersigned in the courts of any other jurisdiction. The undersigned waives any
objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon
FORUM NON CONVENIENS.
D. WAIVER OF JURY TRIAL. THE UNDERSIGNED EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER
THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND THE UNDERSIGNED HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR
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<PAGE>
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT
AS WRITTEN EVIDENCE OF THIS WAIVER OF THE RIGHT TO TRIAL BY JURY.
The undersigned expressly waives any presentment, demand, protest, notice
of protest, or notice of any kind.
__________________________
Michael J. Specchio
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<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of July 9, 1997, made by Michael J. Specchio,
("Pledgor"), to NATIONAL WIRELESS HOLDINGS INC. (the "Pledgee").
BACKGROUND TO THE AGREEMENT
Pledgor executed in favor of Pledgee a $1,100,000 Promissory Note dated as
of July 9, 1997, (as amended, modified and supplemented from time to time, the
"Note").
Pledgor is an officer and director of Pledgee.
In order to induce Pledgee to provide the financial accommodations
described in the Note, Pledgor has agreed to pledge and grant a security
interest to Pledgee in the Pledged Stock (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and for other good
and valuation consideration the receipt and sufficiency of which is hereby
acknowledged, Pledgor hereby agrees with Pledgee as follows:
SECTION 1. DEFINED TERMS
Unless otherwise defined herein, terms defined in the Note shall have such
defined meanings when used herein.
SECTION 2. PLEDGE
Pledgor hereby pledges, assigns, hypothecates, transfers and grants a
security interest to Pledgee in 100,000 shares of Common Stock, $.01 par value
per share (the "Pledged Stock") of the Pledgee, the certificates representing
the Pledged Stock and all dividends, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Stock;
SECTION 3. INDEBTEDNESS SECURED
This pledge is made to secure, and the Pledged Stock is security for, the
payment of all the obligations or liabilities of Pledgor to Pledgee under the
Note (the "Indebtedness").
SECTION 4. DELIVERY OF PLEDGED STOCK
All certificates representing or evidencing the Pledged Stock shall be
delivered to and held by or on behalf of Pledgee pursuant hereto and shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance
<PAGE>
satisfactory to Pledgee. Pledgor hereby authorizes the Pledgee, as issuer of
the Pledged Stock, upon demand by Pledgee to deliver any certificates,
instruments or other distributions issued in connection with the Pledged Stock
directly to Pledgee, in each case to be held by Pledgee, subject to the terms
hereof. Pledgee shall have the right, at any time in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of Pledgee or
any of its nominees any or all of the Pledged Stock. In addition, Pledgee shall
have the right at any time to exchange certificates or instruments representing
or evidencing Pledged Stock for certificates or instruments of smaller or larger
denominations.
SECTION 5. REPRESENTATIONS AND WARRANTIES
Pledgor represents and warrants to Pledgee that:
(a) Pledgor has the requisite power and authority to enter into this
Agreement, to pledge the Pledged Stock for the purposes described herein
and to carry out the transactions contemplated by this Agreement;
(b) The execution, delivery and performance by Pledgor of this
Agreement does not and will not result in any violation of any agreement,
indenture or other instrument, license, judgment, decree, order, law,
statute, ordinance or other governmental rule or regulation applicable to
Pledgor;
(c) This Agreement constitutes a legal, valid and binding obligation
of Pledgor enforceable in accordance with its terms;
(d) Pledgor is the direct and beneficial owner of each share of the
Pledged Stock;
(e) All of the shares of the Pledged Stock have been duly authorized,
validly issued and are fully paid and nonassessable;
(f) Upon delivery of the Pledged Stock to Pledgee or an agent for
Pledgee, this Agreement creates and grants a valid first lien on and
perfected security interest in the Pledged Stock and the proceeds thereof,
subject to no prior security interest, lien, charge or encumbrance, or to
any agreement purporting to grant to any third party a security interest in
the property or assets of Pledgor which would include the Pledged Stock;
(g) There are no restrictions on transfer of the Pledged Stock
contained in the Certificate of Incorporation or by-laws of the Issuer or
otherwise which have not otherwise been enforceably and legally waived by
the necessary parties;
(h) None of the Pledged Stock has been issued or transferred in
violation of the securities registration, securities disclosure or similar
laws of any jurisdiction to which such issuance or transfer may be subject;
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<PAGE>
(i) No consent, approval, authorization or other order of any person,
firm, corporation or other entity and no consent, authorization, approval
or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required by the Pledgor either (i) for the
pledge of the Pledged Stock pursuant to this Agreement or for the
execution, delivery or performance of this Agreement or (ii) for the
exercise by the Pledgee of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Stock pursuant to this
Agreement, except as may be required in connection with such disposition by
laws affecting the offering and sale of securities generally;
(j) No notification of the pledge evidenced hereby to any person,
firm, corporation or other entity is required; and
(k) As of the date hereof, there are no existing options, warrants,
calls or commitments of any such character whatsoever relating to any
Pledged Stock and no indebtedness or other security convertible into any
Pledged Stock.
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
SECTION 6. COVENANTS
Pledgor covenants that, until the Indebtedness shall be satisfied in full
and the Note is irrevocably terminated:
(a) Pledgor will not sell, assign, transfer, convey, or otherwise
dispose of its rights in or to the Pledged Stock or any interest therein;
nor will Pledgor create, incur or permit to exist any pledge, mortgage,
lien, charge, encumbrance or any security interest whatsoever with respect
to any of the Pledged Stock or the proceeds thereof other than that created
hereby;
(b) Pledgor will, at its expense, defend Pledgee's right, title and
security interest in and to the Pledged Stock against the claims of any
person, firm, corporation or other entity;
(c) Pledgor shall at any time, and from time to time, upon the
written request of Pledgee, execute and deliver such further documents and
do such further acts and things as Pledgee may reasonably request in order
to effect the purposes of this Agreement including, but without limitation,
delivering to Pledgee upon the occurrence of an Event of Default
irrevocable proxies in respect of the Pledged Stock in form satisfactory to
Pledgee. Until receipt thereof, this Agreement shall constitute Pledgor's
proxy to Pledgee or its nominee to vote all shares of Pledged Stock then
registered in Pledgor's name; and
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<PAGE>
(d) Pledgor will not consent to or approve the issuance of (i) any
additional shares of any class of capital stock of the Issuer; (ii) any
securities convertible either voluntarily by the holder thereof or
automatically upon the occurrence or nonoccurrence of any event or
condition into, or any securities exchangeable for, any such shares; or
(iii) any warrants, options, contracts or other commitments entitling any
person to purchase or otherwise acquire any such shares.
SECTION 7. VOTING RIGHTS AND DIVIDENDS
In addition to Pledgee's rights and remedies set forth in Section 9 hereof,
in case an Event of Default shall have occurred and has been declared by
Pledgee, Pledgee shall (i) vote the Pledged Stock, (ii) be entitled to give
consents, waivers and ratifications in respect of the Pledged Stock (Pledgor
hereby irrevocably constituting and appointing Pledgee, with full power of
substitution, the proxy and attorney-in-fact of Pledgor for such purposes) and
(iii) be entitled to collect and receive for its own use cash dividends paid on
the Pledged Stock. Pledgor shall not be permitted to exercise or refrain from
exercising any voting rights or other powers if, in the reasonable judgment of
Pledgee, such action would have a material adverse effect on the value of the
Pledged Stock or any part thereof; and, PROVIDED, FURTHER, that Pledgor shall
give at least five (5) days' written notice of the manner in which Pledgor
intends to exercise, or the reasons for refraining from exercising, any voting
rights or other powers other than with respect to any election of directors and
voting with respect to any incidental matters. All dividends and all other
distributions in respect of any of the Pledged Stock, whenever paid or made,
shall be delivered to Pledgee to hold as Pledged Stock and shall, if received by
the Pledgor, be received in trust for the benefit of Pledgee, be segregated from
the other property or funds of the Pledgor, and be forthwith delivered to
Pledgee as Pledged Stock in the same form as so received (with any necessary
indorsement).
SECTION 8. EVENT OF DEFAULT
An Event of Default shall be deemed to have occurred and may be declared
by Pledgee upon the happening of any of the following events:
(a) An Event of Default shall occur under the Note;
(b) Pledgor shall default in the performance of any of its
obligations under any agreement between Pledgor and Pledgee, including,
without limitation, this Agreement; and
(c) Any representation, warranty, statement or covenant made or
furnished to Pledgee by or on behalf of Pledgor proves to have been false
in any material respect when made or furnished or is breached, violated or
not complied with; or
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<PAGE>
SECTION 9. REMEDIES
In case an Event of Default shall have occurred and be declared by
Pledgee, Pledgee may:
(a) Transfer any or all of the Pledged Stock into its name, or into
the name of its nominee or nominees;
(b) Exercise all corporate rights with respect to the Pledged Stock
including, without limitation, all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any
shares of the Pledged Stock as if it were the absolute owner thereof,
including, but without limitation, the right to exchange, at its
discretion, any or all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the issuer
thereof, or upon the exercise by such issuer of any right, privilege or
option pertaining to any of the Pledged Stock, and, in connection
therewith, to deposit and deliver any and all of the Pledged Stock with any
committee, depository, transfer agent, registrar or other designated agent
upon such terms and conditions as it may determine, all without liability
except to account for property actually received by it;
(c) Subject to any requirement of applicable law, sell, assign and
deliver the whole or, from time to time, any part of the Pledged Stock at
the time held by Pledgee, at any private sale or at public auction, with or
without demand, advertisement or notice of the time or place of sale or
adjournment thereof or otherwise (all of which are hereby waived, except
such notice as is required by applicable law and cannot be waived), for
cash or credit or for other property for immediate or future delivery, and
for such price or prices and on such terms as Pledgee in its sole
discretion may determine, or as may be required by applicable law.
