<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
VISTA 2000
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
VISTA 2000, INC.
221 W. First Street, Kewanee, Illinois 61443
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished to stockholders of Vista 2000,
Inc., a Delaware corporation (hereinafter referred to as "Vista" or the
"Company"), in connection with the solicitation by the Board of Directors of
Vista (hereinafter referred to as the "Board of Directors" or the "Board") of
proxies for use at the Annual Meeting of Stockholders (the "Meeting")
scheduled to be held on Tuesday, September 22, 1998 at 10:00 A.M. local time
at the offices of the Company located at 221 W. First Street, Kewanee,
Illinois and at any and all adjournments or postponements thereof. This Proxy
Statement and the accompanying form of proxy are being mailed first to
stockholders on or about August 17, 1998.
The proxy, when properly executed and received by the Secretary of
the Company prior to the Meeting, will be voted as therein specified unless
revoked by filing with the Secretary prior to the Meeting a written
revocation or a duly executed proxy bearing a later date. Unless authority to
vote for one or more of the director nominees is specifically withheld
according to the instructions, a signed proxy will be voted FOR the election
of the six director nominees named herein and, unless otherwise indicated,
FOR each of the other five proposals described in this proxy statement and in
the accompanying notice of meeting.
VOTING RIGHTS AND VOTES REQUIRED
The close of business on August 14, 1998 has been fixed as the
record date for the determination of stockholders entitled to receive notice
of and to vote at the Meeting. As of April 28, 1998, Vista had outstanding
and entitled to vote approximately 47,466,432 shares of Common Stock, $0.01
par value per share ("Common Stock").
A majority of the outstanding shares of Common Stock must be
represented in person or by proxy at the Meeting in order to constitute a
quorum for the transaction of business. The record holder of each share of
Common Stock entitled to vote at the Meeting will have one vote for each
share so held. Abstentions will be treated as Common Stock present and
entitled to vote for purposes of determining the presence of a quorum. If a
broker indicates on a proxy that it does not have the discretionary authority
as to certain Common Stock (a "broker nonvote"), those shares will not be
considered present and entitled to vote with respect to that matter.
When no instructions have been given on a proxy card with respect to
a matter, the shares will be voted in the manner specified on the card.
The affirmative vote of the holders of a majority of the shares of
Common Stock represented at the Meeting in person or by proxy and entitled to
vote at the Meeting will be required to approve the election of six directors
of the Company, the proposal for a 25:1 reverse stock split, with the number
of authorized shares of common stock after the reverse stock split at
50,000,000 shares; the proposal to adopt the Company's 1998 Incentive Stock
Option Plan and to reserve 210,000 shares for issuance thereunder (after
consideration of the 25:1 reverse stock split); the proposal to adopt the
Company's 1998 Non-Employee Director Stock Option Plan and to reserve 90,000
shares for issuance thereunder (after consideration of the 25:1 reverse stock
split); and the appointment of Grant Thornton LLP as the Company's
independent auditors for the fiscal year ending December 26, 1998. In
determining whether a proposal has received the requisite number of
affirmative votes, broker nonvotes will be disregarded
<PAGE>
and have no effect on the outcome of the vote. Abstentions will be included
in the vote totals and, as such, will have the same effect as a negative vote.
VOTING OF PROXIES
Shares represented by all properly executed proxies will be voted at
the Meeting in accordance with the instructions specified thereon. If no
instructions are specified, the shares represented by any properly executed
proxy will be voted FOR the election of the six directors of the Company, FOR
the proposal for a 25:1 reverse stock split, with 50,000,000 shares
authorized, and FOR the selection of Grant Thornton LLP as the Company's
independent auditors for the year-ending December 26, 1998.
The Board of Directors is not aware of any matter that will come
before the Meeting other than as described above. However, if any such other
matter is duly presented, in the absence of instructions to the contrary,
such proxies will be voted in accordance with the judgment of the proxy
holders with respect to such matter properly coming before the Meeting.
REVOCATION OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by a
stockholder at any time before it is exercised. Any proxy may be revoked by a
writing, by a valid proxy bearing a later date delivered to the Company or by
attending the Meeting and voting in person.
SOLICITATION OF PROXIES
The expenses of this solicitation will be paid by Vista. To the
extent necessary to ensure sufficient representation at the Meeting, proxies
may be solicited by any appropriate means by officers, directors and regular
employees of Vista, who will receive no additional compensation therefor.
Vista will pay persons holding stock in their names or in the names of their
nominees, but not owning such stock beneficially (such as brokerage houses,
banks and other fiduciaries), for the expense of forwarding soliciting
material to their principals.
PROPOSAL NO. 1
--------------
ELECTION OF DIRECTORS
A Board of Directors consisting of six directors is to be elected by
the stockholders at the Meeting, each to hold office until the next Annual
Meeting of Stockholders or until a successor is duly elected and qualified.
The Board of Directors recommends the election of the six nominees
named below, all of whom are currently directors of the Company. Unless
authority to vote for one or more of the nominees is specifically withheld
according to the instructions, proxies in the enclosed form will be voted FOR
the election of each of the six nominees named below. The Board of Directors
does not contemplate that any of the nominees will not be able to serve as a
director, but if that contingency should occur prior to the voting of the
proxies, the persons named in the enclosed proxy reserve the right to vote
for such substitute nominee or nominees as they, in their discretion, shall
determine.
G. LOUIS GRAZIADIO, III Age 48 - Chief Executive Officer and Chairman of
the Board since June 1996. He is also the Chairman and CEO of Ginarra
Holdings, Inc., a holding company with investments through various
corporations, and a director of Imperial Credit Industries, Inc., Imperial
Bancorp,
-3-
<PAGE>
Imperial Trust, Imperial Financial Group, Lynx Golf, Inc. and
Franchise Mortgage Acceptance Company.
PERRY A. LERNER Age 55 - Director since June 1996. Mr. Lerner is a
Managing Director of Crown Capital Group, Inc., a New York-based
investment company. A graduate of Harvard Law School and Claremont
McKenna College, Mr. Lerner was a partner of the law firm O'Melveny &
Meyers from 1984-1996 and is a member of the State Bar of New York, State
Bar of California and American Bar Association. Mr. Lerner also serves
on the Board of Directors of Imperial Credit Industries, Inc., Imperial
Financial Group and Franchise Mortgage Acceptance Company.
LEE E. MIKLES Age 42 - Director since June 1996. Mr. Mikles is Chairman
of Mikles/Miller Management, Inc. Prior to the formation of that company,
he headed Mikles/Miller Group, an affiliate of Shearson Lehman Brothers
after serving as First Vice President of the Corporate Finance Department
at Bateman Eichler, Hill Richards Inc. and as First Vice President with
Drexel Burnham Lambert, Inc. from 1981 through 1989. Mr. Mikles also
serves on the Board of Directors of Imperial Bancorp, Imperial Bank,
Imperial Ventures, Coastcast Corporation and Imperial Financial Group.
PAUL A. NOVELLY Age 54 - Director since June 1996. Mr. Novelly
controls Apex Oil Company in St. Louis, MO with a refinery in Long Beach,
CA; International Dunraine, Ltd., a publicly-held company; and AIC,
Limited, which, headquartered in Bermuda, trades petroleum products
internationally through its office in Monaco. Mr. Novelly is a substantial
shareholder and director of Intrawest Corp. He also serves on the Board of
Directors of Apex Oil Company, Inc. International Dunraine, Ltd.,
Coastcast Corporation, Imperial Bancorp, Imperial Bank and Imperial
Financial Group.
RICHARD D. SQUIRES Age 40 - Director since June 1996. Mr. Squires
serves as President of RS Holdings, Inc., a Dallas, Texas based real
estate and high-yield investment company, and as President of R3 Realty
Corporation, formerly Pace Membership Warehouse, Inc., a former
subsidiary of K-Mart Corporation. Mr. Squires has previously served as
Chief Financial Officer of Ft. Worth Holdings, Inc. and Vice President
of Finance at American Hotels Corporation and Second Vice President of
Finance at Punta Gorda Isles, Inc. Mr. Squires has a B.S. in Accounting
from Pennsylvania State University, and a Masters of Business
Administration from Harvard University. Mr. Squires also serves on the Board
of Directors of Crown American Bank.
SHYAM H. GIDUMAL Age 39 - President and Director since November,
1997. Mr. Gidumal has served as President of Strategic Turnarounds &
Investment Corp. and Affiliates, a New York based turn-around management
firm, from 1992 to 1998, and Managing Director of Crown Capital Group, a New
York based investment firm from 1997 to 1998. From 1989 through 1992, Mr.
