SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
VIZACOM INC.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule, and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
VIZACOM INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AUGUST 10, 2000
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To the Stockholders of
VIZACOM INC.:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Vizacom
Inc. will be held at the Hilton Hotel, located at 2117 Route 4 Eastbound, Fort
Lee, New Jersey 07024, on Thursday, August 10, 2000, commencing at 10:00 a.m.
(local time), or at any adjournment or postponement thereof, for the following
purposes:
1. To elect two directors in Class I to our board of directors;
2. To consider and act upon a proposal to approve our 2000 Equity
Incentive Plan; and
3. To consider and act upon such other business as may properly come
before the annual meeting or any adjournment thereof.
The foregoing matters are more fully described in the proxy statement
accompanying this notice to which your attention is directed.
Only our stockholders of record at the close of business on June 26, 2000
will be entitled to vote at the annual meeting or at any adjournment thereof.
You are requested to sign, date and return the enclosed proxy at your earliest
convenience in order that your shares may be voted for you as specified.
By order of the board of directors,
Marc E. Jaffe, chairman and secretary
July 3, 2000
Teaneck, New Jersey
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[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
VIZACOM INC.
GLENPOINTE CENTRE EAST
300 FRANK W. BURR BOULEVARD
TEANECK, NEW JERSEY 07666
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
AUGUST 10, 2000
The 2000 annual meeting of stockholders of Vizacom Inc., a Delaware
corporation, will be held on Thursday, August 10, 2000 at the Hilton Hotel,
located at 2117 Route 4 Eastbound, Fort Lee, New Jersey 07024, commencing at
10:00 a.m. (local time), and any adjournments and postponements thereof, for the
purposes set forth in the accompanying notice of annual meeting of stockholders.
THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF OUR BOARD OF DIRECTORS FOR
USE AT THE ANNUAL MEETING, AND AT ANY ADJOURNMENTS AND POSTPONEMENTS OF THE
ANNUAL MEETING. The approximate date on which this proxy statement and the
enclosed proxy are being first mailed to stockholders is July 3, 2000.
If a proxy in the accompanying form is duly executed and returned, the
shares represented by such proxy will be voted as specified, subject to any
applicable voting or irrevocable proxy agreements. Any person executing an
enclosed proxy may revoke it prior to its exercise either by letter directed to
us or in person at the annual meeting.
Throughout this proxy statement, the terms "we," "us," "our" and "our
company" refers to Vizacom Inc. and, unless the context indicates otherwise, our
subsidiaries on a consolidated basis.
VOTING RIGHTS
Only stockholders of record at the close of business on June 26, 2000 will
be entitled to vote at the annual meeting or any adjournment thereof. We
currently have outstanding only a single class of voting capital stock, namely,
shares of common stock, $.001 par value per share. Each share of common stock
issued and outstanding on the record date is entitled to one vote at the annual
meeting. As of the record date, there were outstanding 12,057,739 shares of our
common stock.
Directors are elected by a plurality of votes actually cast (Proposal
Number 1), while the affirmative vote of a majority of the shares present in
person or by proxy and voting at the annual meeting will be required to approve
our 2000 Equity Incentive Plan (Proposal Number 2). For purposes of determining
whether proposals have received a majority of votes cast, abstentions
<PAGE>
will not be included in the vote totals and, in instances where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned a proxy (so called "broker non-votes"), those votes will not
be included in the vote totals. Therefore, the effect of abstentions and broker
non-votes will have no effect on the vote on all proposals set forth in this
proxy statement. However, abstentions will be counted in the determination of
whether a quorum exists for the purposes of transacting business at the annual
meeting.
SECURITY OWNERSHIP
Our common stock is the only class of our voting securities presently
outstanding. The following table sets forth information with respect to the
beneficial ownership of shares of our common stock, as of the record date, by:
- each person known by us to beneficially own 5% or more of the
outstanding shares of our common stock, based on filings with the
Securities and Exchange Commission and certain other information,
- each of our executive officers and directors, and
- all of our executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting and investment power. In addition, under SEC rules, a person
is deemed to be the beneficial owner of securities which may be acquired by such
person upon the exercise of options and warrants or the conversion of
convertible securities within 60 days from the date on which beneficial
ownership is to be determined.
Except as otherwise indicated in the notes to the following table,
- we believe that all shares are beneficially owned, and investment
and voting power is held by, the persons named as owners, and
- the address for each beneficial owner listed in the table is c/o
Vizacom Inc., Glenpointe Centre East, 300 Frank W. Burr Boulevard
- 7th Floor, Teaneck, New Jersey 07666.
<TABLE>
<CAPTION>
Amount and Nature
of Common Stock Percentage of Shares
Name of Beneficial Owner Beneficially Owned Beneficially Owned
------------------------ ------------------ ------------------
<S> <C> <C> <C>
Vincent DiSpigno. . . . . . 836,413 (1) 6.9
David N. Salav. . . . . . . 836,413 (2) 6.9
Mark E. Leininger . . . . . 626,975 (3) 5.0
Marc E. Jaffe . . . . . . . 249,650 (4) 2.0
Neil M. Kaufman . . . . . . 231,455 (5) 1.9
Norman W. Alexander . . . . 147,009 (6) 1.2
Alan W. Schoenbart. . . . . 91,666 (7) *
Werner G. Haase . . . . . . 16,666 (8) *
Edward James Proctor. . . . 100 (9) *
All officers and directors as a group
(9 persons). . . . . . 3,036,347 (10) 22.9
----------
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<PAGE>
-------------
<FN>
* Less than 1.0%.
(1) Includes (a) 70,163 shares of our common stock issuable upon conversion
of our convertible promissory note held by Mr. DiSpigno in the outstanding
principal amount of $209,410.28 plus accrued interest of $1,081.65 as of
the record date, and (b) 31,250 shares of our common stock issuable upon
exercise of an option granted to Mr. DiSpigno under our 1994 Long Term
Incentive Plan which are exercisable within the next 60 days. Does not
include (x) additional shares of our common stock that may become issuable
under the convertible promissory note held by Mr. DiSpigno with respect to
any accrued and unpaid interest after the record date, (y) 93,750 shares of
our common stock issuable upon exercise of an option granted to Mr.
DiSpigno under our 1994 Incentive Plan which are not exercisable within the
next 60 days or (z) any additional shares of our common stock that may be
issued to Mr. DiSpigno if the price of our common stock falls below $1.00
per share for any 30 day period prior to March 27, 2001 under the terms of
the merger agreement pursuant to which we acquired PWR Systems.
(2) Includes (a) 70,163 shares of our common stock issuable upon conversion
of our convertible promissory note held by Mr. Salav in the outstanding
principal amount of $209,410.28 plus accrued interest of $1,081.65 as of
the record date, (b) 31,250 shares of our common stock issuable upon
exercise of an option granted to Mr. Salav under our 1994 Incentive Plan
which are exercisable within the next 60 days. Does not include (x)
additional shares of our common stock that may become issuable under the
convertible promissory note held by Mr. Salav with respect to accrued and
unpaid interest after the record date, (y) 93,750 shares of our common
stock issuable upon exercise of an option granted to Mr. Salav under our
1994 Incentive Plan which are not exercisable within the next 60 days or
(z) any additional shares of our common stock that may be issued to Mr.
Salav if the price of our common stock falls below $1.00 per share for any
30 day period prior to March 27, 2001 pursuant to the terms of the PWR
merger agreement.
(3) Represents (a) 3,333 shares of our common stock held by Mr. Leininger
and his spouse as joint tenants and (b) 423,642 shares of common stock
issuable upon exercise of options granted to Mr. Leininger under our
various stock plans which are exercisable within the next 60 days. Does not
include 202,608 shares of common stock issuable upon exercise of options
granted to Mr. Leininger under our various stock plans which are not
exercisable within the next 60 days.
(4) Includes 196,317 shares of our common stock issuable upon exercise of
options granted to Mr. Jaffe under our various stock plans which are
exercisable within the next 60 days. Does not include 66,183 shares of
common stock issuable upon exercise of options granted to Mr. Jaffe under
our various stock plans which are not exercisable within the next 60 days.
The address for Mr. Jaffe is c/o Double Impact, Inc., 386 Park Avenue South
- Suite 1900, New York, New York 10016.
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<PAGE>
(5) Includes 174,717 shares of our common stock issuable upon exercise of
options granted to Mr. Kaufman under our various stock plans and otherwise
which are exercisable within the next 60 days. Does not include options to
purchase 121,949 shares of common stock granted to Mr. Kaufman under our
various stock plans which are not exercisable within the next 60 days. The
address for Mr. Kaufman is c/o Kaufman & Moomjian, LLC, 50 Charles
Lindbergh Boulevard, Suite 206, Mitchel Field, New York 11553.
(6) Includes (a) 8,333 shares of our common stock owned of record by Mr.
Alexander's spouse and (b) 107,705 shares of common stock issuable upon
exercise of options granted Mr. Alexander under our various stock plans
which are exercisable within the next 60 days. Does not include 49,378
shares of common stock issuable upon exercise of options granted to Mr.
Alexander under our various stock plans which are not exercisable within
the next 60 days. The address for Mr. Alexander is Burnside, Church Walk,
Marholm, Peterborough, PE 67H2 England.
(7) Represents 91,666 shares of our common stock issuable upon exercise of
options granted to Mr. Schoenbart which are exercisable within the next 60
days. Does not include options to purchase 98,334 shares of common stock
granted to Mr. Schoenbart which are not exercisable within the next 60
days.
(8) Represents 16,667 shares of our common stock issuable upon exercise of
options granted to Mr. Haase under our Outside Director and Advisor Stock
Option Plan which are exercisable within the next 60 days. Does not include
options to purchase 8,333 shares of common stock granted to Mr. Haase under
our Outside Director and Advisor Stock Option Plan which are not
exercisable within the next 60 days. The address for Mr. Haase is c/o
Xceed Inc., 488 Madison Avenue, New York, New York 10022.
(9) Represents 100 shares of our common stock held by Mr. Proctor and his
spouse as joint tenants. Does not include an option to purchase 100,000
shares of our common stock granted to Mr. Proctor under our 1994 Incentive
Plan which are not exercisable within the next 60 days.
(10)Includes (a) the aggregate 11,766 shares of our common stock held
jointly with, or individually, by spouses of our officers and directors,
and (b) an aggregate 1,213,640 shares of our common stock issuable upon
conversion of promissory notes and the exercise of the options discussed in
notes (1) through (9) above which are convertible or exercisable within the
next 60 days.
</FN>
</TABLE>
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<PAGE>
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
THE THREE CLASSES OF OUR BOARD
Our board of directors is divided into three classes. The directors in each
class serve for three-year terms. Set forth below are the members of each class
and the year in which the term of each director class expires.
<TABLE>
<CAPTION>
CLASS I CLASS II CLASS III
(TO SERVE UNTIL (TO SERVE UNTIL (TO SERVE UNTIL
THE ANNUAL MEETING THE ANNUAL MEETING THE ANNUAL MEETING
OF STOCKHOLDERS IN 2000) OF STOCKHOLDERS IN 2001) OF STOCKHOLDERS IN 2002)
------------------------ ------------------------ ------------------------
<S> <C> <C>
Marc E. Jaffe Norman W. Alexander Mark E. Leininger
Werner G. Haase Neil M. Kaufman David N. Salav
Vincent DiSpigno
</TABLE>
DIRECTOR-NOMINEES
Marc E. Jaffe and Werner G. Haase, two of our current directors, have been
nominated by our board of directors for election as directors in Class I, each
to hold office until the Annual Meeting of Stockholders to be held in 2003,
unless he shall resign, become disqualified, disabled or shall otherwise be
removed from office. Shares represented by executed proxies in the form enclosed
will be voted, if authority to do so is not withheld, for the election as Class
I directors of each of Messrs. Jaffe and Haase, unless he shall be unavailable,
in which case such shares will be voted for the substitute nominee designated by
our board. Our board has no reason to believe that either of Messrs. Jaffe nor
Haase will be unavailable or, if elected, will decline to serve.
Directors will be elected by a plurality of votes cast at the annual
meeting.
Our board of directors recommends a vote FOR the election of each of
Messrs. Jaffe and Haase as directors in Class I.
DIRECTORS' COMPENSATION
Directors receive no cash compensation for their services as directors, but
are reimbursed for expenses actually incurred in connection with attending
meetings of our board of directors. Members of our board who are not also
employees, of which there currently are three, are eligible to participate in
our Outside Director and Advisor Stock Option Plan.
BOARD MEETINGS AND COMMITTEES
Our board of directors met eleven times and acted by unanimous written
consent on one occasion during 1999. All of our current directors attended not
less than 75% of such meetings
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<PAGE>
of the board and committees thereof on which they serve, except that Werner
G. Haase attended two of six meetings of the board during the period in which he
has served as a director.
The audit committee of our board of directors currently consists of Norman
W. Alexander, Werner G. Haase and Neil M. Kaufman. Our audit committee met four
times during 1999. The audit committee is responsible for overseeing
management's conduct in the financial reporting process, including reviews of
our annual, quarterly and other financial reports, our systems of internal
accounting and financial controls, our compliance with legal requirements and
such ethics programs as may be established by our management and board of
directors. Our audit committee recommends the engagement of our independent
certified public accountants. In discharging its oversight role, the audit
committee is empowered to meet and discuss with our management and independent
auditors the quality and adequacy of our accounting principles, the completeness
and clarity of our financial disclosures and other significant decisions made by
management in the preparation of our financial reports. The audit committee is
authorized to investigate any matter brought to its attention. The audit
committee has full access to all of our books, records, facilities and personnel
and has the authority to retain outside counsel, auditors and other experts in
fulfilling its duties.
The compensation committee of our board of directors currently consists of
Norman W. Alexander and Werner G. Haase. Our compensation committee held four
meetings during 1999. The compensation committee generally reviews and approves
of our executive compensation and administers all of our stock plans.
PRINCIPAL OCCUPATIONS OF DIRECTORS
Our current directors, and their ages, positions and offices with us,
are as follows:
<TABLE>
<CAPTION>
Name Age Positions and Offices
---- --- ---------------------
<S> <C> <C>
Mark E. Leininger 49 President, chief executive officer and director
Marc E. Jaffe, Esq. 48 Chairman of the board of directors and secretary
Norman W. Alexander 70 Director
Vincent DiSpigno 43 Vice president, acting chief operating officer
and director; chief executive officer of
PWR Systems
Werner G. Haase 61 Director
Neil M. Kaufman, Esq. 39 Director
David N. Salav 34 Vice president and director; president of
PWR Systems
</TABLE>
Set forth below is a brief description of the background of our directors,
based on information provided by them to us.
MARK E. LEININGER has served as a director since July 1996, our president
since January 1998 and our chief executive officer since July 1999. He served as
our chief financial officer from July 1995 through December 1997 and our chief
operating officer from September 1996 to July 1999. From February 1994 through
April 1995, Mr. Leininger was the president of Phoenix Leasing Corporation, a
passenger and cargo air carrier and aircraft leasing company, which filed
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<PAGE>
for bankruptcy protection in 1996. From February 1986 through February
1994, Mr. Leininger held various positions, including chief financial officer
and chief operating officer, with Mid Pacific Air Corporation, a transportation
and service company whose stock was traded on Nasdaq. Mr. Leininger received an
MBA degree from National University, San Diego, California in 1979 and a BA from
Miami University, Oxford, Ohio in 1972.
