SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission File Number: 1-7675
AUDITS & SURVEYS WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1809586
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
650 Avenue of the Americas, New York, NY 10011
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including
area code: (212) 627-9700
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceeding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
The number of shares outstanding of each of the issuer's
classes of common stock, as of May 10, 1995 was:
Class Number of Shares
Common Stock, $0.01 par value 13,094,755
<PAGE>
AUDITS & SURVEYS WORLDWIDE, INC.
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets-
March 31, 1995 and December 31, 1994 3-4
Condensed Consolidated Statements of Income-
Three Months ended March 31, 1995 and April 2, 1994 5
Condensed Consolidated Statements of Cash Flows-
Three Months ended March 31, 1995 and April 2, 1994 6
Condensed Consolidated Statement of Stockholder's
Equity - March 31, 1995 7
Notes to Condensed Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-12
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders 13-14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
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AUDITS & SURVEYS WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Mar. 31, 1995 Dec. 31, 1994
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 399,642 $ 754,309
Accounts receivable:
Billed 6,116,663 7,413,448
Unbilled 2,661,400 1,947,728
Prepaid expenses and other
current assets 1,505,296 1,199,070
Net assets held for sale 1,949,386 -
Total current assets 12,632,387 11,314,555
PROPERTY AND EQUIPMENT:
Furniture and fixtures 370,401 367,660
Equipment 1,631,506 1,566,316
Leasehold improvements 2,729,239 2,729,239
Assets held under capital leases 222,862 222,862
Total 4,954,008 4,886,077
Less accumulated depreciation
and amortization (2,484,599) (2,361,638)
Property and equipment - Net 2,469,409 2,524,439
Receivable from sale of assets 500,000 -
Prepaid pension costs 879,106 -
Due from officers/stockholders 6,135 36,869
Cash surrender value of officers'
life insurance 327,601 293,270
Deferred income taxes 812,426 792,840
Deferred merger costs - 1,112,703
Other assets 1,606,491 403,771
TOTAL $ 19,233,555 $ 16,478,447
</TABLE>
See notes to condensed consolidated financial statements.
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AUDITS & SURVEYS WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Mar. 31, 1995 Dec. 31, 1994
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable - bank $1,200,000 -
Accounts payable and accrued expenses 5,292,330 $2,940,633
Accrued payroll and bonuses 1,212,242 3,432,680
Notes payable to officers/stockholders 1,266,102 1,500,000
Customer billings in excess of revenues
earned 3,733,033 4,613,145
Income taxes payable 421,666 595,065
Current portion of long-term debt 340,179 366,000
Current portion of capital lease
obligations 54,368 44,211
Total current liabilities 13,519,920 13,491,734
Long-term debt, net of current portion 375,000 439,802
Capital lease obligations, net of
current portion 92,819 104,362
Deferred compensation 300,622 292,953
Accrued rent 960,852 963,736
Minority Interest 47,380 54,122
Total liabilities 15,296,593 15,346,709
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 30,000,000
shares authorized; 13,094,744 shares issued
at March 31, 1995; and 10,475,804 shares
issued at December 31,1994 130,948 14,286
Additional paid-in capital 2,071,572 333,960
Retained earnings 1,734,526 1,167,656
Cummulative foreign currency
translation adjustment (84) (3,846)
Total capital stock 3,936,962 1,512,056
Treasury stock, at cost 0 (380,318)
Total stockholders' equity 3,936,962 1,131,738
TOTAL $19,233,555 $16,478,447
</TABLE>
See notes to condensed consolidated financial statements.
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AUDITS & SURVEYS WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
Mar. 31, 1995 Apr. 2, 1994
REVENUES $13,312,846 $9,550,921
COSTS AND EXPENSES:
Direct costs 6,357,864 3,371,466
Selling, general and
administrative expenses 5,673,786 5,088,819
Incentive bonuses 464,000 678,812
Interest expense 59,592 49,208
Other (income) - Net (171,563) (119,459)
TOTAL COSTS AND EXPENSES 12,383,679 9,068,846
INCOME BEFORE PROVISION FOR
INCOME TAXES 929,167 482,075
PROVISION FOR INCOME TAXES 362,297 153,534
NET INCOME $ 566,870 $ 328,541
NET INCOME PER SHARE $ 0.05 $ 0.03
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 10,679,500 10,475,804
See notes to condensed consolidated financial statements.