Gidumal was a partner in the Boston Consulting Group. Mr. Gidumal is a
graduate of Columbia University and Harvard Business School.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF EACH OF THE NOMINEES NAMED ABOVE
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<PAGE>
The following table sets forth certain information with respect to
the current Directors and Executive Officers of the Company:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
NAME AGE POSITION
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
G. Louis Graziadio, III 48 Chief Executive Officer and Chairman of the Board
- ----------------------------------------------------------------------------------------------
Perry A. Lerner 55 Director
- ----------------------------------------------------------------------------------------------
Lee E. Mikles 42 Director
- ----------------------------------------------------------------------------------------------
Paul A. Novelly 54 Director
- ----------------------------------------------------------------------------------------------
Richard D. Squires 40 Director
- ----------------------------------------------------------------------------------------------
Shyam H. Gidumal 39 President and Director
- ----------------------------------------------------------------------------------------------
</TABLE>
RELATIONSHIP AMONG DIRECTORS OR EXECUTIVE OFFICERS
Mr. Graziadio and Mr. Mikles are first cousins; otherwise, there
are no family relationships existing between the officers and directors of
the Company.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
During the fiscal year ended December 27, 1997, ("Fiscal 1997"), the
Board held 8 formal meetings, numerous informal meetings, and acted by
unanimous written consent on 2 occasion(s).
The Company has standing Audit and Compensation Committees of the
Board. Although the Company has no standing Nominating Committee, the Board
of Directors will consider director nominees recommended by stockholders.
Such recommendations should be sent to the Company, to the attention of the
Secretary.
The members of the Audit Committee are Messrs. Mikles and Squires.
The Committee reviews with Grant Thornton LLP, the Company's independent
auditors, the Company's financial statements and internal accounting
procedures, Grant Thornton LLP's auditing procedures and fees, and the
possible effects of professional services upon the independence of Grant
Thornton LLP. The Audit Committee held one meeting during Fiscal 1997, and
met informally as necessary from time to time.
The members of the Compensation Committee are Messrs. Lerner and
Novelly. The Committee makes recommendations to the Board with respect to
compensation and benefits paid to the Company's senior management. The
Compensation Committee also makes determinations under the Company's various
plans providing incentive compensation for management. See "EXECUTIVE
COMPENSATION." The Compensation Committee held one formal meeting during
Fiscal 1997, and met informally as necessary from time to time.
COMPENSATION OF DIRECTORS
The Company pays its non-employee directors $5,000 per quarter in
addition to $15,000 annually for their services as directors. The 1997
compensation for each of the directors, except for Mr. Gidumal, totaled
$35,000. Mr. Gidumal's partial year compensation totaled $8,750. The total
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<PAGE>
compensation for all directors during 1997 was $184,000. In addition, the
Company made certain discretionary payments for services performed in
connection with the Company's reorganization. During Fiscal 1997, such
service fees paid were $75,000 for all of the directors combined. The Company
also reimburses all of its directors for reasonable expenses incurred in
connection with attending Board and Board committee meetings. Except as
described under "Directors' Stock Options" below, the Company had no other
compensation arrangements with directors during Fiscal 1997.
DIRECTORS' STOCK OPTIONS
Pursuant to the Company's Stock Option Plan for Outside Directors
and Consultants, during Fiscal 1997, the Company granted to each of Messrs.
Graziadio and Gidumal an option expiring on December 31, 2006 to purchase
2,400,000 shares of common stock at $.03 per share. Messrs. Lerner, Mikles,
Novelly and Squires were each granted options expiring on December 31, 2006
to purchase 525,000 shares of Common Stock at an exercise price of $.03 per
share. (Messrs. Graziadio, Gidumal, Lerner, Mikles, Novelly and Squires are
collectively referred to as the "Optionees"). Fifty (50%) percent of the
options were exercisable on December 31, 1996, the date of the grant, with
the remaining options exercisable one year later. None of such options are
transferable except by will or intestacy, and during the Optionee's lifetime,
may be exercised only by the Optionee. Unexercised options lapse 90 days
after the Optionee ceases to be a director of the Company, except if
terminated by reason of death, the option lapses six months thereafter.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation
paid by the Company for services rendered during the fiscal year ended
December 27, 1997 to its Chief Executive Officer and each executive officer
of the Company other than the Chief Executive Officer who received
compensation in excess of $100,000 during the year ended December 27, 1997
(the "Named Executive Officers").
-6-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Name and Principal Year Annual Other Long-Term Compensation All
Position Compensation Annual Other
Compensation Compensation
($) ($)
- --------------------------------------------------------------------------------------------------------------------------
Salary Bonus Stock Options Payouts
($) ($) Awards SARs
(#)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
G. Louis Graziadio, III(1) 1997 -0- -0- -0- -0- 2,400,000 -0- 465,000
CEO and Chairman of 1996 -0- -0- -0- -0- -- 158,000
Board
- --------------------------------------------------------------------------------------------------------------------------
Shyam H. Gidumal, (2) 1997 -0- -0- -0- -0- 2,400,000 -0- 1,035,000
President and Director
- --------------------------------------------------------------------------------------------------------------------------
Ken Fristad 1997 95,865 48,000 -0-
President of ACPI
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) On June 6, 1996, Mr. Graziadio was elected Chief Executive Officer
by the Board of Directors. Compensation for his services is as
periodically determined by the Board's Compensation Committee, based
on the type and extent of services Mr. Graziadio provided.
(2) Compensation paid to Mr. Gidumal was paid to companies in which Mr.
Gidumal was a principal for activities prior to Mr. Gidumal being
elected as an officer and director of the Company.
OPTION/SAR GRANTS IN FISCAL 1996
STOCK OPTIONS
Shown below is further information on grants of stock options during
Fiscal 1997 to the Named Executives under the Company's 1995 Incentive Stock
Option Plan, as amended and the 1993 Nonemployee Director Stock Option Plan,
as amended. No stock appreciate rights ("SARs") were granted in 1997.
There were 4,800,000 options granted to the Executive Officers of
the Company and its subsidiaries during the fiscal year ending December 27,
1996. The Company has no SARs outstanding.
The following sets forth the value of options exercised during the
year and unexercised options held by the named executive officers on December
27, 1997:
AGGREGATED OPTIONS/SAR EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
-7-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Name Shares (1) (2) Number of (1)
Acquired on Value Securities Underlying Value of Unexercised
Exercise (#) Realized ($) Unexercised In-the-Money Options/SARs
Options/SARs at Fiscal at Fiscal Year-End($)
Year End(3)
------------------------ ----------------------------
Exercisable/ Exercisable/
Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
G. Louis Graziadio III 1,200,000 39,000 0 / 1,200,000 0 / 39,000
- --------------------------------------------------------------------------------------------------------------------
Shyam H. Gidumal 1,200,000 39,000 0 / 1,200,000 0 / 39,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes a market price of $.0625 per share based on unofficial
trading history less the option exercise price of $.03 per share.
(2) All figures in this column reflect options to purchase shares of
Common Stock.
(3) All unexercised options were exercised by Messrs. Graziadio and
Gidumal subsequent to the end of the Company's fiscal year.
EMPLOYMENT AGREEMENTS
The Company does not have an employment agreement with any executive
officer of the Company.
REPORT OF COMPENSATION COMMITTEE WITH RESPECT TO EXECUTIVE COMPENSATION
The following report of the Compensation Committee required by the
rule of the SEC to be included in the Proxy Statement shall not be deemed
incorporated by reference by any statement incorporating this Proxy Statement
by reference into any filing under the Securities Act of 1933, as amended
(the "Securities Act") or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under either such Act.
EXECUTIVE COMPENSATION PHILOSOPHY:
The Company has not formally adopted an executive compensation
philosophy. Due to the changing character of the Company, as it goes through
this period of reorganization and transition, the Board has maintained the
executive decision-making functions using the services of Mr. Graziadio and a
select group of outside consultants. Once the Company has completed its
reorganization and developed a business strategy, the executive compensation
philosophy will be formalized.
EICP:
The Company does not have an Executive Incentive Compensation Plan.
Recommendations for executive compensation are made by the Board's
Compensation Committee and approved by the Board
-8-
<PAGE>
on an as-needed basis. The Company retained Johnson & Associates to give
advice on the type and amount of compensation to be paid to executive
officers, directors and consultants.
EXECUTIVE OFFICER COMPENSATION:
The Company's Fiscal 1997 and current total compensation programs
for executive officers consists of both cash and stock-based compensation.
The annual cash compensation and any incentive bonuses are decided by vote of
the Board on a discretionary basis. Executive compensation in the form of
stock options is included under the Company's 1993 Incentive Stock Option
Plan, as amended. Under this Plan, the number of Options granted and vesting
periods are decided at the discretion of the Board of Directors.
