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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___ )*
COIN BILL VALIDATOR, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
192583102
---------------------------------------------------
(CUSIP Number)
Mr. Stephen Katz
Odyssey Financial Company
20 East Sunrise Highway, Suite 200, Valley Stream, New York 11581
(516) 887-0491
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 23, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
CHECK THE FOLLOWING BOX IF A FEE IS BEING PAID WITH THE STATEMENT [X]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746 (12-91)
<PAGE>
SCHEDULE 13D
================================================================================
CUSIP NO. 192583102 PAGE __ OF __ PAGES
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Odyssey Financial Company
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York State
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH ---------------------------------------------------------------
REPORTING
PERSON 8 SHARED VOTING POWER
WITH
0
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
200,000
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
200,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
================================================================================
CUSIP NO. 192583102 PAGE __ OF __ PAGES
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stephen Katz
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable.
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 835,220
OWNED BY
EACH ---------------------------------------------------------------
REPORTING
PERSON 8 SHARED VOTING POWER
WITH
0
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
835,220
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 192583102
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this statement relates
consists of the common shares, par value $.01 per share (the "Common Shares"),
of Coin Bill Validator, Inc., a New York corporation (the "Company"). The
address of the Company's principal executive offices is 425B Oser Avenue,
Hauppauge, New York 11788.
ITEM 2. IDENTITY AND BACKGROUND.
The name of the persons filing this statement are Odyssey Financial
Company ("Odyssey") and Stephen Katz ("Katz").
Odyssey is a general partnership formed under the laws of the State of
New York. Odyssey's principal business is investing in securities. The address
of Odyssey's principal business and principal office is 20 East Sunrise Highway,
Suite 200, Valley Stream, New York 11581. Odyssey has not, during the last five
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors). Odyssey has not, during the last five years, been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which it was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
Katz is a partner of Odyssey and the voting trustee with respect to
the Common Shares owned by Odyssey and certain other persons. See Items 4, 5 and
6 below.
The following information is provided with respect to Katz and each
other partner of Odyssey (each, a "Partner" and together, the "Partners"):
(i) (a) Name of Partner: Stephen Katz
(b) Katz's business address is 20 East Sunrise Highway, Suite 200,
Valley Stream, New York 11581.
(c) Katz's principal occupation is Chairman of the Board and Chief
Executive Officer of Cellular Technical Services Company, Inc. ("CTS"), 2401
Fourth Avenue, Seattle, Washington 98121. CTS develops, markets, installs and
supports integrated real-time information systems, including authentication and
service metering technology, for the global wireless communications industry.
(d) Katz has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
<PAGE>
CUSIP No. 192583102
(e) Katz has not, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Katz is a United States citizen.
(ii) (a) Name of Partner: Eileen Katz ("Eileen")
(b) Eileen's business address is 20 East Sunrise Highway, Suite 200,
Valley Stream, New York 11581.
(c) Eileen's principal occupation is housewife.
(d) Eileen has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Eileen has not, during the last five years, been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which she was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Eileen is a United States citizen.
(iii) (a) Name of Partner: Ian David Katz ("Ian")
(b) Ian's address is 1835 Corcoran Street, N.W., Apt. C, Washington,
D.C. 20009.
(c) Ian is an attorney whose present principal employment is as law
clerk to Honorable Eric G. Bruggink, United States Court of Claims, The National
Courts Building, 717 Madison Place, Washington, D.C. 20005.
(d) Ian, has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Ian has not, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
<PAGE>
CUSIP No. 192583102
(f) Ian is a United States citizen.
(iv) (a) Name of Partner: Ross Howard Katz ("Ross")
(b) Ross's business address is 20 East Sunrise Highway, Suite 200,
Valley Stream, New York 11581.
(c) Ross is a full-time student.
(d) Ross has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Ross has not, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Ross is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The entire amount of the purchase price for the 200,000 Common Shares
purchased by Odyssey from the Joseph Vogel Revocable Trust (the "Trust") was
$1,020,000, which amount was provided from Odyssey's working capital. No other
funds or other consideration was provided by any Partner (other than through
capital contributions to Odyssey in respect of such Partner's partnership
interest in Odyssey) for use in such purchase.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transaction was for (a) Odyssey to acquire a
substantial equity stake in the Company through the purchase of 200,000 Common
Shares from the Trust; (b) Katz to obtain, subject to certain conditions, sole
voting control over 200,000 Common Shares owned by Odyssey (which were acquired
from the Trust in the subject transaction), 340,020 Common Shares which were
retained by the Trust and 295,200 Common Shares owned by Joan Vogel ("Vogel"),
the Chairman of the Board of the Company; (c) Katz to be elected to the
Company's board of directors and to serve as Vice Chairman of the Board and
Chief Executive Officer of the Company; and (d) three (3) additional directors,
such persons to be designated by Katz, to be elected to the Company's board of
directors. In addition, Katz may, subject to certain conditions, purchase up to
200,000 Common Shares upon the exercise of options (which become exercisable in
installments beginning March 19, 1997) granted to him under the Company's stock
option plans. The Company's management, the Trust, Vogel and Odyssey intend that
Katz will assume
<PAGE>
CUSIP No. 192583102
an active role in the management and affairs of the Company, including strategic
planning, executive policy-making and the formulation and implementation of
business growth and operations.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The number of Common Shares beneficially owned by Odyssey is
200,000, comprising 7.3% of the outstanding Common Shares. The number of Common
Shares beneficially owned by Katz is 835,220, comprising 30.4% of the
outstanding Common Shares. No other Partner beneficially owns (other than by
reason of such Partner's partnership interest in Odyssey) any Common Shares.
(b) The number of Common Shares as to which Katz has sole voting power
is 835,220, of which Odyssey has sole dispositive power as to 200,000 Common
Shares. Neither Odyssey nor Katz (other than by reason of Katz's partnership
interest in Odyssey) has sole or shared voting power or sole or shared
dispositive power with respect to any other Common Shares. No Partner, other
than Katz, has (other than by reason of such Partner's partnership interest in
Odyssey) sole or shared voting power or sole or shared dispositive power with
respect to any Common Shares.
(c) Effective as of March 19, 1996, the Company granted to Katz:
(i) an incentive stock option under the Company's 1994 Stock
Option Plan to purchase on or before March 18, 2001 at an exercise price of
$6.00 per share up to 50,000 Common Shares (subject to certain anti-dilution
adjustments), vesting as to 16,666 shares, 16,666 shares and 16,668 shares on
March 19, 1997, 1998 and 1999, respectively;
(ii) a non-qualified stock option under the Company's 1994 Stock
Option Plan to purchase on or before March 18, 2001 at a excise price of $6.00
per shares up to 50,000 Common Shares (subject to certain anti-dilution
adjustments), vesting as to 16,666 shares, 16,666 shares and 16,668 shares on
March 19, 1997, 1998 and 1999, respectively; and
(iii) a non-qualified stock option under the Company's 1996 Stock
Option Plan to purchase on or before March 18, 2001 at a purchase price of $6.60
per share up to 100,000 Common Shares (subject to certain anti-dilution
adjustments), vesting as to 33,333 shares, 33,333 shares and 33,334 shares on
March 19, 1997, 1998 and 1999, respectively.