Pledgor hereby waives and releases any and all right or equity of
redemption, whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, Pledgee may bid for and purchase the whole or any
part of the Pledged Stock so sold free from any such right or equity of
redemption. All moneys received by Pledgee hereunder whether upon sale of the
Pledged Stock or any part thereof or otherwise shall be held by Pledgee and
applied by it as provided in Section 11 hereof. No failure or delay on the part
of Pledgee in exercising any rights hereunder shall operate as a waiver of any
such rights nor shall any single or partial exercise of any such rights preclude
any other or future exercise thereof or the exercise of any other rights
hereunder. Pledgee shall have no duty as to the collection or protection of the
Pledged Stock or any income thereon nor any duty as to preservation of any
rights pertaining thereto, except to apply the funds in accordance with the
requirements of Section 11 hereof. Pledgee may exercise its rights with respect
to property held hereunder without resort to other security for or sources of
reimbursement for the Indebtedness. In addition to the foregoing, Pledgee shall
have all of the rights, remedies and
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<PAGE>
privileges of a secured party under the Uniform Commercial Code of New York
regardless of the jurisdiction in which enforcement hereof is sought.
SECTION 10. PRIVATE SALE
Pledgor recognizes that Pledgee shall be unable to effect a public sale of
all or part of the Pledged Stock by reason of certain prohibitions contained in
the Securities Act of 1933, as amended (the "Securities Act"), and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
Pledged Stock for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor agrees that any such private sale may
be at prices and on terms less favorable to the seller than if sold at public
sales and that such private sales shall be deemed to have been made in a
commercially reasonable manner. Pledgor agrees that Pledgee has no obligation
to register the Pledged Stock for public sale under the Securities Act or to
delay sale of any Pledged Stock for the period of time necessary to permit the
Pledgee to register the Pledge Stock.
SECTION 11. PROCEEDS OF SALE
The proceeds of any collection, recovery, receipt, appropriation,
realization or sale of the Pledged Stock shall be applied by Pledgee as follows:
(a) First, to the payment of all costs, expenses and charges of
Pledgee, as such, or the reimbursement of Pledgee for the prior payment of
such costs, expenses and charges incurred in connection with the care and
safekeeping of any of the Pledged Stock (including, without limitation, the
expenses of any sale or other proceeding, the expenses of any taking,
reasonable attorneys' fees and expenses, court costs, any other expenses
incurred or expenditures or advances made by Pledgee in the protection,
enforcement or exercise of its rights, powers or remedies hereunder) with
interest on any such reimbursement at the rate of 15% per annum from the
date of payment.
(b) Second, to the payment of the Indebtedness, in whole or in part,
in such order as Pledgee may elect, whether such Indebtedness is then due
or not due.
(c) Third, to such persons, firms, corporations or other entities as
required by applicable law including, without limitation, Section
9-504(1)(c) of the Uniform Commercial Code.
(d) Fourth, to the extent of any surplus thereafter remaining, to
Pledgor or as a court of competent jurisdiction may direct.
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<PAGE>
SECTION 12. INFORMATION
Pledgor will promptly give or cause to be given written notice to Pledgee
of any notices or other documents received by it with respect to Pledged Stock
registered in the name of Pledgor.
SECTION 13. TERMINATION
This Agreement shall terminate and Pledgor shall be entitled to the
return, at Pledgor's expense, of such of the Pledged Stock as has not
theretofore been sold or otherwise applied pursuant to this Agreement, together
with any moneys at any time held by Pledgee, upon payment in full of the
Indebtedness and irrevocable termination of the Note.
SECTION 14. CONCERNING PLEDGEE
The recitals of fact herein shall be taken as statements of Pledgor for
which Pledgee assumes no responsibility. Pledgee makes no representation to
anyone as to the value of the Pledged Stock or any part thereof or as to the
validity or adequacy of the security afforded or intended to be afforded thereby
or as to the validity of this Agreement. Pledgee shall be protected in relying
upon any notice, consent, request or other paper or document believed by it to
be genuine and correct and to have been signed by a proper person. The
permissive rights of Pledgee hereunder shall not be construed as duties of
Pledgee. Pledgee shall be under no obligation to take any action toward the
enforcement of this Agreement or rights or remedies in respect of any of the
Pledged Stock. Pledgee shall not be personally liable for any action taken or
omitted by it in good faith and reasonably believed by it to be within the power
or discretion conferred upon it by this Agreement.
SECTION 15. NOTICES
Any notice or request hereunder may be given to Pledgor or to Pledgee at
their respective addresses set forth below or at such other address as may
hereafter be specified in a notice designated as a notice of change of address
under this Section. Any notice or request hereunder shall be given by (a) hand
delivery, (b) registered or certified mail, return receipt requested, (c) telex
or telegram, subsequently confirmed by registered or certified mail, or (d) fax
to the number set out below (or such other number as may hereafter be specified
in a notice designated as a notice of change of address) with telephone
communication to a duly authorized officer of the recipient confirming its
receipt as subsequently confirmed by registered or certified mail. Any notice
or other communication required or permitted pursuant to this Agreement shall be
deemed given (a) when personally delivered to any officer of the party to whom
it is addressed, (b) on the earlier of actual receipt thereof or three (3) days
following posting thereof by certified or registered mail, postage prepaid, or
(c) upon actual receipt thereof when sent by a recognized overnight delivery
service or (d) upon actual receipt thereof when sent by fax to the number set
forth below with telephone communication confirming receipt in each case
addressed to each party at its address set forth below or at such other address
as has been furnished in writing by a party to the other by like notice:
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(A) If to Pledgee, at: National Wireless Holdings Inc.
249 Royal Palm Way
Suite 301
Palm Beach, Florida 33480
Attention: Terrence S. Cassidy
Tel: (407) 832-0981
Fax: (407) 655-0146
with a copy to: Hahn & Hessen LLP
350 Fifth Avenue
New York, New York 10118
Attention: James Kardon
Tel: (212) 736-1000
Fax: (212) 594-7167
(B) If to Pledgor, at: Michael J. Specchio
233 No. Garrard Drive
Rantoul, IL 61866
Tel: (217) 893-8730
Fax: (217) 893-8806
SECTION 16. GOVERNING LAW.
This Agreement and all rights and obligations hereunder shall be governed
by and construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York.
SECTION 17. WAIVERS.
(a) PLEDGOR AND PLEDGEE EACH HEREBY EXPRESSLY WAIVE ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE; AND PLEDGOR AND PLEDGEE EACH HEREBY AGREE AND CONSENT THAT ANY SUCH
ACTIONS OR PROCEEDINGS SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY.
(b) Pledgee may at any time and from time to time, either before or after
the maturity thereof, without notice to or further consent of Pledgor, extend
the time of payment
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of, exchange or surrender any collateral for, renew or extend any of the
Indebtedness or increase or decrease the interest rate thereon, and may also
make any agreement with any other party to or person liable on any of the
Indebtedness, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Pledgee and any
such other party or person, or make any election of rights Pledgee may deem
desirable under the United States Bankruptcy Code, as amended, or any other
federal or state bankruptcy, reorganization, moratorium or insolvency law
relating to or affecting the enforcement of creditors' rights generally without
in any way impairing or affecting this Agreement.
(c) Pledgor waives any rights to interpose any defense, counterclaim or
offset of any nature and description which it may have or which may exist
between Pledgee and Pledgor with respect to Pledgor's obligations under this
Agreement, or which Pledgor may assert on the underlying debt, including but not
limited to failure of consideration, breach of warranty, fraud, payment (other
than cash payment in full of the Indebtedness), statute of frauds, bankruptcy,
infancy, statute of limitations, accord and satisfaction, and usury.
(d) Pledgor further waives presentment to or demand of payment from anyone
whomsoever liable upon any of the Indebtedness, protest, notices of presentment,
non-payment or protest and notice of any sale of collateral security or any
default of any sort.
SECTION 18. LITIGATION.
PLEDGOR EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF THE SUPREME
COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL PURPOSES IN
CONNECTION WITH THIS AGREEMENT. ANY JUDICIAL PROCEEDING BY PLEDGOR AGAINST
PLEDGEE INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY ARISING
OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE
SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. PLEDGOR FURTHER CONSENTS
THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT
LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE
AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY
PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK
OR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A REASONABLE TIME FOR
APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE
RULES OF SAID COURTS. PLEDGOR WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF
ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE
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BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.
SECTION 19. NO WAIVER; CUMULATIVE REMEDIES.
No failure on the part of Pledgee to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof nor shall any single or partial exercise of any such right, power or
remedy by Pledgee preclude any other or further exercise thereof or the exercise
of any right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
SECTION 20. SEVERABILITY.