CHIEF EXECUTIVE OFFICER COMPENSATION:
Compensation paid to Mr. Graziadio as Chief Executive Officer during
Fiscal 1997 totaled $465,000. This compensation, as recommended and approved
the Board, was to compensate Mr. Graziadio for services rendered, primarily
in the sale the of assets of the Company's subsidiary, American Consumer
Products, Inc. and the refinancing of the Company's revolving line of credit.
The Company's Compensation Committee consists of Perry A. Lerner and
Paul A. Novelly.
STOCK PRICE PERFORMANCE GRAPH
The following graph sets forth a comparison of the cumulative total
return to stockholders on the Common Stock during the three year and three
months period ended December 27, 1997, based on the market price thereof and
taking into account all stock splits in the form of stock dividends paid
through Fiscal 1997, with the cumulative total return of companies on the
NASDAQ Stock Index and NASDAQ companies comprising SIC 3420-3429.
-9-
<PAGE>
<TABLE>
NASDAQ Stocks (SIC 3420-3429 US Companies)
"VISTA 2000, INC." Nasdaq Stock Market (US Companies) Cutlery, Hantools, and General Hardware
<S> <C> <C> <C>
6/24/94 $0.00 $91.32 $81.75
7/26/94 $0.00 $94.01 $80.40
8/26/94 $0.00 $100.59 $85.96
9/26/94 $0.00 $99.59 $95.52
10/25/94 $100.00 $100.00 $100.00
10/26/94 $100.00 $100.71 $97.92
11/25/94 $100.00 $98.27 $96.60
12/23/94 $79.44 $98.22 $93.05
1/26/95 $51.61 $100.38 $86.04
2/24/95 $54.84 $105.03 $87.75
3/24/95 $64.52 $108.73 $84.24
4/26/95 $53.23 $110.95 $85.92
5/26/95 $77.42 $115.83 $87.11
6/26/95 $138.71 $123.29 $84.48
7/26/95 $180.65 $132.91 $78.88
8/25/95 $170.97 $135.90 $81.15
9/26/95 $161.29 $138.33 $78.03
10/26/95 $159.68 $135.80 $70.69
11/24/95 $211.29 $137.56 $75.30
12/26/95 $248.39 $140.44 $68.95
1/26/96 $277.42 $139.01 $66.82
2/26/96 $290.32 $148.66 $68.11
3/26/96 $332.26 $145.42 $72.12
4/26/96 $88.71 $159.03 $75.30
5/24/96 $43.55 $167.51 $84.06
6/26/96 $37.90 $154.97 $76.56
7/26/96 $37.90 $145.06 $78.84
8/26/96 $37.90 $153.04 $81.93
9/26/96 $37.90 $165.21 $82.98
10/25/96 $37.90 $163.35 $86.92
11/26/96 $37.90 $171.75 $89.08
12/26/96 $37.90 $173.84 $96.23
1/24/97 $37.90 $183.05 $100.11
2/26/97 $37.90 $179.57 $105.59
3/26/97 $37.90 $170.01 $107.97
4/25/97 $37.90 $161.94 $95.85
5/23/97 $37.90 $186.39 $98.67
6/26/97 $37.90 $192.84 $107.54
7/25/97 $37.90 $210.75 $101.69
8/26/97 $37.90 $214.27 $112.96
9/26/97 $37.90 $226.12 $109.45
10/24/97 $37.90 $222.42 $115.38
11/26/97 $37.90 $215.06 $116.37
12/26/97 $37.90 $204.56 $118.01
</TABLE>
<TABLE>
Legend
Symbol CRSP Total Returns Index for: 10/25/94 12/30/94 12/29/95 12/27/96 12/26/97
<S> <C> <C> <C> <C> <C>
"VISTA 2000, INC." 100.0 65.3 254.8 37.9 37.9
Nasdaq Stock Market (US Companies) 100.0 99.5 140.8 173.4 204.6
NASDAQ Stocks (SIC 3420-3429 US Companies) 100.0 97.2 69.2 93.4 118.0
"Cutlery, Handtools, and General Hardware"
Notes:
A. The lines represent monthly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
D. The index levels for all series were set to $100.0 on 10/25/94.
E. No trading activity was recorded for VISTA 2000, INC. (ticker VIST) before 12/01/94 or after 05/30/96.
</TABLE>
<PAGE>
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above.
The Company will neither make nor endorse any predictions as to future stock
performance.
The Stock Price Performance Graph above shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act or the Exchange
Act, except to the extent that the Company specifically incorporates this
information by reference and shall not otherwise be deemed filed under such
Act.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In July 1996, the Board of Directors contracted with a turnaround
management company, S. Gidumal & Company, Inc., and its affiliate, Strategic
Turnarounds & Investment Corp. (collectively "STIC"), to assist with the
restructuring of the Company, including operations, financing, litigation,
strategic planning and divestitures. Mr. Shyam Gidumal is a principal with
STIC and in September 1996 became a member of the Board of Directors of ACPI
and other subsidiaries of ACPI. In November, 1997, Mr. Gidumal became a
member of the Board of Directors of Vista and was elected President of the
Company. STIC was involved in the resolution of the Class Action Litigation,
sale of the assets of FSPI, financings involving ACPI and Alabaster, and the
sale of the key and numbers, letters and signs business of ACPI. STIC was
paid approximately $1,035,000 and $308,000, respectively for its services in
1997 and 1996. In addition, in December 1996, Mr. Gidumal was granted options
to acquire 2,400,000 shares of common stock of the Company at an exercise
price of $.03 per share. Of the options granted, 1,200,000 were immediately
exercisable, with the balance exercisable on December 31, 1997. As of March
23, 1998, Mr. Gidumal had exercised his options and acquired 2,400,000 shares
of the Company's common stock.
The Company has received a claim for payment of legal fees from
former members of the Company's Board of Directors, pursuant to inquiries
made by the SEC. The Company may be obligated to pay certain of these legal
fees but does not believe these fees are material.
During May 1997, four of the Company's directors, together with Mr.
Gidumal and an unaffiliated third party, (the "Individual Purchasers")
purchased approximately 57% of the Company's outstanding Convertible
Preferred Stock directly from the security holders to settle potential and
substantial legal and fraud claims against the Company related to activities
which occurred prior to the date the Company's current management and Board
of Directors assumed control of the Company. During July 1997, the Individual
Purchasers purchased an additional 1,250 preferred shares, or approximately
30% of the Company's outstanding Convertible Preferred Stock directly from
the security holder. As a result of these purchases, subsequent conversions
and additional common shares issued for release of claims, each of the
Individual Purchasers acquired 1,457,085 shares of the Company's common stock
or an aggregate of 8,742,510 shares for all of the Individual Purchasers.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of August 15, 1998, certain
information regarding the beneficial ownership of Common Stock by (i) each
person known by the Company to be beneficial owner of more than five percent
of the outstanding shares of Common Stock, (ii) each director; (iii) each
Named Executive Officer; and (iv) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
------------------------------------------------------- ----------------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER (1) COMMON STOCK BENEFICIALLY OWNED
------------------------------------------------------- ----------------------------------------
------------------------------------------------------- ---------------------- -----------------
NO. OF SHARES % OF CLASS
---------------------- -----------------
<S> <C> <C>
------------------------------------------------------- ---------------------- -----------------
MR. G. LOUIS GRAZIADIO, III (2) 5,053,628 10.6%
2325 Palos Verdes Drive West, Suite 211
Palos Verdes Estates, CA 90274
------------------------------------------------------- ---------------------- -----------------
MR. PERRY A. LERNER 525,000 1.1%
660 Madison Ave., New York, NY 10022
------------------------------------------------------- ---------------------- -----------------
MR. LEE E. MIKLES 1,982,085 4.2%
Mikles/Miller Management, Inc.
100 Wilshire Blvd., Santa Monica, CA 90401
------------------------------------------------------- ---------------------- -----------------
MR. PAUL A. NOVELLY 2,182,085 4.6%
8182 Maryland Ave., St. Louis, MO 63105
------------------------------------------------------- ---------------------- -----------------
MR. RICHARD D. SQUIRES 1,982,085 4.2%
4229 Cochran Chapel, Dallas, TX 75209
------------------------------------------------------- ---------------------- -----------------
MR. SHYAM H. GIDUMAL 3,857,085 8.1%
660 Madison Ave., New York, NY 10022
------------------------------------------------------- ---------------------- -----------------
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP 15,581,968 32.8%
(6 Persons)
------------------------------------------------------- ---------------------- -----------------
</TABLE>
- -----------------
(1) Unless otherwise noted, the Company believes that all persons named
in the table have sole voting and investment power with respect to
all shares of common stock beneficially owned by them. Under the
rules of the Securities and Exchange Commission, a person is deemed
to be a "beneficial" owner of securities if he or she has or shares
the power to vote or direct the voting of such securities or the
power to direct the disposition of such securities. A person is
deemed to be the beneficial owner of any securities of which that
person has the right to acquire beneficial ownership within 60 days.