The foregoing description of these options is a summary only and is qualified in
its entirety by reference to the respective option agreements between the
Company and Katz which are included as exhibits hereto (see Item 7. Exhibits
(e), (f) and (g)). No other transactions in the Common Shares were effected
during the past 60 days by Odyssey or any Partner (except for the transactions
described in the first sentence of Item 4).
<PAGE>
CUSIP No. 192583102
(d) Odyssey has the right to receive and the power to direct the
receipt of dividends from, and the proceeds from the sale of, 200,000 Common
Shares as to which Katz exercises sole voting power. The Trust has the right to
receive and the power to direct the receipt of dividends from, and the proceeds
from the sale of, 340,020 Common Shares as to which Katz exercises sole voting
power. Vogel has the right to receive and the power to direct the receipt of
dividends from, and the proceeds from the sale of, 295,200 Common Shares as to
which Katz exercises sole voting power.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Katz entered into an agreement with the Company (see Exhibit 7(a))
providing for Katz (a) to be elected as a director of the Company, to be
appointed as Vice Chairman of the Board and to be employed as Chief Executive
Officer of the Company, and (b) three (3) additional persons (to be designated
by Katz) to be elected as directors of the Company by the Company's board of
directors.
Odyssey entered into an agreement with the Trust (see Exhibit 7(b))
pursuant to which it purchased 200,000 Common Shares from the Trust at a price
of $5.10 per share, or an aggregate purchase price of $1,020,000. At the same
time, Odyssey, Vogel, the Trust and Katz entered into a Voting Trust Agreement
(see Exhibit 7(c)) pursuant to which Odyssey, Vogel and the Trust appointed Katz
as their voting trustee and transferred to the voting trust of which he is
acting as trustee, all of the Common Shares severally owned by Odyssey, Vogel
and the Trust, so that Katz, as voting trustee, has the sole power to vote the
Common Shares held by them until May 22, 1998, or, if earlier, such date as
Vogel ceases to be a director of the Company.
In addition, the Company entered into an agreement with Vogel (see
Exhibit 7(d)) pursuant to which Vogel agreed to resign as a director and that
her employment agreement with the Company shall terminate if (a) the closing
sale price of the Common Shares on the Nasdaq National Market equals or exceeds
$10 on any 20 trading days and (b) Katz shall have served as Chief Executive
Officer of the Company throughout the period ending on such 20th day.
The foregoing description of these agreements is a summary only and is
qualified in its entirety by reference to the respective agreements, each of
which is included as an exhibit hereto.
Except as described above, there are no contracts, arrangements,
understandings or relationships with respect to the Common Shares to which any
Partner (other than by reason of such Partner's partnership interest in Odyssey)
is a party or is subject.
<PAGE>
CUSIP No. 192583102
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Letter agreement dated May 23, 1996 between the Company and Katz
relating to the election of Katz to the Company's Board of Directors and to the
election of certain additional directors to be designated by him.
(b) Letter agreement dated May 23, 1996 between Odyssey and the Trust
relating to the purchase of 200,000 Common Shares.
(c) Voting Trust Agreement dated May 23, 1996 among Odyssey, Vogel,
the Trust and Katz, as voting trustee, relating to the voting of the Common
Shares owned by them.
(d) Letter agreement dated May 23, 1996 between the Company and Vogel
relating to Vogel's resignation as a director and termination of her employment
agreement.
(e) Incentive Stock Option Agreement under the Company's 1994 Stock
Option Plan dated as of March 19, 1996 between the Company and Katz.
(f) Non-Qualified Stock Option Agreement under the Company's 1994
Stock Option Plan dated as of March 19, 1996 between the Company and Katz.
(g) Non-Qualified Stock Option Agreement under the Company's 1996
Stock Option Plan dated as of March 19, 1996 between the Company and Katz.
(h) Letter agreement dated May 23, 1996 between Odyssey and Katz as to
the joint filing of this statement.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 23, 1996 ODYSSEY FINANCIAL COMPANY
By: /s/ Stephen Katz
---------------------------------
Stephen Katz, General Partner
By: /s/ Stephen Katz
---------------------------------
Stephen Katz
Exhibit 7(a)
COIN BILL VALIDATOR, INC
[Letterhead]
May 24, 1996
Mr. Stephen Katz
20 East Sunrise Highway
Valley Stream, NY 11581
Dear Mr. Katz:
Coin Bill Validator, Inc., a New York corporation (the "Company") is hereby
offering you employment as Chief Executive Officer and you are also becoming
Vice Chairman of the Board of Directors of the Company.
Resolutions duly adopted by the Company electing you to the Board of Directors
and appointing you Vice Chairman of the Board and Chief Executive Officer are
annexed hereto.
The Company shall hereafter use its best efforts to promptly cause such action
to be taken as is required to increase the size of the entire board of directors
from six to nine and to elect to each new directorship a person designated by
you, provided that such person is reasonably acceptable to the Company. You
shall furnish to the board of directors reasonably detailed biographical
information (including the information that would be required to be disclosed
pursuant to Regulation S-K under the Securities Act of 1933) about each person
designate so to be elected to the board. The Company shall use its best efforts
to promptly cause the board of directors to elect each person so designated by
you as a director of the Company, unless the board determines in good faith that
such person is ineligible or unsuitable for such office, in which case, the
board shall within two business days of the date of such determination provide
you written notice of such determination setting forth in reasonable detail the
basis for the ineligibility or unsuitability of such person to serve as a
director. If any person so designated by you is not elected to be a director of
the Company based on such a determination, you shall have the right to designate
another person in lieu of the first person so designated until three persons
designated until three persons designated by you are elected as directors of the
Company.
Page 1 of 3
<PAGE>
Stephen Katz (Cont'd)
As an executive employee of the Company you shall be paid a salary at the rate
of $150,000 per year (less all required withholdings and other deductions),
payable in accordance with the Company's normal payroll practices. You will
herefore be eligible for all other associated fringe benefits. You agree that
you will devote such time (which need not be your full time) as is necessary to
carry out your duties as CEO in the establishment of Strategic Planning as it
related to business growth and operations.
Traditional terms of employment agreements will apply to such things as
expenses; basis of termination; nondisclosure; non-competition; successors;
amendment; New York State Law being applicable; serviceability of covenants; and
remedies will apply. Specific copy regarding those issues will be provided to
you by the Company's President for approval in the near future. Until such time
as otherwise agreed to the period of employment is year-to-year or as the board
deems appropriate and nothing herein should limit in any way the Company's right
to terminate employment at any time.