MARC E. JAFFE, ESQ., has served as a director since August 1995, our
chairman of the board of directors since January 1998 and our secretary since
December 1997. In his capacity as chairman, he does not serve as our chief
executive officer. Mr. Jaffe is managing director - New York of Double Impact,
Inc., a global venture catalyst for Internet-based companies. From 1992 to 2000,
Mr. Jaffe was president of Electronic Licensing Organization, Inc., which, from
time to time, acted as our agent in the acquisition of certain electronic
publishing rights. From 1988 to 1991, Mr. Jaffe was executive vice president of
database management for Franklin Electronic Publishers, a New York Stock
Exchange-listed company engaged in the business of publishing electronic books
on hand held media. From 1985 through 1987, Mr. Jaffe was President of the
software and video division of Simon & Schuster, a publishing company. Mr. Jaffe
received a JD degree from Columbia University School of Law in 1976 and a BA
from Columbia College in 1973.
NORMAN W. ALEXANDER has served as a director since December 1996. Mr.
Alexander is a retired former director of Imperial Foods Ltd., a food products
company, and formerly was the chairman of several subsidiaries of Imperial Foods
Ltd.
VINCENT DISPIGNO has been a director and vice president since April 2000,
has been our acting chief operating officer since June 2000 and has been the
chief executive officer of PWR Systems since June 1994. For three years prior to
that, Mr. DiSpigno was a corporate marketing manager for Arrow Electronics Inc.,
a major electronics distributor. For five years prior to that, Mr. DiSpigno was
a district manager for BusinessLand Inc., a national value added reseller.
WERNER G. HAASE has been a director since May 1999. Mr. Haase has been,
since July 1996, the co-chairman and chief executive officer of Xceed Inc., a
Nasdaq-listed company which is an interactive architect providing Internet
professional services that seek to transform the way companies conduct
e-business. Mr. Haase also served as a director of Xceed Inc. from September
1987 to July 1996, as a director and chief executive officer of Journeycraft,
Inc. prior to its acquisition by Xceed Inc. in July 1996 and was the owner, with
Nurit Kahane Haase, of TheraCom Integrated Medical Communications, Inc. prior to
its acquisition by Xceed in July 1996.
NEIL M. KAUFMAN, ESQ., has been a director since December 1996. Mr. Kaufman
served as our secretary from December 1996 to December 1997. Mr. Kaufman is
currently a member of Kaufman & Moomjian, LLC, our corporate counsel. From
January 1997 to December 1997, Mr. Kaufman was a partner in Moritt, Hock &
Hamroff, LLP. From 1993 to January 1997, he was a member of Blau, Kramer,
Wactlar & Lieberman, P.C. From 1984 to 1993, Mr. Kaufman was associated with
Lord Day & Lord, Barrett Smith. Each of these law firms served as our counsel
during the periods in which Mr. Kaufman was affiliated with such firms. Mr.
Kaufman received
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<PAGE>
a JD degree from New York University School of Law in 1984 and a BA degree from
SUNY Binghamton in 1981.
DAVID N. SALAV has been a director and vice president since April 2000 and
has been the president of PWR Systems since 1991. For one year prior to that,
Mr. Salav was a business development manager for Arrow Electronics, Inc., a
major electronics distributor. Mr. Salav received a B.A. degree from the State
University of New York at Buffalo in 1989.
MANAGEMENT
OUR EXECUTIVE OFFICERS
Our current executive officers, and their ages, positions and offices
with us, are as follows:
<TABLE>
<CAPTION>
Name Age Positions and Offices
---- --- ---------------------
<S> <C> <C>
Mark E. Leininger 49 President, chief executive officer and director
Marc E. Jaffe, Esq. 48 Chairman of the board of directors and secretary
Vincent DiSpigno 43 Vice president, acting chief operating officer
and director; chief executive officer of
PWR Systems
Edward James Proctor 51 Chief technology officer
David N. Salav 34 Vice president and director; president of
PWR Systems
Alan W. Schoenbart 41 Vice president - finance and chief financial
officer
</TABLE>
Set forth below is a brief description of the background of our executive
officers who do not also serve as directors, based on information provided by
them to us. Background information on our executive officers who also serve as
directors is provided in the "Principal Occupations of Directors" subsection
above.
EDWARD JAMES PROCTOR has been our vice president and chief technology
officer since June 2000. From July 1994 to June 2000, Mr. Proctor was vice
president and department head for information management of Visa International
Inc., a leading credit card company. Mr. Proctor received a B.S. degree from
Loyola University, Los Angeles, in 1971.
ALAN W. SCHOENBART has been our vice president - finance and chief
financial officer since April 1999. Mr. Schoenbart served as chief financial
officer of Windswept Environmental Group Inc., an environmental remediation
company, from September 1997 to April 1999. He was chief financial officer of
Advanced Media Inc., a multimedia company, from August 1995 to August 1997. Mr.
Schoenbart was controller of GoodTimes Entertainment, a producer and distributor
of video and software products, from September 1993 to July 1995. Mr. Schoenbart
is a certified public accountant and received a BS degree from Fairleigh
Dickinson University in 1981.
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<PAGE>
EXECUTIVE COMPENSATION
The following summary compensation table sets forth, for the three years
ended December 31, 1999, the cash and other compensation paid to Mark E.
Leininger, our president and chief executive officer, and Alan W. Schoenbart,
our vice president - finance and chief financial officer. No other individual
served as an executive officer of our company during 1999 whose total
compensation, for services rendered during 1999, was $100,000 or more.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
Securities
Name and Principal Positions Year Salary Bonus Underlying Options
---------------------------- ---- ------ ----- ------------------
<S> <C> <C> <C> <C>
Mark E. Leininger, president and 1999 $ 162,500 -- 80,000
chief executive officer 1998 145,000 -- 312,188
1997 145,000 $ 39,737 281,666
Alan W. Schoenbart, vice president - 1999 92,361 15,000 110,000
finance and chief financial officer 1998 -- -- --
1997 -- -- --
</TABLE>
For purposes of the summary compensation table,
- the value of all perquisites provided to these executive
officers did not exceed the lesser of $50,000 or 10% of the executive
officer's salary and bonus,
- options granted to Mr. Leininger in 1998 include options to
purchase 102,188 shares of our common stock repriced under our 1998
repricing program, as discussed in "Repricing of Options" and "Certain
Transactions" below,
- options granted to Mr. Leininger in 1997 include options to
purchase 181,666 shares of our common stock repriced and reduced to
options to purchase 136,250 shares of our common stock under our 1997
repricing program.
- compensation for Mr. Schoenbart includes all amounts paid since his
retention in April 1999.
STOCK OPTION GRANTS IN 1999
The following table sets forth:
- the number of shares underlying options granted during 1999 to Mark E.
Leininger and Alan W. Schoenbart, the only executive officers listed
in the summary compensation table above,
- the percentage that the option grant represents of the total options
granted to all of our employees during 1999,
- the per share exercise price of each such option, and the
expiration date of each such option.
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<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES UNDERLYING TOTAL OPTIONS
OPTIONS GRANTED GRANTED TO ALL EXERCISE EXPIRATION
NAME IN 1999 EMPLOYEES IN 1999 PRICE DATE
---- ------- ----------------- ----- ----
<S> <C> <C> <C> <C>
Mark E. Leininger. . . . . 80,000 10.8 $1.375 1/26/09
Alan W. Schoenbart . . . . 110,000 14.9 $1.03125 4/05/09
</TABLE>
AGGREGATE OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES
Set forth in the table below is information, with respect to Mark E.
Leininger and Alan W. Schoenbart, our only executive officers listed in the
summary compensation table above, as to:
- the total number of unexercised options held on December 31,
1999, separately identified between those exercisable and those not
exercisable as of such date, and
- the aggregate value of in-the-money, unexercised options
held on December 31, 1999, separately identified between those
exercisable and those not exercisable.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1999 AT DECEMBER 31, 1999
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Mark E. Leininger . . . . . . . 310,673 115,577 $658,642 $225,910
Alan W. Schoenbart. . . . . . . 50,000 60,000 114,063 136,875
</TABLE>
None of our executive officers listed in the summary compensation table
above exercised any of their options during 1999. The value of unexercised
in-the-money options is calculated by subtracting the aggregate exercise price
of the options from the aggregate market price of the shares underlying the
options as of December 31, 1999.
EMPLOYMENT AGREEMENTS
In July 1999, we entered into a three year employment agreement with Mark
E. Leininger. This employment agreement provides for a base salary of $162,500
in 1999, at least $172,500 in 2000 and at least $182,500 in 2001 and annual
incentive compensation equal to 3% of our pre- tax income for the year in which
the incentive compensation relates. This agreement with Mr. Leininger also
provides for the continued payment, for a three year period, of his then current
salary and compensation if his employment is terminated without cause. Further,
this employment agreement provides for the payment to Mr. Leininger of an amount
equal to three times his average total compensation for the five prior fiscal
years, minus $1.00, if there is a change of control of our company and Mr.
Leininger elects to terminate his employment within six months of his first
becoming aware of such change in control. This employment agreement also
contains restrictions on his engaging in competition with us for the employment
term and for up to one year thereafter and provisions protecting our proprietary
rights and information. In
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<PAGE>
October 1996, our board of directors determined to pay to Mr. Leininger a
bonus of $25,000 following our first profitable fiscal quarter after the fourth
quarter of 1996. This bonus has not been earned through the first fiscal quarter
of 2000.
On January 28, 1998, the compensation committee of our board of directors
determined to compensate Marc E. Jaffe for his services as chairman of our board
of directors at the rate of $5,000 per month, payable $2,500 in the month of
service and $2,500 twelve months after such initial payment. During 1998, we
paid Mr. Jaffe $30,000 under this arrangement and, pursuant to a letter
agreement, dated December 17, 1998, between us and Mr. Jaffe, we issued to Mr.
Jaffe 30,000 shares of our common stock in satisfaction of $22,500 of our
obligations under this letter agreement. On January 13, 1999, the compensation
committee determined to compensate Marc E. Jaffe for his services as chairman of
the board for the 1999 calendar year at the rate of $5,000 per month. In
November 1999, we agreed to pay Mr. Jaffe an additional $3,000 per month for
November and December 1999 for additional services we requested him to perform.
In March 2000, we entered into three year employment agreements with each
of Vincent DiSpigno, our acting chief operating officer, one of our vice
presidents and the chief executive officer of our PWR Systems subsidiary, and
David N. Salav, another of our vice presidents and the president of our PWR
Systems subsidiary. Each of these agreements provides for an annual base salary
of $200,000 and $25,000 annual bonuses if PWR attains a 30% increase in revenues
over the prior year and PWR Systems has either at least a 20% gross margin or
$1,000,000 in net income for the subject year. Pursuant to these two employment
agreements, we elected Messrs. DiSpigno and Salav to our board. During the term
of these two employment agreements, we have agreed to use our best efforts to
cause their re-election to our board when their initial terms expire. These
employment agreements also contain restrictions on the employee engaging in
competition with us for the employment term and for one year thereafter and
provisions protecting our proprietary rights and information.
OUR STOCK PLANS
We adopted our various stock plans in order to assist us in attracting and
retaining qualified employees, directors, officers and outside consultants and
to align the interests of such persons with those of our stockholders. The
following is a brief description of our stock plans.
1994 LONG TERM INCENTIVE PLAN
Our 1994 Long Term Incentive Plan provides for the grant of incentive stock
options, non-qualified stock options, stock appreciation rights, restricted
stock, performance grants and other types of awards. The 1994 Incentive Plan,
which is administered by the compensation committee of our board of directors,
currently authorizes the issuance of a maximum of 5,000,000 shares of our common
stock. Incentive stock options generally may be granted at an exercise price of
not less than the fair market value of shares of our common stock on the date of
grant, and non-qualified stock options may be granted at an exercise price of
not less than 85% of such fair market value. If any award under the 1994
Incentive Plan terminates, expires unexercised or is canceled, the shares of our
common stock that would otherwise have been
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issuable pursuant thereto will be available for issuance pursuant to the
grant of new awards. We have issued 163,205 shares of our common stock under the
1994 Incentive Plan as of the record date. In addition, options to purchase an
aggregate of 4,368,268 shares were outstanding under the 1994 Incentive Plan as
of the record date. The 1994 Incentive Plan expires in December 2003.
OUTSIDE DIRECTOR AND ADVISOR STOCK OPTION PLAN
Our non-employee directors, of which there are presently three, are
eligible to participate in our Director and Advisor Stock Option Plan.
Currently, up to 750,000 shares of our common stock may be issued under the
Director and Advisor Plan. Under the Director and Advisor Plan, each
non-employee director, upon first becoming a director of our company, receives
an option to purchase 25,000 shares of our common stock at a price equal to the
fair market value of our common stock on the date of grant. On August 1st of
each subsequent year, each non-employee director receives an option to purchase
an additional 25,000 shares of our common stock at a price equal to the per
share fair market value of the common stock. In March 1997, the advisory
committee was eliminated. Options awarded to each non-employee director become
exercisable in three equal annual installments commencing on the date of grant
and are subject to forfeiture under certain conditions. We have issued 21,033
shares of our common stock upon exercise of options granted under the Director
and Advisor Plan as of the record date. In addition, options to purchase 162,191
shares were outstanding under the Director and Advisor Plan as of the record
date. The Director and Advisor Plan expires in December 2005.
SPC 1989 STOCK PLAN
Our SPC 1989 Stock Plan, which we assumed in connection with our
acquisition of Software Publishing Corporation in December 1996, provides for
the grant of incentive stock options, non-qualified stock options, stock
appreciation rights, stock purchase rights, incentive stock rights, performance
grants and other types of awards. We granted awards under the SPC 1989 Plan to
both SPC's and our officers, key employees, consultants and independent
contractors. The SPC 1989 Plan, which is administered by the compensation
committee of our board of directors, currently authorizes the issuance of a
maximum of 89,350 shares of our common stock. A total of 11,948 shares of our
common stock have been issued under the SPC 1989 Plan as of the record date. In
addition, options to purchase 72,853 shares were outstanding under the SPC 1989
Plan as of the record date. The SPC 1989 Plan terminated in October 1999,
although outstanding options granted under the SPC 1989 Plan may still be
exercised in accordance with their respective terms.
SPC 1991 STOCK OPTION PLAN
Our SPC 1991 Stock Option Plan, which we assumed in connection with our
acquisition of Software Publishing Corporation in December 1996, provides for
the grant of incentive stock options, non-qualified stock options and stock
purchase rights to SPC's and our officers, key employees, consultants and
independent contractors. The SPC 1991 Plan, which is administered by our
compensation committee, currently authorizes the issuance of a maximum of
142,960
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shares of our common stock. Incentive stock options generally may be
granted at an exercise price of not less than the fair market value of our
common stock on the date of grant. Non- qualified stock options may be granted
at an exercise price of not less than 85% of fair market value. Stock purchase
rights entitle the rightsholder to purchase shares of our common stock at a
price of not less than 85% of the fair market price of such shares with us
retaining a diminishing right to repurchase such shares over a specified period
should the rightsholder's relationship with us terminate. If any award under the
SPC 1991 Plan terminates, expires unexercised, or is canceled, the shares of our
common stock that would otherwise have been issuable pursuant thereto will be
available for issuance pursuant to the grant of new awards. A total of 7,015
shares of our common stock have been issued under the SPC 1991 Plan as of the
record date. In addition, options to purchase 128,523 shares of our common stock
were outstanding under the SPC 1991 Plan as of the record date. The SPC 1991
Plan will terminate in October 2001.