More than one person may be deemed to be a beneficial owner of the
same securities.
(2) Mr. Graziadio disclaims the beneficial ownership of approximately
978,000 of these shares which are owned by Ginarra Holdings, Inc.
and an additional 499,000 shares which are owned by the Graziadio
Family Trust.
-12-
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
All of the Company's directors and executive officers are current in
required filings with the Securities and Exchange Commission ("SEC"). In
making the foregoing statement, the Company has relied on the written
representation of its directors and executive officers and copies of the
reports that they have filed with the SEC.
PROPOSAL NO. 2
--------------
AMENDMENT OF CERTIFICATE OF INCORPORATION TO REVERSE THE NUMBER OF
OUTSTANDING SHARES ON A BASIS OF 25:1 AND THE NUMBER OF SHARES
AUTHORIZED BY THE ARTICLES OF INCORPORATION SHALL REMAIN 50,000,000
The Company's Articles of Incorporation currently authorizes
50,000,000 shares of the Company's common stock, par value $.01 per share. On
March 17, 1998, the Board approved and adopted, subject to approval and
adoption by the shareholders, a Certificate of Amendment which will reverse
the number of shares outstanding from 47,466,432 to 1,898,657. The Company
shall pay in cash the average closing price of all shares occurring within
the five (5) days preceding the effective date of filing of the Articles of
Amendment for any fractional shares resulting from the reverse stock split.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
REVERSAL OF THE NUMBER OF OUTSTANDING SHARES ON A
BASIS OF 25:1 AND THE NUMBER OF SHARES AUTHORIZED BY
THE ARTICLES OF INCORPORATION SHALL REMAIN 50,000,000.
PROPOSAL NO. 3
--------------
ADOPTION OF 1998 INCENTIVE STOCK OPTION PLAN AND TO RESERVE 210,000
SHARES FOR ISSUANCE THEREUNDER.
On June 2, 1998, the Board approved the adoption of the 1998
Incentive Stock Option Plan (the "1998 Plan") to reserve 210,000 shares (post
25:1 reverse stock split) available for issuance as incentive stock options
as qualified or non-qualified options. The Company previously adopted the
1993 Incentive Stock Option Plan (the "1993 Plan") which was amended on July
18, 1995 and December 31, 1996. Since the implementation of the 1993 Plan as
amended, a number of significant restructuring changes have occurred within
the Company and its subsidiaries, including the sale of certain subsidiary
operations and the change of Company management. At the Annual Meeting, the
shareholders are being asked to approve and ratify the 1998 Plan. The Board
believes that the adoption of the 1998 Plan will benefit the employees who
are now with the Company after the restructuring, foster good employee
relations and encourage and assist employees of the Company to acquire an
equity interest in the Company. In addition, the Board believes the adoption
and utilization of the 1998 Plan will help align employee interest with other
shareholders and help provide for the future financial security of the
Company's employees. The 1998 Plan should thereby be helpful in attracting,
retaining and motivating employees. The details of the 1998 Plan are
described below. A copy of the 1998 Plan is attached to this Proxy Statement
as Exhibit A.
-13-
<PAGE>
DESCRIPTION OF THE 1998 PLAN
Under the 1993 Plan as amended, all of the options have been awarded
and the majority of the options have been exercised. The 1998 Plan allows for
the grant of 210,000 shares (post 25:1 reverse split). The terms of the 1998
Plan are substantially the same as the 1993 Plan as amended.
The purpose of the 1998 Plan is to advance the interests of the
Company, its subsidiaries and its shareholders by affording certain employees
of the Company and its subsidiaries and other key persons as opportunity to
acquire or increase their proprietary interests in the Company. The objective
of the issuance of the options is to promote the growth and profitability of
the Company and its subsidiaries because the recipients of options will have
an additional incentive to achieve the Company's objectives through
participation in its success and growth and by encouraging their continued
association with or service to the Company. Persons eligible to participate
in the 1998 Plan consist of all employees of the Company or any subsidiary
and other key persons whose participation in the 1998 Plan that the
Compensation Committee (the "Committee") determines to be in the best
interest of the Company.
Options granted under the 1998 Plan may be incentive stock options
("ISOs"), which are intended to meet the requirement of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified
options, which are not intended to meet such requirements ("Non-Qualified
Options"). ISOs must have terms of ten years or less from the date of grant
and the fair market value of ISOs that may be exercised for the first time
during any year may not exceed $100,000 based on the fair market value on the
date of grant. The 1998 Plan is administered by the Committee, having the
duties and authorities set forth in such 1998 Plan in addition to any other
authority granted by the Board. The Committee has the full power and
authority, in its discretion, subject to the provisions of the 1998 Plan, to
interpret such 1998 Plan, to prescribe, amend and rescind rules and
regulations relating to them, to determine the details and provisions of each
stock option agreement, and to make all other determinations necessary or
advisable for the administration of such Plan, including, without limitation,
the amending or altering of such 1998 Plan and any options granted
thereunder, as may be required to comply with or to conform to any federal,
state, or local laws or regulations. The Committee, in its discretion,
selects the recipients of awards and the number of shares or options granted
thereunder and determines other matters such as (i) vesting schedules, (ii)
the exercise price of options (which cannot be less than 100% of the fair
market value of the Common Stock on the date of grant for ISOs) and (iii) the
duration of awards (which cannot exceed ten years from the date of grant or
modification of the option).
The aggregate number of shares of Common Stock reserved for the
issuance of options under the 1998 Plan will be 210,000 (post 25:1 reverse
stock split) subject to adjustment in accordance with the 1998 Plan. Any or
all shares of Common Stock subject to the 1998 Plan may be issued in any
combination of ISO or Non-Qualified Options, and the amount of Common Stock
subject to the 1998 Plan may be increased from time to time as provided
therein, subject to shareholder approval. Shares subject to an option may be
either authorized and unissued shares or shares issued and later reacquired
by the Company. The shares covered by an unexercised portion of an option
that has terminated for any reason, may again be optioned or awarded under
the 1998 Plan, and such shares shall not be considered as having been
optioned or issued in computing the number of shares of Common Stock
remaining available for options under the 1998 Plan.
-14-
<PAGE>
CERTAIN FEDERAL INCOME TAX EFFECTS
THE FOLLOWING DISCUSSION OF THE FEDERAL INCOME TAX CONSEQUENCES OF
THE 1998 PLAN IS INTENDED TO BE A SUMMARY OF APPLICABLE FEDERAL INCOME TAX
LAW. STATE AND LOCAL TAX CONSEQUENCES MAY DIFFER.
ISOs. A participant is not taxed on the grant or exercise of an ISO.
However, the difference between the fair market value of the shares on the
exercise date and the exercise price will be a preference item for purposes
of the alternative minimum tax. If a participant holds the shares acquired
upon exercise of an ISO for at least two years following grant and at least
one year following exercise, the participant's gain, if any, by a subsequent
disposition of such shares will be treated as long term capital gain for
federal income tax purposes. The measure of the gain is the difference
between the proceeds received on disposition and the participant's basis in
the shares (which generally equals the exercise price). If the participant
disposes of stock acquired pursuant to exercise of an ISO before satisfying
the one and two year holding periods described above, the participant will
recognize both ordinary income and capital gain in the year of disposition.
The amount of the ordinary income will be the lesser of (i) the amount
realized on disposition less the participant's adjusted basis in the stock
(usually the option exercise price) or (ii) the difference between the fair
market value of the stock on the exercise date and the option exercise price.
The balance of the consideration received on such disposition will be long
term capital gain if the stock had been held for at least one year following
exercise of the ISO. The Company is not entitled to an income tax deduction
on the grant or the exercise of an ISO or on the participant's disposition of
the shares after satisfying the holding period requirement described above.
If the holding periods are not satisfied, the Company will be entitled to an
income tax deduction in the year the participant disposes of the shares, in
an amount equal to the ordinary income recognized by the participant.
NON-QUALIFIED OPTIONS. Generally, a participant is not taxed on the
grant of a Non-Qualified Option. Upon exercise, however, the participant
recognizes ordinary income equal to the difference between the exercise price
and the fair market value of the shares on the date of the exercise. The
Company is entitled to an income tax deduction in the year of exercise in the
amount recognized by the participant as ordinary income. Any gain on
subsequent disposition of the shares is long-term capital gain if the shares
are held for at least one year following exercise. The Company does not
receive an income tax deduction for this gain.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ADOPTION OF THE 1998 PLAN AND TO RESERVE 210,000
SHARES FOR ISSUANCE THEREUNDER.
