As filed with the Securities and Exchange Commission on July 23, 1998
Registration No. 333-
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3698386
- ------------------------------- -----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
5697 RISING SUN AVENUE
PHILADELPHIA, PENNSYLVANIA 19120
------------------------------------------
(Address of principal executive offices)
1994 PERFORMANCE EQUITY PLAN
AND
OTHER EMPLOYEE BENEFIT PLANS
-----------------------------
(Full title of the Plans)
SHELLY FINKEL, Chairman of the Board
Global Telecommunication Solutions, Inc.
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
(215) 342-7700
- ------------------------------------------------------------------------------
(Name, address and telephone number, including area code, of agent for service)
with a copy to:
DAVID ALAN MILLER, Esq.
Graubard Mollen & Miller
600 Third Avenue
New York, New York 10016-2097
(212) 818-8800
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of Securities Amount to be offering price aggregate Amount of
to be registered registered per share offering price registration fee
============================== ================ ================== ==================== =================
<S> <C> <C> <C> <C>
Common Stock issuable
upon exercise of additional
options which may be granted
under the Registrant's 1994
Performance Equity Plan
("1994 Plan") 1,000,000 shares $3.00(1) $3,000,000.00 $ 885.00
- ------------------------------------------------------------------------------------------------------------
Common Stock issuable upon
exercise of options granted
and outstanding under other
employee benefit plans
("Benefit Plans") 425,000 shares (2) $2,798,906.25(3) $ 825.68
- ------------------------------------------------------------------------------------------------------------
TOTAL $5,798,906.25 $ 1,710.68
============================================================================================================
</TABLE>
(Footnotes begin on next page)
<PAGE>
(Footnotes to chart on previous page)
(1) Based on the last sale price of the Common Stock, as reported by The
Nasdaq Stock Market on July 20, 1998, in accordance with Rule 457(c)
promulgated under the Securities Act of 1933, as amended ("Securities
Act").
(2) In accordance with Rule 457(h) promulgated under the Securities Act,
the exercise prices payable for the shares of Common Stock issuable
upon exercise of outstanding options granted pursuant to Benefit Plans
are as follows: $6.125 (60,000 shares); $6.4375 (157,500 shares); $6.50
(7,500 shares); $6.5625 (100,000 shares); and $7.125 (100,000 shares).
(3) The proposed maximum aggregate offering price is the sum of the
exercise prices of the options granted and outstanding under the
Benefit Plans as of July 20, 1998, in accordance with Rule 457(h)
promulgated under the Securities Act.
---------------------
In accordance with the provisions of Rule 462 promulgated under the
Securities Act, the Registration Statement will become effective upon filing
with the Securities and Exchange Commission.
---------------------
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information *
Item 2. Registrant Information and Plan Annual Information *
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act and the Note to Part I of the
Instructions to Form S-8.
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by the Registrant with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended ("Exchange Act") are incorporated by reference
in this Registration Statement:
(a) Annual Report on Form 10-KSB for the year ended December 31,
1997 and amendment thereto on Form 10-KSB/A;
(b) Current Report on Form 8-K, dated February 6, 1998, and
amendments thereto on Form 8-K/A;
(c) Quarterly Report on Form 10-QSB for the quarter ended March
31, 1998;
(d) Proxy Statement, dated June 5, 1998, relating to the Annual
Meeting of Stockholders; and
(e) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A under the Exchange Act
(File No. 1-13478).
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the respective date of filing of such documents. Any statement
contained in a document incorporated by reference herein is modified or
superseded for all purposes to the extent that a statement contained in this
Registration Statement or in any other subsequently filed document that is
incorporated by reference modifies or replaces such statement.
Item 4. Description of Securities.
The Common Stock of the Registrant is registered under Section 12 of
the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit, or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe that such person's conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that such person did not act in good faith and in a
manner which such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that such person's conduct was
unlawful.
II-1
<PAGE>
In the case of an action by or in the right of the corporation, Section
145 empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action in
any of the capacities set forth above against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit if such person acted in good faith
and in a manner such person reasonably believed to be in and not opposed to the
best interests of the corporation, except that indemnification is not permitted
in respect of any claim, issue, or matter as to which such person is adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought determines upon
application that, despite the adjudicate of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper. Section 145 further provides: that a Delaware corporation is
required to indemnify a director, officer, employee, or agent against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with any action, suit, or proceeding or in defense of any claim,
issue, or matter therein as to which such person has been successful on the
merits or otherwise; that indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights to which the indemnified party may be
entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee, or agent and shall inure to the
benefit of such person's heirs, executors, and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer against any such liability asserted against such person in any such
capacity or arising out of such person's status as such whether or not the
corporation would have the power to indemnify him against liability under
Section 145. A Delaware corporation may provide indemnification only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct. Such determination is to be made (i)
by the board of directors by a majority vote of a quorum consisting of directors
who were not party to such action, suit, or proceeding, or (ii) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders.
The Registrant's By-Laws and Article Sixth of its Amended and Restated
Certificate of Incorporation provides for indemnification of directors and
officers of the Company to the fullest extent permitted by law, as now in effect
or later amended. The Registrant currently provides liability insurance for each
director and certain officers for certain losses arising from claims or charges
made against them while acting in their capacities as directors or officers of
the Registrant.
Article Seventh of the Registrant's Amended and Restated Certificate of
Incorporation eliminates the personal liability of the directors of the
Registrant to the fullest extent permitted by the provisions of Section 102 of
the Delaware General Corporation Law, as the same may be amended and
supplemented.
Item 7. Exemption from Registration Claimed.
Not applicable.
II-2
<PAGE>
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C> <C>
4.1 1994 Performance Equity Plan of the Registrant
4.2 Stock Option Agreement for the purchase of 100,000 shares between the
Registrant and Robert Bogin
4.3 Stock Option Agreement for the purchase of 25,000 shares between the
Registrant and Michael Hoppman
4.4 Stock Option Agreement for the purchase of 7,500 shares between the
Registrant and Anthony Casazza
4.5 Stock Option Agreement for the purchase of 100,000 shares between the
Registrant and Shelly Finkel
4.6 Stock Option Agreement for the purchase of 25,000 shares between the
Registrant and James Franklin
4.7 Stock Option Agreement for the purchase of 7,500 shares between the
Registrant and Linda Maynes
4.8 Stock Option Agreement for the purchase of 60,000 shares between the
Registrant and JEB Partners
4.9 Stock Option Agreement for the purchase of 50,000 shares between the
Registrant and Barry Rubenstein
4.10 Stock Option Agreement for the purchase of 50,000 shares between the
Registrant and Eli Oxenhorn
5.1 Opinion of Graubard Mollen & Miller
23.1 Consent of KPMG Peat Marwick LLP, independent accountant for the
registrant
23.2 Consent of Graubard Mollen & Miller (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
</TABLE>
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
II-3
<PAGE>
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Philadelphia, State of Pennsylvania, on this 20th day
of July, 1998.
GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
By: /s/ Shelly Finkel
-------------------------------------------------
Shelly Finkel, Chairman of the Board of Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Shelly Finkel and Robert Bogin his true
and lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said attorneys-in-fact and agents, each acting alone, or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<S> <C> <C>
/s/ Shelly Finkel Chairman of the Board of Directors July 20, 1998
- ----------------------------------------------------
Shelly Finkel
/s/ Robert Bogin President and Director July 20, 1998
- ----------------------------------------------------
Robert Bogin
/s/ Randolph Cherkas Chief Operating Officer and Director July 20, 1998
- ----------------------------------------------------
Randolph Cherkas
/s/ Alan W. Kaufman Director July 20, 1998
- ----------------------------------------------------
Alan W. Kaufman
/s/ Donald L. Ptalis Director July 20, 1998
- ----------------------------------------------------
Donald L. Ptalis
/s/ J. Mark Rubenstein Director July 20, 1998
- ----------------------------------------------------
J. Mark Rubenstein
/s/ Jack N. Tobin Director July 20, 1998
- ----------------------------------------------------
Jack N. Tobin
/s/ Michael Hoppman Chief Financial Officer and Treasurer July 20, 1998
- ---------------------------------------------------- (and principal accounting officer)
Michael Hoppman
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
------------- --------------
<S> <C> <C>
4.1 1994 Performance Equity Plan of the Registrant
4.2 Stock Option Agreement for the purchase of 100,000 shares between the
Registrant and Robert Bogin
4.3 Stock Option Agreement for the purchase of 25,000 shares between the
Registrant and Michael Hoppman
4.4 Stock Option Agreement for the purchase of 7,500 shares between the
Registrant and Anthony Casazza
4.5 Stock Option Agreement for the purchase of 100,000 shares between the
Registrant and Shelly Finkel
4.6 Stock Option Agreement for the purchase of 25,000 shares between the
Registrant and James Franklin
4.7 Stock Option Agreement for the purchase of 7,500 shares between the
Registrant and Linda Maynes
4.8 Stock Option Agreement for the purchase of 60,000 shares between the
Registrant and JEB Partners
4.9 Stock Option Agreement for the purchase of 50,000 shares between the
Registrant and Barry Rubenstein
4.10 Stock Option Agreement for the purchase of 50,000 shares between the
Registrant and Eli Oxenhorn
5.1 Opinion of Graubard Mollen & Miller
23.1 Consent of KPMG Peat Marwick LLP, independent public accountant for the
registrant
23.2 Consent of Graubard Mollen & Miller (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page thereto)
</TABLE>
II-6
<PAGE>
EXHIBIT 4.1
Approved by the Board and Stockholders on October 31, 1994
Amended on August 20, 1996
Amended on June 30, 1998
GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
1994 Performance Equity Plan
Section 1. Purpose; Definitions.
1.1 Purpose. The purpose of the Global Telecommunication Solutions,
Inc. (the "Company") 1994 Performance Equity Plan (the "Plan") is to enable the
Company to offer to its key employees, officers, directors, consultants and
sales representatives whose past, present and/or potential contributions to the
Company and its Subsidiaries have been, are or will be important to the success
of the Company, an opportunity to acquire a proprietary interest in the Company.
The various types of long-term incentive awards which may be provided under the
Plan will enable the Company to respond to changes in compensation practices,
tax laws, accounting regulations and the size and diversity of its businesses.
1.2 Definitions. For purposes of the Plan, the following terms shall
be defined as set forth below:
(a) "Agreement" means the agreement between the Company and
the Holder setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto and the regulations promulgated
thereunder.
(d) "Committee" means the Stock Option Committee of the Board
or any other committee of the Board, which the Board may designate to administer
the Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, par
value $.01 per share.
(f) "Company" means Global Telecommunication Solutions, Inc.,
a corporation organized under the laws of the State of Delaware.
(g) "Deferred Stock" means Stock to be received, under an
award made pursuant to Section 9, below, at the end of a specified deferral
period.
(h) "Disability" means disability as determined under
procedures established by the Committee for purposes of the Plan.
(i) "Effective Date" means the date set forth in Section 13.1,
below.
(j) "Fair Market Value," unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
1
<PAGE>
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last trading day preceding the date of grant of an award
hereunder, as reported by the exchange or Nasdaq, as the case may be; (ii) if
the Common Stock is not listed on a national securities exchange or quoted on
the Nasdaq National Market or Nasdaq SmallCap Market, but is traded in the
over-the-counter market, the closing bid price for the Common Stock on the last
trading day preceding the date of grant of an award hereunder for which such
quotations are reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
fair market value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under
the Plan.
(l) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active
employment with the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 10,
below, that is valued in whole or in part by reference to, or is otherwise based
upon, Stock.
(p) "Parent" means any present or future parent corporation of
the Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the Global Telecommunication Solutions, Inc.
1994 Performance Equity Plan, as hereinafter amended from time to time.
(r) "Restricted Stock" means Stock, received under an award
made pursuant to Section 8, below, that is subject to restrictions under said
Section 8.