LIMITATION ON LIABILITY OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that
indemnification of directors, officers, employees and other agents of a
corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, may be provided by such
corporation.
Our certificate of incorporation includes provisions eliminating the
personal liability of our directors for monetary damages resulting from breaches
of their fiduciary duty except, in accordance with the Delaware General
Corporation Law,
- for any breach of the director's duty of loyalty to us or our
stockholders,
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- where the liability arises from an unlawful payment of a
dividend or an unlawful stock purchase or redemption by us which was
approved by the directors for whom liability is sought, or
- with respect to any transaction from which the director
derived an improper personal benefit.
Our by-laws provide indemnification to directors, officers, employees and
agents, including indemnification against claims brought under state or Federal
securities laws, to the full extent allowable under Delaware law. We also have
entered into indemnification agreements with our directors and executive
officers providing, among other things, that we will provide defense costs
against any such claim, subject to reimbursement in certain events. We also
maintain a directors and officers liability insurance policy in a coverage
amount of $3,000,000, subject to a $200,000 deductible.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 28, 1998, the compensation committee of our board of directors
determined to compensate Marc E. Jaffe for his services as our chairman of the
board of directors at the rate of $5,000 per month, payable $2,500 in the month
of service and $2,500 twelve months after
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such initial payment. During 1998, we paid Mr. Jaffe $30,000 under this
arrangement and, pursuant to a letter agreement, dated December 17, 1998, we
issued to Mr. Jaffe 30,000 shares of our common stock in satisfaction of $22,500
of our obligations under such January 28, 1998 compensation arrangement. On
January 13, 1999, the compensation committee determined to compensate Marc E.
Jaffe for his services as chairman of our board of directors for the 1999
calendar year at the rate of $5,000 per month. In November 1999, we agreed to
pay Mr. Jaffe an additional $3,000 per month for November and December 1999 for
additional services we have requested that he perform.
The following directors and executive officers purchased the number of
shares of our common stock set forth below in our May 1998 private placement,
each at $1.20 per share.
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Norman W. Alexander . . . . . . . . . 8,333
Marc E. Jaffe . . . . . . . . . . . . 23,333
Mark E. Leininger . . . . . . . . . . 3,333
</TABLE>
Mr. Leininger purchased such 3,333 shares of our common stock with his
spouse as joint tenants. In addition, Mr. Alexander's spouse also purchased
8,333 shares of our common stock in the May 1998 private placement.
During 1999, we incurred approximately $400,000 in legal fees to Kaufman &
Moomjian, LLC. During 1998, we incurred approximately $390,000 in legal fees to
Kaufman & Moomjian, LLC and its predecessor. Neil M. Kaufman, one of our
directors, is a member of Kaufman & Moomjian, LLC, and was a member of the
predecessor firm. In May 1998, this predecessor firm was issued 11,904 shares of
our common stock in partial satisfaction of outstanding legal fees equal in
amount to the market value of such shares, and these shares have been assigned
by such firm to Mr. Kaufman. In August 1999, we issued 50,000 shares of our
common stock to members of Kaufman & Moomjian, LLC in satisfaction of $100,000
of outstanding legal fees due Kaufman & Moomjian, LLC.
Effective July 17, 1998, we adopted a repricing program under which we
offered to each optionee granted one or more options under any of our various
stock plans who, as of July 17, 1998, was either an employee or a director of
our company, the right to exchange each outstanding option granted to the
eligible optionee under our various stock plans, for the issuance of two
options, the first such option, or new option, entitling the eligible optionee
to purchase up to 75% of the number of shares of our common stock that were
issuable under each eligible option so exchanged, at an exercise price per share
equal to $1.375, the closing per share price on July 17, 1998, as reported by
The Nasdaq Stock Market, Inc., and the second such option, or non-repriced
option, entitling the eligible optionee to purchase up to 25% of the number of
shares of our common stock that were issuable under the eligible option so
exchanged, at an exercise price per share equal to the exercise price per share
of the eligible option so exchanged. To the extent the eligible option so
exchanged was exercisable as of July 17, 1998, the non-repriced option shall be
exercisable and, where the number of shares exercisable under the eligible
option so exchanged as of July 17, 1998 exceeded the number of shares issuable
under the non-repriced
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<PAGE>
option, any such options shall be immediately exercisable under the new
option. Further, to the extent the eligible option so exchanged was not
exercisable as of July 17, 1998, the non-repriced option shall first become
exercisable in accordance with the earliest dates set forth in the eligible
option so exchanged for the exercisability of shares issuable under the eligible
option so exchanged, and the shares of our common stock issuable under the new
option became exercisable on July 17, 1999, with respect to 25% of the total
number of shares of our common stock issuable under the new option, and will
become exercisable on each of July 17, 2000, 2001, 2002, with respect to an
additional 25% of the total number of shares of our common stock issuable under
the new option. In addition, each new option has a term expiring at the close of
business on July 16, 2008 and shall be deemed granted under such of our various
stock plans under which the eligible option was originally granted and the
non-repriced option shall be deemed granted under such of the plans under which
the eligible option was originally granted. Except as otherwise noted, each of
the new option and non-repriced option shall otherwise be identical to the
eligible option so exchanged.
The creation of the 1998 repricing program was approved primarily because
of the importance to us of having meaningful equity incentives in the hands of
key officers, directors and employees. Our board of directors and compensation
committee believed that stock options which are "out of the money" provide less
compensatory incentive to an officer, director and employee who may be
considering alternative opportunities. Our board and compensation committee
decided to include directors and officers in the 1998 repricing program because
of the importance of their leadership, administrative and technical skills to
the success of our business.
In connection with our 1998 repricing program, the following options held
by then current directors and executive officers granted under our various stock
plans were repriced each to an exercise price of $1.375 per share with a
termination date of July 16, 2008:
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<TABLE>
<CAPTION>
SHARES UNDERLYING ORIGINAL ORIGINAL
OPTIONEE ORIGINAL OPTION EXERCISE PRICE TERMINATION DATE
-------- --------------- -------------- ----------------
<S> <C> <C> <C>
Norman W. Alexander . . . . 4,688 $ 3.75 12/19/06
Norman W. Alexander . . . . 1,875 3.75 7/31/07
Norman W. Alexander . . . . 25,000 3.1875 12/15/07
Marc E. Jaffe . . . . . . . 938 3.75 10/31/04
Marc E. Jaffe . . . . . . . 4,688 3.75 8/2/05
Marc E. Jaffe . . . . . . . 1,875 3.75 7/31/06
Marc E. Jaffe . . . . . . . 1,875 3.75 7/31/07
Mark E. Jaffe . . . . . . . 25,000 3.1875 12/15/07
Marc E. Jaffe . . . . . . . 16,250 2.8125 1/27/08
Neil M. Kaufman . . . . . . 4,688 3.75 4/24/06
Neil M. Kaufman . . . . . . 4,688 3.75 12/19/06
Neil M. Kaufman . . . . . . 1,875 3.75 7/31/07
Mark E. Leininger . . . . . 3,750 3.75 7/20/05
Mark E. Leininger . . . . . 1,875 3.75 2/19/06
Mark E. Leininger . . . . . 13,125 3.75 4/24/06
Mark E. Leininger . . . . . 27,188 3.75 9/28/06
Mark E. Leininger . . . . . 56,250 3.75 2/4/07
Martin F. Schacker. . . . . 6,249 2.859375 12/28/07
Martin F. Schacker. . . . . 18,750 2.8125 1/27/08
</TABLE>
With respect to compensation paid to Mark E. Leininger in his capacity as
our employee, see the Summary Compensation Table above.
In July 1999, we entered into a three year employment agreement with Mark
E. Leininger. This employment agreement provides for a base salary of $162,500
in 1999, at least $172,500 in 2000 and at least $182,500 in 2001 and annual
incentive compensation equal to 3% of our pre- tax income for the year to which
the incentive compensation relates. This agreement with Mr. Leininger also
provides for the continued payment, for a three year period, of his then current
compensation if his employment is terminated without cause. Further, this
employment agreement provides for the payment to Mr. Leininger of an amount
equal to three times his average total compensation for the five prior fiscal
years, minus $1.00, if there is a change of control of our company and Mr.
Leininger elects to terminate his employment within six months of his first
becoming aware of such change in control. This employment agreement also
contains restrictions on his engaging in competition with us for the term
thereof and for up to one year thereafter and provisions protecting our
proprietary rights and information. In October 1996, our Board of Directors
determined to pay to Mr. Leininger a bonus of $25,000 following our first
profitable fiscal quarter after the fourth quarter of 1996. This bonus has not
been paid.
In connection with our acquisition of PWR Systems in March 2000, we entered
into three year employment agreements with each of Vincent DiSpigno, our acting
chief operating officer, one of our vice presidents and the chief executive
officer of our PWR Systems subsidiary, and David Salav, another of our vice
presidents and the president of our PWR Systems subsidiary. Each of these
agreements provides for an annual base salary of $200,000 and $25,000 annual
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bonuses if PWR attains a 30% increase in revenues over the prior year and PWR
System has either at least a 20% gross margin or $1,000,000 in net income for
the subject year. Pursuant to these two employment agreements, we expanded our
board of directors and elected Messrs. DiSpigno and Salav to the expanded board.
During the term of these two employment agreements, we have agreed to use our
best efforts to cause their re-election to our board when their initial terms
expire. These two employment agreements also contain restrictions on the
employee engaging in competition with us for the employment term and for one
year thereafter and provisions protecting our proprietary rights and
information.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4 and 5 and amendments to these
forms furnished to us, together with written representations received by us from
applicable parties that no Form 5 was required to be filed by such parties, all
parties subject to the reporting requirements of Section 16(a) of the Exchange
Act filed all such required reports during and with respect to our 1999 fiscal
year, except that (a) Norman W. Alexander failed to timely file his Form 5 with
respect to an option granted him by our board of directors in January 1999 and
(b) Werner G. Haase failed to timely file his Form 5 with respect to his initial
option grant in August 1999 under our Outside Director and Advisor Stock Plan.
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PROPOSAL NUMBER 2
TO APPROVE OUR
2000 EQUITY INCENTIVE PLAN
Our board of directors has adopted the Vizacom Inc. 2000 Equity Incentive
Plan and is recommending that our stockholders approve the 2000 Plan at the
annual meeting.
The 2000 Plan is integral to our compensation strategies and programs.
There is an ongoing "battle for talent" within the e-commerce solutions,
software and technology industries in which we compete. In order to retain and
secure employees in this intensely competitive employment environment, we must
have competitive compensation programs, particularly with respect to
equity-based awards. The use of stock options and other stock awards among e-
commerce solutions, software and technology companies is widely prevalent and
continues to increase. The 2000 Plan will give us more flexibility to keep pace
with our competitors.
With stockholder approval of the 2000 Plan, we expect to continue our
efforts to use stock options as our most widely used form of long-term
incentive. The 2000 Plan will also permit stock bonus grants, restricted stock
grants, performance stock grants, stock appreciation rights grants and other
types of awards.
Our existing incentive plan, the 1994 Long Term Incentive Plan, by its
terms, expires in December 2003, and no awards can be made under the 1994
Incentive Plan after that date. As of the record date, 4,836,795 shares were
available for award under the 1994 Incentive Plan, of which there were 4,372,468
shares subject to outstanding options under the 1994 Incentive Plan. While the
1994 Incentive Plan will remain in place, it does not provide sufficient shares
so that we can continue to effectively recruit, motivate, and retain the caliber
of employees essential for achievement of our success.
PLAN SUMMARY
A summary of the principal features of the 2000 Plan is provided below, but
is qualified in its entirety by reference to the 2000 Plan. The full text of the
2000 Plan is attached as Appendix A to this proxy statement.
PURPOSE
The purposes of the 2000 Plan are to:
- enable us and our subsidiaries and affiliates to attract and retain
highly qualified personnel who will contribute to our success, and
- provide incentives to participants in the 2000 Plan that are
linked directly to increases in stockholder value which will therefore
inure to the benefit of all of our stockholders.
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SHARES AVAILABLE FOR ISSUANCE
The maximum number of shares of our common stock that initially may be
issued under the 2000 Plan is 5,000,000. This number of shares represents
approximately 41.5% of the outstanding shares of our common stock on the record
date. The 2000 Plan provides for automatic annual increases in the aggregate
number of shares equal to 5% of the total outstanding shares of our common stock
on the last day of the prior calendar year, beginning with January 1, 2001. In
the event of a stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar change in our
capital structure involving our common stock, then the number of shares that may
be granted pursuant to the 2000 Plan and the exercise prices of and number of
shares subject to outstanding options and other awards will be proportionately
adjusted, subject to any required action by our board of directors or
stockholders and compliance with applicable securities laws.
ADMINISTRATION
The 2000 Plan will be administered by our board of directors or, to the
extent the board elects to delegate the administration of the 2000 Plan, to a
committee of the board. We anticipate that our compensation committee will
administer the 2000 Plan to the extent that our board does not choose to
administer the 2000 Plan. We further anticipate that each member of our
compensation committee or other committee administering the 2000 Plan will be a
"non- employee director" within the meaning set forth in Rule 16b-3 promulgated
under the Securities Exchange Act. Throughout the remainder of this discussion
of the 2000 Plan, the term "administrator" refers to our board or the committee
delegated authority to administer the 2000 Plan.
The 2000 Plan provides for the administrator to have full authority, in
its discretion, to:
- select the persons to whom awards will be granted,
- grant awards,
- determine the number of shares to be covered by each award,
- determine the type, nature, amount, pricing, timing and other
terms of each award,
and
- interpret, construe and implement the provisions of the 2000
Plan, including the authority to adopt rules and regulations.
ELIGIBILITY
Participation in the 2000 Plan is limited to our, our subsidiaries' and
affiliates':
- employees,
- officers,
- directors,
- consultants, and
- advisors.
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TYPES OF AWARDS
Under the 2000 Plan, the administrator is authorized to award:
- stock options,
- stock bonuses,
- restricted stock,
- stock appreciation rights, commonly referred to as "SARs,"
- performance grants, and
- other types of awards.
Stock Options
The administrator is authorized to grant stock options, which may be either
incentive stock options, referred to as "ISOs," or nonqualified stock options,
referred to as "NSOs." The exercise price of any NSO must be no less than 85% of
the fair market value of our common stock on the date of the grant; and the
exercise price of an ISO must be no less than 100% of such fair market value.
For purposes of the 2000 Plan, fair market value shall be equal to the closing
market price of our common stock on the principal stock market in which the
common stock trades. In the absence of a market price, fair market value shall
be determined in such manner as the administrator may deem equitable, or as
required by applicable law or regulation.
At the time of grant, the administrator will determine when options are
exercisable and when they expire. In absence of such determination, each option
will have a ten year term, with one quarter of the shares subject to the option
becoming exercisable on the first anniversary of the option grant and with an
additional one-quarter becoming exercisable on each of the next three
anniversary dates. The term of an option cannot exceed ten years, except in the
case of an ISO granted to a person who beneficially owns 10% or more of the
total combined voting power of all of our equity securities, referred to as a
"10% stockholder." An ISO granted to a 10% stockholder cannot have a term
exceeding five years nor may such an ISO be exercisable at less than 110% of the
fair market value of our common stock on the date of grant. ISOs may not be
granted more than ten years after the date of adoption of the 2000 Plan by our
board of directors, which was June 12, 2000.
