SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 1, 1999
VIZACOM INC.
(Exact name of registrant as specified in its charter)
Delaware 1-14076 22-3270045
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
3A Oak Road, Fairfield, New Jersey 07004
(Address of principal executive offices) (Zip Code)
(973) 808-1992
(Registrant's telephone number, including area code)
Software Publishing Corporation Holdings, Inc.
(Former name or former address, if changed since last report)
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Item 5. Other Events.
1. On July 14, 1999, the stockholders of the Company approved the
following proposals:
- Amendments to the Company's Certificate of Incorporation to
(i) change the Company name to Vizacom Inc., and (ii) to increase
the number of authorized shares of the Company's common stock to
60,000,000 from 30,000,000;
- An amendment to increase the number of shares available for
award under the Company's 1994 Long Term Incentive Plan (the
"Plan") to 5,000,000 from 1,333,333;
- An amendment to increase the number of shares available under
the Company's Outside Director and Advisor Stock Plan to 750,000
from 166,666 and to amend certain other provisions thereof.
In addition, Mark E. Leininger was reelected as a Director of the
Company in Class III.
2. On July 14, 1999, the Company entered into a three year employment
agreement with the Company's President and Chief Executive Officer,
Mark E. Leininger. Under the terms of the agreement, Mr. Leininger
will receive $162,500 base pay with minimum $10,000 annual increases
during the term of the agreement. Such annual increases may be revised
upward at the discretion of the Compensation Committee of the Board of
Directors. Mr. Leininger will receive a $25,000 bonus upon the
Company's attainment of its first profitable fiscal quarter.
Mr. Leininger will also receive a quarterly bonus of 3% of the
Company's net income before extraordinary items. In the event of a
change of control, the agreement provides that Mr. Leininger shall
have the right to terminate the employment agreement within six months
thereafter, and receive payment of three times the average annual cash
compensation paid by the Company to Mr. Leininger over the previous
five years, less $1.00. The agreement further contains restrictions on
the employee engaging in competition with the Company for the term
thereof and for up to one year thereafter, and provisions protecting
the Company's proprietary rights and information.
3. Effective July 8, 1999, the Company rescinded its June 11, 1999
issuance of 50,000 shares of common stock to Kaufman & Moomjian,
LLC, and its issuance of options on such date to purchase an aggregate
of 75,000 shares of common stock at an exercise price of $2.75 per
share to Kaufman and Moomjian, LLC and Neil M. Kaufman, a director
of the Corporation. In July 1999, the Company granted under the Plan
to Neil M. Kaufman, a director of the Corporation, options to
purchase 50,000 shares of common stock exercisable at $3.08 per
share which become exercisable immediately, with respect to
one-third of such options, with the remaining options vesting
one-third on the first and second anniversaries of the date of
grant, respectively. The Company also granted to Neil M. Kaufman
37,500 shares of common stock under the Plan in exchange for a
reduction in outstanding fees due to his law firm.
4. On July 1, 1999, the Company sold an aggregate of 762,653 shares
of common stock for aggregate gross proceeds of $1,510,000 to 45
investors in a private placement in which Joseph Stevens &
Company, Inc. acted as placement agent. The issuance of these shares
of Common Stock was a private transaction exempt from registration
under Section 4(2) of the Securities Act and Rule 506 of Regulation D
thereunder.
5. On July 14, 1999, the Board of Directors of the Company called for
redemption all outstanding shares of Class C 11% Cumulative
Non-Convertible Redeemable Preferred Stock of the Company with a
record date for such redemption of July 19, 1999. On July 1,
1999, the Company agreed with Seafish Partners ("Seafish") that in
the event the Company called for redemption any of its shares of
Class C 11% Cumulative Non-Convertible Redeemable Preferred Stock
within 45 days, the Company would sell to Seafish 53,815 shares of
Xceed common stock owned by the Company at a price of $18.44 per Xceed
share, or $992,349 in the aggregate.
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Listed below are all exhibits to this Current Report on Form 8-K.
Exhibit
Number Description
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3.1 Composite Certificate of Certificate of Incorporation, as
amended.
10.1 Agreement dated July 1, 1999 between the Company and Seafish
Partners.
10.2 Employment Agreement dated July 14, 1999 between Vizacom
Inc. and Mark E. Leininger.
10.3 Vizacom Inc. 1994 Long Term Incentive Plan, as amended.
10.4 Vizacom Inc. Outside Directors and Advisor Stock Option Plan
as amended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: July 15, 1999
VIZACOM INC.
By: /s/ Mark E. Leininger
-------------------------------------
Mark E. Leininger, President and Chief
Executive Officer (Principal Executive
Officer)
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<PAGE>
VIZACOM INC
Form 8-K
Exhibit Index
Exhibit
Number Description
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3.1 Composite Certificate of Certificate of Incorporation, as amended.
10.1 Agreement dated July 1, 1999 between the Company and Seafish Partners.
10.2 Employment Agreement dated July 14, 1999 between Vizacom Inc. and
Mark E. Leininger.
10.3 Vizacom Inc. 1994 Long Term Incentive Plan, as amended.
10.4 Vizacom Inc. Outside Directors and Advisor Stock Option Plan as
amended.
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COMPOSITE
CERTIFICATE OF INCORPORATION
of
VIZACOM INC.
(a Delaware corporation)
* * * * * *
FIRST: The name of the corporation is:
Vizacom Inc.
SECOND: The location of the registered office of the Corporation in the State
of Delaware is at Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle. The name of the registered agent of the
Corporation in the State of Delaware at such address upon whom process against
the Corporation may be served is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is SIXTY-TWO MILLION (62,000,000)
shares. Of these (i) SIXTY MILLION (60,000,000) shares shall be shares of Common
Stock of the par value of $.001 per share; (ii) ONE MILLION NINE HUNDRED
THIRTY-NINE THOUSAND FOUR HUNDRED EIGHTY (1,939,480) shares shall be Serial
Preferred Stock of the par value of $.001 per share; and (iii) SIXTY-THOUSAND
FIVE HUNDRED TWENTY (60,520) shares shall be Class B Voting Preferred Stock,
Series A of the par value of $.001 per share.
(b) The statement of the relative rights, preferences and limitations
of the shares of each class is as follows:
A. Serial Preferred Stock. The Serial Preferred Stock may be
issued from time to time in classes or series and shall have such voting
powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights,
and qualifications, limitations or restrictions thereof, as shall be stated
and expressed in the resolution or resolutions of the Board of Directors
providing for the issuance of such stock.
Class B Voting Preferred Stock, Series A:
----------------------------------------
1. Designation. (a) The designation of the
series of Serial Preferred Stock created hereby shall be "Class B
Voting Preferred Stock, Series A" (hereinafter called the "Class
B Preferred"), and the number of shares constituting the Class B
Preferred is 60,520.
(b) All shares of Class B Preferred
shall be identical with each other in all respects. All shares
of Class B Preferred shall rank, as to the payment of dividends
and of distributions of assets upon any dissolution, liquidation
or winding up of the Corporation, prior to the common stock,
par value $.001 per share, of the Corporation, and any other
stock which by its terms ranks junior to the Class B Preferred
and on a parity with any other class or series of stock of the
Corporation ranking on a parity with the Class B Preferred as
to distribution upon dissolution, liquidation or winding up
of the Corporation.
(c) Shares of the Class B Preferred that have
been redeemed, purchased or otherwise acquired by the Corporation
shall not be reissued as Class B Preferred and when retired as
provided by the General Corporation Law of the State of Delaware,
shall have the status of authorized but unissued shares of
Serial Preferred Stock,
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without designation as to series until such shares are once more
designated as part of a particular series by the Board of
Directors of the Corporation or a duly authorized committee
thereof.
2. Dividends. Each holder of shares of
Class B Preferred (each a "Holder") shall not be entitled to receive
any dividends.
3. Liquidation Rights. (a) Upon the
dissolution, liquidation or winding up of the affairs of the
Corporation, whether voluntary or involuntary, the Holders of
shares of Class B Preferred then outstanding shall be entitled to
receive, out of the assets of the Corporation available for
distribution to stockholders after satisfying claims of creditors
but before distributions of assets shall be made on the Common
Stock or any other class or series of stock ranking junior to the
shares of Class B Preferred upon liquidation, dissolution or
winding up of the Corporation, the amount of $.001 per share plus
an amount equal to all accrued but unpaid dividends on such
shares to the date of final distribution.
(b) Neither the sale, lease or exchange
(for cash, shares of stock, securities or other consideration)
of all or substantially all the property and assets of the
Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation, or the merger or
consolidation of any other corporation into or with the
Corporation, shall be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, for the purposes of this
paragraph.
(c) After payment to the Holders of the
full preferential amount provided for in this paragraph 3
($605.20), holders of shares of Class B Preferred in their
capacity as Holders shall have no right or claim to any of the
remaining assets of the Corporation.
(d) If the assets of the Corporation
available for distribution to the Holders upon dissolution,
liquidation or winding up of the Corporation, whether voluntary
or involuntary, shall be insufficient to pay in full all
amounts to which the Holders are entitled pursuant to clause (a)
of this paragraph 3, and to which holders of any other class or
series of stock of the Corporation ranking on a parity with the
Class B Preferred as to distribution upon dissolution,
liquidation or winding up of the Corporation (collectively, the
"Parity Stockholders") are entitled pursuant to the Certificate
of Incorporation, as it may be amended from time to time
(including any Certificate of Designations), then such assets
shall be distributed among the Holders of the Class B Preferred
and the Parity Stockholders ratably in proportion to the full
amounts otherwise due such Holders and Parity Stockholders.
4. Voting Rights. (a) The Holders of shares
of Class B Preferred shall vote together with the shares of
Common Stock of the Corporation. The Holder of each share of
Class B Preferred shall be entitled to ten (10) votes per share
of Class B Preferred.
(b) Voting rights hereunder shall be
exercised at each meeting of stockholders for the election of
directors or otherwise or in connection with a written consent
in lieu thereof, as the case may be.
Junior Participating Preferred Stock, Series A:
----------------------------------------------
Section 1. Designation and Amount. The shares
of such series shall be designated as "Junior Participating
Preferred Stock, Series A" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred Stock
shall be 100,000.
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Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred
Stock to a number less than the number of shares then outstanding
plus the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Company convertible
into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders
of any shares of any series of Preferred Stock (or any similar
stock) ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock,
par value $.001 per share (the "Common Stock"), of the Company,
and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable
in cash on the first day of January, April, July and October
in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the
greater of (i) $10 or (ii) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event
the Company shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then, in each such
case, the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause
(ii) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(b) The Company shall declare a dividend
or distribution on the Series A Preferred Stock as provided in
paragraph (a) of this Section immediately after the Company
declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $10 per share on the Series
A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and
be cumulative on outstanding shares of Series A Preferred Stock
from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or,
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a
quarterly
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dividend and before such Quarterly Dividend Payment Date, in
either of which events, such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 50
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares
of Series A Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock
shall entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Company. In
the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then, in each such case, the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(b) Except as otherwise provided herein, in
any other Certificate of Designations creating a series of Serial
Preferred Stock or any similar stock, or by law, the holders
of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Company having
general voting rights shall vote together as one class on all
matters submitted to a vote of shareholders of the Company.
(c) Except as set forth herein, or as
otherwise provided by law, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred
Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends, or make
any other distributions, on any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make
any other distributions, on any shares of stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which
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dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock; provided
that the Company may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Company ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred
Stock; or
(iv) redeem or purchase or otherwise
acquire for consideration any shares of Series A Preferred
Stock, or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(b) The Company shall not permit any
subsidiary of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company unless the
Company could, under paragraph (a) of this Section 4, purchase
or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Company in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall, upon their cancellation,
become authorized but unissued shares of Serial Preferred Stock and
may be reissued as part of a new series of Serial Preferred Stock
subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other
Certificate of Designations creating a series of Serial Preferred
Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Company, no
distribution shall be made (a) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall
have received $1,000 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment; provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1,000 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (b) to the holders
of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall
at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then, in each such case, the aggregate amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior
to such event under the proviso in clause (a) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding
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immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Company shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other
property, then, in any such case, each share of Series A Preferred
Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then, in
each such case, the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the nominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Serial
Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation
of the Company shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of Series A Preferred Stock, voting together as
a single class.
Class A 14% Cumulative Non-Convertible Redeemable Preferred Stock, Series A
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Section 1. Designation and Amount. The shares of
such class shall be designated as "Class A 14% Cumulative
Non-Convertible Redeemable Preferred Stock, Series A" (the "Class A
Preferred Stock") and the number of shares constituting the Class A
Preferred Stock shall be 1,500. Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Class A Preferred
Stock to a number less than the number of shares then outstanding,
plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Company convertible into Class A
Preferred Stock.
Section 2. Dividends.
2.1. The dividend rate on the shares of Class A
Preferred Stock shall be $140.00 per share per annum. Such
dividends shall be cumulative on each share of Class A Preferred
Stock from the date of issuance and shall be payable in cash if,
when and as declared by the Board of Directors, on June 30, and
December 31, of each year, commencing with June 30, 1999. Each
such dividend shall be paid to the holders of record of shares of
the Class A Preferred Stock as they appear on the stock register
of the Corporation on such record date, not exceeding 30 days
nor less than ten days preceding the payment date
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thereof, as shall be fixed by the Board of Directors of the
Corporation or a duly authorized committee thereof.
2.2. When dividends are not paid in full or declared in
full and sums set apart for the payment thereof upon the Class
A Preferred Stock and any other Serial Preferred Stock ranking
on a parity as to dividends with the Class A Preferred Stock,
all dividends declared upon shares of Class A Preferred Stock
and any other Serial Preferred Stock ranking on a parity as to
dividends shall be declared pro rata so that in all cases the
amount of dividends declared per share on the Class A Preferred
Stock and such other Serial Preferred Stock shall bear to each
other the same ratio that accumulated dividends per share,
including dividends accrued or in arrears, on the shares of
Class A Preferred Stock and such other Serial Preferred Stock
bear to each other. Except as provided in the preceding
sentence, unless full cumulative dividends on the Class A
Preferred Stock have been paid, or declared in full and sums
set apart for the payment thereof, no dividends shall be
declared or paid or set aside for payment or other distribution
made upon the common stock, par value $.001 per share (the
"Common Stock"), of the Corporation or any other stock of the
Corporation ranking junior to or on a parity with the Class A
Preferred Stock as to dividends or liquidation rights, nor
shall any Common Stock or any other stock of the Corporation
ranking junior to or on a parity with the Class A Preferred
Stock as to dividends or upon liquidation be redeemed, purchased,
exchanged or otherwise acquired for any consideration (or any
payment made to or available for a sinking fund for the
redemption of any shares of such stock) by the Corporation or any
subsidiary (except by conversion into or exchange for stock of
the Corporation ranking junior to the Class A Preferred Stock as
to dividends and liquidation rights).
Section 3. Conversion Provisions. The Class A Preferred
Stock is not convertible into shares of Common Stock or any other
capital stock of the Corporation.
Section 4. Liquidation Rights. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Class A Preferred Stock shall be
entitled to receive out of the remaining assets of the Corporation
available for distribution to stockholders, before any distribution of
assets is made to holders of Common Stock or any other class of stock
of the Corporation ranking junior to the Class A Preferred Stock,
liquidating distributions in an amount equal to $1,000 per share, plus
an amount equal to all accrued and unpaid dividends on each such share
up to the date fixed for such distribution. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the amounts payable with respect to the Class A Preferred Stock and
any other shares of stock of the Corporation ranking (as to any such
distribution) on a parity with the Class A Preferred Stock are not
paid in full, holders of the Class A Preferred Stock and of such other
shares of stock will share ratably in any such distribution of assets
of the Corporation in proportion to the full respective preferential
amounts to which they are entitled. After payment of the full amount
of the liquidating distribution to which they are entitled, the
holders of shares of Class A Preferred Stock will not be entitled to
any further participation in any distribution of assets by the
Corporation.
For purposes of this Section 4, a distribution of assets in
any dissolution, winding up, liquidation or reorganization shall not
include (a) any consolidation or merger of the Corporation with
or into any other corporation, (b) any dissolution, liquidation,
winding up or reorganization of the Corporation immediately
followed by reincorporation of another corporation or (c) a sale
or other disposition of all or substantially all of the Corporation's
assets to another corporation; provided, that in each such case,
effective provision is made in the certificate of incorporation of the
resulting and surviving corporation or otherwise for the protection
of the rights of the holders of shares of Class A Preferred Stock.