(s) "SAR Value" means the excess of the Fair Market Value (on
the exercise date) of the number of shares for which the Stock Appreciation
Right is exercised over the exercise price that the participant would have
otherwise had to pay to exercise the related Stock Option and purchase the
relevant shares.
(t) "Stock" means the Common Stock of the Company, par value
$.01 per share.
(u) "Stock Appreciation Right" means the right to receive from
the Company, on surrender of all or part of the related Stock Option, without a
cash payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the exercise price of the Stock Option.
(v) "Stock Option" or "Option" means any option to purchase
shares of Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under
Section 6.3, below, as a result of the payment of the exercise price of a Stock
Option and/or the withholding tax related thereto in the form of Stock owned by
the Holder or the withholding of Stock by the Company.
2
<PAGE>
(x) "Subsidiary" means any present or future subsidiary
corporation of the Company, as such term is defined in Section 424(f) of the
Code.
Section 2. Administration.
2.1 Committee Membership. The Plan shall be administered by the Board
or a Committee. Committee members shall serve for such term as the Board may in
each case determine, and shall be subject to removal at any time by the Board.
2.2 Powers of Committee. The Committee shall have full authority,
subject to Section 4.2, below, to award, pursuant to the terms of the Plan: (i)
Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv)
Deferred Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based Awards.
For purposes of illustration and not of limitation, the Committee shall have the
authority (subject to the express provisions of this Plan):
(a) to select the officers, key employees, directors,
consultants and sales representatives of the Company or any Subsidiary to whom
Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock,
Reload Stock Options and/or Other Stock-Based Awards may from time to time be
awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share price, any restrictions or limitations, and
any vesting, exchange, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions, as the Committee shall determine);
(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash awards made by the
Company or any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish, including
the crediting of interest on deferred amounts denominated in cash and of
dividend equivalents on deferred amounts denominated in Stock;
(f) to determine the extent and circumstances under which
Stock and other amounts payable with respect to an award hereunder shall be
deferred which may be either automatic or at the election of the Holder; and
(g) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Sections 4.2 (d) and 12,
below, the Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
3
<PAGE>
substance of all Agreements relating thereto), and to otherwise supervise the
administration of the Plan. Subject to Section 12, below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan relating to Incentive
Stock Options (including but limited to Stock Reload Options or Stock
Appreciation rights granted in conjunction with an Incentive Stock Option) or
any Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code, or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
Section 3. Stock Subject to Plan.
3.1 Number of Shares. The total number of shares of Common Stock
reserved and available for distribution under the Plan shall be 1,500,000
shares. Shares of Stock under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. If any shares of Stock that
have been granted pursuant to a Stock Option cease to be subject to a Stock
Option, or if any shares of Stock that are subject to any Stock Appreciation
Right, Restricted Stock, Deferred Stock award, Reload Stock Option or Other
Stock-Based Award granted hereunder are forfeited or any such award otherwise
terminates without a payment being made to the Holder in the form of Stock, such
shares shall again be available for distribution in connection with future
grants and awards under the Plan. Only net shares issued upon a stock-for-stock
exercise (including stock used for withholding taxes) shall be counted against
the number of shares available under the Plan.
3.2 Adjustment Upon Changes in Capitalization, Etc. In the event of any
merger, reorganization, consolidation, recapitalization, dividend (other than a
cash dividend), stock split, reverse stock split, or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan, in the
number and exercise price of shares subject to outstanding Options, in the
number of shares and Stock Appreciation Right price relating to Stock
Appreciation Rights, and in the number of shares subject to, and in the related
terms of, other outstanding awards (including but not limited to awards of
Restricted Stock, Deferred Stock, Reload Stock Options and Other Stock-Based
Awards) granted under the Plan as may be determined to be appropriate by the
Committee in order to prevent dilution or enlargement of rights, provided that
the number of shares subject to any award shall always be a whole number.
Section 4. Eligibility.
4.1 General. Awards may be made or granted to key employees, officers,
directors, consultants and sales representatives who are deemed to have rendered
or to be able to render significant services to the Company or its Subsidiaries
and who are deemed to have contributed or to have the potential to contribute to
the success of the Company. No Incentive Stock Option shall be granted to any
person who is not an employee of the Company or a Subsidiary at the time of
grant.
4.2 Non-Employee Directors' Awards. Notwithstanding anything contained
herein to the contrary:
(a) The only awards to be granted to a non-employee director
of the Company hereunder shall be Stock Options with the terms set forth below
and in Section 6, below. If there is an inconsistency between the provisions of
Sections 4 and 6, the provisions of Section 4 shall control;
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(b) On March 31 of each year (or the next business day
thereafter if March 31 is a Saturday, Sunday or legal holiday) during the term
of the Plan, assuming there are enough shares then available for grant
hereunder, each person who is then a director of the Company shall be awarded a
Stock Option to purchase 10,000 shares of the Company's Common Stock (to be
adjusted in accordance with Section 3.2, above) at the Fair Market Value
thereof, all of which options shall be immediately exercisable as of the date of
grant and have a term of ten years; provided, however, that if the Fair Market
Value cannot be determined in accordance with clauses (i) or (ii) of the
definition of Fair Market Value in Section 1.2(j) hereof, the exercise price of
the options shall be the same as the exercise price of the options awarded to
the directors in March of the preceding calendar year;
(c) Any person who shall become a director of the Company
within the six month period following any March 31 shall be awarded, on the date
he so becomes a director, a stock option to purchase 10,000 shares of Common
Stock at the Fair Market Value thereof on the date of grant, which option shall
be immediately exercisable as of the date of the award and have a term of ten
years; provided, however, that if the Fair Market Value cannot be determined in
accordance with clauses (i) or (ii) of the definition of Fair Market Value in
Section 1.2(j) hereof, the exercise price of the option shall be the same as the
exercise price of the options awarded to the directors on the immediately
preceding March 31;
(d) This Section 4.2 shall not be amended more than once every
six months, other than to comport with any changes in the Code or the Employment
Retirement Income Security Act, or the rules and regulations promulgated under
either of those statutes.
Section 5. Required Six-Month Holding Period.
Any equity security issued under this Plan must be held for at least
six months from the date of the grant of the related award.
Section 6. Stock Options.
6.1 Grant and Exercise. Stock Options granted under the Plan may be of
two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Code, as the Committee may from time to time approve. The Committee
shall have the authority to grant Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options and which may be granted alone or in
addition to other awards granted under the Plan. To the extent that any Stock
Option intended to qualify as an Incentive Stock Option does not so qualify, it
shall constitute a separate Nonqualified Stock Option. An Incentive Stock Option
may be granted only within the ten-year period commencing from the Effective
Date and may only be exercised within ten years of the date of grant (or five
years in the case of an Incentive Stock Option granted to an optionee ("10%
Stockholder") who, at the time of grant, owns Stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company.
6.2 Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant and may not be less than 100% of the Fair Market Value of the
Stock as defined above; provided, however, that the exercise price of an
Incentive Stock Option granted to a 10% Stockholder shall not be less than 110%
of the Fair Market Value of the Stock.
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(b) Option Term. Subject to the limitations in Section 6.1,
above, the term of each Stock Option shall be fixed by the Committee.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee and as set forth in Section 11, below. If the Committee provides,
in its discretion, that any Stock Option is exercisable only in installments,
i.e., that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option, by giving written notice of exercise to the Company specifying
the number of shares of Stock to be purchased. Such notice shall be accompanied
by payment in full of the purchase price, which shall be in cash or, unless
otherwise provided in the Agreement, in shares of Stock (including Restricted
Stock and other contingent awards under this Plan) or, partly in cash and partly
in such Stock, or such other means which the Committee determines are consistent
with the Plan's purpose and applicable law. Cash payments shall be made by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; provided, however, that the Company shall not be required
to deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Stock
shall be valued at the Fair Market Value of a share of Stock on the date prior
to the date of exercise. Such payments shall be made by delivery of stock
certificates in negotiable form which are effective to transfer good and valid
title thereto to the Company, free of any liens or encumbrances. Subject to the
terms of the Agreement, the Committee may, in its sole discretion, at the
request of the Holder, deliver upon the exercise of a Nonqualified Stock Option
a combination of shares of Deferred Stock and Common Stock; provided that,
notwithstanding the provisions of Section 9 of the Plan, such Deferred Stock
shall be fully vested and not subject to forfeiture. A Holder shall have none of
the rights of a stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of the
Option.
(e) Transferability. No Stock Option shall be transferable by
the Holder other than by will or by the laws of descent and distribution, and
all Stock Options shall be exercisable, during the Holder's lifetime, only by
the Holder.
(f) Termination by Reason of Death. If a Holder's employment
by the Company or a Subsidiary terminates by reason of death, any Stock Option
held by such Holder, unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, shall be fully vested and may thereafter
be exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.
(g) Termination by Reason of Disability. If a Holder's
employment by the Company or any Subsidiary terminates by reason of Disability,
any Stock Option held by such Holder, unless otherwise determined by the
Committee at the time of grant and set forth in the Agreement, shall be fully
vested and may thereafter be exercised by the Holder for a period of one year
(or such other greater or lesser period as the Committee may specify at the time
of grant) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(h) Other Termination. Subject to the provisions of Section
14.3, below, and unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, if a Holder is an employee of the Company
or a Subsidiary at the time of grant and if such Holder' employment by the
Company or any Subsidiary terminates for any reason other than death or
Disability, the Stock Option shall
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thereupon automatically terminate, except that if the Holder's employment is
terminated by the Company or a Subsidiary without cause or due to Normal
Retirement, then the portion of such Stock Option which has vested on the date
of termination of employment may be exercised for the lesser of three months
after termination of employment or the balance of such Stock Option's term.
(i) Additional Incentive Stock Option Limitation. In the case
of an Incentive Stock Option, the aggregate Fair Market Value of Stock
(determined at the time of grant of the Option) with respect to which Incentive
Stock Options become exercisable by a Holder during any calendar year (under all
such plans of the Company and its Parent and Subsidiary) shall not exceed
$100,000.
(j) Buyout and Settlement Provisions. The Committee may at any
time, in its sole discretion, offer to buy out a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.
(k) Stock Option Agreement. Each grant of a Stock Option shall
be confirmed by, and shall be subject to the terms of, the Agreement executed by
the Company and the Holder.
6.3 Stock Reload Option. The Committee may also grant to the Holder
(concurrently with the grant of an Incentive Stock Option and at or after the
time of grant in the case of a Nonqualified Stock Option) a Stock Reload Option
up to the amount of shares of Stock held by the Holder for at least six months
and used to pay all or part of the exercise price of an Option and, if any,
withheld by the Company as payment for withholding taxes. Such Stock Reload
Option shall have an exercise price equal to the Fair Market Value as of the
date of the Stock Reload Option grant. Unless the Committee determines
otherwise, a Stock Reload Option may be exercised commencing one year after it
is granted and shall expire on the date of expiration of the Option to which the
Reload Option is related.
Section 7. Stock Appreciation Rights.
7.1 Grant and Exercise. The Committee may grant Stock Appreciation
Rights to participants who have been, or are being granted, Options under the
Plan as a means of allowing such participants to exercise their Options without
the need to pay the exercise price in cash. In the case of a Nonqualified Stock
Option, a Stock Appreciation Right may be granted either at or after the time of
the grant of such Nonqualified Stock Option. In the case of an Incentive Stock
Option, a Stock Appreciation Right may be granted only at the time of the grant
of such Incentive Stock Option.
7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be
exercisable as determined by the Committee and set forth in the Agreement,
subject to the limitations, if any, imposed by the Code, with respect to related
Incentive Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate
and shall no longer be exercisable upon the termination or exercise of the
related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
Holder shall be entitled to receive a number of Option Shares equal to the SAR
Value divided by the exercise price of the Option.
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(d) Shares Affected Upon Plan. The granting of a Stock
Appreciation Rights shall not affect the number of shares of Stock available
under for awards under the Plan. The number of shares available for awards under
the Plan will, however, be reduced by the number of shares of Stock acquirable
upon exercise of the Stock Option to which such Stock Appreciation Right
relates.