There is no limit on the number of shares subject to options granted to any
one individual. However, the aggregate fair market value of shares exercisable
in any calendar year by one individual under ISOs, whether under the 2000 Plan
or any other plan of our company, may not exceed $100,000. In such an event, the
shares in excess of such $100,000 limitation shall be deemed granted under an
NSO.
Payment for shares purchased upon exercise of a stock option must be made
in full at the time of purchase. Payment may be made in cash or:
- by reduction of indebtedness we owe to the optionee,
- by the transfer to us of shares of our common stock owned by
the participant for at least six months valued at fair market value
on the date of transfer,
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- in the case of employees, officers and directors, by interest bearing
promissory note, or
- through a "same day sale" or "margin" commitment by an NASD member
broker-dealer.
Restricted Stock Grants
Restricted stock consists of shares which are transferred or sold to a
participant, but are subject to substantial risk of forfeiture and to
restrictions on their sale or other transfer by the participant. The
administrator determines the eligible participants to whom, and the time or
times at which, grants of restricted stock will be made, the number of shares to
be granted, the price to be paid, if any, the time within which the shares
covered by such grants will be subject to forfeiture, the time at which the
restrictions will terminate, and all other terms and conditions of the grants.
Restrictions could include, but are not limited to, performance criteria,
continuous service with us, the passage of time or other restrictions. In the
case of a 10% stockholder, restricted stock will only be issued at fair market
value.
Awards of restricted stock and other incentives under the 2000 Plan may be
made subject to the attainment of performance goals relating to one or more
business criteria within the meaning of Section 162(m) of the Code, including,
but not limited to:
- cash flow,
- cost,
- ratio of debt to equity,
- profit before tax,
- earnings before interest and taxes,
- the ratio of earnings to capital spending,
- free cash flow,
- net profit,
- net sales,
- price of our common stock,
- return on net assets, equity, or stockholders' equity,
- market share, or
- total return to stockholders.
Any performance criteria may be used to measure our performance as a whole
or the performance of any of our subsidiaries, affiliates or business units. Any
performance criteria may be adjusted to include or exclude extraordinary items.
SARs
An SAR is a right, denominated in shares, to receive an amount, payable in
shares, in cash or a combination thereof, that is equal to the excess of: (i)
the fair market value of our common stock on the date of exercise of the right
over (ii) the fair market value of our common stock on the date of grant of the
right, multiplied by the number of shares for which the right is
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exercised. SARs may be awarded either in combination with the grant of an
option or other type of award or individually.
Stock Bonus Awards
The administrator may award shares of our common stock to participants
without payment therefor, as additional compensation for service to us, our
subsidiaries or affiliates.
Performance Grants
The 2000 Plan authorizes the administrator to award performance grants.
Performance grant awards are earned over a performance period determined by the
administrator at the time of the award. There may be more than one performance
award in existence at any one time, and the performance periods may differ or
overlap. Further, performance grants can be awarded separately or in tandem with
other awards.
At the time a performance grant is awarded, the administrator will
establish minimum and maximum performance goals over the performance period. The
portion of the performance award earned by the participant will be determined by
the administrator, based on the degree to which the performance goals are
achieved. No performance grants will be earned by the participant unless the
minimum performance goals are met.
AMENDMENT OF THE 2000 PLAN
Except as may be required for compliance with Rule 16b-3 under the Exchange
Act and Section 162(m) of the Internal Revenue Code, our board of directors has
the right and power to amend the 2000 Plan; provided, however, that the board
may not amend the 2000 Plan in a manner which would impair or adversely affect
the rights of the holder of an outstanding award without such holder's consent.
If the Code or any other applicable statute, rule or regulation, including, but
not limited to, those of any securities exchange, requires stockholder approval
with respect to the 2000 Plan or any type of amendment thereto, then, to the
extent so required, stockholder approval will be obtained.
TERMINATION OF THE 2000 PLAN
Subject to earlier termination by our board of directors, the 2000 Plan
will terminate on June 11, 2010, subject to a five year extension at the
discretion of the board. Termination will not in any manner impair or adversely
affect any award outstanding at the time of termination.
ADMINISTRATOR'S RIGHT TO MODIFY BENEFITS
Any award granted may be converted, modified, forfeited, or canceled, in
whole or in part by the administrator if and to the extent permitted in the 2000
Plan, or applicable agreement entered into in connection with an award grant or
with the consent of the participant to whom such award was granted.
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CHANGE IN CONTROL
Upon the occurrence of a change in control:
- all outstanding options and SARs shall become immediately
exercisable,
- all restrictions on restricted stock shall lapse and our right to
repurchase such restricted stock shall terminate, and
- the maximum amount payable under a performance grant through
the end of the quarter in which the change in control occurs shall
become due.
A change of control will be deemed to have occurred if:
- any person acquires beneficial ownership of 20% or more of the voting
power of our then-outstanding voting securities,
- three or more directors who have not been approved by a
majority of our current board of directors (and those elected with
such current directors' approval), are elected in any single 24-month
period,
- members of our current board cease to constitute a majority
of our board without the approval of our current board (and those
elected with such current directors' approval), or
- we are a party to a merger, consolidation, liquidation,
dissolution or sale of all or substantially all of our assets, other
than a merger in which we are the surviving corporation and such
merger does not result in any other manner in a change in control.
REUSAGE
If a stock option expires or is terminated, surrendered or canceled without
having been fully exercised or if restricted stock or SARs are forfeited or
terminated without the issuance of all of the shares subject to such award, the
shares covered by such awards will again be available for use under the 2000
Plan. Shares covered by an award granted under the 2000 Plan will not be counted
as used unless and until they are actually and unconditionally issued and
delivered to a participant. The number of shares which are transferred to us by
a participant to pay the exercise or purchase price of an award will be
subtracted from the number of shares issued with respect to such award for the
purpose of counting shares used. Shares withheld to pay withholding taxes in
connection with the exercise or payment of an award will not be counted as used.
Shares covered by an award granted under the 2000 Plan which is settled in cash
will not be counted as used.
AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS
The 2000 Plan provides that, in the event options cannot be granted under
our Outside Director and Advisor Stock Option Plan, due to the non-availability
of shares under such plan, the plan's termination or otherwise, each
non-employee director shall automatically be granted:
- upon first being elected to our board of directors, a ten year option
to purchase 25,000 shares.
- on August 1st of each calendar year, a ten year option to
purchase 25,000 shares.
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The exercise price of these options will be equal to the fair market value
of our common stock on the date of grant. Each of these options will become
exercisable in three equal annual installments commencing on the date of grant.
TERMINATION OF OPTIONS
Upon the termination of an optionee's employment or other service with us,
the optionee will have three months to exercise options exercisable as of the
date of termination, except where such termination is for cause, in which event
the option will expire immediately. However, if, the termination is due to the
optionee's death or disability, then the optionee or the optionee's estate shall
have the right to exercise any vested options for twelve months after such death
or disability. The administrator, in its discretion, may delay the termination
of such an option, but only for up to the earlier of: (a) five years from such
termination or (b) the option's original expiration date.
FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A GENERAL SUMMARY, AS OF THE DATE OF THIS PROXY STATEMENT,
OF THE FEDERAL INCOME TAX CONSEQUENCES TO US AND PARTICIPANTS UNDER THE 2000
PLAN. FEDERAL TAX LAWS MAY CHANGE AND THE FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES FOR ANY SUCH PARTICIPANT WILL DEPEND UPON HIS, HER OR ITS
INDIVIDUAL CIRCUMSTANCES. EACH PARTICIPANT HAS BEEN AND IS ENCOURAGED TO SEEK
THE ADVICE OF A QUALIFIED TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF
PARTICIPATION IN THE 2000 PLAN.
ISOs
An optionee does not generally recognize taxable income upon the grant or
upon the exercise of an ISO. Upon the sale of shares received upon exercise of
an ISO, the optionee recognizes income in an amount equal to the difference, if
any, between the exercise price of the ISO shares and the fair market value of
those shares on the date of sale. The income is taxed at long-term capital gains
rates if the optionee has not disposed of the stock within two years after the
date of the grant of the ISO and has held the shares for at least one year after
the date of exercise and we will not be entitled to a federal income tax
deduction. The holding period requirements are waived when an optionee dies.
The exercise of an ISO may in some cases trigger liability for the
alternative minimum tax.
If an optionee sells ISO shares before having held them for at least one
year after the date of exercise and two years after the date of grant, the
optionee recognizes ordinary income to the extent of the lesser of: (i) the gain
realized upon the sale or (ii) the difference between the exercise price and the
fair market value of the shares on the date of exercise. Any additional gain is
treated as long-term or short-term capital gain depending upon how long the
optionee has held the ISO shares prior to disposing of them in a disqualifying
disposition. In the year of
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disposition, we will receive a federal income tax deduction in an amount
equal to the ordinary income which the optionee recognizes as a result of the
disposition.
NSOs
An optionee does not recognize taxable income upon the grant of an NSO.
Upon the exercise of an NSO, the optionee recognizes ordinary income to the
extent the fair market value of the shares received upon exercise of the NSO on
the date of exercise exceeds the exercise price. We will receive an income tax
deduction in an amount equal to the ordinary income which the optionee
recognizes upon the exercise of the stock option. If an optionee sells shares
received upon the exercise of an NSO, the optionee recognizes capital gain
income to the extent the sales proceeds exceed the fair market value of such
shares on the date of exercise.
Restricted Stock
A participant who receives an award of restricted stock does not generally
recognize taxable income at the time of the award or payment. Instead, the
participant recognizes ordinary income in the first taxable year in which his or
her interest in the shares becomes either: (i) freely transferable or (ii) no
longer subject to substantial risk of forfeiture. On the date restrictions
lapse, the participant includes in taxable income the fair market value of the
shares less the cash, if any, paid for the shares.
A participant may elect to recognize income at the time he or she receives
restricted stock in an amount equal to the fair market value of the restricted
stock (less any cash paid for the shares) on the date of the award.
We will receive a compensation expense deduction in the taxable year in
which restrictions lapse (or in the taxable year of the award if, at that time,
the participant had filed a timely election to accelerate recognition of
income).
Other Benefits
In the case of an exercise of an SAR or an award of a performance grant, or
stock bonus, the participant will generally recognize ordinary income in an
amount equal to any cash received and the fair market value of any shares
received on the date of payment or delivery. In that taxable year, we will
receive a federal income tax deduction in an amount equal to the ordinary income
which the participant has recognized.
Million Dollar Deduction Limit
We may not deduct compensation of more than $1,000,000 that is paid to an
individual who, on the last day of the taxable year, is either our chief
executive officer or is among one of the four other most highly-compensated
officers for that taxable year. The limitation on deductions does not apply to
certain types of compensation, including qualified performance-based
compensation. We believe that awards in the form of stock options, performance
stock,
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SARs and performance-based restricted stock constitute qualified
performance-based compensation and, as such, will be exempt from the $1,000,000
limitation on deductible compensation.
REGISTRATION AND EFFECT OF STOCK ISSUANCE
We intend to register under the Securities Act the shares of our common
stock issuable under the 2000 Plan. This will make such shares immediately
eligible for resale in the public market.
The issuance of shares of our common stock under the 2000 Plan will dilute
the voting power of our stockholders.
MISCELLANEOUS
A new benefits table is not provided because no grants have been made under
the 2000 Plan and all benefits, except for automatic grants to non-employee
directors, are discretionary. In addition, automatic grants to non-employee
directors will not occur unless shares are not available under our Outside
Director and Advisor Stock Option Plan. We do not anticipate such
non-availability under that plan prior to its current expiration date in
December 2005, assuming no changes to that plan nor a significant increase in
the number of our non-employee directors.
APPROVAL OF STOCKHOLDERS
In order to be adopted, the 2000 Plan must be approved by the affirmative
vote of a majority of the outstanding shares represented at the meeting and
entitled to vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Our board of directors recommends a vote FOR adoption of the Vizacom Inc.
2000 Equity Incentive Plan.
INDEPENDENT PUBLIC ACCOUNTANTS
Richard A. Eisner & Company, LLP acted as our independent auditors for the
years ended December 31, 1999 and 1998. Richard A. Eisner & Company, LLP also
has been selected to act as our independent auditors for our fiscal year ending
December 31, 2000. We anticipate that a representative of Richard A. Eisner &
Company, LLP will be present at the annual meeting. The auditors' representative
will have the opportunity to make a statement, if the auditors desire to do so,
and will be available to respond to appropriate questions from stockholders.
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FINANCIAL STATEMENTS
We have enclosed our Annual Report to Stockholders for the fiscal year
ended December 31, 1999 with this proxy statement. The annual report to
stockholders includes a copy of our Annual Report on Form 10-KSB for the year
ended December 31, 1999 which we filed with the SEC. Stockholders are referred
to the annual report for financial and other information about us, but such
annual report is not incorporated in this proxy statement and is not a part of
the proxy soliciting material.
MISCELLANEOUS INFORMATION
OTHER BUSINESS
As of the date of this proxy statement, our board of directors does not
know of any business other than specified above to come before the annual
meeting, but, if any other business does lawfully come before the annual
meeting, it is the intention of the persons named in the enclosed proxy to vote
in regard thereto in accordance with their judgment.
AVAILABILITY OF OUR FORM 10-KSB
WE WILL PROVIDE WITHOUT CHARGE TO ANY STOCKHOLDER AS OF THE RECORD DATE,
COPIES OF OUR ANNUAL REPORT ON FORM 10-KSB, UPON WRITTEN REQUEST DELIVERED TO
MARC E. JAFFE, SECRETARY, AT OUR OFFICES AT GLENPOINTE CENTER EAST, 300 FRANK W.
BURR BOULEVARD - 7TH FLOOR, TEANECK, NEW JERSEY 07666.
COST OF SOLICITING PROXIES
We will pay the cost of soliciting proxies in the accompanying form. In
addition to solicitation by use of the mails, certain of our officers and
regular employees may solicit proxies by telephone, telegraph or personal
interview. We also request brokerage houses and other custodians, and, nominees
and fiduciaries, to forward soliciting material to the beneficial owners of our
common stock held of record by such persons, and we may make reimbursement for
payments made for their expense in forwarding soliciting material to the
beneficial owners of the stock held of record by such persons.
STOCKHOLDER PROPOSALS
Stockholder proposals with respect to our next annual meeting of
stockholders must be received by us at our corporate headquarters no later than
March 1, 2001 to be considered for inclusion in our proxy statement for our 2001
Annual Meeting of Stockholders.
For any proposal that is not submitted for inclusion in our proxy statement
for our 2001 Annual Meeting of Stockholders, but is instead sought to be
presented directly at such annual meeting, SEC rules permit management to vote
proxies in management's discretion if we either:
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- receive notice of the proposal before the close of business
on May 15, 2001 and advise our stockholders in our proxy statement for
our 2001 Annual Meeting of Stockholders about the nature of the matter
and how management intends to vote on such matter, or
- do not receive notice of the proposal prior to the close of business
on May 15, 2001.
Notices of intention to present proposals at the 2001 Annual Meeting of
Stockholders should be addressed to us at our corporate headquarters.
By Order of the Board of Directors,
Marc E. Jaffe, chairman and
secretary
July 3, 2000
Teaneck, New Jersey
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Appendix A
VIZACOM INC.