In connection with your employment services as of March 19, 1996 and future
continuing services of employment an option for a period of five years, to
purchase (a) under our 1994 Stock Option Plan 100,000 shares of the Common Stock
of the Company at $6.00 (which is equal to the fair market value of the Common
Stock as of March 19, 1996) and (b) subject to the approval of Shareholders of
the Company of the 1996 Stock Option Plan, 100,000 shares of the Common Stock of
the Company at $6.60 (which is equal to 110% of the fair market value of the
Common Stock, as of March 19, 1996. Such options shall vest at the rate of 33
1/3% per year beginning one year after the date of employment (i.e., beginning
one year after the date of your employment you may exercise up to 33 1/3% of
your options, beginning two years after the date of your employment you may
exercise up to 66 2/3% of your options, etc.) All options will be incentive
stock options to the maximum extent permissible by law and to the extent not so
permissible shall be non-qualified stock options and shall have such other terms
as will be set forth in the option agreements between yourself and the Company,
which will be executed on an immediate basis.
Page 2 of 3
<PAGE>
Stephen Katz (Cont'd)
As part of this agreement, I as President/CEO agree to relinquish my office of
CEO to you, effective upon your acceptance of same. My office of President will
then also encompass full control of the day-to-day operations of the companies
business as the Chief Operating Officer. Resolutions attached hereto duly
reflect same.
Sincerely and Respectfully,
/s/ William H. Wood
------------------------------
William H. (Bill) Wood
President/CEO
Agreed to and Accepted by:
/s/ Stephen Katz
- ------------------------------
Stephen Katz
May 24, 1996
- ------------------------------
Date of Approval
Page 3 of 3
Exhibit 7(b)
ODYSSEY FINANCIAL COMPANY
20 East Sunrise Highway
Valley Stream, NY 11581
May 23, 1996
Joseph Vogel Revocable Trust
c/o Joan Vogel
425-B Oser Avenue
Hauppauge, New York 11788
Attention: Joan Vogel, Trustee
Re: COIN BILL VALIDATOR, INC. (THE "COMPANY')
-----------------------------------------
Gentlemen:
1. The undersigned is hereby purchasing from the Joseph Vogel
Revocable Trust (the "Trust") 200,000 shares of Common Stock of the Company, par
value $.01 per share (the "Shares"), at a purchase price of $5.10 per share.
Concurrently herewith, the undersigned is delivering to the Trust a check in the
amount of $1,020,000 as payment in full for the Shares.
2. The Trust is hereby selling, assigning and transferring the Shares
to the undersigned and is delivering stock certificates representing the Shares,
duly endorsed for transfer.
3. The Trust represents and warrants that it owns the shares of record
solely for the benefit of the Trust beneficiaries, free and clear of any liens,
encumbrances, claims or adverse interests and that upon payment therefor, the
undersigned will be the owner of the Shares, free and clear of all liens,
claims, encumbrances and adverse interests.
4. The undersigned represents and warrants to the Trust that the
undersigned is acquiring the Shares for the undersigned's own account for
investment and not with a view toward the resale or redistribution thereof, and
the undersigned does not now have any reason to anticipate any change in the
undersigned's circumstances or any other particular occasion or event that would
cause the undersigned to be required to sell any of the undersigned's Shares.
<PAGE>
Joseph Vogel Revocable Trust
May 31, 1996
Page 2
5. The undersigned understands the meaning and legal consequences of
the representations and warranties contained herein and shall indemnify and hold
harmless the Company and the Trust from and against any and all loss, damage or
liability due to or arising out of a breach of any representation or warranty of
the undersigned contained in this Agreement.
6. The undersigned understands that (a) none of the Shares have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or the securities laws of certain states in reliance on specific exemptions from
registration thereunder, (b) no securities administrator or any state or federal
government has made any finding or determination relating to the fairness for
investment in the Shares, and (c) no securities administrator of any state or
the federal government has nor will recommend or endorse any offering of the
Shares.
7. The undersigned understands that (a) because neither the offer nor
sale of the Shares has been registered under the Securities Act or the
securities laws of certain states, the Shares may not be sold, assigned, pledged
or otherwise disposed of unless they are so registered or an exemption from such
registration is available, and (b) it may not be possible for the undersigned to
liquidate any investment in the Shares in an emergency or otherwise.
8. Each party shall promptly execute, deliver, file or record such
agreements, instruments, certificates and other documents and perform such other
and further acts as the other party hereto may reasonably request or necessary
to consummate and perfect the transactions contemplated hereby.
9. All representations and warranties set forth above or in any other
written statement or document delivered by the undersigned in connection with
the transactions contemplated hereby shall be true and correct in all respects
on and as of the date hereof and shall survive the date hereof.
<PAGE>
Joseph Vogel Revocable Trust
May 31, 1996
Page 3
Kindly confirm our agreements below.
Very truly yours,
ODYSSEY FINANCIAL COMPANY
By: /S/ STEPHEN KATZ
------------------------
Stephen Katz, General Partner
AGREED:
JOSEPH VOGEL REVOCABLE TRUST
By: /S/ JOAN VOGEL
--------------------------
Joan Vogel, Trustee
By: /S/ MURRAY SILVER
--------------------------
Murray Silver, Trustee
VOTING TRUST AGREEMENT
This Voting Trust Agreement dated as of May 23, 1996 by and among
Odyssey Financial Company ("Odyssey"), Joan Vogel ("Vogel"), the Joseph Vogel
Revocable Trust (the "Trust", and together with Odyssey and Vogel, the
"Shareholders"), and Stephen Katz, as voting trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, each Shareholder owns the number of common shares, par value
$.01 per share (the "Common Shares"), of Coin Bill Validator, Inc., a New York
corporation (the "Company"), set forth opposite such Shareholder's name on the
signature page hereof; and
WHEREAS, the Shareholders desire to provide for the voting of the
Common Shares owned by them (the "Shares") jointly and in a consistent manner so
as to promote and expedite the management of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. The Shareholders hereby declare and establish a Voting Trust for
the benefit of the Shareholders, and appoint the Trustee as the trustee of the
Voting Trust. The Trustee hereby accepts such appointment; provided, however,
that the Trustee may resign such appointment at any time hereafter upon five (5)
days prior written notice given to each Shareholder.
2. Concurrently herewith, each Shareholder is assigning the Shares
owned by such Shareholder to the Trustee to hold IN TRUST for the benefit of
such Shareholder, subject to the terms and conditions hereof; and such
Shareholder is delivering to the Trustee a certificate or certificates, duly
endorsed for transfer to, or accompanied by duly executed stock powers in favor
of, the Trustee. The Shareholders and the Trustee shall give appropriate notice
and take such other actions as may be necessary or appropriate to cause such
assignment to be recorded on the stock records of the Company or its registrar
and transfer agent. The Trustee shall surrender the certificates so delivered to
him to the Company or its transfer agent and shall obtain in lieu thereof
certificates representing the Shares owned by the respective Shareholders, each
registered in the name of the Trustee.