In case any security interest or other right of Pledgee shall be held to
be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other security interest or other right,
privilege or power granted under this Agreement.
SECTION 21. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
may be executed by one or more of the parties hereto, but all of which when
taken together shall constitute but one agreement binding on all the parties
hereto.
SECTION 22. MISCELLANEOUS
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing, signed by
Pledgee and Pledgor. The provisions of this Agreement shall be binding upon the
successors and assigns of Pledgor. The term "Pledgee", as used herein, shall
include any successor or assign of Pledgee at the time entitled to the pledged
interest in the Pledged Stock. The headings in this Agreement are for purposes
of reference only and shall not limit or define the meaning hereof.
SECTION 23. CAPTIONS
The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Agreement.
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IN WITNESS WHEREOF, Pledgor and Pledgee have caused this Agreement to be
duly executed as of the ___ day of ____________, 1997.
______________________________
Michael J. Specchio
NATIONAL WIRELESS HOLDINGS INC.
By:___________________________
Its:_________________________
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EXHIBIT 42
1997 Equity Incentive Plan
<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
1997 EQUITY INCENTIVE PLAN
1. PURPOSE
The purpose of this Equity Incentive Plan (the "Plan") is to advance the
interests of National Wireless Holdings Inc. (the "Company") by enhancing its
ability to attract and retain employees and other persons or entities who are in
a position to make significant contributions to the success of the Company and
its subsidiaries through ownership of shares of the Company's common stock
("Stock").
The Plan was adopted by the Company on July 14, 1997, and adopted by
stockholders on ____________.
The Plan is intended to accomplish these goals by enabling the Company to
grant Awards in the form of Options, Stock Appreciation Rights, Restricted Stock
or Unrestricted Stock Awards, Deferred Stock Awards, Performance Awards, Loans
or Supplement Grants, or combinations thereof, all as more fully described
below.
2. ADMINISTRATION
Unless otherwise determined by the Board of Directors of the Company (the
"Board"), the Plan will be administered by a Committee of the Board designated
for such purpose (the "Committee"). The Committee shall consist of at least two
directors. A majority of the members of the Committee shall constitute a
quorum, and all determinations of the Committee shall be made by a majority of
its members. Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing signed by a majority of
the Committee members. During such times as the Stock is registered under the
Securities Exchange Act of 1934 (the "1934 Act"), all members of the Committee
shall be disinterested persons within the meaning of Rule 16b-3 under the 1934
Act and "outside directors" within the meaning of Section 162(m)(4)(C)(i) of the
Internal Revenue Code of 1986, as amended (the "Code").
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock subject to the
Award; (c) determine the type or types of each Award; (d) determine the terms
and conditions of each Award; (e) waive compliance by a holder of an Award with
any obligations to be performed by such holder under an Award and waive any
terms or conditions of an Award; (f) amend or cancel an existing Award in whole
or in part (and if an award is canceled, grant another Award in its place on
such terms and conditions as the Committee shall specify), except that the
Committee may not, without the consent of the holder of an Award, take any
action under this clause with respect to such Award if such action would
adversely affect the rights of such holder; (g) prescribe the form or forms of
instruments that are required or deemed appropriate under the
<PAGE>
Plan, including any written notices and elections required of Participants (as
defined below), and change such forms from time to time; (h) adopt, amend and
rescind rules and regulations for the administration of the Plan; and (i)
interpret the Plan and decide any questions and settle all controversies and
disputes that may arise in connection with the Plan. Such determinations and
actions of the Committee, and all other determinations and actions of the
Committee made or taken under authority granted by any provision of the Plan,
will be conclusive and will bind all parties. Nothing in this paragraph shall
be construed as limiting the power of the Committee to make adjustments under
Section 7.3 or Section 8.6.
With respect to persons subject to Section 16 of the 1934 Act, transactions
under the Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the 1934 Act.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it is approved by the
stockholders of the Company. No Award may be granted under the Plan ten years
following the date of stockholder approval, but Awards previously granted may
extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
Subject to the adjustment as provided in Section 8.6 below, the aggregate
number of shares of Stock that may be delivered under the Plan will be 200,000.
If any Award requiring exercise by the Participant for delivery of Stock
terminates without having been exercised in full, or if any Award payable in
Stock or cash is satisfied in cash rather than Stock, the number of shares of
Stock as to which such Award was not exercised or for which cash was substituted
will be available for future grants.
Subject to Section 8.6(a), the maximum number of shares of Stock as to
which Options and Stock Appreciation Rights may be granted to any Participant in
any one calendar year is 100,000, which limitation shall be construed and
applied consistently with the rules under Section 162(m) of the Internal Revenue
Code.
Stock delivered under the Plan may be either authorized but unissued Stock
or previously issued Stock acquired by the Company and held in treasury. No
fractional shares of Stock will be delivered under the Plan.
5. ELIGIBILITY AND PARTICIPATION
Each person in the employ of the Company or any of its subsidiaries (an
"Employee") and each other person or entity (including without limitation
non-Employee directors of the Company or a subsidiary of the Company) who, in
the opinion of the Committee, is in a position to make a significant
contribution to the success of the Company or its subsidiaries will be eligible
to receive Awards under the Plan (each such Employee, person or entity receiving
an Award, a "Participant"). A "subsidiary" for purposes of the
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Plan will be a corporation in which the Company owns, directly or indirectly,
stock possessing 50 % or more of the total combined voting power of all classes
of stock.
6. TYPES OF AWARDS
6.1. OPTIONS
(a) NATURE OF OPTIONS. An Option is an Award giving the recipient the
right on exercise thereof to purchase Stock.
Both "incentive stock options," as defined in Section 422 of the Internal
Revenue of 1986, as amended (the "Code") (any Option intended to qualify as an
incentive stock option being hereinafter referred to as an "ISO"), and Options
that are not incentive stock options, may be granted under the Plan. ISOs shall
be awarded only to Employees. Any Option not identified at the time of grant as
being either an ISO or a non-incentive stock option shall be a non-incentive
stock option.
(b) EXERCISE PRICE. The exercise price of an Option will be determined by
the Committee subject to the following:
(1) The exercise price of an ISO shall not be less than 100%
(110% in the case of an ISO granted to a ten-percent stockholder) of
the fair market value of the Stock subject to the Option, determined
as of the time the Option is granted. A "ten percent stockholder" is
any person who at the time of grant owns, directly or indirectly, or
is deemed to own by reason of the attribution rules of section 424(d)
of the Code, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any of its
subsidiaries.
(2) In no case may the exercise price paid for Stock which is
part of an original issue of authorized Stock be less than the par
value per share of the Stock.
(3) The Committee may reduce the exercise price of an Option at
any time after the time of grant, but in the case of an Option
originally awarded as an ISO, only with the consent of the
Participant.
(c) DURATION OF OPTIONS. The latest date on which an Option may be
exercised will be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the day immediately preceding the
date the Option was granted, or such earlier date as may have been specified by
the Committee at the time the Option was granted.
(d) EXERCISE OF OPTIONS. An Option will become exercisable at such time
or times, and on such conditions, as the Committee may specify. The Committee
may at any
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time and from time to time accelerate the time at which all or any part of the
Option may be exercised.
Any exercise of an Option must be in writing, signed by the proper person
and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full in accordance with paragraph
(e) below for the number of shares for which the Option is exercised.
(e) PAYMENT FOR STOCK. Stock purchased on exercise of an Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the
Committee at or after the grant of the Option (with the consent of the optionee
of an ISO if permitted after the grant) or by the instrument evidencing the
Option, (i) through the delivery of shares of Stock which have been outstanding
for at least six months (unless the Committee approves a shorter period) and
which have a fair market value equal to the exercise price, (ii) by delivery of
a promissory note of the person exercising the Option to the Company, payable on
such terms as are specified by the Committee, (iii) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by any combination
of the foregoing permissible forms of payment.
(f) DISCRETIONARY PAYMENTS. If (i) the market price of shares of Stock
subject to an Option (other than an Option which is in tandem with a Stock
Appreciation Right as described in Section 6.2 below) exceeds the exercise price
of the Option at the time of its exercise, and (ii) the person exercising the
Option so requests the Committee in writing, the Committee may in its sole
discretion cancel the Option and cause the Company to pay in cash or in shares
of Common Stock (at a price per share equal to the fair market value per share)
to the person exercising the Option an amount equal to the difference between
the fair market value of the Stock which would have been purchased pursuant to
the exercise (determined on the date the Option is canceled) and the aggregate
exercise price which would have been paid.
6.2. STOCK APPRECIATION RIGHTS.
(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is an
Award entitling the holder on exercise to receive an amount in cash or Stock or
a combination thereof (such form to be determined by the Committee) determined
in whole or in part by reference to appreciation in the fair market value of a
share of Stock on the date of grant as compared to its fair market value on the
date of exercise or any performance standard selected or established by the
Committee.
(b) GRANT OF STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted in tandem with, or independently of, Options granted under the Plan. A
Stock Appreciation Right granted in tandem with an Option which is not an ISO
may be granted either at or after the time the Option is granted. A Stock
Appreciation Right granted in tandem with an ISO may be granted only at the time
the Option is granted. The Committee may also grant Stock Appreciation Rights
which provide that following a change in control of
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the Company, as determined by the Committee, the holder of such Right will be
entitled to receive, with respect to each share of Stock subject to the Right,
an amount equal to the excess of a specified value (which may include an average
of values) for a share of Stock during a period preceding such change in control
over the fair market value of a share of Stock on the date the Right was
granted.