2000 EQUITY INCENTIVE PLAN
ARTICLE 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
1.1. Purpose. The purposes of this 2000 Equity Incentive Plan are (a) to
enable Vizacom Inc. and its subsidiaries and affiliates to attract and
retain highly qualified personnel who will contribute to the success of
Vizacom Inc. and (b) to provide incentives to participants in this 2000
Equity Incentive Plan that are linked directly to increases in
stockholder value which will therefore inure to the benefit of all
stockholders of Vizacom Inc.
1.2. Definitions. For purposes of this Equity Incentive Plan, except as
otherwise defined, capitalized terms shall have the meanings assigned to
them in this Section 1.2.
"Administrator" means the Board or, if and to the extent the
Board elects to delegate the administration of the Plan or does not
administer the Plan, the Committee.
"Affiliate" means any entity or person that directly, or
indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, another entity, where "control"
(including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to cause
the direction of the management and policies of the entity, whether
through the ownership of voting securities, by contract or otherwise.
"Award" means any award under the Plan.
"Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the Participant
setting forth the terms and conditions of the Award.
"Board" means the Board of Directors of the Company.
"Cause" means the commission of any act of a material theft,
embezzlement or fraud involving the Company or any Parent, Subsidiary
or Affiliate of the Company, or a breach of fiduciary duty to the
Company or any Parent, Subsidiary or Affiliate of the Company.
"Change of Control" shall have the meaning assigned to such
term in Section 16.2.
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"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
"Committee" means compensation or other any committee the Board
may appoint to administer the Plan. To the extent necessary and
desirable, the Committee shall be composed entirely of individuals who
meet the qualifications referred to in Section 162(m) of the Code and
Rule 16b-3 under the Exchange Act. If at any time or to any extent the
Board shall not administer the Plan, then the functions of the Board
specified in the Plan shall be exercised by the Committee.
"Common Stock" means the common stock, par value $0.001 per
share, of the Company.
"Company" means Vizacom Inc., a Delaware corporation, or any successor
corporation.
"Disability" means the inability of a Participant to perform
substantially his or her duties and responsibilities to the Company or
to any Parent, Subsidiary or Affiliate by reason of a physical or
mental disability or infirmity for a continuous period of six months,
as determined by the Administrator. The date of such Disability shall
be the last day of such six-month period or the date on which the
Participant submits such medical evidence, satisfactory to the
Administrator, that the Participant has a physical or mental
disability or infirmity that will likely prevent the Participant from
performing the Participant's work duties for a continuous period of
six months or longer, as the case may be.
"Eligible Recipient" means an officer, director, employee, consultant
or advisor of the Company or of any Parent, Subsidiary or
Affiliate. For purposes of the Plan, the term "employee" shall include
all those individuals whose service with or for the Company and/or any
Parent, Subsidiary or Affiliate of the Company, is within the
definition of "employee" in the Rule as to the Use of Form S-8
contained in the General Instructions for the registration statement
on Form S-8 promulgated by the Securities and Exchange Commission.
"Employee Director" means any director of the Company who is
also an employee of the Company or of any Parent, Subsidiary
or Affiliate.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Exercise Price" means the per share price at which a holder
of an Award may purchase the Shares issuable upon exercise of
such Award.
"Fair Market Value" as of a particular date shall mean the
fair market value of a share of Common Stock as determined by the
Administrator; provided, however,
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that 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 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 price 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"); (iv) if the Common Stock is not listed or admitted to
trade on a national securities exchange, not listed and quoted on
Nasdaq and closing bid and asked prices are not furnished by the NASD,
the mean between the closing bid and asked price for the Common Stock
on such date, as furnished by the National Quotation Bureau ("NQB") or
similar organization; (v) 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, NQB or a similar organization, the value
established in good faith by the Administrator; and (vi) in the case
of a Limited Stock Appreciation Right, the Fair Market Value of a
share of Common Stock shall be the "Change in Control Price" (as
defined in the Award Agreement evidencing such Limited Stock
Appreciation Right) of a share of Common Stock as of the date of
exercise.
"Family Member" means, with respect to any Participant, any of the
following:
(a) such Participant's child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, including any
such person with such relationship to the Participant by
adoption;
(b) any person (other than a tenant or employee) sharing such
Participant's household;
(c) a trust in which the persons identified in clauses (a)
and (b) above have more than fifty percent of the beneficial
interest;
(d) a foundation in which the persons identified in clauses (a)
and (b) above or the Participant control the management of
assets; or
(e) any other entity in which the persons identified
in clauses (a) and (b) above or the Participant own more than
fifty percent of the voting interest.
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"Incentive Stock Option" means any Option intended to be
designated as an "incentive stock option" within the meaning
of Section 422 of the Code.
"Incumbent Board" means (i) the members of the Board of the
Company on June 12, 2000, to the extent that they continue to serve
as members of the Board, and (ii) any individual who becomes a member
of the Board after June 12, 2000, if such individual's election
or nomination for election as a director was approved by a vote
of at least three-quarters of the then Incumbent Board.
"Limited Stock Appreciation Right" means a Stock
Appreciation Right that can be exercised only in the event of a
"Change in Control" (as defined in the Award Agreement evidencing such
Limited Stock Appreciation Right).
"Non-Employee Director" means a director of the Company who
is not an employee of the Company or of any Parent, Subsidiary or
Affiliate.
"Non-Qualified Stock Option" means any Option that is not an
Incentive Stock Option, including, but not limited to, any Option that
provides (as of the time such Option is granted) that it will not
be treated as an Incentive Stock Option.
"Option" means an option to purchase Shares granted pursuant
to Article 5 or 11.
"Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, if each of
the corporations in the chain (other than the Company) owns stock
possessing 50% or more of the combined voting power of all classes of
stock in one of the other corporations in the chain.
"Participant" means (i) any Eligible Recipient selected by the
Administrator, pursuant to the Administrator's authority to
receive grants of Options, Stock Appreciation Rights, Limited Stock
Appreciation Rights, awards of Restricted Stock, Performance Shares,
other types of awards, or any combination of the foregoing, or (ii)
any Non-Employee Director who is eligible to receive grants of Options
pursuant to Article 11.
"Performance Grant" shall have the meaning assigned to the term in
Article 8.
"Performance Shares" means Shares that are subject to
restrictions based upon the attainment of specified performance
objectives granted pursuant to Article 8.
"Permitted Transfer" means, as authorized by the Plan and
the Administrator, with respect to an interest in a Non-Qualified
Stock Option, any transfer effected by the Participant during the
Participant's lifetime of an interest in such Non- Qualified Stock
Option but only such transfers which are by gift or pursuant to
domestic relations orders. A permitted transfer does not include any
transfer for value and neither transfers under a domestic relations
order in settlement of
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marital property rights or to an entity in which more than 50%
of the voting interests are owned by Family Members or the
Participant in exchange for an interest in that entity are deemed
transfers for value.
"Plan" means this 2000 Equity Incentive Plan.
"Related Employment" means the employment or performance of
services by an individual for an employer that is neither the Company,
any Parent, Subsidiary nor Affiliate, provided that (i) such
employment or performance of services is undertaken by the individual
at the request of the Company or any Parent, Subsidiary or Affiliate,
(ii) immediately prior to undertaking such employment or performance
of services, the individual was employed by or performing services for
the Company or any Parent, Subsidiary or Affiliate or was engaged in
Related Employment, and (iii) such employment or performance of
services is in the best interests of the Company and is recognized by
the Administrator, as Related Employment. The death or Disability of
an individual during a period of Related Employment 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 a Parent, Subsidiary or Affiliate.
"Restricted Stock" means Shares subject to certain
restrictions granted pursuant to Article 7.
"Restricted Period" means the period of time Restricted
Stock remains subject to restrictions imposed on the Award of
such Restricted Stock.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Shares" means shares of Common Stock reserved for issuance
under or issued pursuant to the Plan, as adjusted pursuant to
Article 4, and any successor security.
"Stock Appreciation Right" means the right pursuant to an
Award granted under Article 6 to receive an amount equal to
the excess, if any, of (i) the Fair Market Value, as of the
date such Stock Appreciation Right or portion thereof is
surrendered, of the Shares covered by such right or such portion
thereof, over (ii) the aggregate exercise price of such right or
such portion thereof as established by the Administrator at the
time of the grant of such Award (or such other exercise price
thereafter established by the Administrator with the consent
of the Participant granted such Award where required by the Plan).
"Stock Bonus" means an Award granted pursuant to Article 9.
"Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company, if
each of the corporations (other than the last corporation) in the
unbroken chain owns stock possessing 50%
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or more of the total combined voting power of all classes of stock
in one of the other corporations in the chain.
"Ten Percent Stockholder" shall have the meaning assigned to it in
Section 5.4.
"Termination" or "Terminated" means, for purposes of the
Plan with respect to a Participant, that such Participant has for any
reason ceased to provide services as an employee, officer, director,
consultant, independent contractor, or advisor to the Company or any
Parent, Subsidiary or Affiliate of the Company. A Participant will not
be deemed to have ceased to provide services in the case of (i) sick
leave, (ii) military leave, or (iii) any other leave of absence
approved by the Administrator, provided, that such leave is for a
period of not more than 90 days, unless reemployment or reinstatement
upon the expiration of such leave is guaranteed by contract or statute
or unless provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated to employees
and other participants in writing. In the case of any Participant on
an approved leave of absence, the Administrator may make such
provisions respecting suspension of vesting of any Award previously
granted to such Participant while such Participant is on leave from
the Company or any Parent, Subsidiary or Affiliate of the Company as
the Administrator may deem appropriate, except that in no event may an
Option be exercised after the expiration of the term set forth in the
Award Agreement with respect to such Option. The Administrator will
have sole discretion to determine whether a Participant has ceased to
provide services and the applicable Termination Date.
"Termination Date" means the effective date of Termination, as
determined by the Administrator.
ARTICLE 2. ADMINISTRATION.
2.1. Administration in Accordance with the Code and Exchange Act. The
Plan shall be administered in accordance with the requirements of
Section 162(m) of the Code (but only to the extent necessary and
desirable to maintain qualification of Awards under the Plan under
Section 162(m) of the Code) and, to the extent applicable, Rule 16b-3
under the Exchange Act ("Rule 16b-3"), by the Board or, at the Board's
sole discretion, by the Committee, which shall be appointed by the
Board, and which shall serve at the pleasure of the Board.
2.2. Administrator's Powers. Except for automatic grants to Non-Employee
Directors pursuant to Article 11, and subject to the general purposes,
terms and conditions of this Plan, the Administrator will have full power
to implement and carry out this Plan. Except for automatic grants to
Non-Employee Directors pursuant to Article 11, the Administrator will have
the authority to:
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(a) construe and interpret this Plan, any Award Agreement and any
other agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to
this Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration
subject to Awards;
(f) determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of, or as
alternatives to, other Awards under this Plan or any other
incentive or compensation plan of the Company or any Parent,
Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission or reconcile any
inconsistency in the Plan, any Award or any Award Agreement;
(j) to make any adjustments necessary or desirable as a result of
the granting of an Award to an Eligible Participant located outside
the United States;
(k) determine whether an Award has been earned; and
(l) make all other determinations necessary or advisable for the
administration of the Plan.
2.3. Administrator's Discretion Final. Except for automatic grants to
Non-Employee Directors pursuant to Article 11, any determination made by
the Administrator with respect to any Award will be made in its sole
discretion at the time of grant of the Award or, unless in contravention
of any express term of the Plan or Award, at any later time, and such
determination will be final and binding on the Company and on all persons
having an interest in any Award under the Plan.
2.4. Administrator's Method of Acting; Liability. The Administrator may act
only by a majority of its members then 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 Eligible Participants. No member of the Administrator and
no officer of the Company shall be liable for anything done or omitted to
be done by such member or officer, by any other member of the
Administrator or by any officer of the Company in connection with the
performance of duties under the Plan, except for such member's or
officer's own willful misconduct or as expressly provided by law.
ARTICLE 3. PARTICIPATION.
3.1. Affiliates. If a Parent, Subsidiary or Affiliate of the Company wishes
to participate in the Plan and its participation shall have been approved
by the Board, the board of directors or other governing body of the
Parent, Subsidiary or Affiliate, as the case may be, shall adopt a
resolution in form and substance satisfactory to the Administrator
authorizing
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participation by the Parent, Subsidiary or Affiliate in the Plan. A
Parent, Subsidiary or 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 Parent, Subsidiary
or 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 Parent, Subsidiary or Affiliate's board of directors or
other governing body taking such action. If the participation in the Plan
of a Parent, Subsidiary or Affiliate shall terminate, such termination
shall not relieve the Parent, Subsidiary or Affiliate of any obligations
theretofore incurred by the Parent, Subsidiary or Affiliate, except as may
be approved by the Administrator.
3.2. Participants. Incentive Stock Options may be granted only to employees
(including officers and directors who are also employees) of the Company,
or any Parent, Subsidiary or Affiliate of the Company. All other Awards
may be granted to employees, officers, directors, consultants, independent
contractors and advisors of the Company or any Parent, Subsidiary or
Affiliate of the Company; provided, that such consultants, contractors and
advisors render bona fide services to the Company or such Parent,
Subsidiary or Affiliate of the Company not in connection with the offer
and sale of securities in a capital-raising transaction. An Eligible
Participant may be granted more than one Award under the Plan.
ARTICLE 4. AWARDS UNDER THE PLAN.
4.1. 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:
(a) Options;
(b) Stock Appreciation Rights;
(c) Restricted Stock;
(d) Performance Grants;
(e) Stock Bonuses; and
(f) any other type of Award deemed by the Committee 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).
4.2. Number of Shares Available Under the Plan. Subject to Sections 4.3 and
4.5, the total number of Shares reserved and available for grant and
issuance pursuant to the Plan will be 5,000,000, plus Shares that are
subject to:
(a) issuance upon exercise of an Option previously granted
but cease to be subject to such Option for any reason other
than exercise of such Option;
(b) an Award previously granted but forfeited or repurchased by the
Company at the original issue price; and
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(c) an Award previously granted that otherwise terminates without
Shares being issued.
Shares may consist, in whole or in part, of authorized and unissued
shares or treasury shares.
The number of Shares which are transferred to the Company by a Participant
to pay the exercise or purchase price of an award will be subtracted from the
number of Shares issued with respect to such Award for the purpose of counting
Shares used under the Plan. Shares withheld to pay withholding taxes in
connection with the exercise or repayment of an Award will not be counted as
used under the Plan. In addition, shares covered by an award granted under the
Plan which is settled in cash will not be counted as used under the Plan.
4.3. Annual Increases in the Number of Shares Available Under the Plan.
Notwithstanding the terms of Section 4.2, on each January 1, commencing
with January 1, 2001, the aggregate number of Shares reserved and available
for grant and issuance pursuant to the Plan will be increased automatically
by a number of Shares equal to 5% of the total outstanding shares of the
Company as of the immediately preceding December 31st, provided that no
more than 4,000,000 shares shall be issued upon exercise of Incentive Stock
Options.
4.4. Reservation of Shares. At all times, the Company shall reserve and
keep available a sufficient number of Shares as shall be required to
satisfy the requirements of all outstanding Options granted under the Plan
and all other outstanding but unexercised Awards granted under the Plan.
4.5. Adjustment in Number of Shares Available Under the Plan. In the
event that the number of outstanding shares of Common Stock is changed
by a stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar change in
the capital structure of the Company without consideration, then (a)
the number of Shares reserved for issuance under the Plan, (b) the
number of Shares that may be granted pursuant to the Plan, (c) the
Exercise Prices of and number of Shares subject to outstanding Options
and other awards, and (d) the exercise prices of and number of Shares
subject to other outstanding Awards, will be proportionately adjusted,
subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided,
however, that, upon occurrence of such an event, fractions of a Share
will not be issued upon exercise of an Award but will, upon such
exercise, either be replaced by a cash payment equal to the Fair
Market Value of such fraction of a Share on the effective date of such
an event or will be rounded up to the nearest whole Share, as
determined by the Administrator.