3. The Trustee shall issue and deliver to each Shareholder a voting
trust certificate, substantially in the form of Exhibit A hereto (each, a "Trust
Certificate") in respect of the Shares delivered to the Trustee by such
Shareholder. The Trustee shall maintain a written record of the issuance of each
Trust Certificate, and any transfer thereof (except as provided in Section 4
below), which record shall set forth the name and address of each holder of a
Trust
<PAGE>
Certificate, the number of Shares represented thereby and the date such Trust
Certificate is issued. Each Trust Certificate shall be transferable only on the
records of the Trustee by the holder thereof in person or by such holder's
attorney upon the surrender thereof, duly endorsed for transfer or accompanied
by an appropriate instrument of transfer, in form and substance reasonably
acceptable to the Trustee. Upon such transfer and surrender, a new Trust
Certificate shall be issued to the transferee, who shall be, by such
transferee's acceptance thereof, bound by the provisions of this Agreement, as
fully to all intents and purposes as if such transferee executed the same.
4. Anything herein to the contrary notwithstanding, at any time or
from time to time any Shares may be withdrawn from the Voting Trust, and sold,
assigned or otherwise transferred by any Shareholder (or subsequent holder of a
Trust Certificate) to any other person, provided that as a result of such sale,
assignment or other transfer, the Shareholder (or subsequent holder of a Trust
Certificate) shall not retain any direct or indirect interest in or control over
such Shares. In any such case, the Trustee shall, on behalf and for the benefit
of such Shareholder (or subsequent holder of a Trust Certificate), cause the
Shares so sold, assigned or transferred to be transferred on the records of the
Company or its registrar and transfer agent and shall deliver the certificate
representing such Shares, duly endorsed for transfer to, or accompanied by a
duly executed stock power or in favor of, the transferee of such Shareholder (or
subsequent holder of a Trust Certificate). If fewer than all the Shares
initially delivered to the Trustee are so sold, assigned or transferred, the
Trustee shall issue and deliver a new Trust Certificate to such Shareholder (or
subsequent holder of a Trust Certificate) representing the remaining Shares held
by the Trustee for the benefit of such Shareholder (or subsequent holder of a
Trust Certificate).
5. The Voting Trust shall continue in effect until the earliest of (a)
May 22, 1998 or (b) the date upon which Vogel ceases to be a director of the
Company or (c) such time, if any, as all of the Shares delivered to the Trustee
are transferred out of the Voting Trust pursuant to Section 4 above or (d) the
date that the Trustee ceases to be employed by the Company or (e) the death of
Vogel, or (f) upon the entering of an order from a court of competent
jurisdiction directing Vogel to terminate this Voting Trust, or (f) upon the
resignation of the Trustee, if the Shareholders do not (acting in their sole and
absolute discretion), within five (5) days of such resignation, agree upon and
appoint a successor voting trustee.
6. The Trustee is hereby fully authorized and empowered to, and the
Trustee shall, vote the Shares in such manner as in the Trustee's sole judgment
shall be in the best common interest of the Shareholders (or any subsequent
holders of Trust Certificates) at any meeting of shareholders of the Company or
in connection with any written consent thereof. In all matters other than
matters arising in the ordinary course of the business of the Company, the
Trustee shall consult with Vogel before taking any action with respect thereto.
7. The Trustee shall receive and hold IN TRUST for the benefit of the
Shareholders (or any subsequent holders of Trust Certificates) any dividends or
other distributions upon or in respect of the Shares and shall allocate and
distribute the same to the Shareholders (or
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<PAGE>
any subsequent holders of Trust Certificates) in proportion to the respective
number of Shares represented by the Trust Certificates held thereby.
8. The Trustee shall be fully indemnified against any loss, liability,
expense or other costs suffered or incurred by the Trustee in his capacity as
such hereunder. The Shareholders (and any subsequent holders of Trust
Certificates) shall promptly reimburse the Trustee for any funds expended or
costs incurred by the Trustee hereunder.
9. Miscellaneous.
a. Limitation of Authority. No provision hereof shall be deemed to
create any partnership, joint venture or joint enterprise or association among
the parties hereto, or, except as hereinabove provided, to authorize or to
empower any party hereto to act on behalf of or obligate any other party hereto.
b. Notices. Any notice hereunder to or upon any party hereto required
or permitted to be given hereunder shall be deemed to have been duly given for
all purposes if (a) in writing and sent by (i) messenger or an overnight courier
service against receipt, or (ii) certified or registered mail, postage paid,
return receipt requested, or (b) sent by telegram, telecopy, telex or similar
electronic means, provided that a written copy thereof is sent on the same day
by postage paid first-class mail, to such party at the following address:
To Odyssey: c/o Stephen Katz
20 East Sunrise Highway
Valley Stream, New York 11581
Fax: (516) 887-0498
To Vogel: 400 East 56th Street
New York, New York 10022
Fax: (516) 434-1771
To the Trust: Joan Vogel, Trustee
400 East 56th Street
New York, New York 10022
Fax: (516) 434-1771
and
Murray Silver, Trustee
175 Lefferts Boulevard
Woodmere, New York ll598
-3-
<PAGE>
To the Trustee: 20 East Sunrise Highway
Valley Stream, New York 11581
Fax: (516) 887-0498
or such other address as any party hereto may at any time, or from time to time,
direct by notice given to the other parties in accordance with this Section. The
date of giving of any such notice shall be, in the case of clause (a)(i), the
date of the receipt; in the case of clause (a)(ii), five business days after
such notice is sent; and, in the case of clause (b), the business day next
following the date such notice is sent.
c. Amendment. Except as otherwise provided herein, no amendment of
this Agreement shall be valid or effective, unless in writing and signing by or
on behalf of the parties hereto.
d. Governing Law. This Agreement shall be governed by, and interpreted
and enforced in accordance with, the laws of the State of New York without
regard to principles of choice of law or conflict of laws.
e. Jurisdiction. Each of the parties hereto hereby irrevocably
consents and submits to the jurisdiction of the Supreme Court of the State of
New and the United States District Court for the Southern District of New York
in connection with any suit, action or other proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby, waives any
objection to venue in New York County, State of New York, or such District and
agrees that service of any summons, complaint, notice or other process relating
to such proceeding may be effected in the manner provided by clause (a)(ii) of
Section 9(b).
f. Remedies. In the event of any actual or prospective breach or
default by any party hereto, the other parties shall be entitled to equitable
relief, including remedies in the nature of rescission, injunction and specific
performance. All remedies hereunder are cumulative and not exclusive, and
nothing herein shall be deemed to prohibit or limit any party from pursuing any
other remedy or relief available at law or in equity for such actual or
prospective breach or default, including the recovery of damages.
g. Severability. The provisions hereof are severable and in the event
that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.
h. Further Assurances. Each party hereto shall execute, deliver, file
or record such agreements, instruments, certificates and other documents and
perform such other and
-4-
<PAGE>
further acts as any other party hereto may reasonably request or as may
otherwise be necessary or proper to consummate and perfect the transactions
contemplated hereby.
i. Assignment. This Agreement, and each right, interest and obligation
hereunder, may not be assigned by any party hereto without the prior written
consent of the other parties hereto, and any purported assignment without such
consent shall be void and without effect.
j. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not intended, and shall not be deemed, to create or
confer any right or interest for the benefit of any person not a party hereto.
IN WITNESS WHEREOF, the Shareholders and the Trustee have duly
executed this Agreement as of the date set forth in the Preamble hereto.