(c) RULES APPLICABLE TO TANDEM AWARDS. When Stock Appreciation Rights are
granted in tandem with Options, the following will apply:
(1) The Stock Appreciation Right will be exercisable only at
such time or times, and to the extent, that the related Option is
exercisable and will be exercisable in accordance with the procedure
required for exercise of the related Option.
(2) The Stock Appreciation Right will terminate and no longer be
exercisable upon the termination or exercise of the related Option,
except that a Stock Appreciation Right granted with respect to less
than the full number of shares covered by an Option will not be
reduced until the number of shares as to which the related Option has
been exercised or has terminated exceeds the number of shares not
covered by the Stock Appreciation Right.
(3) The Option will terminate and no longer be exercisable upon
the exercise of the related Stock Appreciation Right.
(4) The Stock Appreciation Right will be transferable only with
the related Option.
(5) A Stock Appreciation Right granted in tandem with an ISO may
be exercised only when the market price of the Stock subject to the
Option exceeds the exercise price of such option.
(d) EXERCISE OF INDEPENDENT STOCK APPRECIATION RIGHTS. A Stock
Appreciation Right not granted in tandem with an Option will become exercisable
at such time or times, and on such conditions, as the Committee may specify.
The Committee may at any time accelerate the time at which all or any part of
the Right may be exercised.
Any exercise of an independent Stock Appreciation Right must be in writing,
signed by the proper person and delivered or mailed to the Company, accompanied
by any other documents required by the Committee.
6.3. RESTRICTED AND UNRESTRICTED STOCK.
(a) GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant shares of
Restricted Stock in such amounts and upon such terms and conditions as the
Committee shall determine subject to the restrictions described below.
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(b) RESTRICTED STOCK AGREEMENT. The Committee may require, as a condition
to an Award, that a recipient of a Restricted Stock Award enter into a
Restricted Stock Award Agreement, setting forth the terms and conditions of the
Award. In lieu of a Restricted Stock Award Agreement, the Committee may provide
the terms and conditions of an Award in a notice to the Participant of the
Award, on the Stock certificate representing the Restricted Stock, in the
resolution approving the Award, or in such other manner as it deems appropriate.
(c) TRANSFERABILITY AND OTHER RESTRICTIONS. Except as otherwise provided
in this Section 6.3, the shares of Restricted Stock granted herein may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable period or periods established by the Committee
and the satisfaction of any other conditions or restrictions established by the
Committee (such period during which a share of Restricted Stock is subject to
such restrictions and conditions is referred to as the "Restricted Period").
Except as the Committee may otherwise determine, if a Participant ceases to be
an Employee or otherwise suffers a Status Change (as defined at Section 7.2(a)
below) for any reason during the Restricted Period, the Company may purchase the
shares of Restricted Stock subject to such restrictions and conditions for the
amount of cash paid by the Participant for such shares, or such shares of
Restricted Stock shall be forfeited to the Company if no cash was paid by the
Participant.
The Company shall also have the right to retain the certificates
representing shares of Restricted Stock in the Company's possession during the
Restricted Period.
(d) REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Section
6.3, a share of Restricted Stock covered by a Restricted Stock grant shall
become freely transferable by the Participant upon completion of the Restricted
Period including the passage of any applicable period of time and satisfaction
of any conditions to vesting. However, unless otherwise provided by the
Committee, the Committee, in its sole discretion, shall have the right to
immediately waive all or part of the restrictions and conditions with regard to
all or part of the shares held by any Participant at any time.
(e) VOTING RIGHTS, DIVIDENDS AND OTHER DISTRIBUTIONS. During the
Restricted Period, Participants holding shares of Restricted Stock granted
hereunder may exercise full voting rights and shall receive all regular cash
dividends paid with respect to such shares. Except as the Committee shall
otherwise determine, any other cash dividends and other distributions paid to
Participants with respect to shares of Restricted Stock including any dividends
and distributions paid in shares shall be subject to the same restrictions and
conditions as the shares of Restricted Stock with respect to which they were
paid.
(f) OTHER AWARDS SETTLED WITH RESTRICTED STOCK. The Committee may, at the
time any Award described in this Section 6 is granted, provide that any or all
the Stock delivered pursuant to the Award will be Restricted Stock.
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(g) UNRESTRICTED STOCK. The Committee may, in its sole discretion, sell
to any Participant shares of Stock free of restrictions under the Plan for a
price which is not less than the par value of the Stock.
(h) NOTICE OF SECTION 83(B) ELECTION. Any Participant making an election
under Section 83(b) of the Code with respect to Restricted Stock must provide a
copy thereof to the Company within 10 days of filing such election with the
Internal Revenue Service.
6.4. DEFERRED STOCK.
A Deferred Stock Award entitles the recipient to receive shares of Stock to
be delivered in the future. Delivery of the Stock will take place at such time
or times, and on such conditions, as the Committee may specify. The Committee
may at any time accelerate the time at which delivery of all or any part of the
Stock will take place. At the time any Award described in this Section 6 is
granted, the Committee may provide that, at the time Stock would otherwise be
delivered pursuant to the Award, the Participant will instead receive an
instrument evidencing the Participant's right to future delivery of Deferred
Stock.
6.5. PERFORMANCE AWARDS; PERFORMANCE GOALS.
(a) NATURE OF PERFORMANCE AWARDS. A Performance Award entitles the
recipient to receive, without payment, an amount in cash or Stock or a
combination thereof (such form to be determined by the Committee) following the
attainment of performance goals. Performance goals may be related to personal
performance, corporate performance, departmental performance or any other
category of performance established by the Committee. The Committee will
determine the performance goals, the period or periods during which performance
is to be measured and all other terms and conditions applicable to the Award.
(b) OTHER AWARDS SUBJECT TO PERFORMANCE CONDITION. The Committee may, at
the time any Award described in this Section 6 is granted, impose the condition
(in addition to any conditions specified or authorized in this Section 6 or any
other provision of the Plan) that Performance Goals be met prior to the
Participant's realization of any payment or benefit under the Award.
6.6. LOANS AND SUPPLEMENTAL GRANTS.
(a) LOANS. The Company may make a loan to a Participant ("Loan"), either
on the date of or after the grant of any Award to the Participant. A Loan may
be made either in connection with the purchase of Stock under the Award or with
the payment of any Federal, state and local income tax with respect to income
recognized as a result of the Award. The Committee will have full authority to
decide whether to make a Loan and to determine the amount, terms and conditions
of the Loan, including the interest rate (which may be zero), whether the Loan
is to be secured or unsecured or with or without recourse against the borrower,
the terms on which the Loan is to be repaid and the conditions, if any, under
which it may be forgiven. However, no Loan may have a term (including
extensions) exceeding ten years in duration.
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(b) SUPPLEMENTAL GRANTS. In connection with any Award, the Committee may
at the time such Award is made or at a later date, provide for and grant a cash
award to the Participant ("Supplemental Grant") not to exceed an amount equal to
(1) the amount of any Federal, state and local income tax on ordinary income for
which the Participant may be liable with respect to the Award, determined by
assuming taxation at the highest marginal rate, plus (2) an additional amount on
a grossed-up basis intended to make the Participant whole on an after-tax basis
after discharging all the Participant's income tax liabilities arising from all
payments under this Section 6. Any payments under this subsection (b) will be
made at the time the Participant incurs Federal income tax liability with
respect to the Award.
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. DEATH.
If a Participant dies, the following will apply:
(a) All Options and Stock Appreciation Rights held by the Participant
immediately prior to death, to the extent then exercisable, may be exercised by
the Participant's executor or administrator or the person or persons to whom the
Option or Right is transferred by will or the applicable laws of descent and
distribution, at any time within the one year period ending with the first
anniversary of the Participant's death (or such shorter or longer period as the
Committee may determine), and shall thereupon terminate. In no event, however,
shall an Option or Stock Appreciation Right remain exercisable beyond the latest
date on which it could have been exercised without regard to this Section 7.
Except as otherwise determined by the Committee, all Options and Stock
Appreciation Rights held by a Participant immediately prior to death that are
not then exercisable shall terminate at death.
(b) Except as otherwise determined by the Committee, all Restricted Stock
held by the Participant must be transferred to the Company (and, in the event
the certificates representing such Restricted Stock are held by the Company,
such Restricted Stock will be so transferred without any further action by the
Participant) in accordance with Section 6.3(d) above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to death will be forfeited and the Award canceled as of the time
of death, unless otherwise determined the Committee.