4.6. Rights with Respect to Common Shares and Other Securities.
(a) Unless otherwise determined by the Administrator, a Participant
to whom an Award of Restricted Stock has been made (and
any person succeeding to such Participant's rights with respect to
such Award pursuant to the Plan) shall have,
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after issuance of a certificate or copy thereof for the number of
Shares so awarded and prior to the expiration of the Restricted Period
or the earlier repurchase of such Shares as provided in the Plan or
Award Agreement with respect to such Award of Restricted Stock,
ownership of such Shares, including the right to vote the same and to
receive dividends or other distributions made or paid with respect to
such Shares (provided that such Shares, and any new, additional or
different shares, or other securities or property of the Company,
or other forms of consideration which the participant may be entitled
to receive with respect to such 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 of the
Plan as determined by the Administrator), subject, however, to the
options, restrictions and limitations imposed thereon pursuant to the
Plan. Notwithstanding the foregoing, unless otherwise determined
by the Administrator, a Participant with whom an Award Agreement is
made to issue Shares in the future shall have no rights as a
stockholder with respect to Shares related to such Award Agreement
until a stock certificate evidencing such Shares is issued to such
Participant.
(b) Unless otherwise determined by the Administrator, 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 Participant's rights pursuant to the Plan) shall
have no rights as a stockholder with respect to any Shares or as a
holder with respect to other securities, if any, issuable pursuant to
any such Award until the date a stock certificate evidencing such
Shares or other instrument of ownership, if any, is issued to such
Participant. Except as provided in Section 4.5, 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.
ARTICLE 5. STOCK OPTIONS.
5.1. Grant; Determination of Type of Option. The Administrator may grant
one or more Options to an Eligible Participant and will determine (a)
whether each such Option will be an Incentive Stock Option or a
Non-Qualified Stock Option, (b) the number of Shares subject to each such
Option, (c) the Exercise Price of each such Option, (d) the period during
which each such Option may be exercised, and (e) all other terms and
conditions of each such Option, subject to the terms and conditions of
this Article 5. The Administrator may grant an Option either alone or in
conjunction with Stock Appreciation Rights, Performance Grants or other
Awards, either at the time of grant or by amendment thereafter.
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5.2. Form of Option Award Agreement. Each Option granted under the Plan
will be evidenced by an Award Agreement which will expressly identify the
Option as an Incentive Stock Option or a Non-Qualified Stock Option, and,
except as otherwise required by the terms of Article 11 hereof, will be
in such form and contain such provisions (which need not be the same for
each Participant or Option) as the Committee may from time to time
approve, and which will comply with and be subject to the terms and
conditions of the Plan.
5.3. Date of Grant. The date of grant of an Option will be the date on which
the Administrator makes the determination to grant such Option, unless
otherwise specified by the Administrator.
5.4. Exercise Period. Each Option shall be exercisable within the times or
upon the occurrence of one or more events determined by the Administrator
and set forth in the Award Agreement governing such Option;
provided, however, that no Option will be exercisable after the
expiration of ten years from the date the Option is granted; and provided,
further, however, that no Incentive Stock Option granted to a person
who directly or by attribution owns more than 10% of the total combined
voting power of all classes of stock of the Company or of any Parent,
Subsidiary or Affiliate of the Company (each, a "Ten Percent
Stockholder") will be exercisable after the expiration of five years
from the date such Incentive Stock Option is granted. The
Administrator also may provide for an Option to become exercisable at
one time or from time to time, periodically or otherwise, in such
number of Shares or percentage of Shares as the Administrator
determines. Unless otherwise determined by the Administrator, but
excluding Options granted pursuant to Article 11, an Option shall be
exercisable as follows:
(a) up to 25% of the number of Shares subject to such Option
commencing on the first anniversary of the date of grant of such
Option;
(b) up to an additional 25% of the number of Shares subject
to such Option commencing on the second anniversary of the date of
grant of such Option;
(c) up to an additional 25% of the number of Shares subject
to such Option commencing on the third anniversary of the date
of grant of such Option; and
(d) up to an additional 25% of the number of Shares subject
to such Option commencing on the fourth anniversary of the date of
grant of such Option.
5.5. Exercise Price. The Exercise Price of an Option will be determined by
the Administrator when the Option is granted and may be not less than 85%
of the per share Fair Market Value of the Shares subject to such Option on
the date of grant of such Option; provided, however, that: (a) the
Exercise Price of an Incentive Stock Option will be not less than 100% of
the per share Fair Market Value of such Shares on the date of such grant
and (b) the Exercise Price of any Incentive Stock Option granted to a Ten
Percent Stockholder will not be less than 110% of the per share Fair
Market Value of such Shares on the date of such grant. Payment for the
Shares purchased shall be made in accordance with Article 10 of the Plan.
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5.6. Method of Exercise. An Option may be exercised only by delivery to the
Company of an irrevocable written exercise notice (a) identifying the
Option being exercised, (b) stating the number of Shares being purchased,
(c) providing any other matters required by the Award Agreement with
respect to such Option, and (d) containing such representations and
agreements regarding Participant's investment intent and access to
information and other matters, if any, as may be required or desirable by
the Company to comply with applicable securities laws. Such exercise
notice shall be accompanied by payment in full of the Exercise Price for
the number of Shares being purchased in accordance with Article 10 and
the executed Award Agreement with respect to such Option.
5.7. Termination. Notwithstanding anything contained in Section 5.4 or in an
Award Agreement, exercise of Options shall always be subject to the
following:
(a) If the Participant is Terminated for any reason except
death or Disability, then the Participant may exercise each of such
Participant's Options (i) only to the extent that such Options would
have been exercisable on the Termination Date and (ii) no later than
three months after the Termination Date (or such longer time period
not exceeding five years as may be determined by the Administrator,
with any exercise beyond three months after the Termination Date
deemed to be an exercise of an Non-Qualified Stock Option), but in any
event, no later than the original expiration date of such Option;
(b) If the Participant is Terminated because of
Participant's death or Disability (or the Participant dies within
three months after a Termination other than for Cause or because of
Participant's Disability), then each of such Participant's Options (i)
may be exercised only to the extent that such Option would have been
exercisable by Participant on the Termination Date and (ii) must be
exercised by Participant (or Participant's legal representative or
authorized assignee) no later than twelve months after the Termination
Date (or such longer time period not exceeding five years as may be
determined by the Administrator, with any such exercise beyond (A)
three months after the Termination Date when the Termination is for
any reason other than the Participant's death or Disability or (B)
twelve months after the Termination Date when the Termination is
because of Participant's death or Disability, deemed to be an exercise
of a Non-Qualified Stock Option), but in any event no later than the
original expiration date of such Option;
(c) Notwithstanding the provisions in paragraphs 5.7(a) and
5.7(b), if a Participant is terminated for Cause, neither the
Participant, the Participant's estate nor such other person who may
then hold an Option shall be entitled to exercise such Option
whatsoever, whether or not, after the Termination Date, the
Participant may receive payment from the Company or any Parent,
Subsidiary or Affiliate of the Company for vacation pay, for services
rendered prior to the Termination Date, for services rendered for the
day on which Termination occurs, for salary in lieu of notice, for
severance or for any other benefits; provided, however, in making such
a determination, the Administrator shall give the Participant an
opportunity to present to the Administrator evidence on
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Participant's behalf that the provisions of this paragraph 5.7(c)
should not apply and, in the alternative, paragraph 5.7(a) or 5.7(b)
shall apply; provided, further, however, that, for the purpose of
this paragraph 5.7(c), Termination shall be deemed to occur on the
date when the Company dispatches notice or advice to the
Participant that such Participant is Terminated.
5.8. Limitations on Exercise. The Administrator may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an
Option, provided, that such minimum number will not prevent Participant
from exercising the Option for the full number of Shares for which the
Option is then exercisable.
5.9. Limitations on Incentive Stock Options. The aggregate Fair Market
Value (as determined as of the date of grant) of Shares with respect to
which an Incentive Stock Option are exercisable for the first time by a
Participant during any calendar year (under the Plan or under any other
incentive stock option plan of the Company, and any Parent, Subsidiary
and Affiliate of the Company) will not exceed $100,000. If the Fair
Market Value of Shares on the date of grant with respect to which
Incentive Stock Option(s) are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Option(s)
for the first $100,000 worth of Shares to become exercisable in such
calendar year will be deemed Incentive Stock Option(s) and the Option(s)
that become exercisable in such calendar year for the number of Shares
which have a Fair Market Value in excess of $100,000 will be deemed to
be Non-Qualified Stock Option(s). In the event that the Code or the
regulations promulgated thereunder are amended after the effective
date of the Plan to provide for a different limit on the Fair Market
Value of Shares permitted to be subject to Incentive Stock Options,
such different limit will be automatically incorporated herein and
will apply to any Options granted after the effective date of such
amendment.
5.10. Modification, Extension or Renewal. The Administrator may
modify, extend or renew any outstanding Option and authorize the grant
of one or more new Options in substitution therefor; provided that any
such action may not, without the written consent of a Participant,
impair any of such Participant's rights under any Option previously
granted. Any outstanding Incentive Stock Option that is modified,
extended, renewed or otherwise altered will be treated in accordance
with Section 424(h) and other applicable provisions of the Code. The
Administrator may reduce the Exercise Price of any outstanding Option
of a Participant without the consent of the Participant affected by
delivering a written notice to the Participant; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise
Price that would be permitted under Section 5.5 for Options granted on
the date the action is taken to reduce such Exercise Price.
5.11. No Disqualification. Notwithstanding any other provision in the
Plan, no term of the Plan relating to an Incentive Stock Option will
be interpreted, amended or altered, nor will any discretion or
authority granted under the Plan be exercised, so as to disqualify the
Plan
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under Section 422 of the Code or, without the consent of the
Participant affected, to disqualify any Incentive Stock Option under
Section 422 of the Code.
5.12. Prohibition Against Transfer. No Option may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by
will or the laws of descent and distribution or pursuant to a domestic
relations order, and a Participant's Option shall be exercisable
during such Participant's lifetime only by such Participant or such
person receiving such Option pursuant to a domestic relations order.
ARTICLE 6. STOCK APPRECIATION RIGHTS.
6.1 Grant of Stock Appreciation Rights.
(a) The Administrator may grant Stock Appreciation Rights
either alone, or in conjunction with the grant of an Option,
Performance Grant or other Award, 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
Administrator 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 Shares
issuable upon exercise thereof, as the Administrator shall establish.
(b) The Administrator shall determine the number of Shares
to be subject to each Award of Stock Appreciation Rights. The number
of 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 Administrator, to the extent that Shares under such
Award of Stock Appreciation Rights are used to calculate the cash,
Shares, or other securities or property of the Company, 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.
6.2. Prohibition Against Transfer. No Award of Stock Appreciation Rights
may be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of the descent and distribution or
pursuant to a domestic relations order, and Stock Appreciation Rights
Awarded to a Participant shall be exercisable during such Participant's
lifetime only by such Participant or such person receiving such Option
pursuant to a domestic relations order. Unless the Administrator
determines otherwise, the Award of Stock Appreciation Rights to a
Participant shall not be exercisable for at least six months after the
date of grant, unless such Participant is Terminated before the
expiration of such six-month period by reason of such Participant's
Disability or death.
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6.3. Exercise. The Award of Stock Appreciation Rights shall not be
exercisable:
(a) 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 such
Incentive Stock Option is granted, and, in the case of any other
Award of Stock Appreciation Rights, after the expiration of ten years
from the date of such Award. Any Award of Stock Appreciation Rights
may be exercised during such period only at such time or times and
in such installments as the Administrator may establish;
(b) unless the Option or other Award to which the Award of Stock
Appreciation Rights is attached is at the time exercisable; and
(c) unless the Participant 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 any Parent, Subsidiary or Affiliate of the Company, except that
(i) in the case of any Award of Stock Appreciation
Rights (other than those attached to an Incentive Stock
Option), if such Participant is Terminated solely by reason
of a period of Related Employment, the Participant may, during
such period of Related Employment, exercise the Award of Stock
Appreciation Rights as if such Participant had not been
Terminated;
(ii) if such Participant is Terminated by reason
of such Participant's Disability or early, normal or
deferred retirement under an approved retirement program of
the Company or any Parent, Subsidiary or Affiliate of the Company
(or such other plan or arrangement as may be approved by
the Administrator for this purpose) while holding an Award of
Stock Appreciation Rights which has not expired and has not been
fully exercised, such Participant may, at any time within
three years (or such other period determined by the
Administrator) after the Termination Date (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 such Participant could have exercised
the Award of Stock Appreciation Rights on the Termination Date,
or with respect to such greater number of Shares as determined
by the Administrator;
(iii) if such Participant is Terminated for reasons
other than Related Employment, Disability, early, normal
or deferred retirement or death 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 Administrator approves (but in no event after the Award of
Stock Appreciation Rights expires) following such Participant's
Termination Date with respect to any Shares as to which such
Participant could have exercised the Award of Stock Appreciation
Rights on such Participant's Termination Date or as otherwise
permitted by the Administrator; or
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(iv) if any Participant 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, such Participant's executors,
administrators, heirs or distributees, as the case may be, may,
at any time within one year (or such other period determined by
the Administrator) 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 Participant could have exercised the Award
of Stock Appreciation Rights at the time of such death, or with
respect to such greater number of Shares as may be determined by
the Administrator.
6.4. Exercise.
(a) An Award of Stock Appreciation Rights shall entitle the
Participant (or any person entitled to act under the provisions of
clause (iv) of Paragraph 6.3(c) to either (i) exercise such Award and
receive payment in accordance with such Award or (ii) 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
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 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 Administrator shall
be entitled to elect to settle the obligation arising out of the
exercise of Stock Appreciation Rights by the payment of cash or other
securities or property of the Company, or other forms of payment, or
any combination thereof, as determined by the Administrator, equal to
the aggregate value of the Shares the Company would otherwise be
obligated to deliver. Any such election by the Administrator shall be
made as soon as practicable after the receipt by the Company of
written notice of the exercise of such Stock Appreciation Rights. The
value of a Share, other securities or property of the Company, or
other forms of payment determined by the Administrator for this
purpose shall be the Fair Market Value of a Share on the last business
day next preceding the date of the election to exercise such Stock
Appreciation Rights, unless the Administrator determines otherwise and
is set forth in the Award Agreement with respect to such Stock
Appreciation Rights.
(b) An Award of Stock Appreciation Rights may provide that
such Stock Appreciation Rights shall be deemed to have been exercised
at the close of business on the business day preceding the expiration
date of such Stock Appreciation Rights or of the related Option (or
other Award), or such other date as specified by the Administrator, if
at such time such Stock Appreciation Rights has a positive value. Such
deemed exercise shall be settled or paid in the same manner as a
regular exercise thereof as provided in Paragraph 6.4(a).
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6.5. Fractional Shares. No fractional shares may be delivered under this
Article 6, but, in lieu thereof, a cash or other adjustment shall be made
as determined by the Administrator.
ARTICLE 7. RESTRICTED STOCK.