Section 8. Restricted Stock.
8.1 Grant. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture (the "Restriction Period"), the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the
awards.
8.2 Terms and Conditions. Each Restricted Stock award shall be subject
to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name of the
Holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued
and outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board may
in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (i) all
or part of such Restricted Stock shall become vested in accordance with the
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terms of the Agreement, subject to Section 11, below, and (ii) any Retained
Distributions with respect to such Restricted Stock shall become vested to the
extent that the Restricted Stock related thereto shall have become vested,
subject to Section 11, below. Any such Restricted Stock and Retained
Distributions that do not vest shall be forfeited to the Company and the Holder
shall not thereafter have any rights with respect to such Restricted Stock and
Retained Distributions that shall have been so forfeited.
Section 9. Deferred Stock.
9.1 Grant. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock shall be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period (the "Deferral Period") during which, and
the conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.
9.2 Terms and Conditions. Each Deferred Stock award shall be subject to
the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or
the Additional Deferral Period referred to in Section 9.2 (d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred
Stock shall not have any rights of a stockholder by virtue of such award until
the expiration of the applicable Deferral Period and the issuance and delivery
of the certificates representing such Stock. The shares of Stock issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral Period and the issuance and delivery of
such Stock to the Holder.
(c) Vesting; Forfeiture. Upon the expiration of the Deferral
Period with respect to each award of Deferred Stock and the satisfaction of any
other applicable restrictions, terms and conditions all or part of such Deferred
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 11, below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and
the Committee may at any time, defer the receipt of an award (or an installment
of an award) for an additional specified period or until a specified event (the
"Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).
Section 10. Other Stock-Based Awards.
10.1 Grant and Exercise. Other Stock-Based Awards may be awarded,
subject to limitations under applicable law, that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, shares of Common Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, shares of
Common Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and awards valued by reference to the value of securities of or
the performance of specified Subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards under
this Plan or any other plan of the Company.
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10.2 Eligibility for Other Stock-Based Awards. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
such other stock-based awards shall be made, the number of shares of Common
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards.
10.3 Terms and Conditions. Each Other Stock-Based Award shall be
subject to such terms and conditions as may be determined by the Committee and
to Section 11, below.
Section 11. Accelerated Vesting and Exercisability.
If (i) any person or entity other than the Company and/or any
stockholders of the Company as of the Effective Date acquire securities of the
Company (in one or more transactions) having 25% or more of the total voting
power of all the Company' securities then outstanding and (ii) the Board of
Directors of the Company does not authorize or otherwise approve such
acquisition, then, the vesting periods of any and all Options and other awards
granted and outstanding under the Plan shall be accelerated and all such Options
and awards will immediately and entirely vest, and the respective holders
thereof will have the immediate right to purchase and/or receive any and all
Stock subject to such Options and awards on the terms set forth in this Plan and
the respective agreements respecting such Options and awards.
Section 12. Amendment and Termination.
Subject to Section 4.2 (d) hereof, the Board may at any time, and from
time to time, amend alter, suspend or discontinue any of the provisions of the
Plan, but no amendment, alteration, suspension or discontinuance shall be made
which would impair the rights of a Holder under any Agreement theretofore
entered into hereunder, without the Holder' consent.
Section 13. Term of Plan.
13.1 Effective Date. The Plan shall be effective as of October 31, 1994
("Effective Date"). The Effective Date is the date on which all of the Company's
directors and stockholders approved the Plan.
13.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may only be made during the ten
year period following the Effective Date.
Section 14. General Provisions.
14.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within 10 days after the Agreement has been delivered to the Holder for
his or her execution.
14.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
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14.3 Employees.
(a) Engaging in Competition With the Company. In the event a
Holder's employment with the Company or a Subsidiary is terminated for any
reason whatsoever, and within one year after the date thereof such Holder
accepts employment with any competitor of, or otherwise engages in competition
with, the Company, the Committee, in its sole discretion, may require such
Holder to return to the Company the economic value of any award which was
realized or obtained by such Holder at any time during the period beginning on
that date which is six months prior to the date of such Holder's termination of
employment with the Company.
(b) Termination for Cause. The Committee may, in the event a
Holder's employment with the Company or a Subsidiary is terminated for cause,
annul any award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award which was realized or obtained by such
Holder at any time during the period beginning on that date which is six months
prior to the date of such Holder's termination of employment with the Company.
(c) No Right of Employment. Nothing contained in the Plan or
in any award hereunder shall be deemed to confer upon any Holder who is an
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any Holder who
is an employee at any time.
14.4 Investment Representations. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the Holder is
acquiring the shares for investment without a view to distribution thereof.
14.5 Additional Incentive Arrangements. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of Stock Options and the awarding of stock and cash otherwise than
under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
14.6 Withholding Taxes. Not later than the date as of which an amount
must first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If permitted
by the Committee, tax withholding or payment obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Holder from the Company or any Subsidiary.
14.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of New York (without regard to choice of law provisions).
14.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
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14.9 Non-Transferability. Except as otherwise expressly provided in the
Plan, no right or benefit under the Plan may be alienated, sold, assigned,
hypothecated, pledged, exchanged, transferred, encumbranced or charged, and any
attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void.
14.10 Applicable Laws. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933, as amended, and (ii) the rules and regulations of any securities
exchange on which the Stock may be listed.
14.11 Conflicts. If any of the terms or provisions of the Plan or an
Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of said
Section 422 of the Code. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
and therein. If any of the terms or provisions of any Agreement conflict with
any terms or provision of the Plan, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of the
Plan. Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
14.12 Non-Registered Stock. The shares of Stock to be distributed under
this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Stock on a national securities
exchange.
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STOCK OPTION AGREEMENT
AGREEMENT, made as of August 1, 1997, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
ROBERT BOGIN (the "Employee").
WHEREAS, the Employee recently became employed by the Company; and
WHEREAS, the Board of Directors has authorized the grant to the
Employee of an option (the "Option") to purchase an aggregate of 100,000 of the
authorized but unissued or treasury shares of the Common Stock of the Company,
$.01 par value ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Employee the
right and option to purchase all or any part of an aggregate of 100,000 shares
of the Common Stock ("Option Shares") on the terms and conditions set forth
herein. Said Option is a non-qualified stock option not intended to qualify
under any section of the Internal Revenue Code of 1986, as amended, and is not
granted under any plan, including the Company's 1994 Performance Equity Plan
("Plan"). Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option
shall be $6.5625 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, as follows: (i) Options to purchase 50% of the
Option Shares shall be exercisable on and after January 1, 1998; and (ii)
Options to purchase the remaining 50% of the Option Shares shall be exercisable
on and after July 1, 1998. After each portion of the Options vests, it shall
remain exercisable for a period of five years from the date of vesting
("Exercise Period"), except as otherwise set forth in this Agreement.
Notwithstanding the foregoing, if, on or prior to June 30, 1998, (i) the
Company, as a going concern, is sold or otherwise acquired, or (ii) any party or
group of parties not currently owning more than 5% of the outstanding voting
securities of the Company acquires in one or more transactions beneficial
ownership of more than 35% of such securities (the events in (i) and (ii) being
referred to herein as a "Change in Control"), then, notwithstanding the
foregoing vesting provisions and in addition to that percentage of Options
vested at the time of the Change in Control, all of the remaining Options shall
immediately and entirely vest.
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4. Effect of Termination of Employment.
4.1 Termination Due to Death. If Employee's employment by the Company
terminates by reason of death, the Option shall become fully vested and
exercisable and may thereafter be exercised by the legal representative of the
estate or by the legatee of the Employee under the will of the Employee, for a
period of one year from the date of such death or until the expiration of the
Exercise Period, whichever period is shorter.
4.2 Termination Due to Disability. If Employee's employment by the Company
terminates by reason of Disability, the Option shall become fully vested and
exercisable and may thereafter be exercised by the Employee for a period of one
year from the date of such termination or until the expiration of the Exercise
Period, whichever period is shorter.
4.3 Termination by the Company Without Cause and/or Due to Retirement. If
Employee's employment is terminated by the Company without cause or due to
Normal Retirement, then the portion of the Option which has vested by the date
of termination of employment (including vesting on an accelerated basis pursuant
to Section 3) may be exercised for a period of one year from the date of such
termination of employment or until the expiration of the Exercise Period,
whichever is shorter; provided, however, that if Employee is terminated without
cause prior to June 30, 1998, all options vested at the time of such termination
(including vesting on an accelerated basis pursuant to Section 3) shall remain
exercisable for their full term. The portion of the Option not yet exercisable
on the date of termination of employment shall immediately expire.
4.4 Other Termination.
(a) If Employee's employment is terminated for any reason other than
(i) death, (ii) Disability, (iii) Normal Retirement, or (iv) without cause
by the Company, the Option shall expire on the date of termination of
employment.
(b) The Committee, in the event the Employee's employment is
terminated for cause, may require the Employee to return to the Company the
economic benefit of any Option Shares purchased hereunder by the Employee
within the six month period prior to the date of termination. In such
event, the Employee hereby agrees to remit to the Company, in cash, an
amount equal to the difference between the Fair Market Value of the Option
Shares on the date of termination (or the sales price of such Shares if the
Option Shares were sold during such six month period) and the Exercise
Price of such Shares.
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Employee for Federal income tax purposes
with respect to the Option, the Employee shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
2
<PAGE>
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Employee from the Company.
6. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Optionee's proportionate
interest in the Company and his rights hereunder. If (i) the Company shall not
be the surviving corporation in any merger, combination, consolidation or
similar type of corporate transaction, or (ii) if the Company is the survivor,
but the outstanding shares of Common Stock are exchanged for securities of
another company, or property, then the Board of Directors will make appropriate
provision so that this Option will be exercisable for the full period as
provided in this Agreement for securities or other property of the surviving or
other entity as if this Option had been exercised for Common Stock immediately
before such merger, combination, consolidation or other transaction. No
fractional shares of Common Stock shall be issued as a result of any adjustment
under this provision, and to the extent any adjustment results in a fractional
share of Common Stock, then the adjustment will be to the lower full share.
7. Method of Exercise.
7.1 Notice to the Company. The Option may be exercised in whole or in part
by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Employee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
3
<PAGE>
7.3.2 Cashless Payment. The Committee, in its sole discretion, may allow
Employee to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Employee. No transfer of the Option by the Employee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
9. Form S-8 Registration. The Company hereby grants to Employee the right to
have the Option Shares registered on any registration statement on Form S-8
filed by the Company after the date hereof and during the period in which
Employee is employed by the Company or by any subsidiary thereof.
Notwithstanding the foregoing, the Company shall have no obligation hereunder in
connection with any registration statement or amendment thereto unless the
Employee provides to the Company information with respect to his ownership of
Option Shares, manner of proposed disposition and such other matters as the
Company shall reasonably request for disclosure in the registration statement or
any amendment thereto.
10. Company Representations. The Company hereby represents and warrants to
Employee that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to
Employee in accordance with the terms and conditions hereof, will be duly
and validly issued and fully paid and non-assessable.
11. Employee Representations. The Employee hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for
his own account and not with a view towards the distribution thereof;
4
<PAGE>
(ii) he has received a copy of all reports and documents required to
be filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, within the
last 24 months and all reports issued by the Company to its stockholders;
(iii) he understands that he must bear the economic risk of the
investment in the Option Shares, which cannot be sold by him unless they
are registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is under
no obligation to register the Option Shares for sale under the 1933 Act;
(iv) in his position with the Company, he has had both the opportunity
to ask questions and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such
information or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant to
clause (iii) above;
(v) he is aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence
of registration under the 1933 Act or an exemption therefrom as provided
herein; and
(vi) if, at the time of issuance of the Option Shares, the issuance of
such shares have not been registered under the 1933 Act, the certificates
evidencing the Option Shares shall bear the following legend:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) the
Employee has furnished the Company with notice of such proposed transfer and the
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
5
<PAGE>
12.2 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
13.2 Employee and Stockholder Rights. The Employee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Employee at will.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Employee and the Company.