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Section 5. Redemption.
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5.1. The Corporation shall have the right, at the
Corporation's option and by resolution of the Corporation's
Board of Directors, to redeem the Class A Preferred Stock out of
funds legally available therefor, as a whole or in part, at any
time (or from time to time) (in each case, a "Redemption Date"),
upon payment (in respect of each share redeemed) of $1,300
per share, plus all accrued and unpaid dividends to the
Redemption Date (the "Redemption Price").
5.2. (a) If full cumulative dividends on all
outstanding Series C Preferred Stock have not been paid in
full, the Class A Preferred Stock may not be redeemed in
part.
(b) If less than all of the outstanding shares of
Class A Preferred Stock are to be redeemed, the Corporation
will select those to be redeemed pro rata, as nearly as
practicable, or by lot, as the Board of Directors
may determine.
(c) Notice of redemption specifying the
Redemption Date fixed for said redemption and the place
where the amount to be paid upon redemption is payable will
be mailed postage prepaid, by first-class mail, at least
five days but not more than 60 days before the Redemption
Date to each holder of shares of Class A Preferred Stock to
be redeemed, at the address shown on the books of the
Corporation. On and after the Redemption Date,
notwithstanding that any certificate representing Class A
Preferred Stock so called for redemption shall not have
been surrendered for cancellation (provided the funds for
redemption have been set aside in trust as provided in
clause (d) of this paragraph 5.2.), the shares of Class A
Preferred Stock represented thereby shall no longer be
deemed outstanding, and the holder of such certificate or
certificates shall have (with respect to the Corporation)
no right other than the right to receive the Redemption
Price, without interest, upon the surrender of such
certificate; and such Class A Preferred Stock shall not be
transferable on the books of the Corporation except to
the Corporation.
(d) On or before the Redemption Date specified
therein, the Corporation may irrevocably (subject to clause
(e) of this paragraph 5.2) deposit with a bank or trust
company in New York, New York having a capital and surplus
of at least $50,000,000, in a trust to be applied to the
redemption of the shares of Class A Preferred Stock so
called for redemption, the funds necessary for such
redemption. From and after the date of such deposit all
rights of the holders of the shares of Class A Preferred
Stock so called for redemption shall cease and terminate,
excepting only the right to receive the Redemption Price
therefor, without interest. The Corporation may direct
the bank or trust company to invest the funds deposited in
trust to be applied to the redemption of Class A Preferred
Stock so called for redemption into one or more of the
following obligations or securities:
(i) direct obligations of, and obligations
fully guaranteed by, the United States of America,
or any agency thereof, the obligations of which are
backed by the full faith and credit of the United
States Government;
(ii) certificates of deposit, time deposits,
commercial paper, and bankers' acceptances issued by
any bank (or its
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holding company) whose senior unsecured debt has
the highest rating given by Standard & Poor's
Corporation, a New York corporation, or any
successor thereto by merger, consolidation, sale of
substantially all of its assets or otherwise; and
(iii) deposits which are fully insured by
the Federal Deposit Insurance Corporation or the
Federal Savings and Loan Insurance Corporation;
provided, that prior to the Redemption Date, such
investments shall be made in such manner as to
mature by their terms not later than the day preceding the
Redemption Date.
(e) In case the holders of shares of Class A
Preferred Stock which have been called for redemption shall
not, within six years after the Redemption Date, claim the
amount deposited with respect to the redemption thereof,
any such bank or trust company shall, upon demand, pay
over to the Corporation such unclaimed amounts and
thereupon such bank or trust company shall be relieved of
all responsibility in respect thereof to such holder and
such holder shall look only to the Corporation for the
payment of the Redemption Price. Any interest accrued on
funds so deposited shall be paid to the Corporation at such
times as the Corporation may request.
Section 6. Voting Rights.
6.1. Except as provided in this Section 6, holders of
shares of Class A Preferred Stock shall have no voting rights
with respect to their Class A Preferred Stock.
6.2. If any three consecutive semi-annual dividends
payable on Class A Preferred Stock, or on any other class or
series of Serial Preferred Stock ranking on a parity with Class
A Preferred Stock as to dividends or liquidation rights, shall
not be paid in full when payable (a "Default"), the holders
of Class A Preferred Stock and all outstanding series of
Serial Preferred Stock ranking on a parity with the Class
A Preferred Stock as to dividends or liquidation rights
(collectively, the "Pari Passu Preferred Stock"), voting as a
single class without regard to the class or series, shall
thereafter automatically have the right to elect one member of
the Board of Directors of the Corporation (in which event the
number of directors shall automatically be increased
accordingly) until all dividends in arrears on all such Pari
Passu Preferred Stock have been paid or declared and set
apart for payment in trust with a bank or trust company in
accordance with clause (d) of paragraph 5.2. Each director
elected by the holders of Pari Passu Preferred Stock pursuant to
this paragraph 5.2. (herein called a "Preferred Director"), shall
serve as such a director of the Corporation in the class of
directors designated by the Board of Directors of the
Corporation, subject to the provisions of this Section 6, until
the Default shall be cured, at which time the term of each such
Preferred Director shall terminate and the number of directors
shall be reduced accordingly.
6.3. Voting rights under paragraph 6.2. may be
initially exercised either at a special meeting of the holders
of Pari Passu Preferred Stock or at any annual stockholders'
meeting. A special meeting for the exercise of such rights shall
be called by the Secretary of the Corporation as promptly as
possible, and in any event within ten days after receipt of a
written request signed by the holders of record of at least
10% of the outstanding shares of Pari Passu Preferred Stock,
in each case by sending written notice of such meeting to each
holder of Pari Passu Preferred Stock at such holder's registered
address
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on the books of the Corporation. Such notice shall state
the purpose of the meeting and the place and time for the
meeting.
6.4. Any director who shall have been elected by the
holders of Pari Passu Preferred Stock may be removed at any
time, either for or without cause, by, and only by, an
affirmative vote of the holders of record of a majority of
the Pari Passu Preferred Stock, given at a special meeting of
such stockholders called for such purpose, and any vacancy
created by such removal may also be filled at such meeting. A
meeting for the removal of a director elected by the holders of
Pari Passu Preferred Stock and/or the filling of the vacancy
created thereby shall be called by the Secretary of the
Corporation within ten days after receipt of a written request
signed by the holders of record of at least 10% of the
outstanding shares of Pari Passu Preferred Stock by
sending, in each case, written notice of such meeting to each
holder of Pari Passu Preferred Stock at such holder's registered
address on the books of the Corporation. Such meeting shall be
held at the earliest practicable date thereafter. Such notice
shall state the purpose of the meeting and the place and time for
the meeting. The giving of such notice shall constitute the only
obligation of the Corporation pursuant to this paragraph 6.4.
6.5. Any vacancy caused by the death or resignation of
a Preferred Director may be filled only by the holders of
Pari Passu Preferred Stock at a meeting called for such
purpose. Such meeting of the holders of Pari Passu Preferred
Stock shall be called by the Secretary of the Corporation
at the earliest practicable date after any such death or
resignation and, in any event, within ten days after receipt of
a written request signed by the holders of record of at least
10% of the outstanding shares of Pari Passu Preferred Stock by
sending, in each case, written notice of such meeting to each
holder of Pari Passu Preferred Stock at such holder's registered
address on the books of the Corporation. Such notice shall
state the purpose of the meeting and the place and time for the
meeting.
6.6. If any meeting of the holders of Pari Passu
Preferred Stock required by this Section 6 to be called shall
not have been called within ten days after personal service
of a written request therefor upon the Secretary of the
Corporation, or within fifteen days after mailing the same
within the United States of America by registered mail addressed
to the Secretary of the Corporation at the Corporation's
principal office, then the holders of record of at least 10%
of the outstanding shares of Pari Passu Preferred Stock may
designate in writing one of their number to give notice of such
meeting at the expense of the Corporation and such meeting
may be called by such person so designated upon the notice
required for annual meetings of stockholders of the
Corporation. Any holder of Pari Passu Preferred Stock so
designated shall have access to the stock books of the
Corporation for the purpose of causing meetings of holders of
Pari Passu Preferred Stock to be called pursuant to these
provisions.
6.7. Any meeting of the holders of the Pari Passu
Preferred Stock for the purposes of voting as a class for the
election or removal of directors may be held within or without
the State of Delaware, at a place suitable for such meeting of
holders, or if such action is taken in conjunction with an annual
stockholders' meeting, at the location of such annual
stockholders' meeting. The Corporation shall pay all expenses
associated with such meeting. At such meeting, the presence in
person or by proxy of the holders of a majority of the
outstanding shares of Pari Passu Preferred Stock shall be
required to constitute a quorum; in the absence of a quorum, a
majority of the holders present in person or by proxy shall have
the power to adjourn the meeting from time to time without
notice, other than announcement at the meeting, until the
quorum shall be present.
6.8. So long as any shares of Class A Preferred Stock
are outstanding, the Corporation shall not, without the written
consent or the affirmative vote at a meeting
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called for that purpose of holders of at least a majority of the
shares of Class A Preferred Stock then outstanding, in any
manner, whether by amendment to the Certificate of
Incorporation or By-Laws of the Corporation, by merger
(whether or not the Corporation is a surviving corporation
in such merger), by consolidation, or otherwise:
(i) amend, modify or affect the designations,
powers, preferences and relative and other special rights
or the limitations of the Class A Preferred Stock so as to
affect the Class A Preferred Stock adversely; or
(ii) issue any Serial Preferred Stock which ranks
senior to the Class A Preferred Stock as to dividends or
liquidation rights.
6.9. Notwithstanding anything contained herein to the
contrary, any action required or permitted to be taken by the
holders of Class A Preferred Stock and/or Pari Passu Preferred
Stock at any annual or special meeting of holders of Class A
Preferred Stock and/or Pari Passu Preferred Stock may be taken
without a meeting, at any time, without prior notice and without
a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding shares
of Class A Preferred Stock and/or Pari Passu Preferred Stock
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at
which all shares of Class A Preferred Stock and Pari Passu
Preferred Stock entitled to vote thereon were present and voted.
Prompt notice of the taking of corporate action without a meeting
by less than unanimous written consent shall be given to those
holders of Class A Preferred Stock and/or Pari Passu Preferred
Stock who have not consented thereto in writing. Such notice
shall be made to each such holder at the holder's registered
addresses on the books of the Corporation.
Section 7. Shares held by the Corporation. In
determining whether the holders of the requisite aggregate number of
shares of Class A Preferred Stock and/or Pari Passu Preferred Stock
have concurred in any vote, consent, waiver or other action hereunder,
shares of Class A Preferred Stock which are owned by the Corporation
or by any majority-owned subsidiary of the Corporation shall be
disregarded and deemed not to be outstanding for such purpose.
Section 8. Retirement of Redeemed Shares, etc.
Shares of the Class A Preferred Stock which have been redeemed shall
have the status of authorized and unissued Serial Preferred Stock, par
value $.001 per share, of the Corporation, but shall not be reissued
as Class A Preferred Stock.
Class C 11% Cumulative Non-Convertible Redeemable Preferred Stock,
Series A
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Section 1. Designation and Amount. The shares of
such class shall be designated as "Class C 11% Cumulative
Non-Convertible Redeemable Preferred Stock, Series A" (the "Class C
Preferred Stock") and the number of shares constituting the Class C
Preferred Stock shall be 1,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Class C Preferred
Stock to a number less than the number of shares then outstanding,
plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Company convertible into Class C
Preferred Stock.
Section 2. Dividends.
2.1. The dividend rate on the shares of Class
C Preferred Stock shall be $110.00 per share per annum. Such
dividends shall be cumulative on each share of Class
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C Preferred Stock from the date of issuance and shall be payable
in cash if, when and as declared by the Board of Directors, on
June 30, and December 31, of each year, commencing with June 30,
1999. Each such dividend shall be paid to the holders of record
of shares of the Class C Preferred Stock as they appear on the
stock register of the Corporation on such record date, not
exceeding 30 days nor less than ten days preceding the payment
date thereof, as shall be fixed by the Board of Directors of
the Corporation or a duly authorized committee thereof.
2.2. When dividends are not paid in full or
declared in full and sums set apart for the payment thereof
upon the Class C Preferred Stock and any other Serial Preferred
Stock ranking on a parity as to dividends with the Class C
Preferred Stock, all dividends declared upon shares of Class
C Preferred Stock and any other Serial Preferred Stock ranking
on a parity as to dividends shall be declared pro rata so that in
all cases the amount of dividends declared per share on the Class
C Preferred Stock and such other Serial Preferred Stock shall
bear to each other the same ratio that accumulated dividends per
share, including dividends accrued or in arrears, on the shares
of Class C Preferred Stock and such other Serial Preferred Stock
bear to each other. Except as provided in the preceding
sentence, unless full cumulative dividends on the Class C
Preferred Stock have been paid, or declared in full and sums
set apart for the payment thereof, no dividends shall be
declared or paid or set aside for payment or other distribution
made upon the common stock, par value $.001 per share (the
"Common Stock"), of the Corporation or any other stock of the
Corporation ranking junior to or on a parity with
the Class C Preferred Stock as to dividends or liquidation
rights, nor shall any Common Stock or any other stock of the
Corporation ranking junior to or on a parity with the Class C
Preferred Stock as to dividends or upon liquidation be redeemed,
purchased, exchanged or otherwise acquired for any consideration
(or any payment made to or available for a sinking fund for the
redemption of any shares of such stock) by the Corporation or any
subsidiary (except by conversion into or exchange for stock of
the Corporation ranking junior to the Class C Preferred Stock as
to dividends and liquidation rights).
Section 3. Conversion Provisions. The Class C
Preferred Stock is not convertible into shares of Common Stock or any
other capital stock of the Corporation.
Section 4. Liquidation Rights. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Class C Preferred Stock shall be
entitled to receive out of the remaining assets of the Corporation
available for distribution to stockholders, before any distribution of
assets is made to holders of Common Stock or any other class of stock
of the Corporation ranking junior to the Class C Preferred Stock,
liquidating distributions in an amount equal to $1,000 per share, plus
an amount equal to all accrued and unpaid dividends on each such share
up to the date fixed for such distribution. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
the amounts payable with respect to the Class C Preferred Stock and
any other shares of stock of the Corporation ranking (as to any such
distribution) on a parity with the Class C Preferred Stock are not
paid in full, holders of the Class C Preferred Stock and of such other
shares of stock will share ratably in any such distribution of assets
of the Corporation in proportion to the full respective preferential
amounts to which they are entitled. After payment of the full amount
of the liquidating distribution to which they are entitled, the
holders of shares of Class C Preferred Stock will not be entitled to
any further participation in any distribution of assets by the
Corporation.
For purposes of this Section 4, a distribution of
assets in any dissolution, winding up, liquidation or reorganization
shall not include (a) any consolidation or merger of the Corporation
with or into any other corporation, (b) any dissolution, liquidation,
winding up or reorganization of the Corporation immediately followed
by reincorporation of another corporation or (c) a sale or other
disposition of all or substantially all of the Corporation's assets to
another corporation; provided, that
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in each such case, effective provision is made in the certificate
of incorporation of the resulting and surviving corporation or
otherwise for the protection of the rights of the holders of shares
of Class C Preferred Stock.
Section 5. Redemption.
5.1. The Corporation shall have the right, at the
Corporation's option and by resolution of the Corporation's
Board of Directors, to redeem the Class C Preferred Stock out of
funds legally available therefor, as a whole or in part, at any
time (or from time to time) (in each case, a "Redemption Date"),
upon payment (in respect of each share redeemed) of $1,000 per
share, plus all accrued and unpaid dividends to the
Redemption Date (the "Redemption Price").
5.2. (a) If full cumulative dividends on all
outstanding Series C Preferred Stock have not been paid
in full, the Class C Preferred Stock may not be redeemed
in part.
(b) If less than all of the outstanding
shares of Class C Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed pro rata,
as nearly as practicable, or by lot, as the Board of
Directors may determine.