7.2. TERMINATION OF SERVICE (OTHER THAN BY DEATH).
If a Participant who is an Employee ceases to be an Employee for any reason
other than death, or if there is a termination (other than by reason of death)
of the consulting, service or similar relationship in respect of which a
non-Employee Participant was granted an Award hereunder (such termination of the
employment or other relationship being hereinafter referred to as a "Status
Change"), the following will apply:
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(a) Except as otherwise determined by the Committee, all Options and Stock
Appreciation Rights held by the Participant that were not exercisable
immediately prior to the Status Change shall terminate at the time of the Status
Change. Any Options or Rights that were exercisable immediately prior to the
Status Change will continue to be exercisable for a period of three months (or
such longer period as the Committee may determine), and shall thereupon
terminate, unless the Award provides by its terms for immediate termination in
the event of a Status Change (unless otherwise determined by the Committee) or
unless the Status Change results from a discharge for cause which in the opinion
of the Committee casts such discredit on the Participant as to justify immediate
termination of the Award (unless otherwise determined by the Committee). In no
event, however, shall an Option or Stock Appreciation Right remain exercisable
beyond the latest date on which it could have been exercised without regard to
this Section 7. For purposes of this paragraph, in the case of a Participant
who is an Employee, a Status Change shall not be deemed to have resulted by
reason of (i) a sick leave or other bona fide leave of absence approved for
purposes of the Plan by the Committee, so long as the Employee's right to
reemployment is guaranteed either by statute or by contract, or (ii) a transfer
of employment between the Company and a subsidiary or between subsidiaries, or
to the employment of a corporation (or a parent or subsidiary corporation of
such corporation) issuing or assuming an option in a transaction to which
section 424(a) of the Code applies.
(b) Except as otherwise determined by the Committee, all Restricted Stock
held by the Participant at the time of the Status Change must be transferred to
the Company (and, in the event the certificates representing such Restricted
Stock are held by the Company, such Restricted Stock will be so transferred
without any further action by the Participant) in accordance with Section 6.3
(c) above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to the Status Change will be forfeited and the Award cancelled as
of the date of such Status Change unless otherwise determined by the Committee.
7.3.CERTAIN CORPORATE TRANSACTIONS.
Except as otherwise provided by the Committee at the time of grant, in the
event of a consolidation or merger in which the Company is not the surviving
corporation or which results in the acquisition of substantially all the
Company's outstanding Stock by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of substantially all the Company's assets or a dissolution or
liquidation of the Company (a "covered transaction"), the following rules shall
apply:
(a) Subject to paragraph (b) below, all outstanding Awards requiring
exercise will cease to be exercisable, and all other Awards to the extent not
fully vested (including Awards subject to conditions not yet satisfied or
determined) will be forfeited, as of the effective time of the covered
transaction, provided that the Committee may in its sole discretion, on or prior
to the effective date of the covered transaction, (1) make any outstanding
Option and Stock Appreciation Right exercisable in full, (2) remove the
restrictions from any Restricted Stock, (3) cause the Company to make any
payment and
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<PAGE>
provide any benefit under any Deferred Stock Award, Performance Award, or
Supplemental Grant, (4) remove any performance or other conditions or
restrictions on any Award, and (5) forgive all or any portion of the principal
of or interest on a Loan; or
(b) With respect to an outstanding Award held by a participant who,
following the covered transaction, will be employed by or otherwise providing
services to a corporation which is a surviving or acquiring corporation in the
covered transaction or an affiliate of such a corporation, the Committee may at
or prior to the effective time of the covered transaction, in its sole
discretion and in lieu of the action described in paragraph (a) above, arrange
to have such surviving or acquiring corporation or affiliate assume any Award
held by such participant outstanding hereunder or grant a replacement award
which, in the judgment of the Committee, is substantially equivalent to any
Award being replaced.
7.4. TERMINATION FOLLOWING CHANGE OF CONTROL.
Notwithstanding any other provision of this Plan, if the Participant's
employment terminates because of a "Qualified Termination" as defined in Exhibit
A, all unvested Options and Stock Appreciation Rights then held by such person
shall immediately become fully vested, all Options and Stock Appreciation Rights
then held by such person shall remain exercisable until the earlier of (i) the
fourth anniversary of such Qualified Termination and (ii) the latest date on
which such Option or Right could have been exercised without regard to Section
7.1 and Section 7.2, and all other Awards shall immediately become fully vested
and all restrictions, conditions and performance goals with respect to such
Awards shall be deemed satisfied and shall no longer be applicable.
8. GENERAL PROVISIONS
8.1. DOCUMENTATION OF AWARDS.
Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time. Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which will evidence agreement to the terms
thereof.
8.2. RIGHTS AS A STOCKHOLDER, DIVIDEND EQUIVALENTS.
Except as specifically provided by the Plan, the receipt of an Award will
not give a Participant rights as a stockholder; the Participant will obtain such
rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, upon actual receipt of Stock. However, the Committee may,
on such conditions as it deems appropriate, provide that a Participant will
receive a benefit in lieu of cash dividends that would have been payable on any
or all Stock subject to the Participant's Award had such Stock been outstanding.
Without limitation, the Committee may provide for payment to the Participant of
amounts representing such dividends, either currently or in the future, or for
the investment of such amounts on behalf of the Participant.
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<PAGE>
8.3. CONDITIONS ON DELIVERY OF STOCK.
The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove restriction from shares previously delivered under the
Plan (a) until all conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all applicable Federal and state
laws and regulation have been complied with, (c) if the outstanding Stock is at
the time listed on any stock exchange or The Nasdaq National Market, until the
shares to be delivered have been listed or authorized to be listed on such
exchange or market upon official notice of notice of issuance, and (d) until all
other legal matters in connection with the issuance and delivery of such shares
have been approved by the Company's counsel. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the Award, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.
If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of such representative.
8.4. TAX WITHHOLDING.
The Company will withhold from any cash payment made pursuant to an Award
an amount sufficient to satisfy all federal, state and local withholding tax
requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement. The Committee may make such share
withholding mandatory with respect to any Award at the time such Award is made
to a Participant.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as a
condition of exercise that the person exercising the ISO agree (a) to inform the
Company promptly of any disposition (within the meaning of section 424(c) of the
Code) of Stock received upon exercise, and (b) to give such security as the
Committee deems adequate to meet the potential liability of the Company for the
withholding requirements and to augment such security from time to time in any
amount reasonably deemed necessary by the Committee to preserve the adequacy of
such security.
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8.5. NONTRANSFERABILITY OF AWARDS.
Unless otherwise permitted by the Committee, no Award (other than an Award
in the form of an outright transfer of cash or Unrestricted Stock) may be
transferred other than by will or by the laws of descent and distribution, and
during a Participant's lifetime an Award requiring exercise may be exercised
only by the Participant (or in the event of the Participant's incapacity, the
person or persons legally appointed to act on the Participant's behalf).
8.6. ADJUSTMENTS IN THE EVENT OF CERTAIN TRANSACTIONS.
(a) In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to common stockholders other than normal cash dividends,
after the effective date of the Plan, the Committee will make any appropriate
adjustments to the maximum number of shares that may be delivered under the Plan
under Section 4 above.
(b) In any event referred to in paragraph (a), the Committee will also
make any appropriate adjustments to the number and kind of shares of stock or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change. The Committee may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Committee that adjustments are
appropriate to avoid distortion in the operation of the Plan.
(c) In the case of ISOs or for purposes of the limits set forth in the
second paragraph of Section 4, the adjustments described in (a) and (b) will be
made only to the extent consistent with continued qualification of the option
under Section 422 of the Code (in the case of an ISO) or Section 162(m) of the
Code (in the case of the limits in Section 4).
8.7. EMPLOYMENT RIGHTS, ETC.
Neither the adoption of the Plan nor the grant of Awards will confer upon
any person any right to continued retention by the Company or any subsidiary as
an Employee or otherwise, or affect in any way the right of the Company or
subsidiary to terminate an employment, service or similar relationship at any
time. Except as specifically provided by the Committee in any particular case,
the loss of existing or potential profit in Awards granted under the Plan will
not constitute an element of damages in the event of termination of an
employment, service or similar relationship even if the termination is in
violation of an obligation of the Company to the Participant.
8.8. DEFERRAL OF PAYMENTS.
The Committee may agree at any time, upon request of the Participant, to
defer the date on which any payment under an Award will be made.
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8.9. PAST SERVICES AS CONSIDERATION.
Where a Participant purchases Stock under an Award for a price equal to the
par value of the Stock the Committee may determine that such price has been
satisfied by past services rendered by the Participant.
9. EFFECT, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant will
affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
Employees.
The Committee may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, or may at any
time terminate the Plan as to any further grants of Awards, provided that
(except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required in order for the
Plan to continue to qualify for the award of ISOs under section 422 of the Code,
for the award of performance-based compensation under Section 162(m) of the Code
or under Rule 16b-3 promulgated under Section 16 of the 1934 Act.
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<PAGE>
EXHIBIT A
For purposes of Section 7.4 of the Plan, the following terms have the
following meanings:
"Base Salary" means Participant's annual base salary, exclusive of any
bonus or other benefits the Participant may receive.
"Cause" means the following, determined by the Committee in its reasonable
judgment:
(i) willful failure to perform, or gross negligence in the
performance of, Participant's duties and responsibilities to
the Company and its subsidiaries; or
(ii) fraud, embezzlement or other material dishonesty with respect
to the Company or any of its subsidiaries; or
(iii) conviction of, or plea of nolo contendere to, a felony or
other crime involving moral turpitude; or
(iv) other conduct by Participant that is materially harmful to the
business, interests or reputation of the Company or any of its
subsidiaries.