SHAREHOLDERS: NUMBER OF SHARES:
ODYSSEY FINANCIAL COMPANY 200,000
By: /s/ Stephen Katz
---------------------
Stephen Katz, General Partner
Joan Vogel 295,200
- -------------------------- -------
Joan Vogel
JOSEPH VOGEL REVOCABLE TRUST 340,020
-------
By: /s/ Joan Vogel
---------------------
Joan Vogel, Trustee
By: /s/ Murray Silver
---------------------
Murray Silver, Trustee
TRUSTEE:
/s/ Stephen Katz
---------------------
Stephen Katz
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<PAGE>
EXHIBIT A
FORM OF VOTING TRUST CERTIFICATE
COIN BILL VALIDATOR, INC.
Voting Trust Certificate
VT No. ______ No. of Shares _______
THIS CERTIFIES THAT [name of holder of Trust Certificate] is the
beneficial owner of ____ common shares, par value $.01 per share (the "Common
Shares"), of Coin Bill Validator, Inc., a New York corporation (the "Company"),
that have been deposited with the undersigned voting trustee who holds the same
IN TRUST for the benefit of such holder pursuant to the Voting Trust Agreement
dated May 23, 1996 among certain shareholders of the Company and the voting
trustee, a copy of which agreement is on file at the principal offices of the
Company, 425B Oser Avenue, Hauppauge, New York 11788. This certificate and the
interest represented hereby is transferable on the records of the voting trustee
upon its surrender properly endorsed or accompanied by an appropriate instrument
of transfer, subject to and in accordance with the provisions of said Voting
Trust Agreement. The holder of this certificate holds the same subject to, and
such holder's interest in the aforesaid Common Shares is in accordance with, the
terms and conditions of said Voting Trust Agreement, to which such holder, by
such holder's acceptance hereof, agrees to be bound.
IN WITNESS WHEREOF, the undersigned voting trustee has duly executed
this certificate on this ____ day of ________________, 199_.
-----------------------------------
Stephen Katz, Voting Trustee
Exhibit 7(d)
COIN BILL VALIDATOR, INC.
425-B Oser Avenue
Hauppauge, New York 11788
May 23, 1996
Mrs. Joan Vogel
Coin Bill Validator, Inc.
425-B Oser Avenue
Hauppauge, New York 11788
Dear Ms. Vogel:
Reference is made to that certain Employment Agreement, dated January
23, 1996, by and between you and Coin Bill Validator, Inc. (the "Company").
You and the Company hereby agree and acknowledge that such Employment
Agreement shall terminate and no longer be of any force and effect in the event
that and immediately upon both (i) the closing sale price of the common shares
of the Company on the Nasdaq National Market equals or exceeds $10 for any 20
trading days commencing the date hereof, and (ii) Stephen Katz shall have acted
as Chief Executive Officer throughout the period of time from the date hereof
and ending on such 20th day (the "Termination"); PROVIDED, HOWEVER, that in no
event shall the Termination occur prior to July 1, 1996. You shall resign as
director of the Company not later than five business days following receipt of
notice of the Termination.
As of the date of such Termination neither you nor the Company shall
have any obligation or liability to each other except for amounts accrued but
not yet paid; PROVIDED, HOWEVER, the Company shall provide you with health
insurance for the one year period commencing on the Termination.
Kindly confirm our agreements below.
Very truly yours,
COIN BILL VALIDATOR, INC.
By: /S/ WILLIAM H. WOOD
-----------------------
Name: William H. Wood
Title:
AGREED:
/S/ JOAN VOGEL
- ----------------------------
Joan Vogel
Exhibit 7(e)
COIN BILL VALIDATOR, INC.
INCENTIVE STOCK OPTION AGREEMENT
AS OF MARCH 19, 1996
COIN BILL VALIDATOR, INC., a New York corporation (the "Company"),
pursuant to Section 5(a) of the Company's 1994 Stock Option Plan (the "Plan"),
hereby grants to Stephen Katz (the "Optionee") an incentive stock option to
purchase a total of 50,000 shares of the Company's Common Stock, par value $.01
per share ("Common Stock"), at the price of $6.00 per share on the terms and
conditions set forth herein and in the Plan. This option is intended to be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
1. DURATION.
(a) This option was granted as of the date first above written.
(b) This option shall expire at the close of business on March 18,
2001 (the "Termination Date").
2. PRICE.
The purchase price of 6.00 for each share of Common Stock
upon exercise of this option is not less than the fair market value on
the date hereof.
3. QUALIFICATION AS INCENTIVE STOCK OPTION.
Those options that do not meet the criteria of incentive stock
options, as defined in Section 422 of the Code, are non-qualified stock options,
subject to Section 83 of the Code.
4. WRITTEN NOTICE OF EXERCISE.
This option, to the extent it is exercisable as provided in Section 10
herein, may be exercised only be delivering to the Secretary of the Company, at
its principal office within the time specified in Paragraph 1 or such shorter
time as is otherwise provided for herein, a written notice of exercise
substantially in the form described in Section 10.
<PAGE>
5. ANTI-DILUTION PROVISIONS.
(a) If there is any stock dividend or recapitalization resulting in a
stock split, or combination or exchange of shares of Common Stock of the
Company, the number of shares of Common Stock then subject to this option shall
be proportionately and appropriately adjusted; no change shall be made in the
aggregate purchase price to be paid for all shares subject to this option, but
the aggregate purchase price shall be allocated among all shares subject to this
option after giving effect to the adjustment; provided, however, that any
fractional shares resulting from any such adjustment shall be eliminated.
(b) If there is any other change in the Common Stock of the Company,
including recapitalization, reorganization, sale or exchange of assets, exchange
of shares, offering of subscription rights, or a merger or consolidation in
which the Company is the surviving corporation, an adjustment, if any, shall be
made in the shares then subject to this option as the Company's Board of
Directors the ("Board") or the Compensation Committee of the Board (the
"Committee") may deem equitable. Failure of the Board or the Committee to
provide for an adjustment pursuant to this subparagraph prior to the effective
date of any Company action referred to herein shall be conclusive evidence that
no adjustment is required in consequence of such action.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution for
this option of an option covering the number and class of securities and/or cash
or other property which the Optionee would have been entitled to receive in such
merger or consolidation by virtue of such sale if the Optionee had been the
holder of record of a number of shares of Common Stock of the Company equal to
the number of shares covered by the unexercised portion of this option;
provided, only that the excess of the aggregate fair market value of the shares
2
<PAGE>
subject to the options immediately after such substitution over the purchase
price thereof is not more than the excess of the aggregate fair market value of
the shares subject to such options immediately before such substitution over the
purchase price thereof, or (ii) the Company shall give to the Optionee written
notice of its election not to cause such provision to be made and this option
shall become exercisable in full (or, at the election of the Optionee, in part)
at any time during a period of ten (10) days, to be designated by the Company,
ending not more than ten (10) days prior to the effective date of the merger,
consolidation or sale, in which case this option shall not be exercisable to any
extent after the expiration of such ten (10) day period. In no event, however,
shall this option be exercisable after the Termination Date.