(c) Notice of redemption specifying the
Redemption Date fixed for said redemption and the place
where the amount to be paid upon redemption is payable will
be mailed postage prepaid, by first-class mail, at least
five days but not more than 60 days before the Redemption
Date to each holder of shares of Class C Preferred Stock to
be redeemed, at the address shown on the books of the
Corporation. On and after the Redemption Date,
notwithstanding that any certificate representing Class C
Preferred Stock so called for redemption shall not have
been surrendered for cancellation (provided the funds for
redemption have been set aside in trust as provided in
clause (d) of this paragraph 5.2.), the shares of Class C
Preferred Stock represented thereby shall no longer be
deemed outstanding, and the holder of such certificate or
certificates shall have (with respect to the Corporation)
no right other than the right to receive the Redemption
Price, without interest, upon the surrender of such
certificate; and such Class C Preferred Stock shall not
be transferable on the books of the Corporation except to
the Corporation.
(d) On or before the Redemption Date
specified therein, the Corporation may irrevocably (subject
to clause (e) of this paragraph 5.2) deposit with a bank or
trust company in New York, New York having a capital and
surplus of at least $50,000,000, in a trust to be applied
to the redemption of the shares of Class C Preferred
Stock so called for redemption, the funds necessary for
such redemption. From and after the date of such deposit
all rights of the holders of the shares of Class C
Preferred Stock so called for redemption shall cease and
terminate, excepting only the right to receive the
Redemption Price therefor, without interest. The
Corporation may direct the bank or trust
company to invest the funds deposited in trust to be applied
to the redemption of Class C Preferred Stock so called for
redemption into one or more of the following obligations or
securities:
(i) direct obligations of, and
obligations fully guaranteed by, the United States of
America, or any agency thereof, the
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Obligations of which are backed by the full faith
and credit of the United States Government;
(ii) certificates of deposit, time
deposits, commercial paper, and bankers' acceptances
issued by any bank (or its holding company) whose
senior unsecured debt has the highest rating given by
Standard & Poor's Corporation, a New York corporation,
or any successor thereto by merger, consolidation,
sale of substantially all of its assets or otherwise;
and
(iii) deposits which are fully insured
by the Federal Deposit Insurance Corporation or the
Federal Savings and Loan Insurance Corporation;
provided, that prior to the Redemption Date, such
investments shall be made in such manner as to
mature by their terms not later than the day preceding the
Redemption Date.
(e) In case the holders of shares of Class C
Preferred Stock which have been called for redemption shall
not, within six years after the Redemption Date, claim the
amount deposited with respect to the redemption thereof,
any such bank or trust company shall, upon demand, pay
over to the Corporation such unclaimed amounts and
thereupon such bank or trust company shall be relieved of
all responsibility in respect thereof to such holder and
such holder shall look only to the Corporation for the
payment of the Redemption Price. Any interest accrued on
funds so deposited shall be paid to the Corporation at such
times as the Corporation may request.
Section 6. Voting Rights.
6.1. Except as provided in this Section 6, holders of
shares of Class C Preferred Stock shall have no voting rights
with respect to their Class C Preferred Stock.
6.2. If any three consecutive semi-annual dividends
payable on Class C Preferred Stock, or on any other class or
series of Serial Preferred Stock ranking on a parity with Class
C Preferred Stock as to dividends or liquidation rights, shall
not be paid in full when payable (a "Default"), the holders
of Class C Preferred Stock and all outstanding series of
Serial Preferred Stock ranking on a parity with the Class C
Preferred Stock as to dividends or liquidation rights
(collectively, the "Pari Passu Preferred Stock"), voting as a
single class without regard to the class or series, shall
thereafter automatically have the right to elect one member of
the Board of Directors of the Corporation (in which event the
number of directors shall automatically be increased
accordingly) until all dividends in arrears on all such Pari
Passu Preferred Stock have been paid or declared and set
apart for payment in trust with a bank or trust company in
accordance with clause (d) of paragraph 5.2. Each director
elected by the holders of Pari Passu Preferred Stock pursuant to
this paragraph 5.2. (herein called a "Preferred Director"), shall
serve as such a director of the Corporation in the class of
directors designated by the Board of Directors of the
Corporation, subject to the provisions of this Section 6, until
the Default shall be cured, at which time the term of each such
Preferred Director shall terminate and the number of directors
shall be reduced accordingly.
6.3. Voting rights under paragraph 6.2. may be
initially exercised either at a special meeting of the
holders of Pari Passu Preferred Stock or at any annual
stockholders' meeting. A special meeting for the exercise of
such rights shall be called by
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the Secretary of the Corporation as promptly as possible, and in
any event within ten days after receipt of a written request
signed by the holders of record of at least 10% of the
outstanding shares of Pari Passu Preferred Stock, in each case
by sending written notice of such meeting to each holder of
Pari Passu Preferred Stock at such holder's registered address
on the books of the Corporation. Such notice shall state the
purpose of the meeting and the place and time for the meeting.
6.4. Any director who shall have been elected by the
holders of Pari Passu Preferred Stock may be removed at any
time, either for or without cause, by, and only by, an
affirmative vote of the holders of record of a majority of
the Pari Passu Preferred Stock, given at a special meeting of
such stockholders called for such purpose, and any vacancy
created by such removal may also be filled at such meeting. A
meeting for the removal of a director elected by the holders of
Pari Passu Preferred Stock and/or the filling of the vacancy
created thereby shall be called by the Secretary of the
Corporation within ten days after receipt of a written
request signed by the holders of record of at least 10% of
the outstanding shares of Pari Passu Preferred Stock by
sending, in each case, written notice of such meeting to each
holder of Pari Passu Preferred Stock at such holder's registered
address on the books of the Corporation. Such meeting shall be
held at the earliest practicable date thereafter. Such notice
shall state the purpose of the meeting and the place and time for
the meeting. The giving of such notice shall constitute the only
obligation of the Corporation pursuant to this paragraph 6.4.
6.5. Any vacancy caused by the death or resignation of
a Preferred Director may be filled only by the holders of
Pari Passu Preferred Stock at a meeting called for such
purpose. Such meeting of the holders of Pari Passu Preferred
Stock shall be called by the Secretary of the Corporation
at the earliest practicable date after any such death or
resignation and, in any event, within ten days after receipt of
a written request signed by the holders of record of at least
10% of the outstanding shares of Pari Passu Preferred Stock by
sending, in each case, written notice of such meeting to each
holder of Pari Passu Preferred Stock at such holder's registered
address on the books of the Corporation. Such notice shall
state the purpose of the meeting and the place and time for the
meeting.
6.6. If any meeting of the holders of Pari Passu
Preferred Stock required by this Section 6 to be called shall
not have been called within ten days after personal service
of a written request therefor upon the Secretary of the
Corporation, or within fifteen days after mailing the same
within the United States of America by registered mail addressed
to the Secretary of the Corporation at the Corporation's
principal office, then the holders of record of at least 10%
of the outstanding shares of Pari Passu Preferred Stock may
designate in writing one of their number to give notice of such
meeting at the expense of the Corporation and such meeting
may be called by such person so designated upon the notice
required for annual meetings of stockholders of the
Corporation. Any holder of Pari Passu Preferred Stock so
designated shall have access to the stock books of the
Corporation for the purpose of causing meetings of
holders of Pari Passu Preferred Stock to be called pursuant to
these provisions.
6.7. Any meeting of the holders of the Pari Passu
Preferred Stock for the purposes of voting as a class for the
election or removal of directors may be held within or without
the State of Delaware, at a place suitable for such meeting of
holders, or if such action is taken in conjunction with an annual
stockholders' meeting, at the location of such annual
stockholders' meeting. The Corporation shall pay all expenses
associated with such meeting. At such meeting, the presence
in person or by proxy of the holders of a majority of the
outstanding shares of Pari Passu Preferred Stock shall be
required to constitute a quorum; in the absence of a quorum, a
majority of the holders present in person or by proxy
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shall have the power to adjourn the meeting from time to time
without notice, other than announcement at the meeting, until
the quorum shall be present.
6.8. So long as any shares of Class C Preferred Stock
are outstanding, the Corporation shall not, without the written
consent or the affirmative vote at a meeting called for that
purpose of holders of at least a majority of the shares of Class
C Preferred Stock then outstanding, in any manner, whether by
amendment to the Certificate of Incorporation or By-Laws of the
Corporation, by merger (whether or not the Corporation is a
surviving corporation in such merger), by consolidation, or
otherwise:
(i) amend, modify or affect the designations,
powers, preferences and relative and other special rights
or the limitations of the Class C Preferred Stock so as to
affect the Class C Preferred Stock adversely; or
(ii) issue any Serial Preferred Stock which
ranks senior to the Class C Preferred Stock as to dividends
or liquidation rights.
6.9. Notwithstanding anything contained herein to the
contrary, any action required or permitted to be taken by the
holders of Class C Preferred Stock and/or Pari Passu Preferred
Stock at any annual or special meeting of holders of Class C
Preferred Stock and/or Pari Passu Preferred Stock may be taken
without a meeting, at any time, without prior notice and
without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding
shares of Class C Preferred Stock and/or Pari Passu
Preferred Stock having not less than the minimum
number of votes that would be necessary to authorize or
take such action at a meeting at which all shares of Class C
Preferred Stock and Pari Passu Preferred Stock entitled to vote
thereon were present and voted. Prompt notice of the taking of
corporate action without a meeting by less than unanimous written
consent shall be given to those holders of Class C Preferred
Stock and/or Pari Passu Preferred Stock who have not consented
thereto in writing. Such notice shall be made to each such holder
at the holder's registered addresses on the books of the
Corporation.
Section 7. Shares held by the Corporation. In
determining whether the holders of the requisite aggregate number of
shares of Class C Preferred Stock and/or Pari Passu Preferred Stock
have concurred in any vote, consent, waiver or other action hereunder,
shares of Class C Preferred Stock which are owned by the Corporation
or by any majority-owned subsidiary of the Corporation shall be
disregarded and deemed not to be outstanding for such purpose.
Section 8. Retirement of Redeemed Shares, etc.
Shares of the Class C Preferred Stock which have been redeemed shall
have the status of authorized and unissued Serial Preferred Stock, par
value $.001 per share, of the Corporation, but shall not be reissued
as Class C Preferred Stock.
B. Common Stock. Subject to the rights, privileges, preferences
and priorities of any holders of Serial Preferred Stock, the
Common Stock shall be entitled to dividends out of funds legally available
therefor, when, as and if declared and paid to the holders of Common Stock,
and upon liquidation, dissolution or winding up of the Corporation, to
share ratably in the assets of the Corporation available for distribution
to the holders of Common Stock. Except as otherwise provided herein or by
law, the holders of the Common Stock shall have full voting rights and
powers, and each share of Common Stock shall be entitled to one vote. All
shares of Common Stock shall be identical with each other in every respect.
Each issued and outstanding share of Common Stock, par value
of $.001 per share, of the Corporation (the "Old Common Stock") as of the
close of business on May 27, 1998 (the "Effective Date")
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<PAGE>
shall automatically and without any action on the part of the holder
thereof, be reclassified as and changed into one-third (1/3) of one
share of Common Stock, par value of $.001 per share (the "New Common
Stock"), of the Corporation, subject to the treatment of fractional
share interests as described below. Each holder of a certificate or
Certificates which immediately prior to the Effective Date represented
outstanding shares of Old Common Stock (each, an "Old Certificate") shall
be entitled to receive upon surrender of such Old Certificate to the
Company's Transfer Agent for cancellation, a certificate or certificates
(each, a "New Certificate") representing the number of whole shares of the
New Common Stock into which the Old Common Stock formerly represented
by the Old Certificate so surrendered are reclassified under the terms
hereof. From and after the Effective Date, Old Certificates shall represent
only the right to receive New Certificates (and, where applicable, cash in
lieu of fractional shares, as provided below) pursuant to the provisions
hereof. No certificates or scrip representing fractional share interests
in New Common Stock will be issued, and no such fractional share interest
will entitle the holder thereof to vote, or to any rights of a stockholder,
of the Corporation. A holder of Old Certificates shall receive, in lieu
of any fraction of a share of New Common Stock to which the holder would
otherwise be entitled, a cash payment therefor on the basis of the average
of the last sale price of the Old Common Stock on The Nasdaq Stock Market
on the Effective Date (or in the event the Company's Common Stock
is not so traded on the Effective Date, such sale price on the next
preceding day on which such stock was traded on The Nasdaq Stock
Market). If more than one Old Certificate shall be surrendered at one
time for the account of the same stockholder, the number of full shares of
New Common Stock for which New Certificates shall be issued shall be
computed on the basis of the aggregate number of shares represented
by the Old Certificates so surrendered. In the event that the Company's
Transfer Agent determines that a holder of Old Certificates has not
tendered all of such holder's Old Certificates for exchange, the
Transfer Agent shall carry forward any fractional share until all Old
Certificates of such holder have been presented for exchange such that
payment for fractional shares to any one person shall not exceed the
value of one share of New Common Stock. If any New Certificate is to be
issued in a name other than that in which the Old Certificates surrendered
for exchange are issued, the Old Certificates so surrendered shall be
properly endorsed and otherwise in proper form for transfer, and the
person or persons requesting such exchange shall affix any requisite
stock transfer tax stamps to the Old Certificates
surrendered, or provide funds for their purchase, or establish to the
satisfaction of the Transfer Agent that such taxes are not payable. From
and after the Effective Date, the amount of capital represented by the
shares of the New Common Stock into which and for which the shares of the
Old Common Stock are reclassified under the terms hereof shall be the same
as the amount of capital represented by the shares of Old Common Stock so
reclassified, until thereafter reduced or increased in accordance with
applicable law.
FIFTH: The name and mailing address of the incorporator is as follows:
Neil M. Kaufman
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Suite 225
Jericho, New York 11753
SIXTH: (a) The number of directors of the corporation shall be determined in
the manner prescribed by the by-laws of this corporation.
(b) The Board of Directors shall be divided into three (3) classes as
nearly equal in number as possible, and no class shall include less than one
(1) director. The terms of the office of the directors initially classified
shall be as follows: that of Class I shall expire at the next annual meeting of
shareholders to be held in 1994, Class II at the second annual meeting of
shareholders to be held in 1995 and Class III at the third succeeding annual
meeting of shareholders to be held in 1996. The foregoing notwithstanding,
each director shall serve until his successor shall have been duly elected
and qualified, unless he shall resign, become disqualified, disabled or shall
otherwise be removed. Whenever a vacancy occurs on the Board of Directors, a
majority of the remaining directors have the power to fill the vacancy by
electing a successor director to fill that portion of the unexpired term
resulting from the vacancy.
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<PAGE>
(c) At each annual meeting of shareholders after such initial
classification, directors chosen to succeed those whose terms then expire at
such annual meeting shall be elected for a term of office expiring at the third
succeeding annual meeting of shareholders after their election. When the number
of directors is increased by the Board of Directors and any newly created
directorships are filled by the Board of Directors, there shall be no
classification of the additional directors until the next annual meeting of
shareholders. Directors elected, whether by the Board of Directors or by the
shareholders, to fill a vacancy, subject to the foregoing, shall hold office for
a term expiring at the annual meeting at which the term of the Class to which
they shall have been elected expires. Any newly created directorships or any
decrease in directorships shall be so apportioned among the classes as to make
all classes as nearly equal in number as possible.
SEVENTH: Meetings of stockholders may be held within or without the State of
Delaware as the by-laws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the by-laws of the corporation. Election of directors
need not be by written ballot unless the by-laws of the corporation shall so
provide.
EIGHTH: Subject to the provisions contained in Article TWELFTH hereof, the
corporation reserves the right to amend, alter, change or repeal any provision
contained in this Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
NINTH: Any action required to be taken or which may be taken at any annual or
special meeting of stockholders of the corporation may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
TENTH: Special meetings of stockholders may be called by the Chairman of the
Board, President or a majority of the Board of Directors or at the written
request of stockholders owning at least sixty-six and two-thirds percent
(66-2/3%) of the entire voting power of the corporation's capital stock.
ELEVENTH: In the event that it is proposed that the corporation enter into a
merger or consolidation with any other corporation and such other corporation or
its affiliates singly or in the aggregate own or control directly or indirectly
fifteen (15%) percent or more of the outstanding voting power of the capital
stock of this corporation, or that the corporation sell substantially all of its
assets or business to such other corporation, the affirmative vote of the
holders of not less than sixty-six and two-thirds (66-2/3%) percent of the total
voting power of all outstanding shares of capital stock of this corporation
shall be required for the approval of any such proposal; provided, however, that
the foregoing shall not apply to any such merger, consolidation or sale of
assets or business which was approved by resolutions of the Board of Directors
of this corporation prior to the acquisition of the ownership or control of
fifteen (15%) percent of the outstanding shares of this corporation by such
other corporation or its affiliates, nor shall it apply to any such merger,
consolidation or sale of assets or business between this corporation and another
corporation, fifty (50%) percent or more of the total voting power of which is
owned by this corporation. For the purposes hereof, an "affiliate" is any person
(including a corporation, partnership, trust, estate or individual) who directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the person specified; and "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of a person, whether through the ownership
of voting securities, by contract, or otherwise.