PROPOSAL NO. 4
--------------
ADOPTION OF 1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN AND TO
RESERVE 90,000 SHARES FOR ISSUANCE THEREUNDER.
On June 2, 1998, the Board approved the adoption of the 1998
Non-Employee Director Stock Option Plan (the "1998 Director Plan) to reserve
90,000 shares (post 25:1 reverse stock split) available for issuance as
incentive stock options or non-qualifying options. At the Annual Meeting, the
shareholders are being asked to approve and ratify the 1998 Director Plan.
The Board believe that the adoption of the 1998 Director Plan will enable the
Company to attract and retain qualified and experienced directors. The
details of the 1998 Director Plan are described below. A copy of the 1998
Director Plan is attached to this Proxy Statement as Exhibit B.
-15-
<PAGE>
DESCRIPTION OF THE 1998 DIRECTOR PLAN
Under the 1993 Plan as amended, all of the options have been awarded
and all of the options have been exercised. The 1998 Director Plan allows for
the grant of 90,000 shares (post 25:1 reverse split). The terms of the 1998
Director Plan are substantially the same as the 1993 Plan as amended.
The purpose of the 1998 Director Plan is to advance the interests of
the Company, its subsidiaries and its shareholders by affording directors of
the Company an opportunity to acquire or increase their proprietary interests
in the Company. The objective of the issuance of the options to attract and
retain qualified candidates for serving on the Board and to have an
additional incentive to achieve the Company's objectives through
participation in its success and growth and by encouraging their continued
association with or service to the Company. Persons eligible to participate
in the 1998 Director Plan consist of all directors of the Company who are not
employees or consultants.
Options granted under the 1998 Director Plan may only be
non-qualified options ("Non-Qualified Options"). The 1998 Director Plan is
administered by the Committee, having the duties and authorities set forth in
such 1998 Director Plan in addition to any other authority granted by the
Board. The Committee has the full power and authority, in its discretion,
subject to the provisions of the 1998 Director Plan, to interpret such 1998
Director Plan, to prescribe, amend and rescind rules and regulations relating
to them, to determine the details and provisions of each stock option
agreement, and to make all other determinations necessary or advisable for
the administration of such 1998 Director Plan, including, without limitation,
the amending or altering of such 1998 Director Plan and any options granted
thereunder, as may be required to comply with or to conform to any federal,
state, or local laws or regulations. The Committee, in its discretion,
selects the recipients of awards and the number of options granted thereunder
and determines other matters such as (i) vesting schedules, (ii) the exercise
price of options and (iii) the duration of awards (which cannot exceed ten
years from the date of grant or modification of the option).
The aggregate number of shares of Common Stock reserved for the
issuance of options under the 1998 Director Plan will be 90,000 (post 25:1
reverse stock split) subject to adjustment in accordance with the 1998
Director Plan. All shares of Common Stock subject to the 1998 Director Plan
must be issued in Non-Qualified Options, and the amount of Common Stock
subject to the 1998 Director Plan may be increased from time to time as
provided therein, subject to shareholder approval. Shares subject to an
option may be either authorized and unissued shares or shared issued and
later reacquired by the Company. The shares covered by an unexercised portion
of an option that has terminated for any reason, may again be optioned under
the 1998 Director Plan, and such shares shall not be considered as having
been optioned in computing the number of shares of Common Stock remaining
available for options under the 1998 Director Plan.
CERTAIN FEDERAL INCOME TAX EFFECTS
THE FOLLOWING DISCUSSION OF THE FEDERAL INCOME TAX CONSEQUENCES OF
THE 1998 DIRECTOR PLAN IS INTENDED TO BE A SUMMARY OF APPLICABLE FEDERAL
INCOME TAX LAW. STATE AND LOCAL TAX CONSEQUENCES MAY DIFFER.
Generally, a participant is not taxed on the grant of a
Non-Qualified Option. Upon exercise, however, the participant recognizes
ordinary income equal to the difference between the exercise price and the
fair market value of the shares on the date of the exercise. The Company is
entitled to an income tax deduction in the year of exercise in the amount
recognized by the participant as ordinary income.
-16-
<PAGE>
Any gain on subsequent disposition of the shares is long-term capital gain if
the shares are held for at least one year following exercise. The Company
does not receive an income tax deduction for this gain.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ADOPTION OF THE 1998 NON-EMPLOYEE PLAN AND TO RESERVE
90,000 SHARES FOR ISSUANCE THEREUNDER.
PROPOSAL NO. 5
--------------
APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JANUARY 3, 1998.
The firm of Grant Thornton LLP, Certified Public Accountant, served
as the independent auditors of the Company for Fiscal 1997, and the Board of
Directors has selected Grant Thornton LLP as the Company's independent
auditors for the fiscal year ending December 26, 1998. This selection will be
presented to the stockholders for their approval at the Meeting. The Board of
Directors recommends a vote in favor of the proposal to approve and ratify
this selection, and the persons named in the enclosed proxy (unless otherwise
instructed therein) will vote such proxies FOR such proposal. If the
stockholders do not approve this selection, the Board will reconsider its
choice.
The Company has been advised by Grant Thornton LLP that a
representative will be present at the Meeting and will be available to
respond to appropriate questions. In addition, the Company intends to give
such representative an opportunity to make any statements if he should so
desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR
ENDING DECEMBER 26, 1998.
PROPOSAL NO. 6
AMENDMENT TO CHANGE THE NAME OF THE COMPANY FROM
VISTA 2000, INC. TO BOSS HOLDINGS, INC.
The Company's Board of Directors recommends to the Company's
shareholders an amendment to the Company's Articles of Incorporation to
change the name of the Company from Vista 2000, Inc. to Boss Holdings, Inc.
Since the Company's subsidiary Boss Manufacturing Company is the primary
source of revenue for the Company, the Board believes it is appropriate to
change to this nationally recognized name in an effort to promote future
growth of the manufacturing division.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
AMENDMENT TO CHANGE THE COMPANY'S NAME FROM VISTA
2000, INC. TO BOSS HOLDINGS, INC.
-17-
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Company's
1999 Annual Meeting of Stockholders must be received by the Company at its
principal executive offices no later than December 29, 1998 in order to be
included in the Company's Proxy Statement and form of proxy relating to that
meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports
of changes in ownership with the SEC. Such persons are required by SEC
regulations to furnish the Company with copies of all SEC Section 16(a) forms
they file.
Based solely on its review of the copies of such forms furnished to
the Company and written representations from the executive officers and
directors of the Company, the Company believes that all Section 16(a) filing
requirements were met during 1997.
FORM 10-K
THE COMPANY, UPON WRITTEN REQUEST, WILL PROVIDE WITHOUT CHARGE TO
EACH STOCKHOLDER A COPY OF ITS ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 1997.
REQUESTS SHOULD BE DIRECTED TO:
Bruce Lancaster,
Chief Financial Officer
Vista 2000, Inc.
221 W. First Street
Kewanee, IL 61443
OTHER BUSINESS
The Board does not intend to bring any other business before the
Meeting, and, so far as is known to the Board, no matters are to be brought
before the Meeting except as specified in the notice of the Meeting. As to
any business that may properly come before the Meeting, however, it is
intended that proxies, in the form enclosed, will be voted in respect thereof
in accordance with the judgment of the persons voting such proxies.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
G. Louis Graziadio, III
Chairman and Chief Executive Officer
Dated: August __, 1998
-18-
<PAGE>
EXHIBIT A
---------
1998 INCENTIVE STOCK OPTION PLAN
FOR
VISTA 2000, INC.
1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are
to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or non-statutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as
amended, and the regulations promulgated thereunder. Stock purchase rights
may also be granted under the Plan.
2. CERTAIN DEFINITIONS. As used herein, the following definitions
shall apply:
"Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
"Common Stock" means the Common Stock of the Company.
"Company" means Vista 2000, Inc., a Delaware corporation.
"Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services
and is compensated for such services, and any director of the Company
whether compensated for such services or not, provided, that if and in
the event the Company registers any class of any equity security
pursuant to the Exchange Act, the term Consultant shall thereafter not
include directors who are not compensated for their services or are paid
only a director's fee by the Company.
"Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the
Company or any Subsidiary. Continuous Status as an Employee shall not be
considered interrupted in the case of: (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Board, provided
that such leave is for a period of not more than ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by
contract or statute, or unless provided otherwise pursuant to company
policy adopted from time to time; or (iv)
<PAGE>
in the case of transfers between locations of the Company or between the
Company, its Subsidiaries or its successor.
"Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system including without
limitation the National Market System of the National Association
of Securities Dealers, Inc. Automated Quotation ("NASDAQ") System,
its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported, as quoted on
such system or exchange for the last market trading day prior to
the time of determination) as reported in the Wall Street Journal
or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or regularly
quoted by a recognized securities dealer but selling prices are
not reported, its Fair Market Value shall be the mean between the
high and low asked prices for the Common Stock or;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in
good faith by the Administrator.
"Incentive Stock Option" means an option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
"Nonstatutory Stock Option" means an option not intended to
qualify as an Incentive Stock Option.
"Option" means a stock option granted pursuant to the Plan.
"Optioned Stock" means the Common Stock subject to an Option.
"Optionee" means an Employee or Consultant who receives an Option.
"Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
"Plan" means this 1998 Incentive Stock Option Plan.
2
<PAGE>
"Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
"Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section
13 of the Plan, the maximum aggregate number of shares which may be optioned
and sold under the Plan is 210,000 shares of Common Stock (post 25:1 reverse
stock split). The shares may be authorized, but unissued, or reacquired
Common Stock.
If an option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) Procedure.
(i) Administration With Respect to Directors and Officers.
With respect to grants of Options or Stock Purchase Rights to
Employees who are also officers or directors of the Company, the
Plan shall be administered by (A) the Board if the Board may
administer the Plan in compliance with Rule 16b-3 promulgated
under the Exchange Act or any successor thereto ("Rule 16b-3")
with respect to a plan intended to qualify thereunder as a
discretionary plan, or (B) a Committee designated by the Board to
administer the Plan, which Committee shall be constituted in such
a manner as to permit the Plan to comply with Rule 16b-3 with
respect to a plan intended to qualify thereunder as a
discretionary plan. Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise directed by
the Board. From time to time the Board may increase the size of
the Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer
the Plan, all to the extent permitted by Rule 16b-3 with respect
to a plan intended to qualify thereunder as a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with
respect to directors, non-director officers and Employees who are
neither directors nor officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options or Stock Purchase
Rights to Employees or Consultants who are neither directors nor
officers of the Company, the Plan shall be administered by (A)
the Board or (B) a Committee designated by the Board,
3
<PAGE>
which Committee shall be constituted in such a manner as to
satisfy the legal requirements relating to the administration of
incentive stock option plans, if any, of Delaware corporate and
securities laws and of the Code (the "Applicable Laws"). Once
appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor,
fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the
extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by
the Board to such Committee, the Administrator shall have the authority,
in its discretion:
(i) to determine the Fair Market Value of the Common Stock,
in accordance with Section 2(k) of the Plan;
(ii) to select the officers, Consultants and Employees to
whom Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options or
any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock to
be covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, the share price and any
restriction or limitation or waiver of forfeiture restrictions
regarding any Option or other award and/or the shares of Common
Stock relating thereto, based in each case on such factors as the
Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of
Common Stock;
(viii) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with respect
to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount, if any, of any deemed
earnings on any deferred amount during any deferral period); and
4
<PAGE>
(ix) to reduce the exercise price of any option to the then
current Fair Market Value if the Fair Market Value of the Common
Stock covered by such option shall have declined since the date
the Option was granted.
(c) Effect of Committee's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on
all optionees and any other holders of any Options.
5. ELIGIBILITY.
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees.
An Employee or Consultant who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designations, to the extent that
the aggregate Fair Market Value of the Shares with respect to which
Options designated as Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall
be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the time the
Option with respect to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with
the Company, nor shall it interfere in any way with his right or the
Company's right to terminate his employment or consulting relationship
at any time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated
under Section 15 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term stated
in the Option Agreement; provided, however, that in the case of an Incentive
Stock Option, the term shall be no more than ten (10) years from the date of
grant thereof or such shorter term as may be provided in the Option
Agreement. However, in the case of an Option granted to an Optionee who, at
the time the Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Option shall be five (5) years from the
date of grant thereof or such shorter term as may be provided in the Option
Agreement.
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8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined
by the Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, individually and
excluding beneficial interest, owns stock representing more
than ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary, the
per share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(B) granted to any Employee, the per share exercise
price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant
of such Option, individually and excluding beneficial
interest, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market Value
per Share on the date of the grant.
(B) granted to any person, the per Share exercise
price shall be no less than 85% of the Fair Market Value
per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist
entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares
which (x) in the case of Shares acquired upon exercise of an Option
either have been owned by the Optionee for more than six months on the
date of surrender or were not acquired, directly or indirectly, from the
Company, and (y) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option
shall be exercised, (5) authorization from the Company to retain from
the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of exercise
equal to the exercise price for the total number of Shares as to which
the Option is exercised, (6) delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds required to
pay the exercise price, (7) by
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delivering an irrevocable subscription agreement for the Shares which
irrevocably obligates the Option holder to take and pay for the Shares
not more than twelve months after the date of delivery of the
subscription agreement, (8) any combination of the foregoing methods of
payment, or (9) such other consideration and method of payment for the
issuance of Shares to the extent permitted under Applicable Laws. In
making its determination as to the type of consideration to accept, the
Board shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
9. EXERCISE OF OPTION.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria
with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.
An Option may not be exercised for a fraction of a Share. An
Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has
been received by the Company. Full payment may, as authorized by the
Board, consist of any consideration and method of payment allowable
under Section 8(b) of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such
Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate promptly upon exercise of the
Option. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate is
issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.
(b) Termination of Employment. In the event of termination of
an Optionee's consulting relationship or Continuous Status as an
Employee with the Company (as the case may be), such Optionee may, but
only within ninety (90) days (or such other period of time as is
determined by the Board, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the option and
not exceeding ninety (90) days) after the date of such termination (but
in no event later than the expiration date of the term of such option as
set forth in the Option Agreement), exercise his Option to the extent
that Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise
the Option at the date of such termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
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(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's
consulting relationship or Continuous Status as an Employee as a result
of his total and permanent disability (as defined in Section 22(e)(3) of
the Code), Optionee may, but only within twelve (12) months from the
date of such termination (but in no event later than the expiration date
of the term of such Option as set forth in the Option Agreement),
exercise the Option to the extent otherwise entitled to exercise it at
the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if
Optionee does not exercise such Option to the extent so entitled within
the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised, at any time within twelve (12)
months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent the Optionee was entitled to exercise the Option at the date of
death. To the extent that Optionee was not entitled to exercise the
Option at the date of termination, or if Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required thereunder
to qualify for the maximum exemption from Section 16 of the Exchange Act
with respect to Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer is
made.
10. NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
11. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At
the discretion of the Administrator, Optionees may satisfy withholding
obligations as provided in this paragraph. When an Optionee incurs tax
liability in connection with an option or Stock Purchase Right, which tax
liability is subject to tax withholding under applicable tax laws, and the
Optionee is obligated to pay the Company an amount required to be withheld
under applicable tax laws, the Optionee may satisfy the withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued upon exercise of the Option, or the Shares to be issued in connection
with the Stock Purchase Right, if any, that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares
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to be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this
purpose shall be made in writing in a form acceptable to the Administrator
and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Right as to which the election is
made;
(c) all elections shall be subject to the consent or
disapproval of the Administrator;
(d) if the Optionee is subject to Rule 16b-3, the election
must comply with the applicable provisions of Rule 16b-3 and shall
be subject to such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject
to any required action by the shareholders of the Company, the number of
shares of Common Stock covered by each outstanding Option, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options have yet been granted or which have been returned
to the Plan upon cancellation or expiration of an Option, as well as the
price per share of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to an Option.
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In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Optionee at least fifteen (15) days prior
to such proposed action. To the extent it has not been previously exercised,
the option will terminate immediately prior to the consummation of such
proposed action. In the event of a merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent Option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. In the event that such successor corporation does not
agree to assume the Option or to substitute an equivalent Option, the Board
shall-notify the Optionee that the Option shall be exercisable pursuant to
its terms for a period of fifteen (15) days from the date of such notice, and
the Option will terminate upon the expiration of such period.
13. TIME OF GRANTING OPTIONS. The date of grant of an Option shall,
for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by
the Board. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made which would
impair the rights of any Optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and
desirable to comply with Rule 16b-3 under the Exchange Act or with
Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock
exchange), the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and
such Options shall remain in full force and effect as if this Plan had
not been amended or terminated, unless mutually agreed otherwise between
the Optionee and the Board, which agreement must be in writing and
signed by the Optionee and the Company.
15. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option
and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute
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such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions
of law.
16. RESERVATION OF SHARES. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel
to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue
or sell such Shares as to which such requisite authority shall not have been
obtained.