6. INVESTMENT REPRESENTATION AND LEGEND OF CERTIFICATES.
The Optionee agrees that until such time as a registration statement
under the Securities Act of 1933, as amended, becomes effective with respect to
the option and/or the stock, the Optionee is taking this option and will take
the stock underlying this option, for investment and not for resale or
distribution. The Company shall have the right to place upon the face of any
stock certificate or certificates evidencing shares issuable upon the exercise
of this option such legend as the Board on the Committee may prescribe for the
purpose of preventing disposition of such shares in violation of the Securities
Act of 1933, as amended.
7. NON-TRANSFERABILITY.
This option shall not be transferable by the Optionee other than by
will or by the laws of descent and distribution, and is exercisable during the
lifetime of the Optionee only by the Optionee.
8. CERTAIN RIGHTS NOT CONFERRED BY OPTION.
The Optionee shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company.
9. EXPENSES.
The Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock of the Company
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith.
3
<PAGE>
10. EXERCISE OF OPTIONS.
(a) The amount of shares pursuant to this option that shall become
exercisable are as follows: 16,666 shares commencing March 19, 1997; 16,666
shares commencing March 19, 1998; and 16,668 shares commencing March 19, 1999.
(b) An option shall be exercisable by written notice of such exercise,
in the form prescribed by the Board or the Committee, to the Secretary of the
Company, at its principal office. The notice shall specify the number of shares
for which the option is being exercised (which number, if less than all of the
shares then subject to exercise, shall be 100 or a multiple thereof) and shall
be accompanied by payment (i) in cash or by check of the amount of the full
purchase price of such shares or (ii) in such other manner as the Board or the
Committee shall deem acceptable.
(c) No shares shall be delivered upon exercise of any option until all
laws, rules and regulations which the Board or the Committee may deem applicable
have been complied with. If a registration statement under the Securities Act of
1933, as amended, is not then in effect with respect to the shares issuable upon
such exercise, the Company may require as a condition precedent that the person
exercising the option give to the Company a written representation and
undertaking, satisfactory in form and substance to the Board or the Committee,
that such person is acquiring the shares for their own account for investment
and not with a view to the distribution thereof.
(d) The person exercising an option shall not be considered a record
holder of the stock so purchased for any purpose until the date on which such
person is actually recorded as the holder of such stock in the records of the
Company.
(e) This option shall be exercisable only so long as the Optionee
shall continue to be an employee of the Company and within the three month
period after the date of
4
<PAGE>
termination of his employment to the extent it was exercisable on the date prior
to the date of termination. Notwithstanding the foregoing, in no event shall
this option be exercisable after the Termination Date.
(f) Notwithstanding the provisions of Section 10(e) above, in the
event the Optionee is unable to continue his employment with the Company as a
result of his total and permanent disability (as defined in Section 105(d)(4) of
the Internal Revenue Code of 1986, as amended), he may, but only within twelve
(12) months from the date of disability, exercise this option to the extent he
was entitled to exercise it at the date of such disability. Notwithstanding the
foregoing, in no event shall this option be exercisable after the Termination
Date.
(g) Notwithstanding the provisions of Section 10(e) above, in the
event of death of the Optionee:
(i) during the term of this option who is at the time of his
death an employee of the Company and who shall have been in Continuous Status
(as defined in the Plan) as an employee since the date of grant of this option,
this option may be exercised, at any time within twelve (12) months following
the date of death, by the Optionee's estate or by a person who acquired the
right to exercise this option by bequest or inheritance, but only to the extent
of the right that would have accrued had the Optionee continued living one (1)
month after the date of death; or
(ii) within three (3) months after the termination of Continuous
Status as an employee, this option may be exercised, at any time within three
(3) months following the date of death, by the Optionee's estate or by a person
who acquired the right to exercise the option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination.
Notwithstanding the provisions of this Section (g), in no event shall this
option be exercisable after the Termination Date.
5
<PAGE>
11. CONTINUED EMPLOYMENT.
Nothing herein shall be deemed to create any employment agreement or
guaranty of continued employment or limit in any way the Company's right to
terminate Optionee's employment at any time.
COIN BILL VALIDATOR, INC.
By: /S/ WILLIAM H. WOOD
-----------------------
WILLIAM H. WOOD
Accepted as of the date
first set forth above.
/S/ STEPHEN KATZ
----------------
STEPHEN KATZ
6
Exhibit 7(f)
COIN BILL VALIDATOR, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
AS OF MARCH 19, 1996
COIN BILL VALIDATOR, INC., a New York corporation (the "Company"),
pursuant to Section 5(a) of the Company's 1994 Stock Option Plan (the "Plan"),
hereby grants to Stephen Katz (the "Optionee") a non-qualified stock option to
purchase a total of 50,000 shares of the Company's Common Stock, par value $.01
per share ("Common Stock"), at the price of $6.00 per share on the terms and
conditions set forth herein and in the Plan. This option is intended to be a
non-qualified stock option. This option is not intended to be, nor is it, an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
1. DURATION.
(a) This option was granted as of the date first above written.
(b) This option shall expire at the close of business on March 18,
2001 (the "Termination Date").
2. PRICE.
The purchase price of 6.00 for each share of Common Stock upon
exercise of this option is not less than the fair market value on the date
hereof.
3. QUALIFICATION AS INCENTIVE STOCK OPTION.
These options are non-qualified stock options, subject to Section 83
of the Code.
4. WRITTEN NOTICE OF EXERCISE.
This option, to the extent it is exercisable as provided in Section 10
herein, may be exercised only by delivering to the Secretary of the Company, at
its principal office within the time specified in Paragraph 1 or such shorter
time as is otherwise provided for herein, a written notice of exercise
substantially in the form described in Section 10.
<PAGE>
5. ANTI-DILUTION PROVISIONS.
(a) If there is any stock dividend or recapitalization resulting in a
stock split, or combination or exchange of shares of Common Stock of the
Company, the number of shares of Common Stock then subject to this option shall
be proportionately and appropriately adjusted; no change shall be made in the
aggregate purchase price to be paid for all shares subject to this option, but
the aggregate purchase price shall be allocated among all shares subject to this
option after giving effect to the adjustment; provided, however, that any
fractional shares resulting from any such adjustment shall be eliminated.
(b) If there is any other change in the Common Stock of the Company,
including recapitalization, reorganization, sale or exchange of assets, exchange
of shares, offering of subscription rights, or a merger or consolidation in
which the Company is the surviving corporation, an adjustment, if any, shall be
made in the shares then subject to this option as the Company's Board of
Directors the ("Board") or the Compensation Committee of the Board (the
"Committee") may deem equitable. Failure of the Board or the Committee to
provide for an adjustment pursuant to this subparagraph prior to the effective
date of any Company action referred to herein shall be conclusive evidence that
no adjustment is required in consequence of such action.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution for
this option of an option covering the number and class of securities and/or cash
of securities and/or cash or other property which the Optionee would have been
entitled to receive in such merger or consolidation by virtue of such sale if
the Optionee had been the holder of record of a number of shares of Common Stock
of the Company equal to the number of shares covered by the unexercised portion
of this option; provided, only that the excess of the aggregate fair market
value of the shares
2
<PAGE>
subject to the options immediately after such substitution over the purchase
price thereof is not more than the excess of the aggregate fair market value of
the shares subject to such options immediately before such substitution over the
purchase price thereof, or (ii) the Company shall give to the Optionee written
notice of its election not to cause such provision to be made and this option
shall become exercisable in full (or, at the election of the Optionee, in part)
at any time during a period of ten (10) days, to be designated by the Company,
ending not more than ten (10) days prior to the effective date of the merger,
consolidation or sale, in which case this option shall not be exercisable to any
extent after the expiration of such ten (10) day period. In no event, however,
shall this option be exercisable after the Termination Date.