TWELFTH: The provisions set forth in Articles SIXTH, NINTH, TENTH AND ELEVENTH
above may not be altered, amended or repealed in any respect unless such
alteration, amendment or repeal is approved by the affirmative vote of the
holders of not less than sixty-six and two-thirds percent (66-2/3%) of the
total voting power of all outstanding shares of capital stock of the
corporation.
THIRTEENTH: Each person who at any time is or shall have been a director or
officer of the Corporation and is threatened to be or is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is, or
he or his testator or intestate was, a director,
-18-
<PAGE>
officer, employee or agent of the Corporation, or served at the request of
the Corporation as a director, officer, employee, trustee or agent of another
corporation, partnership, joint, venture, trust or other enterprise, shall
be indemnified against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with any such threatened, pending or completed action, suit or
proceeding to the full extent authorized under Section 145 of the General
Corporation Law of the State of Delaware. The foregoing right of indemnification
shall in no way be exclusive of any other rights of indemnification to which
such director, officer, employee or agent may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors, or otherwise.
FOURTEENTH: Any and all right, title, interest and claim in or to any dividends
declared by the Corporation, whether in cash, stock, or otherwise, which are
unclaimed by the stockholder entitled thereto for a period of six (6) years
after the close of business on the payment date shall be and be deemed to be
extinguished and abandoned; such unclaimed dividends in the possession of the
Corporation, its transfer agents, or other agents or depositories, shall at such
time become the absolute property of the Corporation, free and clear of any and
all claims for any person whatsoever.
FIFTEENTH: Any and all directors of the Corporation shall not be liable to the
Corporation or any stockholder thereof for monetary damages for breach of
fiduciary duty as director except as otherwise required by law. No amendment to
or repeal of this Article FIFTEENTH shall apply to or have any effect on the
liability or alleged liability of any director of the Corporation for or with
respect to any act or omission of such director occurring prior to such
amendment or repeal.
SIXTEENTH: The Board of Directors of the Corporation shall expressly have the
power and authorization to make, alter and repeal the By-Laws of the
Corporation, subject to the reserved power of the stockholders to make, alter
and repeal any By-Laws adopted by the Board of Directors.
-19-
SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.
3A Oak Road
Fairfield, New Jersey 07004
July 1, 1999
Seafish Partners
C/o Estudio Chimel
Avenue Luis Maria Campos #799
1426 Capital Federal
Buenos Aires, Argentina
Re: Class C 11% Cumulative Non-Convertible Redeemable Preferred Stock,
Series A ("Class C Preferred Stock")
Dear Sirs:
This letter confirms that as of the date hereof, Software Publishing
Corporation Holdings, Inc. ("SPCH" or the "Company") has agreed with Seafish
Partners ("Seafish") that should SPCH call for redemption of any shares of its
Class C Preferred Stock (the "Redemption"), pursuant to Section 5 of the
certificate of designations relating thereto, within forty-five (45) calendar
days of this agreement, Seafish will purchase from the Company with the
proceeds from the Redemption the number of shares of Xceed, Inc. common stock
the Company owns equal to the quotient of the Redemption amount received by
Seafish divided by $18.44 per share of Xceed, Inc. common stock.
If the above accurately states the agreement between the Company and Seafish,
please so indicate by signing where appropriate below.
Very truly yours,
Software Publishing Corporation Holdings, Inc.
/s/ Mark E. Leininger
By: Mark E. Leininger
President and Chief Executive Officer
Accepted and Agreed to:
Seafish Partners
By: /s/ Paul Stark
-------------------------------
Name: Paul Stark
Title: Agent
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 14th day of July, 1999 by and between Vizacom
Inc., a Delaware corporation (the "Company") and Mark E. Leininger, an
individual residing at 27 Liberty Street, Ridgewood, New Jersey 07450
(hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, this Agreement is intended to supersede and replace all prior
agreements, understandings and arrangements between or among the Company and the
Employee relating to the employment of the Employee.
NOW, THEREFORE, it is agreed as follows:
1. Retention of Services. The Company hereby retains the services of
Employee, and Employee agrees to furnish such services, upon the terms and
conditions hereinafter set forth.
2. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, and further subject to certain provisions hereof which
survive the term hereof, the term of this Agreement shall be comprised of a
three (3) year period of employment commencing on the date hereof, and shall be
extended thereafter for additional one-year periods unless or until the Company
or the Employee provides ninety (90) days' notice to the other party of the
termination of this Agreement.
3. Duties and Extent of Services During Period of Employment.
(a) During the term of employment, Employee shall be employed by the
Company as President and Chief Executive Officer. In such capacity, Employee
agrees that he shall devote his full time business efforts to serving the
Company and its affiliates under the direction of the Board of Directors of the
Company, shall perform all duties incident to his position on behalf of the
Company to the best of his ability. Such duties shall be consistent with the
duties of a President and Chief Executive Officer responsible for the general
management of the business and affairs of the Company.
(b) The Company and Employee agree that Employee shall perform his
basic responsibilities and duties hereunder at the office of the Company in
northern New Jersey; subject, however, to the travel requirements of his
position, including that Employee may be required to perform services on a
temporary basis at the offices of the Company and its affiliates outside
northern New Jersey and travel to visit certain customers, suppliers or
licensors of the Company, in connection with the Company acquiring the rights or
license to market and sell certain products or otherwise in connection with the
business of the Company.
4. Remuneration. During the period of employment, Employee shall be
entitled to receive the following compensation for his services:
(a) The Company initially shall pay to Employee a salary at the rate
of $162,500 per annum, payable in equal semi-monthly installments, or in such
other manner as shall be consistent
<PAGE>
with the Company's payroll practices. This salary shall increase by a minimum of
$10,000 per year on January 1 of each calendar year, commencing on January 1,
2000, and may be further increased by the Board of Directors or the Compensation
Committee of the Board of Directors.
(b) In addition to the salary provided in clause (a) above, not later
than one hundred ten (110) days after the end of each fiscal year of the
Company, the Company shall pay to Employee, as incentive compensation, an amount
equal to three percent (3%) of the Company's Net Income (as defined below) for
such immediately preceding fiscal year. For purposes of this Agreement, "Pre-Tax
Income" shall mean an amount equal to the net income of the Company before
extraordinary items, in each case computed in accordance with United States
generally accepted accounting principles, consistently applied. The Company
agrees to furnish to Employee a copy of the Company's financial statements not
later than one hundred and five (105) days after the end of each fiscal year of
the Company during the term of this Agreement. In the event that this Agreement
is terminated other than pursuant to Section 9(a), the Employee shall be
entitled to receive the amount which would be payable under this clause (b) for
each fiscal quarter of any fiscal year prior to the date of such termination.
(c) In addition to the foregoing, the Company shall pay to Employee a
bonus of $25,000 within fifty (50) days after the end of the first fiscal
quarter of the Company ending after the date of this agreement in which the
Company reports positive net income.
5. Employee Benefits; Expenses.
(a) During the term of this Agreement, the Company shall provide to
the Employee the right to participate in the Company's then existing medical and
dental insurance and other employee benefit plans and policies on the same terms
as are then generally available to the Company's executive and managerial
employees.
(b) Employee shall be entitled to paid vacation each year during the
term of this Agreement at the rate of four (4) weeks per annum. Vacation shall
be taken each year and, if not taken, shall be carried over for one (1) year
and, if not taken during such carry-over period, shall be forfeited.
(c) The Corporation shall reimburse Employee, in accordance with the
practice followed from time to time for other executive and managerial officers
of the Company, for all reasonable and necessary business and traveling
expenses, and other disbursements incurred by Employee for or on behalf of the
Corporation in the performance of Employee's duties hereunder, upon presentation
by Employee to the Company of an appropriate accounting or documentation of
such.
6. Disability. If Employee, during the period of employment, becomes
unable for any 120 days in any twelve-month period due to ill health or other
physical or mental incapacity, to perform his services hereunder, the Company
may thereafter, upon at least 100 days' written notice to Employee, place him on
disability status. After such action by the Company, if such action takes place
within the first nine months of this Agreement, Employee shall thereafter be
entitled to receive
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<PAGE>
one-half of the compensation stated to be payable hereunder until the Employee
returns to full-time or, if such action takes place after nine months have been
served by Employee hereunder, then Employee shall be entitled to receive full
compensation stated to be payable hereunder until Employee returns to full-time.
7. Confidential Information.
(a) In the course of Employee's employment by the Company, Employee
will have access to and possession of valuable and important confidential or
proprietary data or information of the Company and its operations. Employee will
not during Employee's employment by the Company or at any time for a period of
two (2) years thereafter divulge or communicate to any person nor shall Employee
direct any employee, representative or agent of the Company or its affiliates to
divulge or communicate to any person or entity (other than to a person or entity
bound by confidentiality obligations similar to those contained herein and other
than as necessary in performing Employee's duties hereunder) or use to the
detriment of the Company or for the benefit of any other person or entity,
including without limitation any competitor, supplier, licensor, licensee or
customer of the Company , any of such confidential or proprietary data or
information or make or remove any copies thereof, whether or not marked or
otherwise identified as "confidential" or "secret." Employee shall take all
reasonable precautions in handling the confidential or proprietary data or
information within the Company to a strict need-to-know basis and shall comply
with any and all security systems and measures adopted from time to time by the
Company to protect the confidentiality of confidential or proprietary data or
information.
(b) The term "confidential or proprietary data or information" as
used in this Agreement shall mean information not generally available to the
public, including, without limitation, all database information, personnel
information, financial information, customer lists, account lists or other
account information, names, telephone numbers or addresses, supplier lists,
trade secrets, patented or proprietary information, forms, information regarding
products, operations, systems, methods, financing, services, know how, computer
and any other processed or collated data, computer programs, pricing, marketing,
media and advertising data.
(c) Employee will at all times promptly disclose to the Company in
such form and manner as the Company may reasonably require, any inventions,
improvements or procedural or methodological innovations, including without
limitation relating to programs, methods, forms, systems, services, designs,
marketing ideas, products or processes (whether or not capable of being
trademarked, copyrighted or patented) conceived or developed or created by
Employee during or in connection with Employee's employment hereunder and which
relate to the business of the Company ("Intellectual Property"). Employee agrees
that all such Intellectual Property shall be the sole property of the Company.
Employee further agrees that Employee will execute such instruments and perform
such acts as may reasonably be requested by the Company to transfer to and
perfect in the Company all legally protectable rights in such Intellectual
Property.
(d) All written materials, books, records and documents made by
Employee or coming into Employee's possession during Employee's employment by
the Company concerning any products, processes or equipment manufactured, used,
developed, investigated, purchased, sold or
3
<PAGE>
considered by the Company or otherwise concerning the business or affairs of the
Company, including without limitation any files, customer records such as names,
telephone numbers and addresses, lists, firm records, brochures and literature,
shall be the sole property of the Company, shall not be removed from the
Company's premises by the Employee, and upon termination of Employee's
employment by the Company, or upon request of the Company during Employee's
employment by the Company, Employee shall promptly deliver the same to the
Company. In addition, upon termination of Employee's employment by the Company,
Employee will deliver to the Company all other Company property in Employee's
possession or under Employee's control, including, but not limited to, financial
statements, marketing and sales data, customer and supplier lists, customer
lists and other customer information, database information and other documents,
and any Company credit cards.
(e) The Employee acknowledges that the covenants contained in this
Section 7 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 7 may be inadequate and that the violation of any of the covenants
contained in this Section 7 may cause irreparable and continuing damage to the
Company. Accordingly, the Company shall be entitled to specific performance or
any other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, and that
such injunctive relief shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled. The covenants in this Section
7 shall run in favor of the Company and its successors and assigns.
(f) The provisions of this Section 7 shall survive the termination of
this Employment Agreement for a one (1) year period.
8. Non-Competition.
(a) During the term of this Agreement and, other than with respect to
clause (i) below, for one year thereafter (the "Restricted Period"), the
Employee shall not, without the written consent of the Company, directly or
indirectly,
(i) become associated with, render services to, invest in,
represent, advise or otherwise participate in as an officer, employee, director,
stockholder, partner, promoter, agent of, consultant for or otherwise, any
business which is conducted in any of the jurisdictions in which the Company's
business is conducted and which is competitive with the business conducted by
the Company; provided, that this Section 8(a)(i) shall not prohibit the Employee
from purchasing or owning up to five percent (5%) of the outstanding capital
stock of a company which is listed or authorized for trading on any national
securities exchange, Nasdaq or the OTC Electronic Bulletin Board or is a company
with a class of securities registered under Section 12 of the Securities Act of
1934, as amended unless the Employee is terminated other than for cause;
4
<PAGE>
(ii) for the Employee's own account or for the account of any other
person or entity (A) interfere with the Company's relationship with any of its
suppliers, customers, accounts, brokers, representatives or agents or (B)
contact, telephone, meet, solicit or transact any business with any material
customer, account or supplier of the Company who or which transacts or has
transacted business with the Company at any time during the term of this
Agreement, other than any such person or entity listed on Schedule A hereto; or
(iii) employ or otherwise engage, or solicit, entice or induce on
behalf of the Employee or any other person or entity, the services, retention or
employment of any person who has been an employee, principal, partner,
stockholder, sales representative, trainee, consultant to or agent of the
Company within one year of the date of such offer or solicitation.
(b) Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such violation,
including but not limited to any injunctive or other equitable relief or the
recovery of damages from the Employee.
(c) The Employee acknowledges that the covenants contained in this
Section 8 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 8 may be inadequate and that the violation of any of the covenants
contained in this Section 8 may cause irreparable and continuing damage to the
Company. Accordingly, the Company shall be entitled to specific performance or
any other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, and that
such injunctive relief shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled. The covenants in this Section
8 shall run in favor of the Company and its successors and assigns.
(d) In case any one or more of the terms or provisions contained in
this Section 8 shall for any reason be held invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other terms
or provisions hereof, but such term or provision shall be deemed modified or
deleted as or to the extent required by applicable law, and such modification or
deletion shall not affect the validity of the other terms or provisions of this
Section 8. In addition, if any one or more of the restrictions contained in this
Section 8 shall for any reason be held to be unreasonable with regard to time,
duration, geographic scope or activity, the parties contemplate and hereby agree
that such restriction shall be modified and shall be enforced to the full extent
compatible with applicable law. The parties hereto intend that the covenants
contained in this Section 8 shall be deemed a series of separate covenants for
each country, state, county and city. If, in any judicial proceeding, a court
shall refuse to enforce all the separate covenants deemed included in this
Section 8 because, taken together, they cover too extensive a geographic area,
the parties intend that those of such covenants (taken in order of the cities,
counties, states and countries therein which are lease populous) which if
eliminated would permit the remaining separate covenants to be enforced in such
proceeding shall, for the purpose of such proceeding, be deemed eliminated from
the provisions of this Section 8.
5
<PAGE>
(e) The provisions of this Section 8 shall survive the termination of
this Employment Agreement for a one (1) year period.
9. Termination.
(a) The Company may terminate the Employee's services hereunder "for
cause" by delivering to Employee not less than ten (10) days prior to the date
on which the termination is to be effective, a written notice of termination for
cause specifying the act, acts or failure to act that constitute the cause. For
the purposes of this agreement, "for cause" shall mean; (i) any act of fraud or
embezzlement adversely affecting the financial, market, reputation or other
interests of the Company, or any affiliate thereof, (ii) in the event of a
conviction of the Employee for any felony or any knowing violation of any
federal or state securities law or regulation, (iii) repeated failure to perform
Employee's material and substantial duties consistent with the terms of this
Agreement after reasonable notice and an opportunity to cure, (iv) any material
breach by the Employee of this Agreement, or (v) the death of the Employee.