17. AGREEMENTS. Options shall be evidenced by written agreements
in such form as the Board shall approve from time to time.
18. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months
before or after the date the Plan is adopted. Such shareholder approval shall
be obtained in the degree and manner required under applicable state and
federal law.
19. INFORMATION TO OPTIONEES AND PURCHASERS. The Company shall
provide to each Optionee, during the period for which such Optionee or
purchaser has one or more Options, copies of all annual reports and other
information which are provided to all shareholders of the Company. The
Company shall not be required to provide such information if the issuance of
Options under the Plan is limited to key employees whose duties in connection
with the Company assure their access to equivalent information.
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Exhibit B
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
FOR
VISTA 2000, INC.
1. PURPOSE OF THE PLAN
This 1998 Non-Employee Director Stock Option Plan of Vista 2000,
Inc. (the "Company") is intended as an incentive to retain as independent
directors on the Board of Directors of the Company, persons of training,
experience and ability, to encourage the sense of proprietorship of such
persons, and to stimulate the active interest of such persons in the
development and financial success of the Company.
2. CERTAIN DEFINITIONS
As used herein, the following terms shall have the meaning
indicated:
"Board" shall mean the Board of Directors of the Company.
"Common Stock" shall mean the Common Stock, no par value per share,
of the Company.
"Compensation Committee" shall mean the committee designated by the
Board to administer the Plan.
"Date of Grant" shall mean the date on which an Option is granted
to an Eligible Person pursuant to Section 6(c) hereof.
"Director" shall mean a member of the Board.
"Eligible Person(s)" shall mean those persons who are
Directors of the Company and are not Employees.
"Employee(s)" shall mean those persons who are employees of the
Company or who are employees of any Subsidiary.
"ERISA" shall mean the Employee Retirement Income Security Act, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" of a Share on any date of reference shall be
the Closing Price for the twenty (20) consecutive trading days immediately
preceding such date. For this purpose, the Closing Price of the Shares on any
business day shall be: (i) if the Shares are listed or admitted for trading
on any United States national securities exchange, the last reported sale
price of Shares on such exchange, as reported in any newspaper of general
circulation; (ii) if Shares are quoted on NASDAQ, or any similar system of
automated dissemination of quotations of securities prices in common use, the
mean between the closing high bid and low asked
<PAGE>
quotations for such day of Shares on such system; (iii) if neither clause (i)
nor (ii) is applicable, the mean between the high bid and low asked
quotations for Shares as reported by the National Quotation Bureau,
Incorporated if at least two securities dealers have inserted both bid and
asked quotations for Shares on at least five of the ten preceding days; or,
(iv) in lieu of the above, if actual transactions in the Shares are reported
on a consolidated transaction reporting system, the last sale price of the
Shares for such day and on such system. With respect to the first grants of
options pursuant to this Plan, the fair market value of a share shall be the
Price to Public as reflected in the Company's Registration Statement on Form
SB-2, less the pro rata portion of the underwriting discount and offering
expenses of each share offered thereby:
"Internal Revenue Code" or "Code" shall mean the Internal Revenue
Code of 1986, as it now exists or may be amended from time to time.
"Nonqualified Stock Option" shall mean a stock option that is not
an incentive stock option, as defined in Section 422 of the Internal Revenue
Code.
"Option" (when capitalized) shall mean any option granted under
this Plan.
"Optionee" shall mean a person to whom an Option is granted under
this Plan or any person who succeeds to the rights of such person under this
Plan by reason of the death of such person.
"Plan" shall mean this 1998 Nonemployee Director Stock Option Plan
of Vista 2000, Inc.
"Share(s)" shall mean a share or shares of the Common Stock.
"Subsidiary" shall mean any corporation (other than the Company) in
any unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possession 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chains.
3. TOTAL AGGREGATE SHARES
Subject to adjustments provided in Section 14 hereof, a total of
90,000 Shares shall be subject to the Plan. The Shares subject to the Plan
shall consist of unissued Shares or previously issued Shares reacquired and
held by the Company, or any Subsidiary, and such number of Shares shall be
and hereby is reserved for sale for such purpose. Any of such Shares that may
remain unsold and that are not subject to outstanding Options at the
termination of the Plan shall cease to be reserved for the purpose of the
Plan, but until termination of the Plan, the Company shall at all times
reserve a sufficient number of Shares to meet the requirements of the Plan.
Should any Option expire or be canceled prior to its exercise in full, the
Shares theretofore subject to such Option may again be the subject of any
Option under the Plan.
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4. RULE 16b-3 PLAN AND SHAREHOLDER APPROVAL
The Company intends for this Plan to comply with the requirements of
Rule 16b-3 promulgated by the Securities and Exchange Commission pursuant to
the Exchange Act. Accordingly, this Plan shall be approved by stockholders of
the Company owning a majority of the issued and outstanding shares of Common
Stock.
5. TYPE OF OPTIONS
An Option granted hereunder shall be a Nonqualified Stock Option.
6. GRANT OF OPTION
(a) Options shall be granted only to Eligible Persons.
Each Option shall be evidenced by an Option agreement, which shall
contain terms that are not inconsistent with this Plan or
applicable laws.
(b) The Options granted to Directors under this Plan shall
be in addition to regular director's fees or other benefits with
respect to the Director's position with the Company or its
Subsidiaries. Neither the Plan nor any Options granted under the
Plan shall confer upon any person any right to continue to serve as
a Director.
7. EXERCISE PRICE
The exercise price of each Share placed under an Option pursuant to
this Plan shall be the Fair Market Value of such Share on the Date of Grant.
8. VESTING SCHEDULE
(a) Shares subject to an Option shall vest in accordance
with the vesting schedule and vesting terms and conditions
established by the Compensation Committee.
(b) Notwithstanding the foregoing, Shares subject to an
Option shall vest as to all Shares then subject to the Option upon
the occurrence of any of the following events:
(i) a transaction (or series of transactions
occurring within a 60-day period or pursuant to a plan
approved by the Board or shareholders of the Company) occurs
that has the result that stockholders of the Company
immediately before such transaction cease to own directly or
indirectly at least 51% of the voting stock of the Company
or of any entity that results from the participation of the
Company in a reorganization, consolidation, merger,
liquidation or any other form of corporate transaction;
(ii) all or substantially all of the assets of the
Company shall be sold or otherwise disposed of, except that
an Option shall not vest as to all Shares then subject to
such Option if, after such sale or disposition: (i) the
shareholders of the
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Company immediately prior to such transaction continue to
own at least 51% of the voting stock of the entities that
acquired 50% or more in value of the assets of the Company
so sold or conveyed; and (ii) the acquiring entity agrees to
assume the obligations of the Company under this Agreement;
or
(iii) the occurrence of a merger, consolidation or
other reorganization of the Company under the terms of which
the surviving entity does not assume the obligations of the
Company under this Agreement.
9. EXERCISE OF OPTION
(a) An Option shall not be exercisable prior to the
vesting of such Option. After the six-month anniversary of the Date
of Grant of an Option, such Option may be exercised at any time and
from time to time during the term of such Option, in whole or in
part, with respect to Shares that have vested in accordance with
Section 8 hereof.
(b) Options may be exercised: (i) during the Optionee's
lifetime, solely by the Optionee or its transferee if the Option is
sold, pledged, assigned, hypothecated or transferred as permitted
by the Rules of Section 16 of the Exchange Act, or (ii) after
Optionee's death, by the personal representative of the Optionee's
estate or the person or persons entitled thereto under his will or
under the laws of descent and distribution.
(c) An Option shall be deemed exercised when: (i) the
Company has received written notice of such exercise delivered to
the Company in accordance with the notice provisions of the
applicable Options agreement; (ii) full payment of the aggregate
exercise price of the Shares as to which the Option is exercised
has been tendered to the Company; and, (iii) arrangements that are
satisfactory to the Board in its sole discretion have been made for
the Optionee's payment to the Company of the amount, if any, that
the Company determines to be necessary for the Company to withhold
in accordance with the applicable federal or state income tax
withholding requirements.
(d) The exercise price of any Shares purchased shall be
paid (i) solely in cash, by certified or cashier's check, by money
order, by personal check (if approved by the Board) or, (ii) at the
option of the Optionee in Common Stock theretofore owned by such
Optionee (or by a combination of the above); provided; however,
that if the Optionee acquired such stock to be surrendered directly
or indirectly from the Company, he shall have owned such stock for
six months prior to using such stock to exercise an Option, or
(iii) at the option of the Optionee, by delivery to the Company of
an exercise notice together with such other documentation as the
broker and the Company shall require to effect the exercise of such
Option. For purposes of determining the amount, if any, of the
exercise price satisfied by payment in Common Stock, such Common
Stock shall be valued at its Fair Market Value on the date of
exercise. Any Common Stock delivered in satisfaction of all or a
portion of the exercise price shall be approximately endorsed for
transfer and assignment to the Company.