6. INVESTMENT REPRESENTATION AND LEGEND OF CERTIFICATES.
The Optionee agrees that until such time as a registration statement
under the Securities Act of 1933, as amended, becomes effective with respect to
the option and/or the stock, the Optionee is taking this option and will take
the stock underlying this option, for investment and not for resale or
distribution. The Company shall have the right to place upon the face of any
stock certificate or certificates evidencing shares issuable upon the exercise
of this option such legend as the Board on the Committee may prescribe for the
purpose of preventing disposition of such shares in violation of the Securities
Act of 1933, as amended.
7. NON-TRANSFERABILITY.
This option shall not be transferable by the Optionee other than by
will or by the laws of descent and distribution, and is exercisable during the
lifetime of the Optionee only by the Optionee.
3
<PAGE>
8. CERTAIN RIGHTS NOT CONFERRED BY OPTION.
The Optionee shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company.
9. EXPENSE.
The Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock of the Company
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith.
10. EXERCISE OF OPTIONS.
(a) The amount of shares pursuant to this option that shall become
exercisable are as follows: 16,666 shares commencing March 19, 1997; 16,666
shares commencing March 19, 1998; and 16,668 shares commencing March 19, 1999.
(b) An option shall be exercisable by written notice of such exercise,
in the form prescribed by the Board or the Committee, to the Secretary of the
Company, at its principal office. The notice shall specify the number of shares
for which the option is being exercised (which number, if less than all of the
shares then subject to exercise, shall be 100 or a multiple thereof) and shall
be accompanied by payment (i) in cash or by check of the amount of the full
purchase price of such shares or (ii) in such other manner as the Board or the
Committee shall deem acceptable.
(c) No shares shall be delivered upon exercise of any option until all
laws, rules and regulations which the Board or the Committee may deem applicable
have been complied with. If a registration statement under the Securities Act of
1933, as amended, is not then in effect with respect to the shares issuable upon
such exercise, the Company may require as a condition precedent that the person
exercising the option give to the Company a written representation and
undertaking, satisfactory in form and substance to the Board or the Committee,
that such person is acquiring the shares for their own account for investment
and not with a view to the distribution thereof.
4
<PAGE>
(d) The person exercising an option shall not be considered a record
holder of the stock so purchased for any purpose until the date on which such
person is actually recorded as the holder of such stock in the records of the
Company.
(e) This option shall be exercisable only so long as the Optionee
shall continue to be an employee of the Company and within the three month
period after the date of termination of his employment to the extent it was
exercisable on the day prior to the date of termination. Notwithstanding the
foregoing, in no event shall this option be exercisable after the Termination
Date.
(f) Notwithstanding the provisions of Section 10(e) above, in the
event the Optionee is unable to continue his employment with the Company as a
result of this total and permanent disability (as defined in Section 105(d)(4)
of the Internal Revenue Code of 1986, as amended), he may, but only within
twelve (12) months from the date of disability, exercise this option to the
extent he was entitled to exercise it at the date of such disability.
Notwithstanding the foregoing, in no event shall this option be exercisable
after the Termination Date.
(g) Notwithstanding the provisions of Section 10(e) above, in the
event of death of the Optionee:
(i) during the term of this option who is at the time of his
death an employee of the Company and who shall have been in Continuous Status
(as defined in the Plan) as an employee since the date of grant of this option,
this option may be exercised, at any time within twelve (12) months following
the date of death, by the Optionee's estate or by a person who acquired the
right to exercise this option by bequest or inheritance, but only to the extent
of the right that would have accrued had the Optionee continued living one (1)
month after the date of death; or
(ii) within three (3) months after the termination of Continuous
Status as an employee, this option may be exercised, at any time within three
(3) months following the date 5
<PAGE>
(iii) within three (3) months after the termination of Continuous
Status as an employee, this option may be exercised, at any time within three
(3) months following the date of death, by the Optionee's estate or by a person
who acquired the right to exercise the option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination. Notwithstanding the provisions of this Section (g), in no event
shall this option be exercisable after the Termination Date.
11. APPROVAL OF STOCKHOLDERS. This option is subject to the approval
of the Company's 1996 Stock Option Plan by the Company's Stockholders, and if
not so approved on or before March 18, 1997, this option shall terminate and be
of no further force or effect.
12. CONTINUED EMPLOYMENT.
Nothing herein shall be deemed to create any employment agreement or
guaranty of continued employment or limit in any way the Company's right to
terminate Optionee's employment at any time.
COIN BILL VALIDATOR, INC.
By: /S/ WILLIAM H. WOOD
----------------------
WILLIAM H. WOOD
Accepted as of the date
first set forth above.
/S/ STEPHEN KATZ
---------------------
STEPHEN KATZ
6
Exhibit 7(g)
COIN BILL VALIDATOR, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
AS OF MARCH 19, 1996
COIN BILL VALIDATOR, INC., a New York corporation (the "Company"),
pursuant to Section 5(a) of the Company's 1996 Stock Option Plan (the "Plan"),
hereby grants to Stephen Katz (the "Optionee") a non-qualified stock option to
purchase a total of 100,000 shares of the Company's Common Stock, par value $.01
per share ("Common Stock"), at the price of $6.60 per share on the terms and
conditions set forth herein and in the Plan. This option is intended to be a
non-qualified stock option. This option is not intended to be, nor is it, an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
1. DURATION.
(a) This option was granted as of the date first above written.
(b) This option shall expire at the close of business on March 18,
2001 (the "Termination Date").
2. PRICE.
The purchase price of $6.60 for each share of Common Stock upon
exercise of this option is 110% of the fair market value on the date hereof.
3. QUALIFICATION AS INCENTIVE STOCK OPTION.
These options are non-qualified stock options, subject to Section 83
of the Code.
<PAGE>
4. WRITTEN NOTICE OF EXERCISE.
This option, to the extent it is exercisable as provided in Section 10
herein, may be exercised only by delivering to the Secretary of the Company, at
its principal office within the time specified in Paragraph 1 or such shorter
time as is otherwise provided for herein, a written notice of exercise
substantially in the form described in Section 10.