(b) If the Company terminates Employee's employment hereunder for any
reason other than "for cause" as set forth in Section 9(a) hereof, the Company
shall pay to the Employee compensation pursuant to Sections 4(a) and 4(b) hereof
at the time and in the manner provided for herein for a three (3) year period
commencing on the date of such termination, and no other compensation payable
hereunder shall be payable to the Employee. If the Company terminates Employee's
employment hereunder "for cause" as set forth in Section 9(a) hereof, Employee
shall not be entitled to receive any further compensation hereunder; provided,
that the Company shall reimburse the Employee for any unpaid expenses incurred
pursuant to Section 5(c) of this Agreement. Employee and the Company acknowledge
that the foregoing provisions of this paragraph 9(b) are reasonable and are
based upon the facts and circumstances of the parties at the time of entering
into this Agreement, and with due regard to future expectations.
10. Notices. Any notice to be given to the Company hereunder shall be
deemed sufficient if addressed to the Company in writing and delivered or mailed
by certified or registered mail to it at 3A Oak Road, Fairfield, New Jersey,
Attention: President, or to such other address as the Company may hereafter
designate, and a copy to Neil M. Kaufman, Esq., Kaufman & Moomjian, LLC, 50
Charles Lindbergh Boulevard, Suite 206, Mitchel Field, New York 11553. Any
notice to be given to Employee hereunder shall be delivered or mailed by
certified or registered mail to him at the address set forth at the head of this
Agreement or such other address as he may hereafter designate.
11. Change of Control. (a) In the event that there shall be a change in
the control of the Company, as hereinafter defined, or in any person directly or
indirectly presently controlling the Company, as hereinafter defined, Employee
shall have the option, exercisable within six (6) months of his becoming aware
of such event, to terminate his employment by the Company pursuant to this
Employment Agreement forthwith. Upon such termination, Employee shall have the
right to immediately receive as a lump sum payment an amount equal to three (3)
times the average of the total annual cash compensation paid by the Company to
Employee, with respect to the five fiscal years of the Company prior to the
change of control, minus $1.00.
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<PAGE>
(b) For purposes of this Agreement, a change in control of the
Company, or in any person directly or indirectly controlling the Company, shall
mean:
(i) A change in control as such term is presently defined in
Regulation 240.12b-2 under the Securities Exchange Act of 1934
("Exchange Act); or
(ii) if any "person" (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) other than the Company or any
"person" who on the date of this Agreement is a director or
officer of the Company, becomes the "beneficial owner" (as
defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty
(20%) percent of the voting power of the Company's then
outstanding securities, unless such person becomes such a
beneficial owner as a result of a transaction approved by a
majority of the board of directors of the Company; or
(iii) if during any period of two (2) consecutive years
during the term of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors cease
for any reason to constitute at least a majority thereof, unless
the election of each director who is not a director at the
beginning of such period has been approved in advance by
directors representing at least two-thirds (2/3) of the directors
then in office who were directors at the beginning of the period.
12. Successors and Assigns; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the Company, and unless clearly inapplicable, all references herein to the
Company shall be deemed to include any such successor. In addition, this
Agreement shall be binding upon and inure to the benefit of the Employee and his
heirs, executors, legal representatives and assigns; provided, however, that the
obligations of Employee hereunder may not be delegated without the prior written
approval of the Board of Directors of the Company. In the event of any
consolidation or merger of the Company into or with any other corporation during
the term of this Agreement, or the sale of all or substantially all of the
assets of the Company to another corporation, person or entity during the term
of this Agreement, such successor corporation shall assume this Agreement and
become obligated to perform all of the terms and provisions hereof applicable to
the Company, and Employee's obligations hereunder shall continue in favor of
such successor corporation.
13. Amendments. This Agreement may not be altered, modified, amended or
terminated except by a written instrument signed by each of the parties hereto.
14. Prior Agreements Superseded. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
any other agreements, oral or written, entered into between Employee and the
Company prior to the date of this Agreement relating thereto.
15. Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware, without regard to
conflicts of laws.
7
<PAGE>
16. Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law or public policy, the
remaining provisions shall remain in full force and effect.
17. Waiver. No term or provision hereof shall be deemed waived and no
breach consented to or excused, unless such waiver, consent or excuse shall be
in writing and signed by the party claimed to have waived, consented or excused.
A consent, waiver or excuse of any breach shall not constitute a consent to,
waiver or, or excuse of any other or subsequent breach whether or not of the
same kind of the original breach.
18. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
agreement.
19. Acknowledgment. Employee acknowledges that he has carefully read this
Agreement, has had an opportunity to consult counsel regarding this Agreement
and hereby represents and warrants to the Company that Employee's entering into
this Agreement, and the obligations and duties undertaken by Employee hereunder,
will not conflict with, constitute a breach of or otherwise violate the terms of
any other agreement to which Employee is a party and that Employee is not
required to obtain the consent of any person, firm, corporation or other entity
in order to enter into and perform his obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SOFTWARE PUBLISHING CORPORATION
HOLDINGS, INC.
By: /s/ Marc E. Jaffe
Marc E. Jaffe
Chairman
/s/ Mark E. Leininger
Mark E. Leininger
8
VIZACOM INC.
1994 Long-Term Incentive Plan
(As amended through July 14. 1999)
1. PURPOSE. The purpose of the 1994 Long-Term Incentive Plan (the "Plan")
is to advance the interests of Vizacom Inc., a Delaware corporation (the
"Company"), and its stockholders by providing incentives to certain key
employees of the Company and its affiliates and to certain other key individuals
who perform services for these entities, including those who contribute
significantly to the strategic and long-term performance objectives and growth
of the Company and its affiliates.
2. ADMINISTRATION.
(a) The Plan shall be determined solely by the Long-Term Incentive Plan
Administrative Committee (the "Committee") of the Board of Directors (the
"Board") of the Company, as such Committee is from time to time constituted, or
any successor committee the Board may designate to administer the Plan; provided
that if at any time Rule 16b-3 or any successor rule ("Rule 16b-3") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), so permits
without adversely affecting the ability of the Plan to comply with the
conditions for exemption from Section 16 of the Exchange Act (or any successor
provision) provided by Rule 16b-3, the Committee may delegate the administration
of the Plan in whole or in part, on such terms and conditions, and to such
person or persons as it may determine in its discretion, as it relates to
persons not subject to Section 16 of the Exchange Act (or any successor
provision). The membership of the Committee or such successor committee shall be
constituted so as to comply at all times with the applicable requirements of
Rule 16b-3. No member of the Committee shall be eligible or have been eligible
within one year prior to his appointment to receive awards under the Plan
("Awards") or to receive awards under any other plan, program or arrangement of
the Company or any of its affiliates if such eligibility would cause such member
to cease to qualify as a "Non-Employee Director" or any successor standard under
Rule 16b-3 as then in effect; provided that if at any time Rule 16b-3 so permits
without adversely affecting the ability of the Plan to comply with the
conditions for exemption from Section 16 of the Exchange Act (or any successor
provision) provided by Rule 16b-3, one or more members of the Committee may
cease to qualify as a "Non-Employee Director" or any successor standard.
(b) The Committee has all the powers vested in it by the terms of the Plan
set forth herein, such powers to include exclusive authority (except as may be
delegated as permitted herein) to select the key employees and other key
individuals to be granted Awards under the Plan, to determine the type, size and
terms of the Award to be made to each individual selected, to modify the terms
of any Award that has been granted, to determine the time when awards will be
granted, to establish performance objectives, to make any adjustments necessary
or desirable as a result of the granting of Awards to eligible individuals
located outside the United States and to prescribe the form of the instruments
embodying Awards made under the Plan. The Committee is authorized to interpret
the Plan and the Awards granted under the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determination, which it deems necessary or desirable for the administration of
the Plan. The Committee (or its delegate as permitted herein) may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award in the manner and to the extent the Committee deems necessary or
desirable to carry it into effect. any decision of the Committee (or its
delegate as permitted herein) in the interpretation and administration of the
Plan, as described herein, shall lie within its sole and absolute discretion and
shall be final, conclusive and binding on all parties concerned. The Committee
may act only by a majority of its members in office, except that the members
thereof may authorize any one or more of their members or any officer of the
Company to execute and deliver documents or to take any other ministerial action
on behalf of the Committee with respect to Awards made or to be made to Plan
participants. No member of the Committee and no officer of the Company shall be
liable for anything done or omitted to be done by him, by any other member of
the Committee or by any officer of the Company in connection with the
performance of duties under the Plan, except for his own willful misconduct or
as expressly provided by statute. Determinations to be made by the Committee
under the Plan may be made by its delegates.
<PAGE>
3. PARTICIPATION.
(a) Affiliates. If an Affiliate (as hereinafter defined) of the Company
wishes to participate in the Plan and its participation shall have been approved
by the Board upon the recommendation of the Committee, the board of directors or
other governing body of the Affiliate shall adopt a resolution in form and
substance satisfactory to the Committee authorizing participation by the
Affiliate in the Plan with respect to its key employees or other key individuals
performing services for it. As used herein, the term "Affiliate" means any
entity in which the Company has a substantial direct or indirect equity interest
or which has a substantial direct or indirect equity interest in the Company, as
determined by the Committee in its discretion.
An Affiliate participating in the Plan may cease to be a participating
company at any time by action of the Board or by action of the board of
directors or other governing body of such Affiliate, which latter action shall
be effective not earlier than the date of delivery to the Secretary of the
Company of a certified copy of a resolution of the Affiliate's board of
directors or other governing body taking such action. If the participation in
the Plan of an Affiliate shall terminate, such termination shall not relieve it
of any obligations theretofore incurred by it, except as may be approved by the
Committee in its discretion.
(b) Participants. Consistent with the purposes of the Plan, the Committee
shall have exclusive power (except as may be delegated as permitted herein) to
select the key employees and other key individuals performing services for the
Company, including consultants or independent contractors and others who perform
services for the Company and its Affiliates who may participate in the Plan and
be granted Awards under the Plan. Eligible individuals may be selected
individually or by groups or categories, as determined by the Committee in its
discretion. No director of the Company, unless he is an employee of the Company
or is an officer or director of an Affiliate, shall be eligible to receive an
Award under the Plan, except to the extent that such director provides services
to the Company in addition to those provided in the grantee's capacity as a
director. In no event may a corporation be eligible to receive an Award of
Incentive Stock Options under the Plan.
4. AWARDS UNDER THE PLAN.
(a) Types of Awards. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights,"
(iii) "Restricted Stock," (iv) "Performance Grants" and (v) any other type of
Award deemed by the Committee in its discretion to be consistent with the
purposes of the Plan (including but not limited to, Awards of or options or
similar rights granted with respect to unbundled stock units or components
thereof, and Awards to be made to participants who are foreign nationals or are
employed or performing services outside the United States). Stock Options, which
include "Non-Qualified Stock Options" and "Incentive Stock Options" or
combinations thereof, are rights to purchase common shares of the Company and
stock of any other class into which such shares may thereafter be changed (the
"Common Shares"). Non-Qualified Stock Options and Incentive Stock Options are
subject to the terms, conditions and restrictions specified in Paragraph 5.
Stock Appreciation Rights are rights to receive (without payment to the Company)
cash, Common Shares, other Company securities (which may include, but need not
be limited to, unbundled stock units or components thereof, debentures,
preferred stock, warrants, securities convertible into Common Shares or other
property, and other types of securities including, but not limited to, those of
the Company or an Affiliate, or any combination thereof ("Other Company
Securities") or property, or other forms of payment, or any combination thereof,
as determined by the Committee, based on the increase in the value of the number
of Common Shares specified in the Stock Appreciation Right. Stock Appreciation
Rights are subject to the terms, conditions and restrictions specified in
Paragraph 6. Shares of Restricted Stock are Common Shares which are issued
subject to certain restrictions pursuant to Paragraph 7. Performance Grants are
contingent awards subject to the terms, conditions and restrictions described in
Paragraph 8, pursuant to which the participant may become entitled to receive
cash, Common Shares, Other Company Securities or property, or other forms of
payment, or any combination thereof, as determined by the Committee.
(b) Maximum Number of Shares that May Be Issued. There may be issued under
the Plan (as Restricted Stock, in payment of Performance Grants, pursuant to the
exercise of Stock Options or Stock
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<PAGE>
Appreciation Rights, or in payment of or pursuant to the exercise of such other
Awards as the Committee, in its discretion, may determine) an aggregate of not
more than 5,000,000 Common Shares, subject to adjustment as provided in
Paragraph 15. Common Shares issued pursuant to the Plan may be either authorized
but unissued shares, treasury shares, reacquired shares, or any combination
thereof. If any Common Shares issued as Restricted Stock or otherwise subject to
repurchase or forfeiture rights are reacquired by the Company pursuant to such
rights, or if any Award is canceled, terminates or expires unexercised, any
Common Shares that would otherwise have been issuable pursuant thereto will be
available for issuance under new Awards.
(c) Rights with Respect to Common Shares and Other Securities.
(i) Unless otherwise determined by the Committee in its
discretion, a participant to whom an Award of Restricted Stock has been
made (and any person succeeding to such a participant's rights pursuant to
the Plan) shall have, after issuance of a certificate or copy thereof for
the number of Common Shares awarded and prior to the expiration of the
Restricted Period or the earlier repurchase of such Common Shares as herein
provided, ownership of such Common Shares, including the right to vote the
same and to receive dividends or other distributions made or paid with
respect to such Common Shares (provided that such Common Shares, and any
new, additional or different shares, or Other Company Securities or
property, or other forms of consideration which the participant may be
entitled to receive with respect to such Common Shares as a result of a
stock split, stock dividend or any other change in the corporate or capital
structure of the Company, shall be subject to the restrictions hereinafter
described as determined by the Committee in its discretion), subject,
however, to the options, restrictions and limitations imposed thereon
pursuant to the Plan. Notwithstanding the foregoing, unless otherwise
determined by the Committee in its discretion, a participant with whom an
Award agreement is made to issue Common Shares in the future shall have no
rights as a shareholder with respect to Common Shares related to such
agreement until issuance of a certificate to him.
(ii) Unless otherwise determined by the Committee in its
discretion, a participant to whom a grant of Stock Options, Stock
Appreciation Rights, Performance Grants or any other Award is made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have no rights as a stockholder with respect to any Common Shares or
as a holder with respect to other securities, if any, issuable pursuant to
any such Award until the date of the issuance of a stock certificate to him
for such Common Shares or other instrument of ownership, if any. Except as
provided in Paragraph 15, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities, other property or other forms of
consideration, or any combination thereof) for which the record date is
prior to the date such stock certificate or other instrument of ownership,
if any, is issued.
5. STOCK OPTIONS. The Committee may grant Stock Options either alone, or
in conjunction with Stock Appreciation Rights, Performance Grants or other
Awards, either at the time of grant or by amendment thereafter, provided that an
Incentive Stock Option may be granted only to an eligible employee of the
Company or its parent or subsidiary corporation. Each Stock Option (referred to
herein as an "Option") granted under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Option or the Common Shares issuable upon exercise
thereof, as the Committee, in its discretion, shall establish:
(a) The option price may be less than, equal to, or greater than, the fair
market value of the Common Shares subject to such Option at the time the Option
is granted, as determined by the Committee, but in no event will such option
price be less than 85% of the fair market value of the underlying Common Shares
at the time the Option is granted; provided, however, that in the case of an
Incentive Stock Option granted to such an employee, the option price shall not
be less than the fair market value of the Common Shares subject to such Option
at the time the Option is granted, or if granted to such an employee who owns
stock representing more than ten percent of the voting power of all classes of
stock of the Company or of its parent or subsidiary (a "Ten Percent Employee"),
such
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<PAGE>
option price shall be not less than 110% of such fair market value at the
time the Option is granted; provided, further that in no event will such option
price be less than the par value of such Common Shares.
(b) The Committee shall determine the number of Common Shares to be
subject to each option. The number of Common Shares subject to an outstanding
Option may be reduced on a share-for-share or other appropriate basis, as
determined by the Committee, to the extent that Common Shares under such Option
are used to calculate the cash, Common Shares, Other Company Securities or
property, or other forms of payment, or any combination thereof, received
pursuant to exercise of a Stock Appreciation Right attached to such Option, or
to the extent that any other Award granted in conjunction with such Option is
paid.
(c) The Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution, and shall be exercisable during the grantee's lifetime only by
him. Unless the Committee determines otherwise, the Option shall not be
exercisable for at least six months after the date of grant, unless the grantee
ceases employment or performance of services before the expiration of such
six-month period by reason of his disability as defined in Paragraph 12 or his
death.