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any per son
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
6
<PAGE>
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Philadelphia, Pennsylvania 19120
By:___________________________
EMPLOYEE: Address: ________________________________
________________________________
______________________________
ROBERT BOGIN
7
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
1. I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
2. I have received a copy of all reports and documents required to be filed
by the Company with the Commission pursuant to the Exchange Act within the last
24 months and all reports issued by the Company to its stockholders;
3. I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
4. I agree that I will not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company;
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<PAGE>
4. In my position with the Company, I have had both the opportunity to ask
questions and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
5. I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
6. If, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933. The shares may not be sold or transferred in the
absence of such registration or an exemption therefrom under said
Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
2
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of November 10, 1997, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
MICHAEL HOPPMAN (the "Employee").
WHEREAS, the Employee recently became employed by the Company; and
WHEREAS, the Board of Directors has authorized the grant to the
Employee of an option (the "Option") to purchase an aggregate of 25,000 of the
authorized but unissued or treasury shares of the Common Stock of the Company,
$.01 par value ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Employee the right
and option to purchase all or any part of an aggregate of 25,000 shares of the
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a non-qualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$6.4375 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, as follows: (i) Options to purchase 10,000 of the
Option Shares shall be exercisable on and after August 18, 1998; (ii) Options to
purchase the 10,000 of the Option Shares shall be exercisable on and after
August 18, 1999; and (iii) Options to purchase the remaining 5,000 Option Shares
shall be exercisable on and after August 18, 2000. After each portion of the
Options vests, it shall remain exercisable for a period of five years from the
date of vesting ("Exercise Period"), except as otherwise set forth in this
Agreement. Notwithstanding the foregoing, if, (i) the Company, as a going
concern, is sold or otherwise acquired, or (ii) any party or group of parties
not currently owning more than 5% of the outstanding voting securities of the
1
<PAGE>
Company acquires in one or more transactions beneficial ownership of more than
35% of such securities (the events in (i) and (ii) being referred to herein as a
"Change in Control"), then, notwithstanding the foregoing vesting provisions and
in addition to that percentage of Options vested at the time of the Change in
Control, all of the remaining Options shall immediately and entirely vest.
4. Effect of Termination of Employment.
4.1 Termination Due to Death. If Employee's employment by the Company
terminates by reason of death, the Option shall become fully vested and
exercisable and may thereafter be exercised by the legal representative of the
estate or by the legatee of the Employee under the will of the Employee, for a
period of one year from the date of such death or until the expiration of the
Exercise Period, whichever period is shorter.
4.2 Termination Due to Disability. If Employee's employment by the Company
terminates by reason of Disability, the Option shall become fully vested and
exercisable and may thereafter be exercised by the Employee for a period of one
year from the date of such termination or until the expiration of the Exercise
Period, whichever period is shorter.
4.3 Termination by the Company Without Cause and/or Due to Retirement. If
Employee's employment is terminated by the Company without cause or due to
Normal Retirement, then the portion of the Option which has vested by the date
of termination of employment (including vesting on an accelerated basis pursuant
to Section 3) may be exercised for a period of one year from the date of such
termination of employment or until the expiration of the Exercise Period,
whichever is shorter; provided, however, that if Employee is terminated without
cause prior to June 30, 1998, all options vested at the time of such termination
(including vesting on an accelerated basis pursuant to Section 3) shall remain
exercisable for their full term. The portion of the Option not yet exercisable
on the date of termination of employment shall immediately expire.
4.4 Other Termination.
(a) If Employee's employment is terminated for any reason other than (i)
death, (ii) Disability, (iii) Normal Retirement, or (iv) without cause by the
Company, the Option shall expire on the date of termination of employment.
2
<PAGE>
(b) The Committee, in the event the Employee's employment is terminated for
cause, may require the Employee to return to the Company the economic benefit of
any Option Shares purchased hereunder by the Employee within the six month
period prior to the date of termination. In such event, the Employee hereby
agrees to remit to the Company, in cash, an amount equal to the difference
between the Fair Market Value of the Option Shares on the date of termination
(or the sales price of such Shares if the Option Shares were sold during such
six month period) and the Exercise Price of such Shares.
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Employee for Federal income tax purposes
with respect to the Option, the Employee shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Employee from the Company.
6. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Optionee's proportionate
interest in the Company and his rights hereunder. If (i) the Company shall not
be the surviving corporation in any merger, combination, consolidation or
similar type of corporate transaction, or (ii) if the Company is the survivor,
but the outstanding shares of Common Stock are exchanged for securities of
another company, or property, then the Board of Directors will make appropriate
provision so that this Option will be exercisable for the full period as
provided in this Agreement for securities or other property of the surviving or
other entity as if this Option had been exercised for Common Stock immediately
before such merger, combination, consolidation or other transaction. No
fractional shares of Common Stock shall be issued as a result of any adjustment
under this provision, and to the extent any adjustment results in a fractional
share of Common Stock, then the adjustment will be to the lower full share.
7. Method of Exercise.
7.1 Notice to the Company. The Option may be exercised in whole or in part
by written notice in the form attached hereto as Exhibit A directed to the
3
<PAGE>
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Employee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
7.3.2 Cashless Payment. The Committee, in its sole discretion, may allow
Employee to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Employee. No transfer of the Option by the Employee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
4
<PAGE>
9. Form S-8 Registration. The Company hereby grants to Employee the right to
have the Option Shares registered on any registration statement on Form S-8
filed by the Company after the date hereof and during the period in which
Employee is employed by the Company or by any subsidiary thereof.
Notwithstanding the foregoing, the Company shall have no obligation hereunder in
connection with any registration statement or amendment thereto unless the
Employee provides to the Company information with respect to his ownership of
Option Shares, manner of proposed disposition and such other matters as the
Company shall reasonably request for disclosure in the registration statement or
any amendment thereto.
10. Company Representations. The Company hereby represents and warrants to
Employee that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to
Employee in accordance with the terms and conditions hereof, will be
duly and validly issued and fully paid and non-assessable.
11. Employee Representations. The Employee hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, within
the last 24 months and all reports issued by the Company to its
stockholders;
(iii)he understands that he must bear the economic risk of the invest ment
in the Option Shares, which cannot be sold by him unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is
under no obligation to register the Option Shares for sale under the
1933 Act;
5
<PAGE>
(iv) in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of
the Company and all persons act ing on its behalf concerning the terms
and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information
obtained pursuant to clause (iii) above;
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vi) if, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates
evidencing the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933. The shares may not be sold or transferred in the
absence of such registration or an exemption therefrom under said
Act."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) the
Employee has furnished the Company with notice of such proposed transfer and the
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
12.2 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
6
<PAGE>
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
13.2 Employee and Stockholder Rights. The Employee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Employee at will.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Employee and the Company.
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
7
<PAGE>
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Philadelphia, Pennsylvania 19120
By:__________________________
EMPLOYEE: Address:
______________________________
MICHAEL HOPPMAN
8
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
1. I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
2. I have received a copy of all reports and documents required to be filed
by the Company with the Commission pursuant to the Exchange Act within the last
24 months and all reports issued by the Company to its stockholders;
3. I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
4. I agree that I will not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company;
1
<PAGE>
4. In my position with the Company, I have had both the opportunity to ask
questions and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
5. I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
6. If, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
2
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of November 10, 1997, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
ANTHONY J. CASAZZA (the "Employee").
WHEREAS, the Employee recently became employed by the Company; and
WHEREAS, the Board of Directors has authorized the grant to the
Employee of an option (the "Option") to purchase an aggregate of 7,500 of the
authorized but unissued or treasury shares of the Common Stock of the Company,
$.01 par value ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Employee the right
and option to purchase all or any part of an aggregate of 7,500 shares of the
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a non-qualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$6.4375 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, as follows: (i) Options to purchase 2,500 of the
Option Shares shall be exercisable on and after November 11, 1998; (ii) Options
to purchase 2,500 of the Option Shares shall be exercisable on and after
November 11, 1999; and (iii) Options to purchase the remaining 2,500 of the
Option Shares shall be exercisable on and after November 11, 2000. After each
portion of the Options vests, it shall remain exercisable for a period of five
years from the date of vesting ("Exercise Period"), except as otherwise set
forth in this Agreement. Notwithstanding the foregoing, if (i) the Company, as a
going concern, is sold or otherwise acquired, or (ii) any party or group of
parties not currently owning more than 5% of the outstanding voting
1
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securities of the Company acquires in one or more transactions beneficial
ownership of more than 35% of such securities (the events in (i) and (ii) being
referred to herein as a "Change in Control"), then, notwithstanding the
foregoing vesting provisions and in addition to that percentage of Options
vested at the time of the Change in Control, all of the remaining Options shall
immediately and entirely vest.
4. Effect of Termination of Employment.
4.1 Termination Due to Death. If Employee's employment by the Company
terminates by reason of death, the Option shall become fully vested and
exercisable and may thereafter be exercised by the legal representative of the
estate or by the legatee of the Employee under the will of the Employee, for a
period of one year from the date of such death or until the expiration of the
Exercise Period, whichever period is shorter.
4.2 Termination Due to Disability. If Employee's employment by the Company
terminates by reason of Disability, the Option shall become fully vested and
exercisable and may thereafter be exercised by the Employee for a period of one
year from the date of such termination or until the expiration of the Exercise
Period, whichever period is shorter.
4.3 Termination by the Company Without Cause and/or Due to Retirement. If
Employee's employment is terminated by the Company without cause or due to
Normal Retirement, then the portion of the Option which has vested by the date
of termination of employment (including vesting on an accelerated basis pursuant
to Section 3) may be exercised for a period of one year from the date of such
termination of employment or until the expiration of the Exercise Period,
whichever is shorter. The portion of the Option not yet exercisable on the date
of termination of employment shall immediately expire.
4.4 Other Termination.
(a) If Employee's employment is terminated for any reason other than (i)
death, (ii) Disability, (iii) Normal Retirement, or (iv) without cause by the
Company, the Option shall expire on the date of termination of employment.
(b) The Committee, in the event the Employee's employment is terminated for
cause, may require the Employee to return to the Company the economic benefit of
2
<PAGE>
any Option Shares purchased hereunder by the Employee within the six month
period prior to the date of termination. In such event, the Employee hereby
agrees to remit to the Company, in cash, an amount equal to the difference
between the Fair Market Value of the Option Shares on the date of termination
(or the sales price of such Shares if the Option Shares were sold during such
six month period) and the Exercise Price of such Shares.
4.4.1 Withholding Tax. Not later than the date as of which an amount first
must be included in the gross income of the Employee for Federal income tax
purposes with respect to the Option, the Employee shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Employee from the Company.
5. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Optionee's proportionate
interest in the Company and his rights hereunder. If (i) the Company shall not
be the surviving corporation in any merger, combination, consolidation or
similar type of corporate transaction, or (ii) if the Company is the survivor,
but the outstanding shares of Common Stock are exchanged for securities of
another company, or property, then the Board of Directors will make appropriate
provision so that this Option will be exercisable for the full period as
provided in this Agreement for securities or other property of the surviving or
other entity as if this Option had been exercised for Common Stock immediately
before such merger, combination, consolidation or other transaction. No
fractional shares of Common Stock shall be issued as a result of any adjustment
under this provision, and to the extent any adjustment results in a fractional
share of Common Stock, then the adjustment will be to the lower full share.
6. Method of Exercise.
6.1 Notice to the Company. The Option may be exercised in whole or in part
by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
3
<PAGE>
6.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment therefor.
4
<PAGE>
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Employee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
7.3.2 Cashless Payment. The Committee, in its sole discretion, may allow
Employee to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Employee. No transfer of the Option by the Employee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
9. Form S-8 Registration. The Company hereby grants to Employee the right to
have the Option Shares registered on any registration statement on Form S-8
filed by the Company after the date hereof and during the period in which
Employee is employed by the Company or by any subsidiary thereof.