7.1. Grant. An Award of Restricted Stock is an offer by the Company to sell
to an Eligible Participant Shares that are subject to restrictions. The
Administrator will determine to whom an offer will be made, the number of
Shares the person may purchase, the Exercise Price to be paid, the
restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the provisions of
this Article 7.
7.2 Form of Restricted Stock Award. All purchases under an Award of
Restricted Stock will be evidenced by an Award Agreement that will be in
such form (which need not be the same for each Award of Restricted Stock
or Participant) as the Administrator will from time to time approve, and
will comply with and be subject to the terms and conditions of the Plan.
The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Award Agreement evidencing the offer to
purchase the Restricted Stock and full payment for the Shares to the
Company within 30 days from the date such Award Agreement is tendered
to such Eligible Participant. If such Eligible Participant does not
execute and deliver such Award Agreement along with full payment for
the Shares to the Company within such 30 day period, then such offer
will terminate, unless otherwise determined by the Administrator.
7.3. Purchase Price. The Exercise Price of Shares sold pursuant to an Award
of Restricted Stock will be determined by the Administrator on the date
such Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Exercise Price will be 100% of the per
share Fair Market Value on the date such Award is granted of the Shares
subject to the Award. Payment of the Exercise Price may be made in
accordance with Article 10 of the Plan.
7.4. Terms of Restricted Stock Awards. Each Award of Restricted Stock shall
be subject to such restrictions as the Administrator may impose. These
restrictions may be based upon completion of a specified number of years
of service with the Company or upon completion of the performance goals as
set out in advance in the Participant's individual Award Agreement.
Awards of Restricted Stock may vary from Participant to Participant
and between groups of Participants. Prior to the grant of an Award of
Restricted Stock, the Administrator shall:
(a) determine the nature, length and starting date of any performance
period for the Restricted Stock Award;
(b) select from among the performance factors to be used to measure
performance goals, if any; and
(c) determine the number of Shares that may be awarded to the
Participant.
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Prior to the payment of any Restricted Stock pursuant to an Award,
the Administrator shall determine the extent to which such Restricted
Stock Award has been earned. Performance periods may overlap and
Participants may participate simultaneously with respect to Restricted
Stock Awards that are subject to different performance periods and having
different performance goals and other criteria.
7.5. Termination During Performance Period. If a Participant is Terminated
during a performance period with respect to any Award of Restricted Stock
for any reason, then such Participant will be entitled to payment (whether
in Shares, cash or otherwise) with respect to the Restricted Stock Award
only to the extent earned as of the date of Termination in accordance with
the Award Agreement with respect to such Restricted Stock, unless the
Administrator determines otherwise.
ARTICLE 8. PERFORMANCE GRANTS.
8.1. Award. The Award of a Performance Grant ("Performance Grant") to a
Participant will entitle such Participant to receive a specified amount
(the "Performance Grant Actual Value") as determined by the Administrator;
provided that the terms and conditions specified in the Plan and in the
Award of such Performance Grant are satisfied. Each Award of a Performance
Grant shall be subject to the terms and conditions set forth in this
Article 8 and such other terms and conditions, including, but not limited
to, restrictions upon any cash, Shares, other securities or property of
the Company, or other forms of payment, or any combination thereof, issued
in respect of the Performance Grant, as the Administrator shall establish,
shall be embodied in an Award Agreement in such form and substance as is
approved by the Administrator.
8.2. Terms. The Administrator shall determine the value or range of values
of a Performance Grant to be awarded to each Participant selected for an
Award of a Performance Grant and whether or not such Performance Grant is
granted in conjunction with an Award of Options, Stock Appreciation
Rights, Restricted Stock or other type of Award, or any combination
thereof, under the Plan (which may include, but need not be limited to,
deferred Awards) concurrently or subsequently granted to such Participant
(the "Associated Award"). As determined by the Administrator, the maximum
value of each Performance Grant (the "Maximum Value") shall be:
(a) an amount fixed by the Administrator at the time the award is
made or amended thereafter;
(b) an amount which varies from time to time based in whole
or in part on the then current Fair Market Value of a Share, other
securities or property of the Company, or other securities or
property, or any combination thereof; or
(c) an amount that is determinable from criteria specified by the
Administrator.
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
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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
Administrator.
8.3. Award Period. The award period ("Performance Grant Award Period") in
respect of any Performance Grant shall be a period determined by the
Administrator. At the time each Performance Grant is made, the
Administrator shall establish performance objectives to be attained within
the Performance Grant Award Period as the means of determining the
Performance Grant Actual Value of such 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 Subsidiary, Parent or Affiliate of
the Company, or one or more of divisions or units thereof, or any
combination of the foregoing, as the Administrator shall determine, and
may be applied on an absolute basis or be relative to industry or other
indices, or any combination thereof. Each Performance Grant Actual Value
of a Performance Grant shall be equal to the Performance Grant Maximum
Value of such Performance grant only if the performance objectives are
attained in full, but the Administrator shall specify the manner in
which the Performance Grant Actual Value shall be determined if the
performance objectives are met in part. Such performance measures, the
Performance Grant Actual Value or the Performance Grant Maximum Value,
or any ombination thereof, may be adjusted in any manner by the
Administrator at any time and from time to time during or as soon as
practicable after the Performance Grant Award Period, if it determines
that such performance measures, the Performance grant Actual Value or
the Performance Grant Maximum Value, or any combination thereof, are
not appropriate under the circumstances.
8.4. Termination. The rights of a Participant in Performance Grants awarded
to such Participant shall be provisional and may be canceled or paid in
whole or in part, all as determined by the Administrator, if such
Participant's continuous employment or performance of services for the
Company, any Parent, Subsidiary and Affiliate of the Company shall
terminate for any reason prior to the end of the Performance Grant Award
Period, except solely by reason of a period of Related Employment.
8.5. Determination of Performance Grant Actual Values. The Committee shall
determine whether the conditions of Paragraphs 8.2 or 8.3 have been met
and, if so, shall ascertain the Performance Grant Actual Value of
Performance Grants. If a Performance Grant has no Performance Grant Actual
Value, the Award of such Performance Grant 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 such Associated Award's terms. If a
Performance Grant has a Performance Grant Actual Value and:
(a) was not awarded in conjunction with an Associated Award,
the Administrator shall cause an amount equal to the Performance
Grant Actual Value of such Performance Grant to be paid to the
Participant or the Participant's beneficiary as provided below; or
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(b) was awarded in conjunction with an Associated Award, the
Administrator shall determine, in accordance with criteria specified
by the Administrator, whether to (i) to cancel such Performance
Grant, in which event no amount in respect thereof shall be
paid to the Participant or the Participant's beneficiary, and the
Associated Award may be permitted to continue in effect in
accordance with the Associated Award's terms, (ii) pay the
Performance Grant Actual Value to the Participant or the Participant's
beneficiary as provided below, in which event such Associated Award
may be canceled, or (iii) pay to the Participant or the
Participant's beneficiary as provided below, the Performance Grant
Actual Value of only a portion of such Performance Grant, in
which case 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 Administrator.
Such determination by the Administrator shall be made as promptly as
practicable following the end of the Performance Grant Award Period or upon
the earlier termination of employment or performance of services, or at
such other time or times as the Administrator shall determine, and shall be
made pursuant to criteria specified by the Administrator.
8.6. Payment. Payment of any amount in respect of the Performance Grants
which the Administrator determines to pay as provided in this Article 8
shall be made by the Company as promptly as practicable after the end of
the Performance Grant Award Period or at such other time or times as the
Administrator shall determine, and may be made in cash, Shares, other
securities or property of the Company, or other forms of payment, or any
combination thereof or in such other manner, as determined by the
Administrator. Notwithstanding anything in this Article 8 to the contrary,
the Administrator may determine and pay out a Performance Grant Actual
Value of a Performance Grant at any time during the Performance Grant Award
Period.
ARTICLE 9. STOCK BONUSES.
9.1. Awards of Stock Bonuses. A Stock Bonus is an Award of Shares (which
may consist of Restricted Stock) for services rendered to the Company or
any Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may be
awarded for past services already rendered to the Company, or any Parent,
Subsidiary or Affiliate of the Company pursuant to an Award Agreement (the
"Stock Bonus Agreement") that will be in such form (which need not be the
same for each Participant) as the Administrator will from time to time
approve, and will comply with and be subject to the terms and conditions of
the Plan. A Stock Bonus may be awarded upon satisfaction of such
performance goals as are set out in advance in the Participant's individual
Award Agreement that will be in such form (which need not be the same for
each Participant) as the Administrator will from time to time approve, and
will comply with and be subject to the terms and conditions of the Plan.
Stock Bonuses may vary from Participant to Participant and between groups
of Participants, and may be based upon the achievement of the Company, any
Parent,
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Subsidiary or Affiliate of the Company and/or individual
performance factors or upon such other criteria as the Administrator may
determine.
9.2 Terms of Stock Bonuses. The Administrator will determine the number of
Shares to be awarded to the Participant. If the Stock Bonus is being earned
upon the satisfaction of performance goals set forth in an Award Agreement,
then the Administrator will:
(a) determine the nature, length and starting date of any performance
period for each Stock Bonus;
(b) select from among the performance factors to be used to measure
the performance, if any; and
(c) determine the number of Shares that may be awarded to the
Participant. Prior to the payment of any Stock Bonus, the
Administrator shall determine the extent to which such Stock Bonuses
have been earned. Performance periods may overlap and Participants
may participate simultaneously with respect to Stock Bonuses
that are subject to different performance periods and different
performance goals and other criteria. The number of Shares may be
fixed or may vary in accordance with such performance goals and
criteria as may be determined by the Administrator. The
Administrator may adjust the performance goals applicable to the
Stock Bonuses to take into account changes in law and accounting or
tax rules and to make such adjustments as the Administrator deems
necessary or appropriate to reflect the impact of extraordinary or
unusual items, events or circumstances to avoid windfalls or
hardships.
9.3. Form of Payment. The earned portion of a Stock Bonus may be paid
currently or on a deferred basis with such interest or dividend
equivalent, if any, as the Administrator may determine. Payment may be
made in the form of cash or whole Shares or a combination thereof,
either in a lump sum payment or in installments, all as the Administrator
will determine.
ARTICLE 10. PAYMENT FOR SHARE PURCHASES.
10.1. Payment. Payment for Shares purchased pursuant to this Plan may be made
in cash (by check) or, where expressly approved for the Participant by
the Administrator and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of Shares that either (i) have been owned by the
Participant for more than six months and have been paid for within the
meaning of Rule 144 promulgated under the Securities Act (and, if
such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares) or
(ii) were obtained by Participant in the public market;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Administrator and bearing interest at
a rate sufficient to avoid imputation of income under Sections 483 and
1274 of the Code; provided, however, that Participants who are not
employees or directors of the Company
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will not be entitled to purchase Shares with a promissory note unless
the note is adequately secured by collateral other than the Shares;
(d) by waiver of compensation due or accrued to the Participant for
services rendered;
(e) with respect only to purchases upon exercise of an
Option, and provided that a public market for the Company's stock
exists, (i) through a "same day sale" commitment from the Participant
and a broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD Dealer") whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased to pay for the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company, or (ii) through a "margin"
commitment from the Participant and an NASD Dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise
Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the Company; or
(f) by any combination of the foregoing.
10.2. Loan Guarantees. The Company, in its sole discretion, may assist a
Participant in paying for Shares purchased under the Plan by
authorizing a guarantee by the Company of a third-party loan to the
Participant.
ARTICLE 11. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS.
11.1. Types of Options and Shares. Each Option granted under this Plan
pursuant to this Article 11 shall be a Non-Qualified Stock Option.
11.2. Eligibility. Options subject to this Article 11 shall be granted
only to Non-Employee Directors and only when the Non-Employee
Directors do not receive a grant under the Company's Outside Director
and Advisor Stock Option Plan due to the unavailability of shares
subject to or the termination of such plan.
11.3. Initial Grant. Subject to Section 11.2, each Non-Employee
Director who first becomes a member of the Board on or after the
effective date of the Plan, will automatically be granted an Option
for 25,000 Shares on the date such Non-Employee Director first becomes
a member of the Board.
11.4. Succeeding Grant. Subject to Section 11.2, on August 1st of each
calendar year, each Non-Employee Director will automatically be granted
an Option for 25,000 Shares, provided the Non-Employee Director is a
member of the Board on such date.
11.5. Exercise Price. The Exercise Price of an Option granted pursuant to
this Article 11 shall be the Fair Market Value of a Share on the date
that the Option is deemed granted.
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11.6. Exercisability of Options. Each option granted pursuant to this Article
11 shall be exercisable as follows:
(a) up to 33-1/3% of the number of Shares subject to such Option
commencing immediately upon the grant of such Option;
(b) up to an additional 33-1/3% of the number of Shares
subject to such Option commencing on the first anniversary of the date
of grant of such Option; and
(c) up to an additional 33-1/3% of the number of Shares
subject to such Option commencing on the second anniversary of the
date of grant of such Option.
11.7. Method of Exercise. An Option granted pursuant to this Article 11
may be exercised only by delivery to the Company of an irrevocable
written exercise notice (a) identifying the Option being exercised,
(b) stating the number of Shares being purchased, (c) providing any
other matters required by the Award Agreement with respect to such
Option, and (d) containing such representations and agreements
regarding Participant's investment intent and access to information
and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws. Such exercise
notice shall be accompanied by payment in full of the Exercise Price
for the number of Shares being purchased and the executed Award
Agreement with respect to such Option.
11.8. Termination. Notwithstanding anything contained in Section 11.7 or in
an Award Agreement, exercise of Options granted pursuant to this Article
11 shall always be subject to the following:
(a) If the Participant is Terminated for any reason except
death or Disability, then the Participant may exercise each of such
Participant's Options (i) only to the extent that such Options would
have been exercisable on the Termination Date and (ii) no later than
three months after the Termination Date (or such longer time period
not exceeding five years as may be determined by the Administrator,
with any exercise beyond three months after the Termination Date
deemed to be an exercise of an Non-Qualified Stock Option), but in any
event, no later than the original expiration date of such Option;
(b) If the Participant is Terminated because of
Participant's death or Disability (or the Participant dies within
three months after a Termination other than for Cause or because of
Participant's Disability), then each of such Participant's Options may
be exercised only to the extent that such Option would have been
exercisable by Participant on the Termination Date and must be
exercised by Participant (or Participant's legal representative or
authorized assignee) no later than twelve months after the Termination
Date (or such longer time period not exceeding five years as may be
determined by the Administrator, but in any event no later than the
original expiration date of such Option;
(c) Notwithstanding the provisions in paragraphs 11.8(a) and
11.8(b), if a Participant is Terminated for Cause, neither the
Participant, the Participant's estate nor such other person who may
then hold the Option shall be entitled to exercise
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any Option with respect to any Shares whatsoever, after termination
of service, whether or not, after termination of service, the
Participant may receive payment from the Company or any Parent,
Subsidiary or Affiliate of the Company for services rendered prior
to termination, for services rendered for the day on which
termination occurs, or for any other benefits; provided, however,
in making such a determination, the Administrator shall give the
Participant an opportunity to present to the Administrator evidence
on Participant's behalf that the provisions of this paragraph
11.8(c) should not apply and, in the alternative, paragraph 11.8(a)
or 11.8(b) shall apply; provided, further, however, that, for the
purpose of this paragraph 11.8(c), termination of service shall be
deemed to occur on the date when the Company dispatches notice or
advice to the Participant that such Participant's service is
terminated.