(d) The Option shall not be exercisable:
(i) in the case of any Incentive Stock Option granted to a Ten
Percent Employee, after the expiration of five years from the date it is
granted, and, in the case of any other Option, after the expiration of ten
years from the date it is granted; provided, that an Option may be
exercised during such period only at such time or times and in such
installments as the Committee may establish;
(ii) unless payment in full is made for the shares being acquired
thereunder at the time of exercise, such payment shall be made in such form
(including, but not limited to, cash, Common Shares, or the surrender of
another outstanding Award under the Plan, or any combination thereof) as
the Committee may determine in its discretion; and
(iii) unless the person exercising the Option has been, at all
times during the period beginning with the date of the grant of the Option
and ending on the date of such exercise, employed by or otherwise
performing services for the Company or an Affiliate, or a corporation, or a
parent or subsidiary of a corporation, substituting or assuming the Option
in a transaction to which Section 425(a) of the Internal Revenue Code of
1986, as amended, or any successor statutory provisions thereto (the
"Code"), is applicable, except that:
(A) in the case of any Non-Qualified Stock Option, if
such person shall cease to be employed by or otherwise performing
services for the Company or an Affiliate solely by reason of a period
of related Employment as defined in Paragraph 14, he may, during such
period of Related Employment, exercise the Non-Qualified Stock Option
as if he continued such employment or performance of service; or
(B) if such person shall cease such employment or
performance of services by reason of his disability as defined in
Paragraph 12 or early, normal or deferred retirement under an approved
retirement program of the Company or an Affiliate (or such other plan
or arrangement as may be approved by the Committee, in its discretion,
for this purpose) while holding an option which has not expired and
has not been fully exercised, such person, at any time within three
years (or such other period determined by the Committee) after the
date he ceased such employment or performance of services (but in no
event after the Option has expired), may exercise the Option with
respect to any shares as to which he could have exercised the Option
on the date he ceased such employment or performance of services, or
with respect to such greater number of shares as determined by the
Committee; or
(C) if such person shall cease such employment or
performance of services for reasons other than Related Employment,
disability, early, normal or deferred retirement or death
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<PAGE>
(as provided elsewhere) while holding an Option which has not expired
and has not been fully exercised, such person may exercise the Option
at any time during the period, if any, which the Committee approves
(but not beyond the expiration of the Option) following the date he
ceased such employment or performance of services with respect to any
shares as to which he could have exercised the Option on the date he
ceased such employment or performance of services or, in the
Committee's discretion, any or all shares under the Option whether or
not he could have exercised the Option on the date he ceased such
employment or performance of services; or
(D) if any person to whom an Option has been granted
shall die holding an Option which has not expired and has not been
fully exercised, his executors, administrators, heirs or distributees,
as the case may be, may, at any time within one year (or such other
period determined by the Committee) after the date of death (but in no
event after the Option has expired), exercise the Option with respect
to any shares as to which the decedent could have exercised the Option
at the time of his death, or with respect to such greater number of
shares as determined by the Committee.
(e) In the case of an Incentive Stock Option, the amount of aggregate fair
market value of Common Shares (determined at the time of grant of the Option
pursuant to subparagraph 5(a) of the Plan) with respect to which incentive stock
options are exercisable for the first time by an employee during any calendar
year (under all such plans of his employer corporation and its parent and its
parent and subsidiary corporations) shall not exceed $100,000.
(f) It is the intent of the Company that Non-Qualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that the
Incentive Stock Options granted under the Plan be consistent with and contain or
be deemed to contain all provisions required under Section 422A and other
appropriate provisions of the Code and any implementing regulations (and any
successor provisions thereof), and that any ambiguities in construction shall be
interpreted in order to effectuate such intent. The Agreements providing
Non-Qualified Stock Options shall provide that such Options are not "incentive
stock options" for the purposes of Section 422A of the Code.
6. STOCK APPRECIATION RIGHTS. The Committee may grant Stock Appreciation
Rights either alone, or in conjunction with Stock Options, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter. Each Award
of Stock Appreciation Rights granted under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Award of Stock Appreciation Rights or the Common
Shares issuable upon exercise thereof, as the Committee in its discretion shall
establish:
(a) The Committee shall determine the number of Common Shares to be
subject to each Award of Stock Appreciation Rights. The number of Common Shares
subject to an outstanding Award of Stock Appreciation Rights may be reduced on a
share-for-share or other appropriate basis, as determined by the Committee, to
the extent that Common Shares under such Award of Stock Appreciation Rights are
used to calculate the cash, Common Shares, Other Company Securities or property,
or other forms of payment, or any combination thereof, received pursuant to
exercise of an Option attached to such Award of Stock Appreciation Rights, or to
the extent that any other Award granted in conjunction with such Award of Stock
Appreciation Rights is paid.
(b) The Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of the descent and distribution, and shall be exercisable during the
grantee's lifetime only by him. Unless the Committee determines otherwise, the
Award of Stock Appreciation Rights shall not be exercisable for at least six
months after the date of grant, unless the grantee ceases employment or
performance of services before the expiration of such six-month period by reason
of his disability as defined in Paragraph 12 or his death.
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<PAGE>
(c) The Award of Stock Appreciation Rights shall not be exercisable:
(i) in the case of any Award of Stock Appreciation Rights that
are attached to an Incentive Stock Option granted to a Ten Percent
Employee, after the expiration of five years from the date it is granted,
and, in the case of any other award of Stock Appreciation Rights, after the
expiration of ten years from the date it is granted. Any Award of Stock
Appreciation Rights may be exercised during such period only at such time
or times and in such installments as the Committee may establish;
(ii) unless the Option or other Award to which the Award of Stock
Appreciation Rights is attached is at the time exercisable; and
(iii) unless the person exercising the Award of Stock
Appreciation Rights has been, at all times during the period beginning with
the date of the grant thereof and ending on the date of such exercise,
employed by or otherwise performing services for the Company or an
Affiliate, except that
(A) in the case of any Award of Stock Appreciation
Rights (other than those attached to an Incentive Stock Option), if
such person shall cease to be employed by or otherwise performing
services for the Company or an Affiliate solely by reason of a period
of Related Employment as defined in Paragraph 14, he may, during such
period of Related Employment, exercise the Award of Stock Appreciation
Rights as if he continued such employment or performance of services;
or
(B) if such person shall cease such employment or
performance of services by reason of his disability as defined in
Paragraph 12 or early, normal or deferred retirement under an approved
retirement program of the Company or an Affiliate (or such other plan
or arrangement as may be approved by the Committee, in its discretion,
for this purpose) while holding an Award of Stock Appreciation Rights
which has not expired and has not been fully exercised, such person
may, at any time within three years (or such other period determined
by the Committee) after the date he ceased such employment or
performance of services (but in no event after the Award of Stock
Appreciation Rights has expired), exercise the Award of Stock
Appreciation Rights with respect to any shares as to which he could
have exercised the Award of Stock Appreciation Rights on the date he
ceased such employment or performance of services, or with respect to
such greater number of shares as determined by the Committee; or
(C) if such person shall cease such employment or
performance of services for reasons other than Related Employment,
disability, early, normal or deferred retirement or death (as provided
elsewhere) while holding an Award of Stock Appreciation Rights which
has not expired and has not been fully exercised, such person may
exercise the Award of Stock Appreciation Rights at any time during the
period, if any, which the Committee approves (but in no event after
the Award of Stock Appreciation Rights expires) following the date he
ceased such employment or performance of services with respect to any
shares as to which he could have exercised the Award of Stock
Appreciation Rights on the date he ceased such employment or
performance of services or as otherwise permitted in the Committee's
discretion; or
(D) if any person to whom an Award of Stock
Appreciation Rights has been granted shall die holding an Award of
Stock Appreciation Rights which has not expired and has not been fully
exercised, his executors, administrators, heirs or distributees, as
the case may be, may, at any time within one year (or such other
period determined by the Committee) after the date of death (but in no
event after the Award of Stock Appreciation Rights has expired),
exercise the Award of Stock Appreciation Rights with respect to any
shares as to which the decedent could have exercised the Award of
Stock Appreciation Rights at the time of his death, or with respect to
such greater number of shares as determined by the Committee.
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<PAGE>
(d) An Award of Stock Appreciation Rights shall entitle the holder (or any
person entitled to act under the provisions of subparagraph 6(c)(iii)(D) hereof)
to exercise such Award or to surrender unexercised the option (or other Award)
to which the Stock Appreciation Rights is attached (or any portion of such
Option or other Award) to the Company and to receive from the Company in
exchange therefor, without payment to the Company, that number of Common Shares
having an aggregate value equal to the excess of the fair market value of one
share, at the time of such exercise, over the exercise price (or Option Price,
as the case may be) per share, times the number of shares subject to the Award
or the Option (or other Award), or portion thereof, which is so exercised or
surrendered, as the case may be. The Committee shall be entitled in its
discretion to elect to settle the obligation arising out of the exercise of a
Stock Appreciation Right by the payment of cash or Other Company Securities or
property, or other forms of payment, or any combination thereof, as determined
by the Committee, equal to the aggregate value of the Common Shares it would
otherwise be obligated to deliver. Any such election by the Committee shall be
made as soon as practicable after the receipt by the Committee of written notice
of the exercise of the Stock Appreciation Right. The value of a Common Share,
Other Company Securities or property, or other forms of payment determined by
the Committee for this purpose shall be the fair market value thereof on the
last business day next preceding the date of the election to exercise the Stock
Appreciation Right, unless the Committee, in its discretion, determines
otherwise.
(e) A Stock Appreciation Right may provide that it shall be deemed to have
been exercised at the close of business on the business day preceding the
expiration date of the Stock Appreciation Right or of the related Option (or
other Award), or such other date as specified by the Committee, if at such time
such Stock Appreciation Right has a positive value. Such deemed exercise shall
be settled or paid in the same manner as a regular exercise thereof as provided
in subparagraph 6(d) hereof.
(f) No fractional shares may be delivered under this Paragraph 6, but in
lieu thereof a cash or other adjustment shall be made as determined by the
Committee in its discretion.
7. RESTRICTED STOCK. Each Award of Restricted Stock under the Plan shall
be evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions as the Committee,
in its discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be issued
to a participant pursuant to the Award, and the extent, if any, to which they
shall be issued in exchange for cash, other consideration, or both.
(b) Common Shares issued to a participant in accordance with the Award may
not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed
of, except by will or the laws of descent and distribution, or as otherwise
determined by the Committee, for such period as the Committee shall determine,
from the date on which the Award is granted (the "Restricted Period"). The
Company will have the option, at the Committee's discretion, to repurchase the
shares subject to the Award at such price as the Committee shall have fixed or
to provide for forfeiture to the Company of the shares subject to the Award,
which option or forfeiture may be exercisable (i) if the participant's
continuous employment or performance of services for the Company and its
Affiliates shall terminate for any reason, except solely by reason of a period
of Related Employment as defined in Paragraph 14, or except as otherwise
provided in subparagraph 7(c), prior to the expiration of the Restricted Period,
(ii) if, on or prior to the expiration of the Restricted Period or the earlier
lapse of such forfeiture option, the participant has not paid to the Company an
amount equal to any federal, state, local or foreign income or other taxes which
the Company determines is required to be withheld in respect of such shares, or
(iii) under such other circumstances as determined by the Committee in its
discretion. Such repurchase option or forfeiture shall be exercisable on such
terms, in such manner and during such period as shall be determined by the
Committee when the Award is made or as amended thereafter, except as otherwise
determined in the Committee's discretion. Each certificate for Common Shares
issued pursuant to a Restricted Stock Award shall bear an appropriate legend
referring to the foregoing repurchase option or forfeiture and other
restrictions and to the fact that the shares are partly paid, shall be deposited
by the award holder with the Company, together with a stock power endorsed in
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<PAGE>
blank, or shall be evidenced in such other manner permitted by applicable law as
determined by the Committee in its discretion. Any attempt to dispose of any
such Common Shares in contravention of the foregoing repurchase and forfeiture
options and other restrictions shall be null and void and without effect. If
Common Shares issued pursuant to a Restricted Stock Award shall be repurchased
or forfeited pursuant to the repurchase option described above, the participant,
or in the event of his death, his personal representative, shall forthwith
deliver to the Secretary of the Company the certificates for the Common Shares
awarded to the participant, accompanied by such instrument of transfer, if any,
as may reasonably be required by the Secretary of the Company.
(c) If a participant who has been in continuous employment or performance
of services for the Company or an Affiliate since the date on which a Restricted
Stock Award was granted to him shall, while in such employment or performance of
services, die, or terminate such employment or performance of services by reason
of disability as defined in Paragraph 12 or by reason of early normal or
deferred retirement under an approved retirement program of the Company or an
Affiliate (or such other plan or arrangement as may be approved by the Committee
in its discretion, for this purpose) and any of such events shall occur after
the date on which the Award was granted to him and prior to the end of the
Restricted Period of such Award, the Committee may determine to cancel the
repurchase option or forfeiture (and any and all other restrictions) on any or
all of the Common Shares subject to such Award; and the repurchase option or
forfeiture shall become exercisable at such time as to the remaining shares, if
any.
8. PERFORMANCE GRANTS. The Award of a Performance Grant ("Performance
Grant") to a participant will entitle him to receive a specified amount
determined by the Committee (the "Actual Value"), if the terms and conditions
specified herein and in the Award are satisfied. Each Award of a Performance
Grant shall be subject to the following terms and conditions, and to such other
terms and conditions, including but not limited to, restrictions upon any cash,
Common Shares, Other Company Securities or property, or other forms of payment,
or any combination thereof, issued in respect of the Performance Grant, as the
Committee, in its discretion, shall establish, and shall be embodied in an
instrument in such form and substance as is determined by the Committee.
(a) The Committee shall determine the value or range of values of a
Performance Grant to be awarded to each participant selected for an award and
whether or not such a Performance Grant is granted in conjunction with an Award
of Options, Stock Appreciation Rights, Restricted Stock or other Award, or any
combination thereof, under the Plan (which may include, but need not be limited
to, deferred Awards) concurrently or subsequently granted to the participant
(the "Associated Award"). As determined by the Committee, the maximum value of
each Performance Grant (the "Maximum Value") shall be: (i) an amount fixed by
the Committee at the time the award is made or amended thereafter, (ii) an
amount which varies from time to time based in whole or in part on the then
current value of a Common Share, Other Company Securities or property, or other
securities or property, or any combination thereof, or (iii) an amount that is
determinable from criteria specified by the Committee. Performance Grants may be
issued in different classes or series having different names, terms and
conditions. In the case of a Performance Grant awarded in conjunction with an
Associated Award, the Performance Grant may be reduced on an appropriate basis
to the extent that the Associated Award has been exercised, paid to or otherwise
received by the participant, as determined by the Committee.
(b) The award period ("Award Period") in respect of any Performance Grant
shall be a period determined by the Committee. At the time each Award is made,
the Committee shall establish performance objectives to be attained within the
Award Period as the means of determining the Actual Value of such a Performance
Grant. The performance objectives shall be based on such measure or measures of
performance, which may include, but need not be limited to, the performance of
the participant, the Company, one or more of its subsidiaries or one or more of
their divisions or units, or any combination of the foregoing, as the Committee
shall determine, and may be applied on an absolute basis or be relative to
industry or other indices, or any combination thereof. The Actual Value of a
Performance Grant shall be equal to its Maximum Value only if the performance
objectives are attained in full, but the Committee shall specify the manner in
which the Actual Value of Performance Grants shall be determined if the
performance objectives are met in part. Such performance measures, the Actual
Value or the Maximum Value, or any combination thereof, may be adjusted in any
manner by the Committee in its discretion at any time and from time to time
during or as soon as practicable after the Award
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<PAGE>
Period, if it determines that such performance measures, the Actual Value or the
Maximum Value, or any combination thereof, are not appropriate under the
circumstances.
(c) The rights of a participant in Performance Grants awarded to him shall
be provisional and may be canceled or paid in whole or in part, all as
determined by the Committee, if the participant's continuous employment or
performance of services for the Company and its Affiliates shall terminate for
any reason prior to the end of the Award Period, except solely by reason of a
period of Related Employment as defined in Paragraph 14.