Notwithstanding the foregoing, the Company shall have no obligation hereunder in
connection with any registration statement or amendment thereto unless the
Employee provides to the Company information with respect to his ownership of
Option Shares, manner of proposed disposition and such other matters as the
Company shall reasonably request for disclosure in the registration statement or
any amendment thereto.
10. Company Representations. The Company hereby represents and warrants to
Employee that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
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<PAGE>
(ii) the Option Shares, when issued and delivered by the Company to
Employee in accordance with the terms and conditions hereof, will be
duly and validly issued and fully paid and non-assessable.
11. Employee Representations. The Employee hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, within
the last 24 months and all reports issued by the Company to its
stockholders;
(iii)he understands that he must bear the economic risk of the invest ment
in the Option Shares, which cannot be sold by him unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is
under no obligation to register the Option Shares for sale under the
1933 Act;
(iv) in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of
the Company and all persons acting on its behalf concerning the terms
and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information
obtained pursuant to clause (iii) above;
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vi) if, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates
evidencing the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933.
6
<PAGE>
The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) the
Employee has furnished the Company with notice of such proposed transfer and the
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
12.2 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
13.2 Employee and Stockholder Rights. The Employee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Employee at will.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
7
<PAGE>
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Employee and the Company.
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Philadelphia, Pennsylvania 19120
By:________________________
EMPLOYEE: Address:
___________________________
ANTHONY CASAZZA
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<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
1. I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
2. I have received a copy of all reports and documents required to be filed
by the Company with the Commission pursuant to the Exchange Act within the last
24 months and all reports issued by the Company to its stockholders;
3. I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
4. I agree that I will not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company;
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4. In my position with the Company, I have had both the opportunity to ask
questions and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
5. I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
6. If, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ --------------------------------------
(Signature) (Address)
- ------------------------------ ---------------------------------------
(Print Name)
---------------------------------------
(Social Security Number)
2
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of November 10, 1997, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
SHELLY FINKEL (the "Employee").
WHEREAS, the Employee and the Company recently entered into an
agreement to amend Employee's employment agreement; and
WHEREAS, the Board of Directors has authorized the grant to
the employee of an option (the "Option") to purchase an aggregate of 100,000 of
the authorized but unissued or treasury shares of the common stock of the
Company, $.01 par value ("Common Stock"), on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Employee desires to acquire the Option on the
terms and conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Employee the right
and option ("Option") to purchase all or any part of an aggregate of 100,000
shares of the Common Stock on the terms and conditions set forth herein. Said
Option is a non-qualified stock option not intended to qualify under Section 422
of the Internal Revenue Code of 1986, as amended and is not granted under any
plan, including the Company's 1994 Performance Equity Plan ("Plan"), certain
terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$6.4375 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, as follows: (i) Options to purchase 50% of the
Option Shares shall be exercisable January 1, 1998; and (ii) Options to purchase
the remaining 50% of the Option Shares shall be exercisable on and after January
1, 1999. After each portion of the Options vests, it shall remain exercisable
for a period of five years from the date of vesting ("Exercise Period") except
as otherwise set forth in this Agreement. Notwithstanding the foregoing, if (i)
the Company, as a going concern, is sold or otherwise acquired, or (ii) any
party or group of parties not currently owning more than 5% of the outstanding
voting securities of the Company acquires in one or more transactions beneficial
ownership of more than 35% of such securities (the events in (i) and (ii) being
referred to herein as a "Change in Control"), then, notwithstanding the
1
<PAGE>
foregoing vesting provisions and in addition to that percentage of Options
vested at the time of the Change in Control, all of the remaining Options shall
immediately and entirely vest.
4. Effect of Termination of Employment.
4.1. Termination Due to Death. If Employee's employment by the Company
terminates by reason of death, the Option shall become fully vested and
exercisable and may thereafter be exercised by the legal representative of the
estate or by the legatee of the Employee under the will of the Employee, for a
period of one year from the date of such death or until the expiration of the
Exercise Period, whichever period is shorter.
4.2. Termination Due to Disability. If Employee's employment by the Company
terminates by reason of Disability, the Option shall become fully vested and
exercisable and may thereafter be exercised by the Employee for a period of one
year from the date of such termination or until the expiration of the Exercise
Period, whichever period is shorter.
4.3. Termination by the Company Without Cause and/or Due to Retirement. If
Employee's employment is terminated by the Company without cause or due to
Normal Retirement, then the portion of the Option which has vested by the date
of termination of employment may be exercised for a period of three months from
termination of employment or until the expiration of the Exercise Period,
whichever is shorter. The portion of the Option not yet exercisable on the date
of termination of employment shall immediately expire.
4.4. Other Termination.
(a) If Employee's employment is terminated for any reason other than (i)
death, (ii) Disability, (iii) Normal Retirement, or (iv) without cause by the
Company, the Option shall expire on the date of termination of employment.
(b) The Committee, in the event the Employee's employment is termi nated
for cause, may require the Employee to return to the Company the economic
benefit of any Option Shares purchased hereunder by the Employee within the six
month period prior to the date of termination. In such event, the Employee
hereby agrees to remit to the Company, in cash, an amount equal to the
difference between the Fair Market Value of the Option Shares on the date of
termination (or the sales price of such Shares if the Option Shares were sold
during such six month period) and the Exercise Price of such Shares.
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Employee for Federal income tax purposes
2
<PAGE>
with respect to the Option, the Employee shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Employee from the Company.
6. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Optionee's proportionate
interest in the Company and his rights hereunder. If (i) the Company shall not
be the surviving corporation in any merger, combination, consolidation or
similar type of corporate transaction, or (ii) if the Company is the survivor,
but the outstanding shares of Common Stock are exchanged for securities of
another company, or property, then the Board of Directors will make appropriate
provision so that this Option will be exercisable for the full period as
provided in this Agreement for securities or other property of the surviving or
other entity as if this Option had been exercised for Common Stock immediately
before such merger, combination, consolidation or other transaction. No
fractional shares of Common Stock shall be issued as a result of any adjustment
under this provision, and to the extent any adjustment results in a fractional
share of Common Stock, then the adjustment will be to the lower full share.
7. Method of Exercise.
7.1. Notice to the Company. The Option may be exercised in whole or in part
by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
7.2. Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment therefor.
7.3. Payment of Purchase Price.
7.3.1. Cash Payment. The Employee shall make cash payments by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; the Company shall not be required to deliver certificates
for Option Shares until the Company has confirmed the receipt of good and
available funds in payment of the purchase price thereof.
3
<PAGE>
7.3.2. Cashless Payment. The Committee, in its sole discretion, may allow
Employee to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Employee. No transfer of the Option by the Employee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
9. Company Representations. The Company hereby represents and warrants to the
Employee that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to the
Employee in accordance with the terms and conditions hereof, will be
duly and validly issued and fully paid and non-assessable.
10. Employee Representations. The Employee hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, within
the last 24 months and all reports issued by the Company to its
stockholders;
4
<PAGE>
(iii)he understands that he must bear the economic risk of the investment
in the Option Shares, which cannot be sold by him unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is
under no obligation to register the Option Shares for sale under the
1933 Act;
(iv) in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of
the Company and all persons acting on its behalf concerning the terms
and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information
obtained pursuant to clause (iii) above;
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vi) if, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates
evidencing the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933. The shares may not be sold or transferred in the
absence of such registration or an exemption therefrom under said
Act."
11. Restriction on Transfer of Option Shares.
11.1. Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) the
Employee has furnished the Company with notice of such proposed transfer and the
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
11.2. Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
5
<PAGE>
12. Miscellaneous.
12.1. Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
12.2. Conflicts with Code and/or Plan. In the event of a conflict between
the provisions of the Code and the provisions of the Plan, the provisions of the
Code shall in all respects be controlling. In the event of a conflict between
the provisions of the Plan and the provisions of this Agreement, the provisions
of the Plan shall in all respects be controlling.
12.3. Employee and Stockholder Rights. The Employee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Employee at will.
12.4. Waiver. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
12.5. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Employee and the Company.
12.6. Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any per son
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
12.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
6
<PAGE>
12.8. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Philadelphia, Pennsylvania 19120
By:__________________________
EMPLOYEE: Address: 1385 York Avenue
New York, New York 10017
____________________________
SHELLY FINKEL
7
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
(i) I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the
distribution thereof;
(ii) I have received a copy of the Plan and all reports and documents
required to be filed by the Company with the Commission pursuant to
the Exchange Act within the last 24 months and all reports issued by
the Company to its stockholders;
(iii)I understand that I must bear the economic risk of the investment in
the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is
under no obli gation to register the Option Shares for sale under the
1933 Act;
(iv) I agree that I will not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by me hereby except in
accordance with Company's policy, if any, regarding the sale and
disposition of securities owned by employees and/or directors of the
Company;
1
<PAGE>
(v) in my position with the Company, I have had both the opportunity to
ask questions and receive answers from the officers and directors of
the Company and all persons acting on its behalf concerning the terms
and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information
obtained pursuant to clause (ii) above;
(vi) I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vii)if, at the time of issuance of the Option Shares, the issuance of
such shares have not been registered under the 1933 Act, the
certificates evidencing the Option Shares shall bear the following
legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933. The shares may not be sold or transferred in the
absence of such registration or an exemption therefrom under said
Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
2
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of November 10, 1997, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
JAMES FRANKLIN (the "Employee").
WHEREAS, the Employee recently became employed by the Company; and
WHEREAS, the Board of Directors has authorized the grant to the
Employee of an option (the "Option") to purchase an aggregate of 25,000 of the
authorized but unissued or treasury shares of the Common Stock of the Company,
$.01 par value ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Employee the right
and option to purchase all or any part of an aggregate of 25,000 shares of the
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a non-qualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$6.4375 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, as follows: (i) Options to purchase 8,334 of the
Option Shares shall be exercisable on and after October 28, 1998; (ii) Options
to purchase 8,333 of the Option Shares shall be exercisable on and after October
28, 1999; and (iii) Options to purchase the remaining 8,333 of the Option Shares
shall be exercisable on and after October 28, 2000. After each portion of the
Options vests, it shall remain exercisable for a period of five years from the
date of vesting ("Exercise Period"), except as otherwise set forth in this
Agreement. Notwithstanding the foregoing, if (i) the Company, as a going
concern, is sold or otherwise acquired, or (ii) any party or group of parties
not currently owning more than 5% of the outstanding voting securities of the
Company acquires in one or more transactions beneficial ownership of more than
35% of such securities (the events in (i) and (ii) being referred to herein as a
1
<PAGE>
"Change in Control"), then, notwithstanding the foregoing vesting provisions and
in addition to that percentage of Options vested at the time of the Change in
Control, all of the remaining Options shall immediately and entirely vest.
4. Effect of Termination of Employment.
4.1 Termination Due to Death. If Employee's employment by the Company
terminates by reason of death, the Option shall become fully vested and
exercisable and may thereafter be exercised by the legal representative of the
estate or by the legatee of the Employee under the will of the Employee, for a
period of one year from the date of such death or until the expiration of the
Exercise Period, whichever period is shorter.
4.2 Termination Due to Disability. If Employee's employment by the Company
terminates by reason of Disability, the Option shall become fully vested and
exercisable and may thereafter be exercised by the Employee for a period of one
year from the date of such termination or until the expiration of the Exercise
Period, whichever period is shorter.
4.3 Termination by the Company Without Cause and/or Due to Retirement. If
Employee's employment is terminated by the Company without cause or due to
Normal Retirement, then the portion of the Option which has vested by the date
of termination of employment (including vesting on an accelerated basis pursuant
to Section 3) may be exercised for a period of one year from the date of such
termination of employment or until the expiration of the Exercise Period,
whichever is shorter. The portion of the Option not yet exercisable on the date
of termination of employment shall immediately expire.
4.4 Other Termination.
(a) If Employee's employment is terminated for any reason other than (i)
death, (ii) Disability, (iii) Normal Retirement, or (iv) without cause by the
Company, the Option shall expire on the date of termination of employment.