"Change of Control" means such time as:
(i) a "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Exchange Act) becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of Voting Stock representing more than 50 % of
the total voting power of the Voting Stock of the Company on a
fully diluted basis,
(ii) individuals who on the May 30, 1996 constitute the Board
(together with any new directors whose election by the Board
or whose nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the members
of the Board then in office who either were members of the
Board on May 30, 1996 or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the members of the Board then in
office and
(iii) the merger or consolidation of the Company with or into
another corporation; or the merger or consolidation of another
corporation with and into the Company, with the effect that,
immediately after such transaction, the Voting Stock of the
entity surviving such
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<PAGE>
merger or consolidation received in such transaction by the
stockholders of the Company immediately prior to such
transaction represents the ultimate beneficial ownership of
less than 50% of Voting Stock of the entity surviving such
merger or consolidation.
"Disability" has the meaning given it in any long-term disability plan of
the Company in which Participant participates. Participant's employment shall be
deemed terminated for Disability when Participant is entitled to receive
long-term disability compensation pursuant to such long-term disability plan.
If the Company does not maintain such a plan, Participant shall be deemed
terminated for Disability if the Company terminates his employment due to
illness, injury, accident or condition of either a physical or psychological
nature as a result of which Participant is unable to perform substantially the
duties and responsibilities of his position for 180 days during a period of 365
consecutive calendar days.
"Good Reason" means the voluntary termination by Participant of his or her
employment after the occurrence, without Participant's express written consent,
of any of the following events:
(i) assignment to Participant of duties materially inconsistent
with his or her positions, duties, responsibilities, or
reporting requirements with the Company (or a subsidiary)
immediately prior to a Change of Control or a material adverse
alteration in Participant's status or the nature of his or her
responsibilities with the Company immediately prior to a
Change in Control; or
(ii) reduction in Participant's rate of Base Salary to less than
100 percent of the rate of Base Salary paid to the Participant
immediately preceding the Change of Control, or reduction in
Participant's total cash compensation opportunities, including
salary, incentives and other benefits, for any fiscal year to
less than 100 percent of the total cash compensation
opportunities made available to the Participant immediately
preceding the Change of Control (for this purpose, such
opportunities shall be deemed reduced if the objective
standards by which Participant's incentive compensation is
measured become materially more stringent or if the amount of
such compensation is materially reduced on a discretionary
basis from the amount that would be payable solely by
reference to the objective standards).
"Qualified Termination" means the termination of Participant's employment
during a Standstill Period (1) by the Company other than for Cause, death or
Disability, and (2) in the case of a Participant who at the time of the Change
of Control holds an office specifically designated by the Committee in its sole
discretion to have such right, by Participant for Good Reason.
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"Standstill Period" is the period commencing on the date of a Change of
Control and continuing until the close of business on the last business day of
the 24th calendar month following such Change of Control.
"Voting Stock" means the capital stock of any class or kind ordinarily
having the power to vote for the election of directors, managers or other voting
members of the governing body of such Person.
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EXHIBIT 43
Restated Stockholders Agreement, dated September 10, 1997, between the Company,
Joseph D. Truscelli and Electronic Data Submission Systems, Inc.
<PAGE>
RESTATED STOCKHOLDERS AGREEMENT
THIS AGREEMENT made and entered into this 10th day of September, 1997, by
and between JOSEPH D. TRUSCELLI ("Truscelli"), NATIONAL WIRELESS HOLDINGS INC.
("National"), a Delaware corporation, (Truscelli and National are hereinafter
sometimes referred to individually as a "Shareholder" or collectively as
"Shareholders") and ELECTRONIC DATA SUBMISSION SYSTEMS, INC., a Delaware
corporation, (hereinafter referred to as the "Company").
RECITALS
The Shareholders are the beneficial owners and holders of record of all of
the issued and outstanding common voting stock of the Company. The individual
ownership of each Shareholder is set forth on Schedule A.
Truscelli has delivered to National an Irrevocable Proxy (the "Proxy")
authorizing National to vote one (1) share of Truscelli's stock in the Company.
The Company and the Shareholders agree that it is desirable to amend
certain sections of the Shareholders Agreement and to restate it in its
entirety.
Electronic Data Submission Systems, Inc., a Colorado corporation ("EDSS
Colorado"), recently merged into the Company (the "Merger").
The Company, EDSS Colorado and the Shareholders are parties to a
Shareholders Agreement, dated as of July 25, 1996, as amended (the "Shareholders
Agreement").
The Company recently granted the numbers of bonus shares set forth on
Schedule B.
The Shareholders and the Company desire to provide for the effective
management of the Company by the Shareholders. The Shareholders in consideration
hereof desire to place certain restrictions on the right of a Shareholder to
sell or otherwise dispose of its shares and to allow their sale by a Shareholder
and purchase by the Company or other Shareholders upon the occurrence of certain
conditions.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
and conditions contained in this Agreement, the parties hereto mutually agree as
follows:
1. STOCK LEGEND. The following legends shall be endorsed upon each
certificate representing the shares prior to its delivery to the Shareholder:
The shares of stock represented by the within certificate are not
registered securities within the provisions of the Securities Act of 1933,
as
<PAGE>
amended (the "Securities Act") and the transferability or resale of such
shares is restricted thereby.
The shares of capital stock which are evidenced by this certificate
may not be sold, transferred or otherwise disposed of by the registered
owner thereof except in accordance with and subject to the terms and
conditions of a Stockholders Agreement dated __________, 1997, by and among
Electronic Data Submission Systems, Inc., a Delaware corporation (the
"Company"), and the shareholders thereof, a copy of which Agreement is on
deposit with the Secretary of the Company.
2. GENERAL RESTRICTION ON TRANSFER. Without the prior approval of the
Company's Board of Directors, each Shareholder shall not sell, transfer or
otherwise dispose of all or any part of his or its shares in the Company except
in accordance with the provisions of this Agreement. Notwithstanding anything
in this Agreement to the contrary, a Shareholder may transfer some or all of his
or its shares in the Company to an "affiliate" (as hereinafter defined) without
the prior consent of the Company so long as the transferee agrees in writing to
be bound by the terms of this Agreement. For purposes of this Agreement,
"affiliate" shall mean as to an individual, any spouse, parent, sibling, or
child of such individual or any corporation, trust, partnership or limited
liability company controlled by such individual, or as to any corporation, any
corporation controlling such corporation, any corporation controlled by such
corporation, or any shareholder individually or group of shareholders
collectively in control of such corporation.
3. OPTIONAL REDEMPTION UPON DEATH OF TRUSCELLI. Upon the death of
Truscelli, Truscelli's estate may offer all, but not less than all, of the
shares owned by Truscelli to the Company for redemption. If Truscelli's estate
so elects, the Company shall, if it is not prohibited by the General Corporation
Law of the State of Delaware (the "GCL"), any successor statute, or any other
applicable corporate law from doing so, have the option to redeem all, but not
less than all, of the shares owned by Truscelli at the time the Company receives
written notice of his death (the "Death Date") at the prices set forth in
Section 6 hereof to be determined as of the Death Date. The Company shall have
the option to pay for such shares either in a lump sum within 90 days following
written notice to the Company of the Death Date or in installments as set forth
in Section 7.
4. COMPANY'S RIGHT OF FIRST REFUSAL. If any Shareholder desires to sell,
transfer or otherwise dispose of all or any part of the shares which he or it
then owns or if a Shareholder is required by law to transfer some or all of his
or its shares due to divorce, dissolution, liquidation, corporate
reorganization, bankruptcy or for any other reason, he or it shall first deliver
written notice thereof to the Company (the "Company Notice"), specifying the
number of shares which he or it desires or is required to dispose of, the name,
address, telephone number, and social security number of the proposed
transferee, the proposed price (if any), terms and all conditions of the
proposed sale, transfer or disposition, and the names of the shareholders or
beneficiaries of any proposed transferee which is a trust, estate, or
corporation (the "Third Party Offer"). Upon the delivery of such written notice
(the "Company Notice Date"), the Company shall, to the extent that it is
permitted to do so by the GCL, any successor statute, or any other applicable
corporate statute have the option (the
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"Company Option"), but shall not be required, to buy all or any part of the
shares owned by the Shareholder which he or it has specified in the Company
Notice are to be transferred at the price and on all of the terms and conditions
set forth in the Third-Party Offer. The Company shall give the selling
Shareholder written notice of its election to exercise the Company Option within
30 days of the Company Notice Date.
5. CONTINGENT OPTION OF REMAINING SHARES. If the Company is prohibited
by the GCL, any successor statute, or any other applicable corporate law from
buying any of the shares offered for sale to it by the Shareholder pursuant to
Sections 3 or 4 or if the Company elects not to buy any of the shares offered
for sale to it by the Shareholder pursuant to Section 4 of this Agreement, then
the other Shareholder will have the option to buy all, but not less than all, of
the shares which the Company is so prohibited from buying or so elects not to
buy, at the same price which the Company would have been required to pay for the
said shares pursuant to Section 3 or 4 of this Agreement. In the foregoing
events, the Company will, not later than 30 days from the Company Notice Date,
notify each of the Shareholders in writing thereof, specifying the number of
said shares which it is so prohibited from buying or has so elected not to buy
and the price which it would have been required to pay for the said shares
pursuant to Section 3 or 4 of this Agreement. The other Shareholder shall have
the option to purchase the shares within 30 days following the date on which the
Company delivers said written notice to the other Shareholder (the "Shareholder
Notice Date").