(d) The Committee shall determine whether the conditions of subparagraph
8(b) or 8(c) hereof have been met and, if so, shall ascertain the Actual Value
of the Performance Grants. If the Performance Grants have no Actual Value, the
Award and such Performance Grants shall be deemed to have been canceled and the
Associated Award, if any, may be canceled or permitted to continue in effect in
accordance with its terms. If the Performance Grants have any Actual Value and:
(i) were not awarded in conjunction with an Associated Award, the
Committee shall cause an amount equal to the actual Value of the
Performance Grants earned by the participant to be paid to him or his
beneficiary as provided below; or
(ii) were awarded in conjunction with an Associated Award, the
Committee shall determine, in accordance with criteria specified by the
Committee (A) to cancel the Performance Grants, in which event no amount in
respect thereof shall be paid to the participant or his beneficiary, and
the Associated Award may be permitted to continue in effect in accordance
with its terms, (B) to pay the Actual Value of the Performance Grants to
the participant or his beneficiary as provided below, in which event the
Associated Award may be canceled or (C) to pay to the participant or his
beneficiary as provided below, the Actual Value of only a portion of the
Performance Grants, in which a complimentary portion of the Associated
Award may be permitted to continue in effect in accordance with its terms
or be canceled, as determined by the Committee.
Such determination by the Committee shall be made as promptly as
practicable following the end of the Award Period or upon the earlier
termination of employment or performance of services, or at such other time or
times as the Committee shall determine, and shall be made pursuant to criteria
specified by the Committee.
Payment of any amount in respect of the Performance Grants which the
Committee determines to pay as provided above shall be made by the Company as
promptly as practicable after the end of the Award Period or at such other time
or times as the Committee shall determine, and may be made in cash, Common
Shares, Other Company Securities or property, or other forms of payment, or any
combination thereof or in such other manner, as determined by the Committee in
its discretion. Notwithstanding anything in this Paragraph 8 to the contrary,
the Committee may, in its discretion, determine and pay out the Actual Value of
the Performance Grants at any time during the Award Period.
9. DEFERRAL OF COMPENSATION. The Committee shall determine whether or not
an Award shall be made in conjunction with deferral of the participant's salary,
bonus or other compensation, or any combination thereof, and whether or not such
deferred amounts may be
(i) forfeited to the Company or to other participants, or any
combination thereof, under certain circumstances (which may include, but
need not be limited to, certain types of termination of employment or
performance of services for the Company and its Affiliates),
(ii) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures and/or
(iii) credited with income equivalents (which may include, but need
not be limited to, interest, dividends or other rates of return) until the
date or dates of payment of the Award, if any.
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<PAGE>
10. DEFERRED PAYMENT OF AWARDS. The Committee may specify that the payment
of all or any portion of cash, Common Shares, Other Company Securities or
property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as the Committee
shall determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return, or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents to
be determined by the Committee in its discretion.
11. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder, or reduction of the Option Price of an Option or exercise
price of an Award of Stock Appreciation Rights); provided, that no such
amendment shall adversely affect in a material manner any right of a participant
under the Award without his written consent, unless the Committee determines in
its discretion that there have occurred or are about to occur significant
changes in the participant's position, duties or responsibilities, or
significant changes in economic, legislative, regulatory, tax, accounting or
cost/benefit conditions which are determined by the Committee in its discretion
to have or to be expected to have a substantial effect on the performance of the
Company, or any subsidiary, affiliate, division or department thereof, on the
Plan or an any Award under the Plan. The Committee may, in its discretion,
permit holders of Awards to surrender outstanding Awards as a condition
precedent to the grant of new Awards under the Plan.
12. DISABILITY. For the purposes of this Plan, a participant shall be
deemed to have terminated his employment or performance of services for the
Company and its Affiliates by reason of disability if the Committee shall
determine that the physical or mental condition of the participant by reason of
which such employment or performance of services terminated was such at that
time as would entitle him to payment of monthly disability benefits under any
disability plan of the Company or an Affiliate in which he is a participant. If
the participant is not eligible for benefits under any disability plan of the
Company or an Affiliate, he shall be deemed to have terminated such employment
or performance of services by reason of disability if the Committee shall
determine that he is permanently and totally disabled within the meaning of
Section 22(e)(3) of the Code.
13. TERMINATION OF A PARTICIPANT. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment by or
the performance of services for the Company or an Affiliate, provided that
transfers between the Company and an Affiliate or between Affiliates, and
approved leaves of absence shall not be deemed such a termination.
14. RELATED EMPLOYMENT. For the purposes of this Plan, Related Employment
shall mean the employment or performance of services by an individual for an
employer that is neither the Company nor an Affiliate, provided that (i) such
employment or performance of services is undertaken by the individual at the
request of the Company or an Affiliate, (ii) immediately prior to undertaking
such employment or performance of services, the individual was employed by or
performing services for the Company or an Affiliate or was engaged in Related
Employment as herein defined, and (iii) such employment or performance of
services is in the best interests of the Company and is recognized by the
Committee, in its discretion, as Related Employment for purposes of this
Paragraph 14. The death or disability of an individual during a period of
Related Employment as herein defined shall be treated, for purposes of this
Plan, as if the death or onset of disability had occurred while the individual
was employed by or performing services for the Company or an Affiliate.
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<PAGE>
15. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding Common Shares of the Company by reason of any stock split, stock
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, rights offering, share offering, reorganization, combination or
exchange of shares, a sale by the Company of all or part of its assets, any
distribution to stockholders other than a normal cash dividend, or other
extraordinary or unusual event, if the Committee shall determine, in its
discretion, that such change equitably requires an adjustment in the terms of
any Award or the number of Common Shares available for Awards, such adjustment
may be made by the Committee and shall be final, conclusive and binding for all
purposes of the Plan.
16. DESIGNATION OF BENEFICIARY BY PARTICIPANT. A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of any
Award under the Plan in the event of his death, on a written form to be provided
by and filed with the Committee, and in a manner determined by the Committee in
its discretion. The Committee reserves the right to review and approve
beneficiary designations. A participant may change his beneficiary from time to
time in the same manner, unless such participant has made an irrevocable
designation. Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Committee in its
discretion. If no designated beneficiary survives the participant and is living
on the date on which any amount becomes payable to such participant's
beneficiary, such payment will be made to the legal representatives of the
participant's estate, and the term "beneficiary" as used in the Plan shall be
deemed to include such person or persons. If there is any question as to the
legal right of any beneficiary to receive a distribution under the Plan, the
Committee in its discretion may determine that the amount in question be paid to
the legal representatives of the estate of the participant, in which event the
Company, the Board and the Committee and the members thereof will have no
further liability to anyone with respect to such amount.
17. CHANGE IN CONTROL.
(a) Upon any Change in Control:
(i) each Stock Option and Stock Appreciation Right that is
outstanding on the date of such Change in Control shall be exercisable in
full immediately;
(ii) all restrictions with respect to Restricted Stock shall
lapse immediately, and the Company's right to repurchase or forfeit any
Restricted Stock outstanding on the date of such Change in Control shall
thereupon terminate and the certificates representing such Restricted Stock
and the related stock powers shall be promptly delivered to the
participants entitled thereto; and
(iii) All Award Periods for the purposes of determining the
amounts of Awards of Performance Grants shall end as of the end of the
calendar quarter immediately preceding the date of such Change in Control,
and the amount of the Award payable shall be the portion of the maximum
possible Award allocable to the portion of the Award Period that had
elapsed and the results achieved during such portion of the Award Period.
(b) For this purpose, a Change in Control shall be deemed to occur when
and only when any of the following events first occurs:
(i) any person who is not currently such becomes the beneficial
owner, directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company's then outstanding
voting securities; or
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<PAGE>
(ii) three or more directors, whose election or nomination for
election is not approved by a majority of the Incumbent Board (as
hereinafter defined), are elected within any single 24-month period to
serve on the Board of Directors; or
(iii) members of the Incumbent Board cease to constitute a
majority of the Board of Directors without the approval of the remaining
members of the Incumbent Board; or
(iv) any merger (other than a merger where the Company is the
survivor and there is no accompanying Change in Control under subparagraphs
(i), (ii) or (iii) of this paragraph (b)), consolidation, liquidation or
dissolution of the Company, or the sale of all or substantially all of the
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur pursuant to subparagraph (i) of this paragraph (b) solely because 25% or
more of the combined voting power of the Company's outstanding securities is
acquired by one or more employee benefit plans maintained by the Company or by
any other employer, the majority interest in which is held, directly or
indirectly, by the Company. For purposes of this Section 17, the terms "person"
and "beneficial owner" shall have the meaning set forth in Sections 3(a) and
13(d) of the Exchange Act, and in the regulations promulgated thereunder, as in
effect on December 15, 1993; and the term "Incumbent Board" shall mean (A) the
members of the Board of Directors of the Company on December 31, 1993, to the
extent that they continue to serve as members of the Board of Directors, and (B)
any individual who becomes a member of the Board of Directors after December 31,
1993, if his election or nomination for election as a director was approved by a
vote of at least three-quarters of the then Incumbent Board.
18. MISCELLANEOUS PROVISIONS.
(a) No employee or other person shall have any claim or right to be
granted an Award under the Plan. Determinations made by the Committee under the
Plan need not be uniform and may be made selectively among eligible individuals
under the Plan, whether or not such eligible individuals are similarly situated.
Neither the Plan nor any action taken hereunder shall be construed as giving any
employee or other person any right to continue to be employed by or perform
services for the Company or any Affiliate, and the right to terminate the
employment of or performance of services by any participant at any time and for
any reason is specifically reserved.
(b) No participant or other person shall have any right with respect to
the Plan, the Common Shares reserved for issuance under the Plan or in any
Award, contingent or otherwise, until written evidence of the Award shall have
been delivered to the recipient and all the terms, conditions and provisions of
the Plan and the Award applicable to such recipient (and each person claiming
under or through him) have been met.
(c) Except as may be approved by the Committee where such approval shall
not adversely affect compliance of the Plan with Rule 16b-3 under the Exchange
Act, a participant's rights and interest under the Plan may not be assigned or
transferred, hypothecated or encumbered in whole or in part either directly or
by operation of law or otherwise (except in the event of a participant's death)
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner; provided, however, that
any Option or similar right (including, but not limited to, a Stock Appreciation
Right) offered pursuant to the Plan shall not be transferable other than by will
or the laws of descent and distribution and shall be exercisable during the
participant's lifetime only by him.
(d) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder with
respect to any Award unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, local and foreign
legal, securities exchange and other applicable requirements.
(e) It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3 under the Exchange Act, that any ambiguities or inconsistencies
in construction of the Plan be interpreted to give effect to
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<PAGE>
such intention and that if any provision of the Plan is found not to be in
compliance with Rule 16b-3, such provision shall be deemed null and void to the
extent required to permit the Plan to comply with Rule 16b-3.
(f) The Company and its Affiliates shall have the right to deduct from any
payment made under the Plan, any federal, state, local or foreign income or
other taxes required by law to be withheld with respect to such payment. It
shall be a condition to the obligation of the Company to issue Common Shares,
Other Company Securities or property, other securities or property, or other
forms of payment, or any combination thereof, upon exercise, settlement or
payment of any Award under the Plan, that the participant (or any beneficiary or
person entitled to act) pay to the Company, upon its demand, such amount as may
be requested by the Company for the purpose of satisfying any liability to
withhold federal, state, local or foreign income or other taxes. If the amount
requested is not paid, the Company may refuse to issue Common Shares, Other
Company Securities or property, other securities or property, or other forms of
payment, or any combination thereof. Notwithstanding anything in the Plan to the
contrary, the Committee may, in its discretion, permit an eligible participant
(or any beneficiary or person entitled to act) to elect to pay a portion or all
of the amount requested by the Company for such taxes with respect to such
Award, at such time and in such manner as the Committee shall deem to be
appropriate including, but not limited to, by authorizing the Company to
withhold, or agreeing to surrender to the Company on or about the date such tax
liability is determinable, Common Shares, Other Company Securities or property,
other securities or property, or other forms of payment, or any combination
thereof, owned by such person or a portion of such forms of payment that would
otherwise be distributed, or have been distributed, as the case may be, pursuant
to such Award to such person, having a fair market value equal to the amount of
such taxes.
(g) The expenses of the Plan shall be borne by the Company. However, if an
Award is made to an individual employed by or performing services for an
Affiliate:
(i) if such Award results in payment of cash to the participant,
such Affiliate shall pay to the Company an amount equal to such cash
payment unless the Committee shall otherwise determine in its discretion;
(ii) if the Award results in the issuance by the Company to the
participant of Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment, or any combination
thereof, such Affiliate shall, unless the Committee shall otherwise
determine in its discretion, pay to the Company an amount equal to the fair
market value thereof, as determined by the Committee, on the date such
Common Shares, other Company Securities or property, other securities or
property, or other forms of payment, or any combination thereof, are issued
(or in the case of the issuance of Restricted Stock or of Common Shares,
Other Company Securities or property, or other securities or property, or
other forms of payment subject to transfer and forfeiture conditions, equal
to the fair market value thereof on the date on which they are no longer
subject to applicable restrictions), minus the amount, if any, received by
the Company in respect of the purchase of such Common Shares, Other Company
Securities or property, other securities or property or other forms of
payment, or any combination thereof, all as the Committee shall determine
in its discretion; and
(iii) the foregoing obligations of any such Affiliate entity
shall survive and remain in effect and binding on such entity even if its
status as an Affiliate of the Company should subsequently cease, except as
otherwise agreed by the Company and the entity.
(h) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's general
creditors.
(i) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken by the Company, the Board or the Committee or its delegates.
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<PAGE>
(j) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of payment
of Awards under the Plan or any combination thereof, as of any specific time
shall mean such value as determined by the Committee in accordance with
applicable law.
(k) The masculine pronoun includes the feminine and the singular includes
the plural wherever appropriate.
(l) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Awards hereunder or any Common
Shares issued pursuant hereto as may be required by Section 13 or 15(d) of the
Exchange Act (or any successor provision) or any other applicable statute, rule
or regulation.
(m) The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the Plan
and to Awards granted under the Plan, shall be governed by the substantive laws,
but not the choice of law rules, of the State of Delaware.
19. PLAN AMENDMENT OR SUSPENSION. The Plan may be amended or suspended in
whole or in part at any time and from time to time by the Board, but no
amendment shall be effective unless and until the same is approved by
stockholders of the Company where the failure to obtain such approval would
adversely affect the compliance of the Plan with Rule 16b-3 under the Exchange
Act and with other applicable law. No amendment of the Plan shall adversely
affect in a material manner any right of any participant with respect to any
Award theretofore granted without such participant's written consent, except as
permitted under Paragraph 11.
20. PLAN TERMINATION. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan;
or
(b) ten years from the date the Plan is initially approved and adopted by
the stockholders of the Company in accordance with Paragraph 21 hereof;
provided, however, that the Board may, prior to the expiration of such ten-year
period, extend the term of the Plan for an additional period of up to five years
for the grant of Awards other than Incentive Stock Options. No termination of
the Plan shall materially alter or impair any of the rights or obligations of
any person, without his consent, under any Award theretofore granted under the
Plan except that subsequent to termination of the Plan, the Committee may make
amendments permitted under Paragraph 11.
21. SHAREHOLDER ADOPTION. The Plan shall be submitted to the stockholders
of the Company for their approval and adoption at a meeting to be held on or
before December 31, 1993, or at any adjournment thereof. The Plan shall not be
effective and no Award shall be made hereunder unless and until the Plan has
been so approved and adopted. The stockholders shall be deemed to have approved
and adopted the Plan only if it is approved and adopted at a meeting of the
stockholders duly held by vote taken in the manner required by the laws of the
State of Delaware and the applicable Federal securities laws.
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VIZACOM INC.
OUTSIDE DIRECTOR AND ADVISOR STOCK OPTION PLAN
(As amended through July 14, 1999)
1. Purpose. Vizacom Inc. (the "Company") hereby adopts the Visicom Inc.
Outside Director and Advisor Stock Option Plan (the "Plan"). The Plan is
intended to recognize the contributions made to the Company by the non-employee
members of the Board of Directors and Board of Advisors of the Company or an
Affiliate (as defined below), to provide such persons with additional incentive
to devote themselves to the future success of the Company or an Affiliate, and
to improve the ability of the Company or an Affiliate to attract, retain, and
motivate individuals upon whom the Company's sustained growth and financial
success depend, by providing such persons with an opportunity to acquire or
increase their proprietary interest in the Company through receipt of options to
purchase the Company's Common Stock, par value $.001 per share (the "Common
Stock").
2. Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a parent corporation
or a subsidiary corporation with respect to the Company within the meaning
of Section 424(e) or (f) of the Code.
(b) "Board of Directors" or "Board" means the Board of Directors
or the Board of Advisors of the Company.
(c) "Change in Control" shall have the meaning as set forth in
Section 9 of the Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall have the meaning set forth in Section 3 of
the Plan.
(f) "Company" means Vizacom Inc., a Delaware corporation.
(g) "Disability" shall have the meaning set forth in Section 22(e)(3)
of the Code.
(h) "Fair Market Value" shall have the meaning set forth in Subsection
8(c) of the Plan.
(i) "Non-qualified Stock Option" means an Option granted under
the Plan which is not intended to qualify, or otherwise does not qualify,
as an "incentive stock option" within the meaning of Section 422(b) of the
Code.
(j) "Option" means a Non-qualified Stock Option granted under the
Plan.
(k) "Optionee" means a person to whom an Option has been granted
under the Plan, which Option has not been exercised and has not expired or
terminated.
(l) "Option Document" means the document described in Section 8
of the Plan, as applicable, which sets forth the terms and conditions of
each grant of Options.
(m) "Option Price" means the price at which Shares may be
purchased upon exercise of an Option, as calculated pursuant to Subsection
8(c) of the Plan.
(n) "Outside Director" means a member of the Board of Directors
or the Board of Advisors of the Company who is not an employee of the
Company or an Affiliate.
<PAGE>
(o) "Rule 16b-3" means Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended.
(p) "Shares" means the shares of Common Stock of the Company
which are the subject of Options.
3. Administration of the Plan. The Plan shall be administered by the Board
of Directors of the Company; however, the Board of Directors may designate a
committee composed of two or more of its Directors to operate and administer the
Plan in its stead.
(a) Meetings. The Committee shall hold meetings at such times and
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous
consent of the members of the Committee shall be the valid acts of the
Committee.
(b) Administration. The interpretation and construction by the
Committee of any provisions of the Plan or of any Option granted under it
shall be final, binding and conclusive.
(c) Exculpation. No member of the Board of Directors shall be
personally liable for monetary damages for any action taken or any failure
to take any action in connection with the administration of the Plan or the
granting of Options under the Plan, provided that this Subsection 3(c)
shall not apply to (i) any breach of such member's duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of law, (iii) acts
or omissions that would result in liability under Section 174 of the
General Corporation Law of the State of Delaware, as amended, and (iv) any
transaction from which the member derived an improper personal benefit.
(d) Indemnification. Service on the Committee shall constitute
service as a member of the Board of Directors of the Company. Each member
of the Committee shall be entitled without further act on his or her part
to indemnity from the Company to the fullest extent provided by applicable
law and the Company's Certificate of Incorporation and/or By-laws in
connection with or arising out of any action, suit or proceeding with
respect to the administration of the Plan or the granting of Options
thereunder in which he or she may be involved by reason of his or her being
or having been a member of the Committee, whether or not he or she
continues to be such member of the Committee at the time of the action,
suit or proceeding.
4. Grants under the Plan. Grants under the Plan may only be in the form of
a Non-qualified Stock Option.
5. Eligibility. All Outside Directors shall be eligible to receive Options
hereunder. The Committee, in its sole discretion, shall determine whether an
individual is eligible to receive Options under the Plan.
6. Shares Subject to Plan. The aggregate maximum number of Shares for which
Options may be granted pursuant to the Plan is 750,000, subject to adjustment
as provided in Section 10 of the Plan. The Shares shall be issued from
authorized and unissued Common Stock or Common Stock held in or hereafter
acquired for the treasury of the Company. If an Option terminates or expires
without having been fully exercised for any reason, the Shares for which the
Option was not exercised may again be the subject of one or more Options granted
pursuant to the Plan.
7. Term of the Plan. The Plan is effective as of August 2, 1995, the date
on which it was adopted by the Board of Directors, subject to the approval of
the Plan on or before December 31, 1995 by a majority of the votes cast at a
duly called meeting of the stockholders at which a quorum representing a
majority of all outstanding voting stock of the Company is, either in person or
by proxy, present and voting. If the Plan is not so approved on or before
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December 31, 1995, all Options granted under the Plan shall be null and void. No
Option may be granted under the Plan after December 31, 2005.
8. Option Documents and Terms. Each Option granted under the Plan shall be
a Non-qualified Stock Option. Options granted pursuant to the Plan shall be
evidenced by the Option Documents in such form as the Committee shall from time
to time approve, which Option Documents shall comply with and be subject to the
following terms and conditions and such other terms and conditions as the
Committee shall from time to time require which are not inconsistent with the
terms of the Plan.
(a) Number of Option Shares. Each Option Document shall state the
number of Shares to which it pertains. An Optionee may receive more than
one Option on the terms and subject to the conditions and restrictions of
the Plan.
(b) Timing of Grants; Number of Shares Subject of Options. Each
Outside Director shall be granted, on the earlier of (i) August 1, 1995 or
(ii) his or her becoming an Outside Director, an Option to purchase twenty
five thousand (25,000) Shares. Thereafter, each Outside Director shall be
granted annually, commencing on the first day of August, 1996 and on the
first day of each August thereafter, an Option to purchase ten thousand
(10,000) Shares; provided that if at the time of any grant of Options the
number of Shares reserved for issuance under this Plan is less than the
number of Shares underlying the Options to be granted pursuant to the terms
hereof, then the number of Options granted to each director shall be
reduced proportionately.
(c) Option Price. Each Option Document shall state the Option
Price, which shall be equal to the Fair Market Value of the Shares on the
date the Option is granted. "Fair Market Value" shall mean: (i) if the
Common Stock is listed or admitted to trade on a national securities
exchange, the closing price of the Common Stock on the Composite Tape, as
published in The Wall Street Journal, of the principal national securities
exchange on which the Common Stock is so listed or admitted to trade, on
such date, or, if there is no trading of the Common Stock on such date,
then the closing price of the Common Stock as quoted on such Composite Tape
on the next preceding date on which there was trading in such shares; (ii)
if the Common Stock is not listed or admitted to trade on a national
securities exchange but is listed and quoted on The Nasdaq Stock Market
("Nasdaq"), the last sale price, in the case of the Common Stock being
listed on The Nasdaq National Market or The Nasdaq SmallCap Market, for the
Common Stock on such date as reported by Nasdaq, or, if there is no
reported trading of the Common Stock on such date, then the last sale or
bid price, as the case may be, for the Common Stock on the next preceding
date on which there was trading in the Common Stock; (iii) if the Common
Stock is not listed or admitted to trade on a national securities exchange
and is not listed and quoted on Nasdaq, the mean between the closing bid
and asked price for the Common Stock on such date, as furnished by the
National Association of Securities Dealers, Inc. ("NASD") or similar
organization; or (iv) if the stock is not listed or admitted to trade on a
national securities exchange, not listed and quoted on Nasdaq and if bid
and asked prices for the Common Stock are not furnished by the NASD or a
similar organization, the value established in good faith by the Committee
in the Committee's sole discretion.
(d) Exercise. Each Option shall be exercisable on the date of
grant to the extent of not more than thirty-three and one-third percent
(33-1/3%) of the Shares granted. After the expiration of one (1) year from
the date of grant, the Option may be exercised to the extent of not more
than sixty-six and two-thirds percent (66-2/3%) of the Shares granted, and
after the expiration of two (2) years from the date of grant, the Option
may be exercised to the extent of not more than one hundred percent (100%)
of the shares granted. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and
payment in full of the Option Price for the shares to be purchased. Each
such notice shall specify the number of Shares to be purchased and shall
(unless the Shares are covered by a then current registration statement or
a Notification under Regulation A under the Securities Act of 1933, as
amended (the "Act")), contain the Optionee's acknowledgment in form and
substance satisfactory to the Company that (a) such Shares are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the
Company, may be made without violating the registration
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<PAGE>
provisions of the Act), (b) the Optionee has been advised and understands
that (i) the Shares have not been registered under the Act and are
"restricted securities" within the meaning of Rule 144 under the Act
and are subject to restrictions on transfer and (ii) the Company is under
no obligation to register the Shares under the Act or to take any action
which would make available to the Optionee any exemption from such
registration, (c) such Shares may not be transferred without compliance
with all applicable federal and state securities laws, and (d) an
appropriate legend referring to the foregoing restrictions on transfer
and any other restrictions imposed under the Option Documents may be
endorsed on the certificates. Notwithstanding the foregoing, if the
Company determines that issuance of Shares should be delayed pending (A)
registration under federal or state securities laws, (B) the receipt of an
opinion of counsel acceptable to the Company that an appropriate exemption
from such registration is available, (C) the listing or inclusion of
the Shares on any securities exchange or an automated quotation system or
(D) the consent or approval of any governmental regulatory body whose
consent or approval is necessary in connection with the issuance of
such Shares, the Company may defer exercise of any Option granted
hereunder until any of the events described in this Subsection 8(d)
has occurred.
(e) Medium of Payment. An Optionee shall pay for Shares (i) in
cash, (ii) by certified or cashier's check payable to the order of the
Company, or (iii) by such other mode of payment as the Committee may
approve, including payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board. Without limiting
the foregoing, the Committee may provide an Option Document that payment
may be made in whole or in part in shares of the Company's Common Stock. If
payment is made in whole or in part in shares of the Company's Common
Stock, then the Optionee shall deliver to the Company certificates
registered in the name of such Optionee representing the shares owned by
such Optionee, free of all liens, claims and encumbrances of every kind and
having an aggregate Fair Market Value on the date of delivery that is at
least as great as the Option Price of the Shares (or relevant portion
thereof) with respect to which such Option is to be exercised by the
payment in shares of Common Stock, accompanied by stock powers duly
endorsed in blank by the Optionee. In the event that certificates for
shares of the Company's Common Stock delivered to the Company represent a
number of shares in excess of the number of shares required to make payment
for the Option Price of the Shares (or relevant portion thereof) with
respect to which such Option is to be exercised by payment in shares of
Common Stock, the stock certificate issued to the Optionee shall represent
(i) the Shares in respect of which payment is made, and (ii) such excess
number of shares. Notwithstanding the foregoing, the Committee may impose
from time to time such limitations and prohibitions on the use of shares of
the Common Stock to exercise an Option as it deems appropriate.
(f) Termination of Options. All Options granted pursuant to this
Plan shall be exercisable until the first to occur of the following:
(i) Expiration of ten (10) years from the date of grant;
(ii) Expiration of three months from the date on which
the Optionee's service as an Outside Director terminates for any
reason other than Disability or death; provided, however, that the
Committee, in its sole discretion, shall have the authority to extend
the expiration date of any or all outstanding Options held by an
Optionee whose service as an Outside Director terminates for any
reason other than Disability or death beyond such three month period,
but in no event shall such extension of the expiration date of an
Option be to a date beyond the tenth anniversary of the grant of such
Option; or
(iii) Expiration of one year from the date the
Optionee's service with Company as an Outside Director terminates due
to the Optionee's Disability or death.
(g) Transfers. No option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution.
During the lifetime of the person to whom an Option is granted, such Option
may be exercised only by such person. Notwithstanding the foregoing, a
Non-qualified Stock Option may be transferred pursuant to the terms of a
"qualified domestic relations order," within the meaning of Sections
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401(a)(13) and 414(p) of the Code or within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
(h) Other Provisions. Subject to the provisions of the Plan, the
Option Documents shall contain such other provisions including, without
limitation, additional restrictions upon the exercise of the Option or
additional limitations upon the term of the Option, as the Committee shall
deem advisable.
(i) Amendment. Subject to the provisions of the Plan, the
Committee shall have the right to amend Option Documents issued to an
Optionee, subject to the Optionee's consent if such amendment is not
favorable to the Optionee, except that the consent of the Optionee shall
not be required for any amendment made under Section 9 of the Plan, as
applicable.
9. Change in Control. In the event of a Change in Control, the Committee
may take whatever action it deems necessary or desirable with respect to the
Options outstanding, including, without limitation, accelerating the expiration
or termination date in the respective Option Documents to a date no earlier than
thirty (30) days after notice of such acceleration is given to the Optionees. In
addition to the foregoing, in the event of a Change in Control, Options granted
pursuant to the Plan shall become immediately exercisable in full.
A "Change in Control" shall be deemed to have occurred upon the earliest to
occur of the following events: (i) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) approve a plan or
other arrangement pursuant to which the Company will be dissolved or liquidated,
or (ii) the date the stockholders of the Company (or the Board of Directors, if
stockholder action is not required) and the stockholders of the other
constituent corporation (or its board of directors, if stockholder action is not
required) have approved a definitive agreement to merge or consolidate the
Company with or into such other corporation, other than, in either case, a
merger or consolidation of the Company in which holders of shares of the
Company's Common Stock immediately prior to the merger or consolidation will
hold at least a majority of the ownership of common stock of the surviving
corporation (and, if one class of common stock is not the only class of voting
securities entitled to vote on the election of directors of the surviving
corporation, a majority of the voting power of the surviving corporation's
voting securities) immediately after the merger or consolidation, which common
stock (and if applicable voting securities) is to be held in the same proportion
as such holders' ownership of Common Stock of the Company immediately before the
merger or consolidation, or (iv) the date any entity, person or group (within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange
Act of 1934, as amended) other than (A) the Company or any of its subsidiaries
or any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries, or (B) any person who, on the date the Plan
is effective, shall have been the beneficial owner of or have voting control
over shares of Common Stock of the Company, possessing more than ten percent
(10%) of the aggregate voting power of the Company's Common Stock shall have
become the beneficial owner of, or shall have obtained voting control over, more
than ten percent (10%) of the outstanding shares of the Company's Common Stock,
or (v) the first day after the date this Plan is effective when directors are
elected such that a majority of the Board of Directors shall have been members
of the Board of Directors for less than two (2) years, unless the nomination for
election of each new director who was not a director at the beginning of such
two (2) year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period.
10. Adjustments on Changes in Capitalization. The aggregate number of
Shares and class of Shares as to which Options may be granted hereunder, the
number and class or classes of Shares covered by each outstanding Option and the
Option Price thereof shall be appropriately adjusted in the event of a stock
dividend, stock split, recapitalization or other change in the number or class
of issued and outstanding equity securities of the Company resulting from a
subdivision or consolidation of the Common Stock and/or, if appropriate, other
outstanding equity securities or a recapitalization or other capital adjustment
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common Stock) affecting the
Common Stock which is effected without receipt of consideration by the Company.
The Committee shall have authority to determine the adjustments to be made under
this Section, and any such determination by the Committee shall be final,
binding and conclusive.
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11. Amendment of the Plan. The Board of Directors of the Company may amend
the Plan from time to time in such manner as it may deem advisable. The
provisions of the Plan relating to (i) which directors shall be granted Options
pursuant to Section 8; (ii) the amount of Shares subject to Options granted
pursuant to Section 8; (iii) the price at which Shares subject to Options
granted pursuant to Section 8 may be purchased; and (iv) the timing of grants of
Options pursuant to Section 8, shall not be amended more than once every six (6)
months, other than to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended. No amendment to the Plan
shall adversely affect any outstanding Option, however, without the consent of
the Optionee that holds such Option.
12. No Commitment to Retain. The grant of an Option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any Affiliate to retain the
Optionee as a member of the Company's Board of Directors or in any other
capacity.
13. Withholding of Taxes. Whenever the Company proposes or is required to
deliver or transfer Shares in connection with the exercise of an Option, the
Company shall have the right to (a) require the recipient to remit or otherwise
make available to the Company an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or transfer of
any certificate or certificates for such Shares or (b) take whatever other
action it deems necessary to protect its interests with respect to tax
liabilities. The Company's obligation to make any delivery or transfer of Shares
shall be conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.
14. Interpretation. The Plan is intended to enable transactions under the
Plan with respect to directors and officers (within the meaning of Section 16(a)
under the Securities Exchange Act of 1934, as amended) to satisfy the conditions
of Rule 16b-3; to the extent that any provision of the Plan, or any provisions
of any Option granted pursuant to the Plan, would cause a conflict with such
conditions or would cause the administration of the Plan as provided in Section
3 to fail to satisfy the conditions of Rule 16b-3, such provision shall be
deemed null and void to the extent permitted by applicable law.
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