(b) The Committee, in the event the Employee's employment is terminated for
cause, may require the Employee to return to the Company the economic benefit of
any Option Shares purchased hereunder by the Employee within the six month
period prior to the date of termination. In such event, the Employee hereby
agrees to remit to the Company, in cash, an amount equal to the difference
between the Fair Market Value of the Option Shares on the date of termination
(or the sales price of such Shares if the Option Shares were sold during such
six month period) and the Exercise Price of such Shares.
2
<PAGE>
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Employee for Federal income tax purposes
with respect to the Option, the Employee shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Employee from the Company.
6. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Optionee's proportionate
interest in the Company and his rights hereunder. If (i) the Company shall not
be the surviving corporation in any merger, combination, consolidation or
similar type of corporate transaction, or (ii) if the Company is the survivor,
but the outstanding shares of Common Stock are exchanged for securities of
another company, or property, then the Board of Directors will make appropriate
provision so that this Option will be exercisable for the full period as
provided in this Agreement for securities or other property of the surviving or
other entity as if this Option had been exercised for Common Stock immediately
before such merger, combination, consolidation or other transaction. No
fractional shares of Common Stock shall be issued as a result of any adjustment
under this provision, and to the extent any adjustment results in a fractional
share of Common Stock, then the adjustment will be to the lower full share.
3
<PAGE>
7. Method of Exercise.
7.1 Notice to the Company. The Option may be exercised in whole or in part
by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Employee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
7.3.2 Cashless Payment. The Committee, in its sole discretion, may allow
Employee to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Employee. No transfer of the Option by the Employee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
4
<PAGE>
9. Form S-8 Registration. The Company hereby grants to Employee the right to
have the Option Shares registered on any registration statement on Form S-8
filed by the Company after the date hereof and during the period in which
Employee is employed by the Company or by any subsidiary thereof.
Notwithstanding the foregoing, the Company shall have no obligation hereunder in
connection with any registration statement or amendment thereto unless the
Employee provides to the Company information with respect to his ownership of
Option Shares, manner of proposed disposition and such other matters as the
Company shall reasonably request for disclosure in the registration statement or
any amendment thereto.
10. Company Representations. The Company hereby represents and warrants to
Employee that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to
Employee in accordance with the terms and conditions hereof, will be
duly and validly issued and fully paid and non-assessable.
11. Employee Representations. The Employee hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, within
the last 24 months and all reports issued by the Company to its
stockholders;
(iii)he understands that he must bear the economic risk of the invest ment
in the Option Shares, which cannot be sold by him unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is
under no obligation to register the Option Shares for sale under the
1933 Act;
5
<PAGE>
(iv) in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of
the Company and all persons act ing on its behalf concerning the terms
and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information
obtained pursuant to clause (iii) above;
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vi) if, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates
evidencing the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) the
Employee has furnished the Company with notice of such proposed transfer and the
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
12.2 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
6
<PAGE>
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
13.2 Employee and Stockholder Rights. The Employee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Employee at will.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Employee and the Company.
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
7
<PAGE>
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Philadelphia, Pennsylvania 19120
By:________________________
EMPLOYEE: Address:
____________________________
JAMES FRANKLIN
8
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
1. I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
2. I have received a copy of all reports and documents required to be filed
by the Company with the Commission pursuant to the Exchange Act within the last
24 months and all reports issued by the Company to its stockholders;
3. I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
4. I agree that I will not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company;
<PAGE>
4. In my position with the Company, I have had both the opportunity to ask
questions and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
5. I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
6. If, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of November 11, 1997, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
LINDA MAYNES (the "Employee").
WHEREAS, the Employee recently became employed by the Company; and
WHEREAS, the Board of Directors has authorized the grant to the
Employee of an option (the "Option") to purchase an aggregate of 7,500 of the
authorized but unissued or treasury shares of the Common Stock of the Company,
$.01 par value ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Employee the right
and option to purchase all or any part of an aggregate of 7,500 shares of the
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a non-qualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$6.50 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, as follows: (i) Options to purchase 2,500 of the
Option Shares shall be exercisable on and after November 11, 1998; (ii) Options
to purchase 2,500 of the Option Shares shall be exercisable on and after
November 11, 1999; and (iii) Options to purchase the remaining 2,500 of the
Option Shares shall be exercisable on and after November 11, 2000. After each
portion of the Options vests, it shall remain exercisable for a period of five
years from the date of vesting ("Exercise Period"), except as otherwise set
forth in this Agreement. Notwithstanding the foregoing, if (i) the Company, as a
going concern, is sold or otherwise acquired, or (ii) any party or group of
parties not currently owning more than 5% of the outstanding voting
1
<PAGE>
securities of the Company acquires in one or more transactions beneficial
ownership of more than 35% of such securities (the events in (i) and (ii) being
referred to herein as a "Change in Control"), then, notwithstanding the
foregoing vesting provisions and in addition to that percentage of Options
vested at the time of the Change in Control, all of the remaining Options shall
immediately and entirely vest.
4. Effect of Termination of Employment.
4.1 Termination Due to Death. If Employee's employment by the Company
terminates by reason of death, the Option shall become fully vested and
exercisable and may thereafter be exercised by the legal representative of the
estate or by the legatee of the Employee under the will of the Employee, for a
period of one year from the date of such death or until the expiration of the
Exercise Period, whichever period is shorter.
4.2 Termination Due to Disability. If Employee's employment by the Company
terminates by reason of Disability, the Option shall become fully vested and
exercisable and may thereafter be exercised by the Employee for a period of one
year from the date of such termination or until the expiration of the Exercise
Period, whichever period is shorter.
4.3 Termination by the Company Without Cause and/or Due to Retirement. If
Employee's employment is terminated by the Company without cause or due to
Normal Retirement, then the portion of the Option which has vested by the date
of termination of employment (including vesting on an accelerated basis pursuant
to Section 3) may be exercised for a period of one year from the date of such
termination of employment or until the expiration of the Exercise Period,
whichever is shorter. The portion of the Option not yet exercisable on the date
of termination of employment shall immediately expire.
4.4 Other Termination.
(a) If Employee's employment is terminated for any reason other than (i)
death, (ii) Disability, (iii) Normal Retirement, or (iv) without cause by the
Company, the Option shall expire on the date of termination of employment.
(b) The Committee, in the event the Employee's employment is terminated for
cause, may require the Employee to return to the Company the economic benefit of
2
<PAGE>
any Option Shares purchased hereunder by the Employee within the six month
period prior to the date of termination. In such event, the Employee hereby
agrees to remit to the Company, in cash, an amount equal to the difference
between the Fair Market Value of the Option Shares on the date of termination
(or the sales price of such Shares if the Option Shares were sold during such
six month period) and the Exercise Price of such Shares.
4.4.1 Withholding Tax. Not later than the date as of which an amount first
must be included in the gross income of the Employee for Federal income tax
purposes with respect to the Option, the Employee shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Employee from the Company.
5. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Optionee's proportionate
interest in the Company and his rights hereunder. If (i) the Company shall not
be the surviving corporation in any merger, combination, consolidation or
similar type of corporate transaction, or (ii) if the Company is the survivor,
but the outstanding shares of Common Stock are exchanged for securities of
another company, or property, then the Board of Directors will make appropriate
provision so that this Option will be exercisable for the full period as
provided in this Agreement for securities or other property of the surviving or
other entity as if this Option had been exercised for Common Stock immediately
before such merger, combination, consolidation or other transaction. No
fractional shares of Common Stock shall be issued as a result of any adjustment
under this provision, and to the extent any adjustment results in a fractional
share of Common Stock, then the adjustment will be to the lower full share.
6. Method of Exercise.
6.1 Notice to the Company. The Option may be exercised in whole or in part
by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
3
<PAGE>
6.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment therefor.
6.3 Payment of Purchase Price.
6.3.1 Cash Payment. The Employee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
6.3.2 Cashless Payment. The Committee, in its sole discretion, may allow
Employee to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
7. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Employee. No transfer of the Option by the Employee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
8. Form S-8 Registration. The Company hereby grants to Employee the right to
have the Option Shares registered on any registration statement on Form S-8
filed by the Company after the date hereof and during the period in which
Employee is employed by the Company or by any subsidiary thereof.
Notwithstanding the foregoing, the Company shall have no obligation hereunder in
connection with any registration statement or amendment thereto unless the
4
<PAGE>
Employee provides to the Company information with respect to his ownership of
Option Shares, manner of proposed disposition and such other matters as the
Company shall reasonably request for disclosure in the registration statement or
any amendment thereto.
9. Company Representations. The Company hereby represents and warrants to
Employee that:
(i) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to
Employee in accordance with the terms and conditions hereof, will be
duly and validly issued and fully paid and non-assessable.
10. Employee Representations. The Employee hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, within
the last 24 months and all reports issued by the Company to its
stockholders;
(iii)he understands that he must bear the economic risk of the invest ment
in the Option Shares, which cannot be sold by him unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder and that the Company is
under no obligation to register the Option Shares for sale under the
1933 Act;
(iv) in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of
the Company and all persons acting on its behalf concerning the terms
and conditions of the offer made hereunder and to obtain any
additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort
or expense necessary to verify the accuracy of the information
obtained pursuant to clause (iii) above;
5
<PAGE>
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vi) if, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates
evidencing the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933.
6
<PAGE>
The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) the
Employee has furnished the Company with notice of such proposed transfer and the
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
12.2 Anything in this Agreement to the contrary notwithstanding, Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
13.2 Employee and Stockholder Rights. The Employee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Employee at will.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
7
<PAGE>
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Employee and the Company.
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Philadelphia, Pennsylvania 19120
By:________________________
EMPLOYEE: Address:
_____________________________
LINDA MAYNES
8
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
1. I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
2. I have received a copy of all reports and documents required to be filed
by the Company with the Commission pursuant to the Exchange Act within the last
24 months and all reports issued by the Company to its stockholders;
3. I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
4. I agree that I will not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company;
1
<PAGE>
4. In my position with the Company, I have had both the opportunity to ask
questions and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
5. I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
6. If, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
2
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of January 30, 1998, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
J.E.B. PARTNERS (the "Consultant").
WHEREAS, the Consultant recently became employed by the Company; and
WHEREAS, the Board of Directors has authorized the grant to the
Consultant of an option (the "Option") to purchase an aggregate of 60,000 of the
authorized but unissued or treasury shares of the Common Stock of the Company,
$.01 par value ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Consultant desires to acquire the Option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Consultant the right
and option to purchase all or any part of an aggregate of 60,000 shares of the
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a non-qualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$6.125 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement immediately upon execution of this Agreement and
shall remain exercisable for a period of five years from the date of vesting
("Exercise Period"), except as otherwise set forth in this Agreement.
4. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Consultant for Federal income tax purposes
with respect to the Option, the Consultant shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Consultant from the Company.
1
<PAGE>
5. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Consultant's
proportionate interest in the Company and his rights hereunder. If (i) the
Company shall not be the surviving corporation in any merger, combination,
consolidation or similar type of corporate transaction, or (ii) if the Company
is the survivor, but the outstanding shares of Common Stock are exchanged for
securities of another company, or property, then the Board of Directors will
make appropriate provision so that this Option will be exercisable for the full
period as provided in this Agreement for securities or other property of the
surviving or other entity as if this Option had been exercised for Common Stock
immediately before such merger, combination, consolidation or other transaction.
No fractional shares of Common Stock shall be issued as a result of any
adjustment under this provision, and to the extent any adjustment results in a
fractional share of Common Stock, then the adjustment will be to the lower full
share.
6. Method of Exercise.
6.1 Notice to the Company. The Option may be exercised in whole or in part
by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
6.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Consultant as soon as practicable after payment
therefor.
6.3 Payment of Purchase Price.
6.3.1 Cash Payment. The Consultant shall make cash payments by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; the Company shall not be required to deliver certificates
for Option Shares until the Company has confirmed the receipt of good and
available funds in payment of the purchase price thereof.