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(e) The Optionee shall not be, nor have any of the rights
or privileges of, a shareholder of the Company with respect to any
Shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such Shares shall have
been issued by the Company to the Optionee.
10. TERMINATION OF OPTION PERIOD
(a) The unexercised portion of an Option shall
automatically and without notice terminate and become null and void
and be forfeited upon the earliest to occur of the following:
(i) if the Optionee's position as a Director of the
Company terminates, other than by reason of such Optionee's
death or disability, thirty (30) days after the date that
the Optionee's position as a Director of the Company
terminates;
(ii) One (1) year after the death of Optionee;
(iii) One (1) year after the date on which the
Optionee's position as Director is terminated by reason of a
mental or physical disability determined by a medical doctor
satisfactory to the Company; or
(iv) ten (10) years after the Date of Grant of such
Option.
(b) The Board of Directors of the Company in its sole
discretion may, by giving written notice to an Optionee
("Cancellation Notice"), cancel, effective upon the date of the
consummation of any corporate transaction described in Section 8(b)
hereof, any portion of an Option that remains unexercised on such
date. Such cancellation notice shall be given to Optionee at least
ten (10) days prior to the date of cancellation.
11. TERMS OF OPTION
Each Option granted under this Plan shall have a term of ten
(10) years from the Date of Grant of such Option.
12. ASSIGNABILITY OF OPTIONS
The Option may be sold, pledged, assigned, hypothecated or
transferred only as permitted by the Rules of Section 16 of the Exchange Act.
13. ADJUSTMENTS
If at any time there shall be an increase or decrease in the number
of issued and outstanding Shares, through the declaration of a stock dividend
or through any recapitalization resulting in a stock split-up, combination or
exchange of Shares, then appropriate proportional adjustment shall be made in
the number of Shares (and, with respect to Options, the exercise
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<PAGE>
price per Share): (i) subject to outstanding Options; (ii) reserved under the
Plan; and (iii) granted as subsequent Options.
(a) In the event of a merger, consolidation or other
reorganization of the Company under the terms of which the Company
is not the surviving corporation, but the surviving corporation
elects to assume an Option, each Optionee shall be entitled to
receive, upon the exercise of such Option, with respect to each
Share: (i) the number of shares of stock of the surviving
corporation (or equity interest in any other entity); and (ii) any
other notes, evidences of indebtedness or other property, that the
Optionee would have received in connection with such merger,
consolidation or other reorganization had he exercised the Option
with respect to such Shares immediately prior to such merger,
consolidation or other reorganization.
(b) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class
or securities convertible into shares of capital stock of any
class, either in connection with direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares
or other securities, shall not affect and not adjustment by reason
thereof shall be made with respect to, the number of or exercise
price of Shares then subject to outstanding Options granted under
the Plan.
(c) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not
affect in any manner the right or power of the Company to make,
authorize or consummate: (i) any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issuance by the Company of
debt securities or preferred stock that would rank above the Shares
subject to outstanding Options; (iv) the dissolution or liquidation
of the Company; (v) any sale, transfer or assignment of all or any
part of the assets or business of the Company; or (vi) any other
corporate act or proceeding, whether of a similar character or
otherwise.
14. PURCHASE FOR INVESTMENT.
As a condition of any issuance of a stock certificate for Shares,
the Board may obtain such agreements or undertakings, if any, as it may deem
necessary or advisable to assure compliance with any provision of this Plan
or any law or regulation, including, but not limited to, the following:
(a) a representation and warranty by the Optionee to the
Company, at the time his Option is exercised, that he is acquiring
the Shares to be issued to him for investment and not with a view
to, or for sale in connection with, the distribution of any such
Shares; and
(b) a representation, warranty or agreement to be bound by
any legends that are, in the opinion of the Board, necessary or
appropriate to comply with the provisions
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<PAGE>
of any securities law deemed by the Board to be applicable to the
issuance of the Shares and are endorsed upon the certificates
representing the Shares.
15. AMENDMENTS, MODIFICATIONS, SUSPENSION OR DISCONTINUANCE OF
THIS PLAN.
For the purpose of complying with changes in the Code or ERISA, the
Board may amend, modify, suspend or terminate the Plan at any time. For the
purpose of meeting or addressing any other changes in legal requirements or
any other purpose, the Board may amend, modify, suspend or terminate the Plan
only once every six months. Subject to changes in law or other legal
requirements, including any change in the provisions of Rule 16b-3 that would
permit otherwise, the Plan may not be amended without the consent of the
holders of a majority of the shares of Common Stock then outstanding, to (i)
increase materially the aggregate number of shares of Common Stock that may
be issued under the Plan (except for adjustments pursuant to Section 13 of
the Plan); (ii) increase materially the benefits accruing to Optionees under
the Plan; or (iii) modify materially the requirements as to eligibility for
participation in the Plan.
16. GOVERNMENTAL REGULATION.
This Plan and the granting of Options and the exercise of Options
hereunder, and the obligation of the Company to sell and deliver shares under
such Options, shall be subject to all applicable laws, rules, and regulations
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
17. MISCELLANEOUS.
(a) If any provision of this Plan is held invalid for any
reason, such holding shall not affect the remaining provisions
hereof, but instead this Plan shall be construed and enforced as if
such provision had never been included in this Plan.
(b) This Plan shall be governed by the laws of the State
of Delaware.
(c) Headings contained in this Plan are for convenience
only and shall in no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine or neuter
gender shall be a reference to such other gender as is appropriate.
18. EFFECTIVE DATE AND TERMINATION DATE.
The effective date of this Plan is June 2, 1998, the date
on which the Board adopted this Plan, as amended, but is subject to the
approval of the Plan by at least a majority of the votes cast by the
shareholders of the Company at the next meeting of shareholders.
7
<PAGE>
VISTA 2000, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby constitutes and appoints G. Louis Graziadio, III
and Shyam H. Gidumal, and each of them, his or her true and lawful agent and
proxy with full power of substitution in each, to represent and to vote on
behalf of the undersigned all of the shares of Vista 2000, Inc.. (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at the offices of the Company located
at 221 W. First Street, Kewanee, Illinois at 10:00 A.M., local time on
Tuesday, September 22, 1998 and at any adjournment or adjournments thereof,
upon the following proposals more fully described in the Notice of Annual
Meeting of Stockholders and Proxy Statement for the Meeting (receipt of which
is hereby acknowledged).
This proxy when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR proposals 1 through 7.
1. ELECTION OF DIRECTORS: / / VOTE FOR all the nominees; except
/ / VOTE WITHHELD from all nominees
vote withheld from the following nominees (if any) _______________________
Nominees: G. Louis Graziadio, III, Shyam H. Gidumal, Perry A. Lerner, Lee
E. Mikles, Paul A. Novelly, Richard D. Squires
2. Approval of Proposal for a 25:1 reverse stock split with 50,000,000 shares
authorized by the Articles of Incorporation.
/ / FOR / / AGAINST / / ABSTAIN
3. Approval of Proposal to adopt the Company's 1998 Incentive Stock Option
Plan and to reserve 210,000 shares after a 25:1 stock split.
/ / FOR / / AGAINST / / ABSTAIN
4. Approval of Proposal to adopt the Company's 1998 Non-Employee Director
Stock Option Plan to reserve 90,000 shares after a 25:1 stock split.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
5. Approval of Proposal to ratify the appointment of Grant Thornton LLP as
independent auditors for fiscal year ending December 26, 1998.
/ / FOR / / AGAINST / / ABSTAIN
6. Approval of Proposal to change the Company's name from, Vista 2000, Inc. to
Boss Holdings, Inc.
/ / FOR / / AGAINST / / ABSTAIN
7. In his discretion, the proxy is authorized to vote upon other matters as
may properly come before the Meeting.
/ / FOR / / AGAINST / / ABSTAIN
I / / WILL / / WILL NOT ATTEND THE MEETING.
Dated: ____________________________________
___________________________________________
Signature of Stockholder
___________________________________________
Signature of Stockholder
THIS PROXY MUST BE SIGNED EXACTLY AS THE
NAME APPEARS HEREON. WHEN SHARES ARE HELD
BY JOINT TENANTS, BOTH SHOULD SIGN. IF THE
SIGNER IS A CORPORATION, PLEASE SIGN FULL
CORPORATE NAME BY DULY AUTHORIZED OFFICER,
GIVING FULL TITLE AS SUCH. IF A
PARTNERSHIP, PLEASE SIGN PARTNERSHIP NAME
BY AUTHORIZED PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