To the extent that neither the Company nor the other Shareholder elect to
exercise the aforesaid options, the offering Shareholder shall be entitled, for
an ensuing period of 30 days from and after the expiration of the option periods
provided hereinabove, to sell, transfer, or otherwise dispose of the shares
owned by the Shareholder so long as the transferee executes this Agreement and
agrees to be bound by all terms hereof; provided, however, that any such sale,
transfer, or disposition pursuant to the provisions of paragraph 4 hereof shall
be only upon the price, terms, conditions, and to the offeree stated in the
Third-Party Offer. If no such sale or other transfer is consummated within said
30-day period, the restrictions and options herein provided shall be restored
and shall continue in full force and effect. So long as these restrictions and
options remain in effect, the offering Shareholder and any transferee shall not
thereafter sell or otherwise transfer any shares in the Company without first
giving the Company and the other Shareholder, where required hereby, notice as
herein provided and otherwise complying with the foregoing provisions.
6. VALUATION OF SHARES. The price to be paid for any shares of stock of
the Company to be redeemed, sold and/or purchased pursuant to Section 3 of this
Agreement shall be determined as follows:
(a) During the balance of the calendar year 1997, the price shall be
$640.00 per share.
(b) On or before January 1, 1998, and on or before January 1 of each
subsequent year, Shareholders owning not less than eighty percent (80%) of the
Company's stock and the Company shall stipulate the agreed value of the shares
of stock to be effective during such calendar year. Such stipulation shall be
made, from time to time, by filing the
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following statement, signed by Shareholders owning not less than eighty percent
(80%) of the outstanding shares of the Company's stock, with the Secretary of
the Company;
"The value of each share of the common capital stock of Electronic
Data Submission Systems, Inc., for the year ________, for the purposes of
the Stockholders Agreement between the undersigned dated ___________, 1997,
shall be $_________ per share."
Appropriate adjustments in the stipulated value shall be made for any stock
dividends, stock splits, recapitalization or issuance by the Company of
additional outstanding shares occurring after the fixing of the last stipulated
value.
(c) In the event the parties fail to enter into the stipulation provided
in (b) above with respect to any year, the last previous stipulated value shall
be used except as hereinafter provided. If no stipulated value is entered into
for any year preceding the death of a Shareholder, the valuation of the shares
shall be fixed by a board of three (3) arbitrators selected as follows: The
surviving Shareholders (by vote weighted in proportion to their stock ownership)
and the representative of the estate of the deceased Shareholder shall each
select one third-party arbitrator, and the two so selected shall select one
third-party arbitrator, and the decision of a majority of the three arbitrators
with respect to the value of the shares shall be final and binding upon the
parties. The cost of arbitration shall be split equally between the surviving
Shareholders and the state of the deceased Shareholder. In determining the
value of the shares of stock, the arbitrators shall disregard: (i) discounts for
block sales, minority interest and lack of marketability, and (ii) the excess of
any insurance proceeds or claim arising out of insurance owned by the Company on
the life of the deceased Shareholder, over and above the cash surrender value
thereof at the date of death. The arbitrators shall first value the Company as
a whole on a going-concern basis and then determine the value of the shares then
outstanding, assuming that all stock options, stock warrants and convertible
stock or securities are exercised or converted, as the case may be, immediately
before calculation of the number of shares outstanding.
7. INSTALLMENT PAYMENTS. The Company or the acquiring Shareholder, as
the case may be, may elect to pay the purchase price for any shares acquired
hereunder in installments as follows:
(a) At least twenty percent (20%) of the purchase price, or, only in the
alternative in the event the shares are purchased pursuant to Section 3 above
and the Company receives proceeds of a key man life insurance policy that exceed
twenty percent (20%) of the purchase price, shall be paid in cash within ninety
(90) days after the relevant notice date;
(b) The balance of the purchase price shall be paid by delivery of the
Company's or the acquiring Shareholder's, as the case may be, promissory note in
an amount equal to said balance of the purchase price (the "Note"). The Note
shall bear interest commencing ninety (90) days after the relevant notice date
at a rate equal to the lowest rate then allowed to be charged under the Internal
Revenue Code without subjecting the recipient to imputed interest, but in no
event less than seven percent (7%) per annum. The term of
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the Note shall be for a period not greater than four (4) years from the date of
the Note. Principal and interest shall be amortized over the term of the Note
and payable in equal installments not less frequently than quarterly. The Note
shall contain customary provisions relating to default including but not limited
to reasonable attorneys' fees and acceleration. The maker of the Note shall
have the right to prepay all or part of the principal at any time without
penalty.
8. CONDITIONS PRECEDENT TO OBLIGATIONS. The Company's and the
Shareholders' rights and obligations under this Agreement are subject to the
following additional provisions:
(a) If any party to this Agreement elects to pay in installments for the
shares being purchased by it pursuant hereto, he, she or it shall have the right
at any time to prepay without penalty all or any portion of the unpaid principal
balance of installments plus interest accrued to the date of such payment.
(b) Properly endorsed certificates for the shares being sold by the
Shareholder or his estate, as the case may be, to the Company or the other
Shareholders pursuant to this Agreement, shall be delivered to the party buying
them by the seller not later than the date of the lump sum payment of the
purchase price therefor. If the party buying the shares elects to pay for them
in installments, the shares shall be placed in escrow with a mutually agreed
upon bank or person (the "Escrow Agent") prior to the date of payment of the
first installment of the purchase price therefor. The Escrow Agent shall hold
the shares as collateral for the installment payment obligations of the party
buying the shares and shall release the shares to the buying party upon payment
in full or to the selling party in the event of a default which is not cured
within thirty (30) days following notice of default. Upon placement of the
shares in escrow, the Shareholder or his estate, as the case may be, shall cease
to be a Shareholder of the Company with respect to such shares and the shares
shall not be voted while in escrow.
9. VOTING AGREEMENT.
9.1 IRREVOCABLE PROXY. The Proxy has been cancelled, and National
shall return the Proxy to Truscelli.
9.2 ELECTION OF DIRECTORS.
a) If the Company's board of directors has three (3) members,
National shall nominate two (2) members and Truscelli shall nominate (1)
member.
b) If the Company's board of directors has five (5) members,
National shall nominate three (3) members and Truscelli shall nominate two
(2) members.
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<PAGE>
c) National and Truscelli shall each vote a sufficient number
of shares in favor of the other party's nominee(s) to assure that such
nominee(s) will be elected to the Company's board of directors.
10. CO-SALE RIGHTS.
10.1 CO-SALE RIGHTS. Except for any Permitted Transfer, no
Shareholder shall sell for value any shares representing more than 10% of the
then outstanding shares the Company without permitting the other Shareholders to
participate as a seller in such transaction (the "Co-Sale Rights") such that the
other Shareholders shall be entitled to sell on the same terms as the selling
Shareholder, in connection with such transaction, the number of shares equal to
(i) the total number of shares of Common Stock which the purchaser is willing to
acquire in such transaction, multiplied by (ii) a fraction, the numerator of
which is the number of shares owned by the other Shareholders and the
denominator of which is the total number of the Company's outstanding shares at
the time of such transaction.
10.2 PROCEDURE. Before accomplishing or entering into a binding
contract for any sale for value of any shares that would be covered by the
Co-Sale Rights, each Shareholder agrees to give the other Shareholders prompt
written notice (the "Co-Sale Notice") of any such proposed sale (the "Sale
Proposal"), stating the terms and conditions of the Sale Proposal, including
without limitation the name and address of the buyer, the number of shares which
will be sold in the transaction, the form and amount of consideration and the
payment terms. The other Shareholders shall notify the selling Shareholder in
writing within twenty (20) business days after receipt of the Co-Sale Notice
(the "Co-Sale Election Period") as to whether or not the other Shareholder
wishes to exercise his Co-Sale Rights and participate in the Sale Proposal.
Failure by the other Shareholders to respond in writing within the Co-Sale
Election Period shall be deemed to be a waiver by the other Shareholder of his
Co-Sale Rights with respect to only such Sale Proposal. Upon a waiver by the
other Shareholder of his Co-Sale Rights for any Sale Proposal, the selling
Shareholder may sell his or its Shares in accordance with the Sale Proposal
provided that (a) such sale is consummated within 60 days after the expiration
of the Co-Sale Election Period, (b) the transaction involves more than 10% of
the Company's outstanding shares and (c) the terms of the actual transaction are
in all material respects as set forth in the Co-Sale Notice. For purposes of
this Section, transactions involving (a) a single buyer or coordinated group of
buyers and multiple Shareholders as seller or (b) multiple sales by a single
Shareholder within a twelve-month period, shall be grouped together for purposes
of determining whether the number of shares exceeds 10% of the Company's
outstanding shares.
11. TAKE ALONG RIGHTS. The provisions of this Section 11 are not intended
to limit or restrict the rights of the Shareholders in their capacity as holders
of the capital stock of the Company, except that the Shareholders shall not be
entitled to exercise dissenters' rights under the GCL or any succeeding
provisions providing for dissenters' rights with respect to an Acquisition
Transaction effected pursuant to the Take Along Rights under this Section 11.