6.3.2 Cashless Payment. The Committee, in its sole discretion, may allow
Consultant to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
2
<PAGE>
"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
7. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Consultant. No transfer of the Option by the Consultant by will or by the
laws of descent and distribution shall be effective to bind the Company unless
the Company shall have been furnished with written notice thereof and a copy of
the will and/or such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.
8. Form S-8 Registration. The Company hereby grants to Consultant the right to
have the Option Shares registered on any registration statement on Form S-8
filed by the Company after the date hereof and during the period in which
Consultant is employed by the Company or by any subsidiary thereof.
Notwithstanding the foregoing, the Company shall have no obligation hereunder in
connection with any registration statement or amendment thereto unless the
Consultant provides to the Company information with respect to his ownership of
Option Shares, manner of proposed disposition and such other matters as the
Company shall reasonably request for disclosure in the registration statement or
any amendment thereto.
9. Company Representations. The Company hereby represents and warrants to
Consultant that:
(i) the Company, by appropriate and all required action, is duly authorized
to enter into this Agreement and consummate all of the transactions contemplated
hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to
Consultant in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
10. Consultant Representations. The Consultant hereby represents and warrants to
the Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, within the last 24 months and all
reports issued by the Company to its stockholders;
3
<PAGE>
(iii) he understands that he must bear the economic risk of the investment
in the Option Shares, which cannot be sold by him unless they are registered
under the Securities Act of 1933 (the "1933 Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;
(iv) in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of the Company
and all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (iii) above;
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
(vi) if, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
11. Restriction on Transfer of Option Shares.
11.1 Anything in this Agreement to the contrary notwithstanding, Consultant
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) the
Consultant has furnished the Company with notice of such proposed transfer and
the Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
11.2 Anything in this Agreement to the contrary notwithstanding, Consultant
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
4
<PAGE>
12. Miscellaneous.
12.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier to the parties at their
respective addresses set forth herein, or to such other address as either shall
have specified by notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
12.2 Consultant and Stockholder Rights. The Consultant shall not have any
of the rights of a stockholder with respect to the Option Shares until such
shares have been issued after the due exercise of the Option. Nothing contained
in this Agreement shall be deemed to confer upon Consultant any right to
continued employment with the Company or any subsidiary thereof, nor shall it
interfere in any way with the right of the Company to terminate Consultant in
accordance with the provisions regarding such termination set forth in
Consultant's written consulting agreement with the Company, or if there exists
no such agreement, to terminate Consultant at will.
12.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
12.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Consultant and the Company.
12.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any per son
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
12.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
12.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Philadelphia, Pennsylvania 19120
By:________________________
CONSULTANT: Address: ________________________________
________________________________
____________________________
J.E.B. PARTNERS
6
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
1. I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
2. I have received a copy of all reports and documents required to be filed
by the Company with the Commission pursuant to the Exchange Act within the last
24 months and all reports issued by the Company to its stockholders;
3. I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
4. I agree that I will not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company;
1
<PAGE>
4. In my position with the Company, I have had both the opportunity to ask
questions and receive answers from the officers and directors of the Company and
all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
5. I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
6. If, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
2
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of April 2, 1998 between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
BARRY RUBENSTEIN (the "Optionee").
WHEREAS, the Optionee and Mr. Eli Oxenhorn ("Oxenhorn") have
introduced the Company to Wien Securities ("Wien"), an entity that may commit,
prior to April 15, 1998, to provide certain financing to the Company;
WHEREAS, in consideration for making such introduction, the
Company has awarded each of the Optionee and Oxenhorn an option ("Option") to
purchase 50,000 of the authorized but unissued or treasury shares of the common
stock of the Company, $.01 par value ("Common Stock"), on the terms and
conditions set forth in this Agreement; and
WHEREAS, the Optionee desires to acquire the Option on the
terms and conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Optionee the right
and option to purchase all or any part of an aggregate of 50,000 shares of
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a nonqualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$7.125 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, at any time from and after September 1, 1998, and
it shall remain exercisable, except as otherwise provided herein, until the
close of business on April 2, 2003 (the "Exercise Period").
1
<PAGE>
4. Termination of Option. Notwithstanding the foregoing, if the Company and Wien
do not enter into an agreement prior to April 15, 1998 with respect to Wien
providing financing to the Company, then the Option will terminate.
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Optionee for Federal income tax purposes
with respect to the Option, the Optionee may be required to pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company pursuant to this Agreement shall be conditioned upon such payment or
arrangements with the Company, if such payments or arrangements are required,
and the Company shall, to the extent permitted by law, have the right to deduct
any Withholding Taxes from any payment of any kind otherwise due to the Optionee
from the Company.
6. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, common stock split,
common stock dividend on the Common Stock, combination of shares, or any similar
change in the Common Stock of the Company as a whole, the Company shall
proportionally adjust the number and kind of Option Shares and the exercise
price of the Option, to such extent and in such manner as shall as closely as
possible maintain the Optionee's proportionate interest in the Company and his
rights hereunder. If (i) the Company shall not be the surviving corporation in
any merger, combination, consolidation or similar type of corporate transaction,
or (ii) if the Company is the survivor, but the outstanding shares of Common
Stock are exchanged for securities of another company, or property, then the
Board of Directors will make appropriate provision so that this Option will be
exercisable for the full period as provided in this Agreement for securities or
other property of the surviving or other entity as if this Option had been
exercised for Common Stock immediately before such merger, combination,
consolidation or other transaction. No fractional shares of Common Stock shall
be issued as a result of any adjustment under this provision, and to the extent
any adjustment results in a fractional share of Common Stock, then the
adjustment will be to the lower full share.
7. Method of Exercise.
7.1 Notice to the Company. The Option shall be exercised in whole or in
part by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
2
<PAGE>
7.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Optionee as soon as practicable after payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Optionee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
7.3.2 Cashless Payment. The Company, in its sole discretion, may allow the
Optionee to use Common Stock of the Company (or other securities or promissory
notes) owned by him (or to surrender a portion of this Option) to pay the
purchase price for the Option Shares (and any required Withholding Taxes). Such
payment would be made by delivery of certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value, as defined below. The value of any Option
surrendered shall equal the difference between the Exercise Price and the Fair
Market Value on the date of surrender multiplied by the number of Option Shares
underlying the portion of the Option surrendered.
7.3.3 Fair Market Value. "Fair Market Value," unless otherwise required by
any applicable provision of the Internal Revenue Code of 1986, as amended, or
any regulations issued thereunder, means, as of any given date: (i) if the
Common Stock is listed on a national securities exchange or quoted on the Nasdaq
National Market or Nasdaq SmallCap Market, the last sale price of the Common
Stock in the principal trading market for the Common Stock on the last trading
day preceding the date of exercise, as reported by the exchange or Nasdaq, as
the case may be; (ii) if the Common Stock is not listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but
is traded in the over-the-counter market, the closing bid price for the Common
Stock on the last trading day preceding the date of exercise for which such
quotations are reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
Fair Market Value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Board of Directors of the Company shall
determine, in good faith.
3
<PAGE>
8. Nonassignability. The Option shall not be assignable or transferable, without
the consent of the Company, except by will or by the laws of descent and
distribution in the event of the death of the Optionee. No transfer of the
Option by the Optionee by will or by the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
with written notice thereof and a copy of the will and/or such other evidence as
the Company may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of the
Option.
9. Registration Rights. If the Company and Wien enter into an agreement prior to
April 15, 1998 with respect to Wien providing financing to the Company, then the
Optionee will receive the same registration rights that Wien receives for
securities issued by the Company in consideration for agreeing to provide such
financing.
10. Company Representations. The Company hereby represents and warrants to the
Optionee that:
(i) the Company, by appropriate and all required action, is duly authorized
to enter into this Agreement and consummate all of the transactions contemplated
hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to the
Optionee in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
11. Optionee Representations. The Optionee hereby represents and warrants to the
Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, within the last 24 months and all
reports issued by the Company to its stockholders;
4
<PAGE>
(iii) he understands that he must bear the economic risk of the investment
in the Option Shares, which cannot be sold by him unless they are registered
under the Securities Act of 1933 (the "1933 Act") or an exemption therefrom is
available thereunder and that, except as provided herein, the Company is under
no obligation to register the Option Shares for sale under the 1933 Act;
(iv) he has had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort or
expense necessary to verify the accuracy of the information obtained pursuant to
clause (ii) above;
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
(vi) the certificates evidencing the Option Shares shall bear the following
legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of April 2, 1998, a
copy of which is on file with the Company, and may not be transferred,
pledged or disposed of except in accordance with the terms and
conditions thereof."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary notwithstanding, Optionee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the 1933 Act, or
in the event that they are not so registered, unless (i) an exemption from the
1933 Act registration requirements is available thereunder, and (ii) Optionee
has furnished the Company with notice of such proposed transfer and the
5
<PAGE>
Company's legal counsel, in its reasonable opinion, shall deem such proposed
transfer to be so exempt.
12.2 Anything in this Agreement to the contrary notwithstanding, the
Optionee hereby agrees that, if he is, or at any time hereinafter becomes, an
employee or director of the Company or any subsidiary thereof, he shall not
sell, transfer by any means or otherwise dispose of the Option Shares acquired
by him except in accordance with Company's policy, if any, regarding the sale
and disposition of securities owned by employees and/or directors of the
Company.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally, sent by
confirmed facsimile, registered or certified mail, or by private courier to the
parties at their respective addresses set forth herein, or to such other address
as either shall have specified by notice in writing to the other. Notice shall
be deemed duly given hereunder when delivered, faxed or mailed as provided
herein.
13.2 Optionee and Stockholder Rights. The Optionee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. If Optionee is, or
hereinafter becomes, an employee or director of the Company or any subsidiary
thereof, nothing contained in this Agreement shall be deemed to confer upon the
Optionee any right to continued employment, or a continued directorship
position, with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate the Optionee in accordance
with the provisions regarding such termination set forth in Optionee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Optionee at will, and/or terminate Optionee's directorship in
accordance with the Company's Certificate of Incorporation and By-laws and/or
the laws of the State of Delaware, as the case may be.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by Optionee and the Company.
6
<PAGE>
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC. Address:
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
By:__________________________
OPTIONEE:
Address:
68 Wheatley Road
Brookville, New York 11545
Fax:________________________
_______________________________
BARRY RUBENSTEIN
7
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
Global Telecommunication Solutions, Inc.
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
Attention: The Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of April 2, 1998 with
Global Telecommunication Solutions, Inc. (the "Company"), I hereby irrevocably
elect to exercise the right to purchase _________ shares of the Company's common
stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for _________ shares of
the Company's Common Stock, free and clear of any encumbrances, duly
endorsed, having a Fair Market Value (as such term is defined in
Section 7.3.3 of the Stock Option Agreement) of $---------.
|_| with the consent of the Company, by surrender of a portion of my
Option having a value of $_____________ as calculated in accordance
with Section 7.3.2 of the Stock Option Agreement.
|_| with the consent of the Company, __________________________
I hereby represent and warrant to, and agree with, the Company that:
(i) I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the
distribution thereof;
(ii) I have received a copy of all reports and documents required to be
filed by the Company with the Commission pursuant to the Exchange Act
within the last 24 months and all reports issued by the Company to its
stockholders;
(iii)I understand that I must bear the economic risk of the investment in
the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder;
1
<PAGE>
(iv) I have had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting
on its behalf concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it
without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (ii) above;
(v) I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vi) the certificates evidencing the Option Shares shall bear the following
legends:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933. The shares may not be sold or transferred in the
absence of such registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of April 2, 1998,
a copy of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with the
terms and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
2
<PAGE>
STOCK OPTION AGREEMENT
AGREEMENT, made as of April 2, 1998 between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
ELI OXENHORN (the "Optionee").