11.9. Limitations on Exercise. The Administrator may specify a
reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided, that such minimum number will not
prevent Participant from exercising the Option for the full number of
Shares for which the Option is then exercisable.
11.10. Prohibition Against Transfer. No Option may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except
by will or the laws of descent and distribution or pursuant to a domestic
relations order, and a Participant's Option shall be exercisable
during such Participant's lifetime only by such Participant or such
person receiving the Option pursuant to a domestic relations order.
ARTICLE 12. DEFERRAL OF COMPENSATION.
12.1. Deferral Terms. The Administrator shall determine whether or not an
Award to a Participant shall be made in conjunction with deferral of such
Participant's salary, bonus or other compensation, or any combination
thereof, and whether or not such deferred amounts may be:
(a) 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, any Parent,
Subsidiary and Affiliate);
(b) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures; and/or
(c) 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 such Award, if any.
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ARTICLE 13. DEFERRED PAYMENT OF AWARDS.
13.1. Deferral Terms. The Administrator may specify that the payment
of all or any portion of cash, Shares, other securities or property of
the Company, 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 Administrator shall determine. 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, 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 Administrator.
ARTICLE 14. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN.
14.1. Amendments and Substitutions. The terms of any outstanding Award
under the Plan may be amended from time to time by the Administrator
in any manner that the Administrator deems appropriate (including, but
not limited to, acceleration of the date of exercise of any Award
and/or payments thereunder, or reduction of the Exercise Price of an
Award); provided, however, that no such amendment shall adversely
affect in a material manner any right of a Participant under such
Award without the Participant's written consent. The Administrator may
permit or require holders of Awards to surrender outstanding Awards as
a condition precedent to the grant of new Awards under the Plan.
ARTICLE 15. DESIGNATION OF BENEFICIARY BY PARTICIPANT.
15.1. Designation. A Participant may designate one or more
beneficiaries to receive any rights and payments to which such
Participant may be entitled in respect of any Award in the event of
such Participant's death. Such designation shall be on a written form
acceptable to and filed with the Administrator. The Administrator
shall have the right to review and approve beneficiary designations. A
Participant may change the Participant's beneficiary(ies) from time to
time in the same manner as the original designation, 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 Administrator. If no
designated beneficiary survives the Participant and is living on the
date on which any right or amount becomes payable to such
Participant's beneficiary(ies), 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
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under the Plan, the Administrator 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 Administrator, the Board
and the Committee and the members thereof will have no further liability
to any person or entity with respect to such amount.
ARTICLE 16. CHANGE IN CONTROL.
16.1. Effect of a Change in Control. Upon any Change in Control:
(a) each Stock Option and Stock Appreciation Right that is
outstanding on the date of such Change in Control shall be exercisable
in full immediately;
(b) 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
(c) all Performance Grant 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 Performance
Grant payable shall be the portion of the maximum possible Performance
Grant allocable to the portion of the Performance Grant Award Period
that had elapsed and the results achieved during such portion of the
Performance Grant Award Period.
16.2. Change of Control. For this purpose, a Change in Control shall be
deemed to occur when and only when any of the following events first
occurs:
(a) any person who is not currently such becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding voting securities;
(b) three or more directors, whose election or
nomination for election is not approved by a majority of the Incumbent
Board, are elected within any single 24-month period to serve on
the Board;
(c) members of the Incumbent Board cease to constitute a majority of
the Board without the approval of the remaining members of the
Incumbent Board; or
(d) any merger (other than a merger where the Company is the
survivor and there is no accompanying Change in Control under
clauses (a), (b) or (c) of this Section 16.2), 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 clause (a) of this Section 16.2 solely because 20%
or more of the combined voting power of the Company's outstanding
securities is acquired by one or more
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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 Article 16, 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.
ARTICLE 17. PLAN AMENDMENT OR SUSPENSION.
17.1. 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
Sections 162 and 422 of the Code, Rule 16b-3 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.
ARTICLE 18. PLAN TERMINATION.
18.1. Method of Plan Termination. The 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) June 11, 2010; 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.
18.2. Effect of Termination on Outstanding Awards. No termination of
the Plan shall materially alter or impair any of the rights or
obligations of any person, without such person's consent, under any
Award theretofore granted under the Plan, except that subsequent to
termination of the Plan, the Administrator may make amendments
permitted under Article 14.
ARTICLE 19. STOCKHOLDER ADOPTION.
19.1. Stockholder Approval. 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 June 10, 2001.
19.2. Effectiveness of Plan Prior to Stockholder Approval. The Plan
shall not be effective and no Award shall be made hereunder unless and
until the Plan has been approved by the stockholders of the Company as
provided in Section 19.1. The stockholders shall be deemed to have
approved and adopted the Plan only if it is approved at a meeting of
the
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stockholders duly held by vote taken in the manner required by the
laws of the State of Delaware and the applicable federal securities
laws.
ARTICLE 20. TRANSFERABILITY.
20.1. Transferability. Except as may be approved by the Administrator
where such approval shall not adversely affect compliance of the Plan
with Sections 162 and 422 of the Code and/or Rule 16b-3, 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 or pursuant to a domestic relations order and
shall be exercisable during the Participant's lifetime only by such
Participant or such person receiving such option pursuant to a
domestic relations order.
ARTICLE 21. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
21.1. Voting and Dividends. No Participant will have any of the rights
of a stockholder with respect to any Shares subject to or issued
pursuant to the Plan until such Shares are issued to the Participant.
After Shares are issued to the Participant, the Participant will be a
stockholder and have all the rights of a stockholder with respect to
such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares;
provided, however, that if such Shares are Restricted Stock, then any
new, additional or different securities the Participant may become
entitled to receive with respect to such Shares by virtue of a stock
dividend, stock split or any other change in the corporate or capital
structure of the Company will be subject to the same restrictions as
the Restricted Stock; provided, further, that the Participant will
have no right to retain such stock dividends or stock distributions
with respect to Restricted Stock that is repurchased at the
Participant's Exercise Price in accordance with an Award Agreement
with respect to such Restricted Stock.
21.2. Financial Statements. The Company will provide financial
statements to each Participant prior to such Participant's purchase of
Shares under the Plan, and to each Participant annually during the
period such Participant has Awards outstanding; provided, however, the
Company will not be required to provide such financial statements to
Participants whose services in connection with the Company assure them
access to equivalent information.
21.3. Restrictions on Shares. At the discretion of the Administrator,
the Company may reserve to itself and/or its assignee(s) in the Award
Agreement a right to repurchase a portion of or all Shares issued
pursuant to such Award Agreement and held by a Participant
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following such Participant's Termination at any time within 90 days
after the later of Participant's Termination Date or the date
Participant purchases Shares under the Plan, for cash and/or
cancellation of purchase money indebtedness, at the Participant's
Exercise Price or such other price as the Administrator may determine at
the time of the grant of the Award.
ARTICLE 22. CERTIFICATES.
22.1. Legal Restrictions; Stock Legends. All Shares or other
securities delivered under this Plan will be subject to such stock
transfer orders, legends and other restrictions as the Administrator
may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules,
regulations and other requirements promulgated under such laws or any
stock exchange or automated quotation system upon which the Shares may
be listed or quoted and each stock certificate evidencing such Shares
and other certificates shall be appropriately legended.
ARTICLE 23. ESCROW; PLEDGE OF SHARES.
23.1 Deposit of Shares; Escrow. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to
deposit all stock certificates evidencing Shares, together with stock
powers or other instruments of transfer approved by the Administrator,
appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Administrator may cause a legend
or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory
note as partial or full consideration for the purchase of Shares under
the Plan will be required to pledge and deposit with the Company
all or part of the Shares so purchased as collateral to secure the
payment of Participant's obligation to the Company under the promissory
note; provided, however, that the Administrator may require or accept
other or additional forms of collateral to secure the payment of
such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note
notwithstanding any pledge of the Participant's Shares or other
collateral. In connection with any pledge of the Shares, Participant
will be required to execute and deliver a written pledge agreement in
such form as the Administrator will from time to time approve. The
Shares purchased with the promissory note may be released from the
pledge on a pro rata basis as the promissory note is paid.
ARTICLE 24. EXCHANGE AND BUYOUT OF AWARDS.
24.1. Exchange. The Administrator may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants,
to issue new Awards in exchange for the surrender and cancellation of
any or all outstanding Awards.
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24.2 Buyout of Awards. The Administrator may, at any time or from time to
time, authorize the Company to buy from a Participant an Award
previously granted with payment in cash, Shares (including Restricted
Stock) or other consideration, based on such terms and conditions as
the Administrator and the Participant may agree.
ARTICLE 25. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
25.1. Compliance with Applicable Laws. An Award will not be effective
unless such Award is made in compliance with all applicable federal
and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted,
as they are in effect on the date of grant of the Award and also on
the date of exercise or other issuance. Notwithstanding any other
provision in this Plan, the Company will have no obligation to issue
or deliver stock certificates for Shares under this Plan prior to:
(a) obtaining any approvals from governmental agencies that the
Administrator determines are necessary or advisable; and/or
(b) completion of any registration or other qualification of
such Shares under any state or federal law or ruling of any
governmental body that the Administrator determines to be necessary or
advisable.
25.2. No Obligation to Register Shares or Awards. The Company will be
under no obligation to register the Shares under the Securities Act or
to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated
quotation system, and the Company will have no liability for any
inability or failure to do so.
ARTICLE 26. NO OBLIGATION TO EMPLOY.
26.1. No Right to Employment or Continuation of Relationship. Nothing
in this Plan or any Award granted under the Plan will confer or be
deemed to confer on any Participant any right to continue in the
employ of, or to continue any other relationship with, the Company or
any Parent, Subsidiary or Affiliate of the Company or limit in any way
the right of the Company or any Parent, Subsidiary or Affiliate of the
Company to terminate Participant's employment or other relationship at
any time, with or without cause.
ARTICLE 27. NONEXCLUSIVITY OF THE PLAN.
27.1. Neither the adoption of the Plan by the Board, the submission of
the Plan to the stockholders of the Company for approval, nor any
provision of this Plan will be construed as creating any limitations
on the power of the Board or the Committee to adopt such additional
compensation arrangements as the Board may deem desirable, including,
without limitation, the granting of stock options and bonuses
otherwise than
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under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
ARTICLE 28. MISCELLANEOUS PROVISIONS.
28.1. No Rights Unless Specifically Granted. No employee or other
person shall have any claim or right to be granted an Award under the
Plan under any contract, agreement or otherwise. Determinations made
by the Administrator under the Plan need not be uniform and may be
made selectively among Eligible Participants under the Plan, whether
or not such Eligible Participants are similarly situated.
28.2. No Rights Until Written Evidence Delivered. No Participant or
other person shall have any right with respect to the Plan, the Shares
reserved for issuance under the Plan or in any Award, contingent or
otherwise, until written evidence of the Award, in the form of an
Award Agreement, 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 such recipient) have been met.
28.3 Compliance with Applicable Law. No 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.
28.4 Compliance with Rule 16b-3. 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 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.
28.5. Right to Withhold Payments. The Company and any Parent,
Subsidiary and Affiliate of the Company 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 Shares, other securities or property of the
Company, 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 Shares, other securities or property of
the Company, other securities or property, or other forms of payment,
or any combination thereof. Notwithstanding anything in the Plan to
the contrary, the Administrator may permit an Eligible Participant
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<PAGE>
(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 Administrator 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, Shares, other securities or property of the Company,
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.
28.6. Expenses of Administration. 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 a Parent, Subsidiary or Affiliate of the Company:
(a) if such Award results in payment of cash to the
Participant, such Parent, Subsidiary or Affiliate shall pay to the
Company an amount equal to such cash payment unless the Administrator
shall otherwise determine;
(b) if the Award results in the issuance by the Company to the
Participant of Shares, other securities or property of the
Company, other securities or property, or other forms of payment, or
any combination thereof, such Parent, Subsidiary or Affiliate of the
Company shall, unless the Administrator shall otherwise determine, pay
to the Company an amount equal to the fair market value thereof, as
determined by the Administrator, on the date such Shares, other
securities or property of the Company, 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 Shares, other
securities or property of the Company, 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 such applicable restrictions),
minus the amount, if any, received by the Company in respect of the
purchase of such Shares, other securities or property of the Company,
other securities or property or other forms of payment, or any
combination thereof, all as the Administrator shall determine; and
(c) the foregoing obligations of any such Parent,
Subsidiary or Affiliate of the Company shall survive and remain in
effect and binding on such entity even if its status as a Parent,
Subsidiary or Affiliate of the Company should subsequently cease,
except as otherwise agreed by the Company and such Parent, Subsidiary
or Affiliate.
28.7. Unfunded Plan. 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.
28.8. Acceptance of Award Deemed Consent. By accepting any Award or
other benefit under the Plan, each Participant and each person
claiming under or through such Participant
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<PAGE>
shall be conclusively deemed to have indicated such Participant's
(or other person's) acceptance and ratification of, and consent to,
any action taken by the Company, Administrator, Board or Committee
or their respective delegates under the Plan.
28.9. Fair Market Value Determined By the Administrator. Fair market
value in relation to other securities or property of the Company,
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 Administrator in accordance with
the Plan and applicable law.
28.10. Use of Terms. For the purposes of the Plan, in the use of any term, the
singular includes the plural and the plural includes the singular
wherever appropriate.
28.11. Filing of Reports. The appropriate officers of the Company
shall cause to be filed any reports, returns or other information
regarding Awards hereunder or any 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.
28.12. Validity; Construction; Interpretation. The validity,
construction, interpretation, administration and effect of the Plan,
and of its rules and regulations, and rights relating to the Plan and
Award Agreements 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.
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<PAGE>
VIZACOM INC.
The undersigned hereby appoints Mark E. Leininger and Marc E. Jaffe, or
either of them, attorneys and proxies with full power of substitution in each of
them, in the name and stead of the undersigned, to vote as proxy all the stock
of the undersigned in VIZACOM INC., a Delaware corporation (the "Company"), at
the Company's Annual Meeting of Stockholders scheduled to be held on August 10,
2000, and any adjournments or postponements thereof.
(Continued and to be signed, on reverse side)
<PAGE>
The Board of Directors recommends a vote FOR the following proposals.
1. Election of the nominees listed at right as directors in Class I, as set
forth in the Company's proxy statement:
Marc E. Jaffe Werner G. Haase
[ ] FOR the nominees listed at right
WITHHOLD authority to vote for all nominees
Withhold authority to vote for the following individual nominees:
----------------------------------------------------------
[Print Name]
2. Approval of the Company's 2000 Equity Incentive Plan:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Upon such other business as may properly come before the meeting or any
adjournment thereof.
<PAGE>
[Reverse side of proxy card]
THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY THE PROXIES, OR EITHER OF THEM,
AS SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED
FOR THE ABOVE-LISTED DIRECTOR-NOMINEES AND FOR PROPOSAL 2, AS SET FORTH ABOVE.
RECEIPT OF THE COMPANY'S PROXY STATEMENT, DATED JULY 3, 2000, IS HEREBY
ACKNOWLEDGED.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
[L.S.] [L.S.] Dated: , 2000
----------------- ------------------- ---------------
(Note: Please sign exactly as your name appears hereon.
Executors, administrators, trustees, etc. should so
indicate when signing, giving full title as such. If
signer is a corporation, execute in full corporate name
by authorized officer. If shares are held in the name
of two or more persons, all should sign.)