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<PAGE>
11.1 RIGHT TO INITIATE SALE. Shareholders owning not less than
two-thirds (2/3) of the Company's shares (the "Initiating Shareholder") shall
have the right to sell the Company to an unaffiliated third party under this
Section 11 (the "Take-Along Rights"), whether such sale (a "Sale Transaction")
is in the form of (a) a sale of all or substantially all of the assets of the
Company, (b) a sale of all of the outstanding stock of the Company, (c) a
merger, consolidation or reorganization, or (d) any other transaction which
effectively transfers all or substantially all of the operating assets and
business of the Company. If (a) one or more Shareholders exercise their
Take-Along Rights, and (b) a Sale Transaction is consummated, then each
Shareholder shall be entitled to a pro rata share of the Aggregate Acquisition
Consideration based on the number of Shares owned by such Shareholder.
11.2 NOTICE OF INITIATION OF ACTION TO SELL. The Initiating
Shareholders agree that, no more than thirty (30) days after the initiation by
the Initiating Shareholders in his, its or their individual capacity of any
action to sell the Company in a Sale Transaction pursuant to this Section 11
(which actions shall include, but not be limited to, solicitations by such
Shareholder of offers to acquire the Company or the engagement of an investment
banking firm by the Company for any purpose relating to the sale of the
Company), such Initiating Shareholders shall notify the other Shareholders and
the Company in writing of the proposed initiation of such action.
11.3 NOTICE OF ACQUISITION OFFER. If an Acquisition Offer shall be
made as a result of the efforts by the Initiating Shareholders which Initiating
Shareholders desire to have the Company accept, the Initiating Shareholders
shall give the Acquisition Notice to the Other Shareholders stating that the
Initiating Shareholders propose that the Acquisition Offer be accepted, which
notice shall set forth the name and address of the Acquisition Offeror and the
Aggregate Sale Consideration and shall be accompanied by a signed copy of the
Acquisition Offer and any other documents provided by the Acquisition Offer or
to the Initiating Shareholders in connection therewith. The Initiating
Shareholders shall not receive any consideration in connection with the
consummation pursuant to this Agreement of a Sale Transaction other than his or
its pro rata share of the Aggregate Sale Consideration based on the number of
Shares owned by the Initiating Shareholders.
11.4 ACQUISITION OFFER. The Acquisition Offer shall:
(a) be in writing, signed by the Acquisition Offeror and
addressed to the Company; and
(b) propose to pay the entire Aggregate Sale Consideration
allocated among the holders of the shares of the Common Stock in a manner
such that the fair market value of the consideration paid for each share of
Common Stock outstanding immediately prior to such closing (the "Per Share
Acquisition Consideration") shall be the same for all shareholders of the
Company.
11.5 CONSUMMATION OF SALE TRANSACTION. The Shareholders and any
transferee of Shares shall use their best efforts to consummate the Sale
Transaction all as the Initiating Shareholder may reasonably request.
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<PAGE>
12. ADDITIONAL RIGHTS AND AGREEMENTS.
12.1 PRE-EMPTIVE RIGHTS. Each Shareholder shall have a right of
first refusal to purchase a pro rata portion (as provided below) of any shares
of capital stock of the Company or any other instrument which is exercisable or
convertible into shares of the Company's capital stock which the Company
proposes to sell (a "Proposed Sale"). The notice shall set forth the material
terms and conditions of the Proposed Sale and shall constitute an offer to sell
such securities to the respective Shareholders on such terms and conditions.
Each Shareholder may accept such offer by delivering a written notice of
acceptance to the Company within ten (10) days after receipt of the Company's
notice of the Proposed Sale. The pro rata portion of securities to be sold in
the Proposed Sale that the respective Shareholders may acquire by exercise of
his or its rights hereunder is the ratio that the number of shares of Common
Stock owned by such Shareholder bears to the total number of shares of the
Common Stock issued and outstanding before the Proposed Sale. If any
Shareholder elects to exercise such right of first refusal and does not complete
the purchase of such securities within fifteen (15) days after delivery of its
written notice of acceptance to the Company, or such later date as may be
specified by the Company, the Company may complete the Proposed Sale on the
terms and conditions specified in the Company's notice to the Shareholders. The
rights granted to the Shareholders pursuant to this Section 12 do not apply to
(a) any Public Offering, and (b) any Proposed Sale (including the grant of stock
options) of shares of Common Stock to employees (excluding Truscelli) of the
Company approved by the Company's Board of Directors pursuant to any equity
incentive plan adopted by the company and approved by the shareholders, provided
that the aggregate number of shares to be issued to such employees, inclusive of
all shares previously issued to such employees, does not exceed 10% of the
Company's then outstanding shares.
13. RESTRICTION ON ENCUMBRANCES. Each Shareholder agrees not to pledge or
hypothecate any shares owned by him, except as collateral to a note (i) in favor
of the Company or (ii) in favor of a lending institution, if the proceeds of
such loan are used in their entirety to purchase additional shares of common
stock of the Company, providing that the borrowing Shareholder delivers to the
Company a written undertaking of the lender, in form acceptable to the Company,
that such lender will only dispose of said shares in accordance with the
provisions of this Agreement.
14. APPLICATION TO NEWLY AUTHORIZED SHARES. If the Company amends its
articles of incorporation to authorize it to issue shares of any other class of
capital stock, this Agreement shall be deemed to apply to any shares of such
other class of capital stock as though they were and to the same extent it
applies to shares of its class of common stock.
15. AMENDMENT. This Agreement may be amended, restated or revoked only by
the written agreement of all of the parties to this Agreement.
16. BINDING EFFECT. This Agreement shall be binding upon and (unless
inconsistent with its provisions) shall inure to the benefit of the executor,
administrator or personal representative and the heirs and assigns of each of
the Shareholders.
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<PAGE>
17. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the state of Delaware applicable to contracts made
in and to be performed in that State.
18. COUNTERPART. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Agreement.
19. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof and the
agreement shall be construed in all other respects as if such invalid or
unenforceable provision were omitted.
20. PRIOR AGREEMENTS. This Agreement cancels, terminates and supersedes
all prior agreements of the parties or any of them respecting any and all
subject matter contained herein, including without limitation the Shareholders
Agreement.
21. VOTING RIGHTS OF JOINTLY-HELD SHARES. If two or more persons hold
shares in the Company in joint ownership, the joint owners shall designate one
person to vote the shares and the other joint owner(s) shall have no voting
rights for so long as such designation is in effect.
22. TERMINATION. This Agreement shall terminate in its entirety upon the
earliest of (i) the effective date of a registration statement of the Company
under the Securities Act of 1933 covering the Company's initial public offering
of Common Stock resulting in gross proceeds of at least $5,000,000, or (ii) the
sale of all or substantially all of the assets or business of the Company, by
sale of assets, merger, consolidation or otherwise.
23. COUNSEL. Each of the parties recognizes that Hahn & Hessen LLP acts
as counsel for National and the Company and waives any conflict that may arise
resulting therefrom.
24. NOTICE. Any written notice required to be delivered pursuant to this
Agreement shall be sent by prepaid first class certified mail, return receipt
requested, and such notice shall be considered to be delivered on the date such
fax is received (as evidenced by an answer back) or two days after such notice
is deposited in the United States mail. Any such notice, if sent to the
Company, shall be addressed to the Company at its principal place of business,
and if sent to any of the Shareholders it shall be addressed to him at his
address or fax number as shown on the signature page hereof, and in the case of
the Company or National with a copy to Hahn & Hessen LLP, 350 Fifth Avenue, New
York, New York 10118, Fax No.: 212-594-7167, Attention: James Kardon; in each
case unless a different address or fax number has been designated by notice to
the other parties.
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IN WITNESS WHEREOF, the Shareholders have hereunto set their hands and
seals and the Company has caused these presents to be executed and signed by its
duly authorized officers and its corporate seal to be affixed hereto this day
and year first above written.
ELECTRONIC DATA SUBMISSION
SYSTEMS, INC.
A Delaware Corporation
By:___________________________________
Joseph D. Truscelli, President
Address: _____________________
_____________________
Fax. No.:_____________________
SHAREHOLDERS:
______________________________________
Joseph D. Truscelli
Address:__________________
__________________
Fax No.: __________________
NATIONAL WIRELESS HOLDINGS INC.
A Delaware Corporation
By:___________________________________
Terrence S. Cassidy, President
Address:______________________
______________________
Fax No.:______________________
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SCHEDULE A
NAME NUMBER OF SHARES
OF COMMON STOCK ISSUED
Joseph D. Truscelli 4,466
National Wireless Holdings Inc. 6,403
Richard Staufer 293*
Gary Alcorn 293*
Hugh Sullivan 177*
_______
Total 11,632
-------
-------
_______________________
* Subject to certain restrictions set forth in Restricted Stock Award
Agreements.
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EXHIBIT B
NAME OF EMPLOYEE NUMBER OF SHARES
Hugh Sullivan 177
19601 E. Country Club Drive #101
Aventura, FL 33180
Gary Alcorn 293
5590 Flintridge Drive
Colorado Springs, CO 80918
Richard Staufer 293
26861 Chipmunk Drive
Evergreen, CO 80439 ___
763
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