WHEREAS, the Optionee and Mr. Barry Rubenstein ("Rubenstein")
have introduced the Company to Wien Securities ("Wien"), an entity that may
commit, prior to April 15, 1998, to provide certain financing to the Company;
WHEREAS, in consideration for making such introduction, the
Company has awarded each of Optionee and Rubenstein an option ("Option") to
purchase 50,000 of the authorized but unissued or treasury shares of the common
stock of the Company, $.01 par value ("Common Stock"), on the terms and
conditions set forth in this Agreement; and
WHEREAS, the Optionee desires to acquire the Option on the
terms and conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Optionee the right
and option to purchase all or any part of an aggregate of 50,000 shares of
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a non-qualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$7.125 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, at any time from and after September 1, 1998, and
it shall remain exercisable, except as otherwise provided herein, until the
close of business on April 2, 2003 (the "Exercise Period").
1
<PAGE>
4. Termination of Option. Notwithstanding the foregoing, if the Company and Wien
do not enter into an agreement prior to April 15, 1998 with respect to Wien
providing financing to the Company, then the Option will terminate.
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Optionee for Federal income tax purposes
with respect to the Option, the Optionee may be required to pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company pursuant to this Agreement shall be conditioned upon such payment or
arrangements with the Company, if such payments or arrangements are required,
and the Company shall, to the extent permitted by law, have the right to deduct
any Withholding Taxes from any payment of any kind otherwise due to the Optionee
from the Company.
6. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, common stock split,
common stock dividend on the Common Stock, combination of shares, or any similar
change in the Common Stock of the Company as a whole, the Company shall
proportionally adjust the number and kind of Option Shares and the exercise
price of the Option, to such extent and in such manner as shall as closely as
possible maintain the Optionee's proportionate interest in the Company and his
rights hereunder. If (i) the Company shall not be the surviving corporation in
any merger, combination, consolidation or similar type of corporate transaction,
or (ii) if the Company is the survivor, but the outstanding shares of Common
Stock are exchanged for securities of another company, or property, then the
Board of Directors will make appropriate provision so that this Option will be
exercisable for the full period as provided in this Agreement for securities or
other property of the surviving or other entity as if this Option had been
exercised for Common Stock immediately before such merger, combination,
consolidation or other transaction. No fractional shares of Common Stock shall
be issued as a result of any adjustment under this provision, and to the extent
any adjustment results in a fractional share of Common Stock, then the
adjustment will be to the lower full share.
7. Method of Exercise.
7.1 Notice to the Company. The Option shall be exercised in whole or in
part by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
2
<PAGE>
7.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Optionee as soon as practicable after payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Optionee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
7.3.2 Cashless Payment. The Company, in its sole discretion, may allow the
Optionee to use Common Stock of the Company (or other securities or promissory
notes) owned by him (or to surrender a portion of this Option) to pay the
purchase price for the Option Shares (and any required Withholding Taxes). Such
payment would be made by delivery of certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value, as defined below. The value of any Option
surrendered shall equal the difference between the Exercise Price and the Fair
Market Value on the date of surrender multiplied by the number of Option Shares
underlying the portion of the Option surrendered.
7.3.3 Fair Market Value. "Fair Market Value," unless otherwise required by
any applicable provision of the Internal Revenue Code of 1986, as amended, or
any regulations issued thereunder, means, as of any given date: (i) if the
Common Stock is listed on a national securities exchange or quoted on the Nasdaq
National Market or Nasdaq SmallCap Market, the last sale price of the Common
Stock in the principal trading market for the Common Stock on the last trading
day preceding the date of exercise, as reported by the exchange or Nasdaq, as
the case may be; (ii) if the Common Stock is not listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but
is traded in the over-the-counter market, the closing bid price for the Common
Stock on the last trading day preceding the date of exercise for which such
quotations are reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
Fair Market Value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Board of Directors of the Company shall
determine, in good faith.
3
<PAGE>
8. Nonassignability. The Option shall not be assignable or transferable, without
the consent of the Company, except by will or by the laws of descent and
distribution in the event of the death of the Optionee. No transfer of the
Option by the Optionee by will or by the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
with written notice thereof and a copy of the will and/or such other evidence as
the Company may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of the
Option.
9. Registration Rights. If the Company and Wien enter into an agreement prior to
April 15, 1998 with respect to Wien providing financing to the Company, then the
Optionee will receive the same registration rights that Wien receives for
securities issued by the Company in consideration for agreeing to provide such
financing.
10. Company Representations. The Company hereby represents and warrants to the
Optionee that:
(i) the Company, by appropriate and all required action, is duly authorized
to enter into this Agreement and consummate all of the transactions contemplated
hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to the
Optionee in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
11. Optionee Representations. The Optionee hereby represents and warrants to the
Company that::
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, within the last 24 months and all
reports issued by the Company to its stockholders;
4
<PAGE>
(iii) he understands that he must bear the economic risk of the investment
in the Option Shares, which cannot be sold by him unless they are registered
under the Securities Act of 1933 (the "1933 Act") or an exemption therefrom is
available thereunder and that, except as provided herein, the Company is under
no obligation to register the Option Shares for sale under the 1933 Act;
(iv) he has had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort or
expense necessary to verify the accuracy of the information obtained pursuant to
clause (ii) above;
(v) he is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
(vi) the certificates evidencing the Option Shares shall bear the following
legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of April 2, 1998, a
copy of which is on file with the Company, and may not be transferred,
pledged or disposed of except in accordance with the terms and
conditions thereof."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary notwithstanding, the
Optionee hereby agrees that he shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him without registration
under the 1933 Act, or in the event that they are not so registered, unless (i)
an exemption from the 1933 Act registration requirements is available
thereunder, and (ii) Optionee has furnished the Company with notice of such
5
<PAGE>
proposed transfer and the Company's legal counsel, in its reasonable opinion,
shall deem such proposed transfer to be so exempt.
12.2 Anything in this Agreement to the contrary notwithstanding, the
Optionee hereby agrees that, if he is, or at any time hereinafter becomes, an
employee or director of the Company or any subsidiary thereof, he shall not
sell, transfer by any means or otherwise dispose of the Option Shares acquired
by him except in accordance with Company's policy, if any, regarding the sale
and disposition of securities owned by employees and/or directors of the
Company.
13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally, sent by
confirmed facsimile, registered or certified mail, or by private courier to the
parties at their respective addresses set forth herein, or to such other address
as either shall have specified by notice in writing to the other. Notice shall
be deemed duly given hereunder when delivered, faxed or mailed as provided
herein.
13.2 Optionee and Stockholder Rights. The Optionee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. If Optionee is, or
hereinafter becomes, an employee or director of the Company or any subsidiary
thereof, nothing contained in this Agreement shall be deemed to confer upon the
Optionee any right to continued employment, or a continued directorship
position, with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate the Optionee in accordance
with the provisions regarding such termination set forth in the Optionee's
written employment agreement with the Company, or if there exists no such
agreement, to terminate Optionee at will, and/or terminate Optionee's
directorship in accordance with the Company's Certificate of Incorporation and
By-laws and/or the laws of the State of Delaware, as the case may be.
13.3 Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. This Agreement may not be
amended except by writing executed by Optionee and the Company.
6
<PAGE>
13.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
13.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
13.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC. Address:
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
By:__________________________
OPTIONEE:
Address:
56 Intervale
Roslyn Estates, New York 11576
Fax: _______________________
_______________________________
ELI OXENHORN
7
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
Global Telecommunication Solutions, Inc.
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
Attention: The Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of April 2, 1998 with
Global Telecommunication Solutions, Inc. (the "Company"), I hereby irrevocably
elect to exercise the right to purchase _________ shares of the Company's common
stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
|_| a [personal check] [certified check] [bank check] payable to the order
of "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for _________ shares of
the Company's Common Stock, free and clear of any encumbrances, duly
endorsed, having a Fair Market Value (as such term is defined in
Section 7.3.3 of the Stock Option Agreement) of $---------.
|_| with the consent of the Company, by surrender of a portion of my
Option having a value of $_____________ as calculated in accordance
with Section 7.3.2 of the Stock Option Agreement.
|_| with the consent of the Company, __________________________________
I hereby represent and warrant to, and agree with, the Company that:
(i) I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the
distribution thereof;
(ii) I have received a copy of all reports and documents required to be
filed by the Company with the Commission pursuant to the Exchange Act
within the last 24 months and all reports issued by the Company to its
stockholders;
(iii)I understand that I must bear the economic risk of the investment in
the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an
exemption therefrom is available thereunder;
1
<PAGE>
(iv) I have had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting
on its behalf concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it
without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (ii) above;
(v) I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom
as provided herein; and
(vi) the certificates evidencing the Option Shares shall bear the following
legends:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities
Act of 1933. The shares may not be sold or transferred in the
absence of such registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of April 2, 1998,
a copy of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with the
terms and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
- ------------------------------ ----------------------------------------
(Signature) (Address)
- ------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
2
<PAGE>
GRAUBARD MOLLEN & MILLER
600 Third Avenue
New York, NY 10016
July 23, 1998
Global Telecommunication Solutions, Inc.
5697 Rising Sun Avenue
Philadelphia, PA 19120
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to you in connection with the offering by Global
Telecommunication Solutions, Inc. ("Company"), of up to 1,000,000 shares of the
Company's Common Stock, $.01 par value per share ("Common Stock"), pursuant to
options that may be granted under the Company's 1994 Performance Equity Plan
("1994 Plan") and up to 425,000 shares of Common Stock pursuant to options that
have been granted under certain other employee benefit plans ("Benefit Plans")
of the Company.
In such capacity, we have examined, among other documents, the 1994 Plan,
the forms of the Stock Option Agreements between the Company and the grantees of
options under the 1994 Plan and the Benefit Plans, copies of the Certificate of
Incorporation, as amended, and By-Laws, as amended, of the Company and copies of
resolutions adopted by the Company's Board of Directors relating, among other
things, to the amendment to the 1994 Plan, the authorization and sale of the
shares of Common Stock to be sold pursuant to the 1994 Plan and the Benefit
Plans, and the minutes of a meeting of the stockholders of the Company at which
the amendment to the 1994 Plan was approved. We have assumed that all of the
Stock Option Agreements between the Company and the grantees of options under
the 1994 Plan and the Benefit Plans are or will be in the same form as the forms
of the Stock Option Agreements we examined. In addition, we have examined and
relied upon, to the extent we deemed such reliance proper, certificates of
officers and directors of the Company, certificates of certain public officials
and such other records and documents as we have considered necessary and proper
in order that we may render the opinion hereinafter set forth. We have assumed
the authenticity of such Certificate of Incorporation, as amended, By-Laws, as
amended, resolutions, certificates, records and other documents examined by us
and the correctness of all statements of fact contained therein, and nothing has
come to our attention that indicates that such documents and other items are not
authentic or correct. With respect to such examination, we have assumed the
genuineness of all signatures appearing on all documents presented to us as
originals and the conformity to originals of all documents presented to us as
conformed or reproduced documents. We have not examined the certificates for the
shares of Common Stock other than specimens thereof.
As members of the Bar of the State of New York, we do not purport to be
experts in the laws of any jurisdiction other than the State of New York and
with respect to the federal laws of the United States.
<PAGE>
Global Telecommunication Solutions, Inc.
July 23, 1998
Page 2
Based on the foregoing, we are of the opinion that the shares of Common
Stock being offered pursuant to the Stock Option Agreements and the terms of the
1994 Plan and the respective Benefit Plans to which each Stock Option Agreement
relates, have been duly authorized and, when issued and delivered against
payment therefor, as contemplated by the Stock Option Agreements, will be
validly issued and fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, to the use of our name as your counsel, and to all
references made to us in the Registration Statement. In giving this consent we
do not hereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act, or the rules and regulations
promulgated thereunder.
This opinion is being delivered to you solely for your benefit and may not
be relied upon in any manner by any other person.
Very truly yours,
/s/ Graubard Mollen & Miller
_________________________________
GRAUBARD MOLLEN & MILLER
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Global Telecommunication Solutions, Inc.:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
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KPMG PEAT MARWICK LLP
Philadelphia, Pennsylvania
July 17, 1998