5. ANTI-DILUTION PROVISIONS.
(a) If there is any stock dividend or recapitalization resulting in a
stock split, or combination or exchange of shares of Common Stock of the
Company, the number of shares of Common Stock then subject to this option shall
be proportionately and appropriately adjusted; no change shall be made in the
aggregate purchase price to be paid for all shares subject to this option, but
the aggregate purchase price shall be allocated among all shares subject to this
option after giving effect to the adjustment; provided, however, that any
fractional shares resulting from any such adjustment shall be eliminated.
(b) If there is any other change in the Common Stock of the Company,
including recapitalization, reorganization, sale or exchange of assets, exchange
of shares, offering of subscription rights, or a merger or consolidation in
which the Company is the surviving corporation, an adjustment, if any, shall be
made in the shares then subject to this option as the Company's Board of
Directors (the "Board") or the Compensation Committee of the Board (the
"Committee") may deem equitable. Failure of the Board or the Committee to
provide for an adjustment pursuant to this subparagraph prior to the effective
date of any Company action referred to herein shall be conclusive evidence that
no adjustment is required in consequence of such action.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution for
this option of an option covering the number and class of securities and/or cash
or other property which the Optionee would have been entitled to receive in such
merger or
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<PAGE>
consolidation by virtue of such sale if the Optionee had been the holder of
record of a number of shares of Common Stock of the Company equal to the number
of shares covered by the unexercised portion of this option; provided, only that
the excess of the aggregate fair market value of the shares subject to the
options immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the shares
subject to such options immediately before such substitution over the purchase
price thereof, or (ii) the Company shall give to the Optionee written notice of
its election not to cause such provision to be made and this option shall become
exercisable in full (or, at the election of the Optionee, in part) at any time
during a period of ten (10) days, to be designated by the Company, ending not
more than ten (10) days prior to the effective date of the merger, consolidation
or sale, in which case this option shall not be exercisable to any extent after
the expiration of such ten (10) day period. In no event, however, shall this
option be exercisable after the Termination Date.
6. INVESTMENT REPRESENTATION AND LEGEND OF CERTIFICATES.
The Optionee agrees that until such time as a registration statement
under the Securities Act of 1933, as amended, becomes effective with respect to
the option and/or the stock, the Optionee is taking this option and will take
the stock underlying this option, for investment and not for resale or
distribution. The Company shall have the right to place upon the face of any
stock certificate r certificates evidencing shares issuable upon the exercise of
this option such legend as the Board on the Committee may prescribe for the
purpose of preventing disposition of such shares in violation of the Securities
Act of 1933, as amended.
7. NON-TRANSFERABILITY.
This option shall not be transferable by the Optionee other than by
will or by the laws of descent and distribution, and is exercisable during the
lifetime of the Optionee only by the Optionee.
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<PAGE>
8. CERTAIN RIGHTS NOT CONFERRED BY OPTION.
The Optionee shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company.
9. EXPENSES.
The Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock of the Company
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith.
10. EXERCISE OF OPTIONS.
(a) The amount of shares pursuant to this option that shall become
exercisable are as follows: 33,333 shares commencing March 19, 1997; 33,333
shares commencing March 19, 1998; and 33,334 shares commencing March 19, 1999.
(b) An option shall be exercisable by written notice of such exercise,
in the form prescribed by the Board or the Committee, to the Secretary of the
Company, at its principal office. The notice shall specify the number of shares
for which the option is being exercised (which number, if less than all of the
shares then subject to exercise, shall be 100 or a multiple thereof) and shall
be accompanied by payment (i) in cash or by check of the amount of the full
purchase price of such shares or (ii) in such other manner as the Board or the
Committee shall deem acceptable.
(c) No shares shall be delivered upon exercise of any option until all
laws, rules and regulations which the Board or the Committee may deem applicable
have been complied with. If a registration statement under the Securities Act of
1993, as amended, is not then in effect with respect to the shares issuable upon
such exercise, the Company may require as a condition precedent that the person
exercising the option give to the Company a written
4
<PAGE>
representation and undertaking, satisfactory in form and substance to the Board
or the Committee, that such person is acquiring the shares for their own account
for investment and not with a view to the distribution thereof.
(d) The person exercising an option shall not be considered a record
holder of the stock so purchased for any purpose until the date on which such
person is actually recorded as the holder of such stock in the records of the
Company.
(e) This option shall be exercisable only so long as the Optionee
shall continue to be an employee of the Company and within the three month
period after the date of termination of his employment to the extent it was
exercisable on the day prior to the date of termination. Notwithstanding the
foregoing, in no event shall this option be exercisable after the Termination
Date.
(f) Notwithstanding the provisions of Section 10(e) above, in the
event the Optionee is unable to continue his employment with the Company as a
result of his total and permanent disability (as defined in Section 105(d)(4) of
the Internal Revenue Code of 1986, as amended), he may, but only within twelve
(12) months from the date of disability, exercise this option to the extent he
was entitled to exercise it at the date of such disability. Notwithstanding the
foregoing, in no event shall this option be exercisable after the Termination
Date.
(g) Notwithstanding the provisions of Section 10(e) above, in the
event of death of the Optionee:
(i) during the term of this option who is at the time of his
death an employee of the Company and who shall have been in Continuous Status
(as defined in the Plan) as an employee since the ate of grant of this option,
this option may be exercised, at any time within twelve 912) months following
the date of death, by the Optionee's estate or by a person who acquired the
right to exercise this option by bequest or inheritance, but only to the extent
of the right that would have accrued had the Optionee continued living one (1)
month after the date of death; or
5
<PAGE>
of death, by the Optionee's estate or by a person who acquired the right to
exercise the option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of termination.
Notwithstanding the provisions of this Section (g), in no event shall this
option be exercisable after the Termination Date.
11. CONTINUED EMPLOYMENT.
Nothing herein shall be deemed to create any employment agreement or
guaranty of continued employment or limit in any way the Company's right to
terminate Optionee's employment at any time.
COIN BILL VALIDATOR, INC.
By: /S/ WILLIAM H. WOOD
----------------------
WILLIAM H. WOOD
Accepted as of the date
first set forth above.
/S/ STEPHEN KATZ
---------------------
STEPHEN KATZ
6
Exhibit 7(h)
ODYSSEY FINANCIAL COMPANY
20 East Sunrise Highway, Suite 200
Valley Stream, New York 11581
May 23, 1996
Mr. Stephen Katz
20 East Sunrise Highway
Suite 200
Valley Stream, New York 11581
Re: COIN BILL VALIDATOR, INC.
Dear Mr. Katz:
This letter will confirm the agreement between Odyssey Financial
Company, a New York general partnership ("Odyssey"), and Stephen Katz ("Katz")
to file jointly a statement on Schedule 13D pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended, with respect to the purchase by
Odyssey of certain common shares of Coin Bill Validator, Inc., a New York
corporation (the "Company"), the creation of a voting trust, of which Katz will
serve as voting trustee, with respect to these and certain other common shares
of the Company, and certain related transactions.
Very truly yours,
ODYSSEY FINANCIAL COMPANY
By: /S/ STEPHEN KATZ
----------------------
STEPHEN KATZ
AGREED:
/S/ STEPHEN KATZ
- ---------------------
STEPHEN KATZ