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AUDITS & SURVEYS WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
Mar. 31, 1995 Apr. 2, 1994
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $566,870 $328,541
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 120,415 133,340
Deferred income taxes (59,371) 102,598
Deferred compensation 7,669 7,491
Amortization of deferred charges 8,561 12,806
Increase in cash surrender value of
officers' life insurance (34,331) -
Accrued rent (2,884) (238,702)
Minority Interest (6,742) 48,697
Changes in operating assets and liabilities:
Accounts receivable 583,113 (834,190)
Prepaid expenses and deferred changes (221,167) (171,809)
Other current assets 42,283 96,067
Other noncurrent assets (955,947) (118,641)
Income taxes payable (173,399) 49,941
Accounts payable and accrued expenses 1,079,280 641,519
Accrued payroll and bonuses (2,220,438) (1,250,758)
Customer billings in excess of revenues
earned (880,112) 514,358
Net cash used in operating activities (2,146,200) (678,742)
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to officers/stockholders (9,167) (24,577)
Repayment of loans from officers/stockholders 39,901 4,567
Repayment of loans from affiliates - 55,502
Purchases of property and equipment (65,385) (73,906)
Investment in subsidiary - 30,805
Payment of deferred merger costs (141,465) -
Cash received from Triangle merger 1,089,794 -
Net cash provided (used) in investing
activities 913,678 (7,609)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings-bank 1,200,000 750,000
Principal payments on notes
payable-officers/stockholders (233,898) (153,786)
Principal payments on long-term debt (90,623) (75,942)
Principal payments on capital
lease obligations (1,386) (10,039)
Distribution to stockholders - (161,431)
Net cash provided by financing activities 874,093 348,802
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EFFECT OF EXCHANGE RATE DIFFERENCES ON CASH 3,762 (1,579)
NET INCREASE (DECREASE) IN CASH (354,667) (339,128)
CASH, BEGINNING OF PERIOD 754,309 720,081
CASH, END OF PERIOD $399,642 $380,953
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for: Interest $ 31,196 $ 43,635
Income taxes $ 710,944 $ 0
The Company issued common stock in order
to effect the merger with Triangle. Such
stock aggregated $2,234,592 (net of $1,254,168
of related merger costs). In conjunction with
the acquisition, liabilities were assumed as follows:
Fair value of assets acquired (includes
$1,089,794 of cash acquired) $2,707,009
Value of common stock issued (net of
$1,254,168 of related merger costs) 2,234,592
Liabilities assumed $ 472,417
</TABLE>
See notes to condensed consolidated financial statements.
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AUDITS & SURVEYS WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN RETAINED TREASURY STOCK
SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31, 1994 14,075,650 $14,286 $333,960 $1,167,656 3,600,551 $380,318
Net income 0 0 0 566,870 0 0
Triangle merger 2,769,706 116,662 3,188,531 0 150,050 1,070,601
Elimination of
Treasury Shares (3,750,601) 0 (1,450,919) 0 (3,750,601) (1,450,919)
BALANCE, MARCH 31, 1995 13,094,755 $130,948 $2,071,572 $1,734,526 0 $0
</TABLE>
See notes to condensed consolidated financial statements.
-8-<PAGE>
AUDITS & SURVEYS WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying financial statements of Audits & Surveys
Worldwide, Inc. ("the Company" or the "Combined Company") include
the accounts of Audits and Surveys, Inc. and subsidiaries ("A&S")
for the entire period and the accounts of The Triangle
Corporation ("Triangle") as of March 24, 1995, the effective date
of the merger (the "Merger") described in Note 3. Triangle, as
used hereinafter, refers to the Company prior to the Merger.
2. The 1995 and 1994 financial statements have been prepared by the
Company and are unaudited. In the opinion of the Company's
management all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows for the interim periods have
been made. Certain information and footnote disclosures required
under generally accepted accounting principles have been
condensed or omitted from the consolidated financial statements
pursuant to the rules and regulations of the Securities and
Exchange Commission. The consolidated financial statements
presented herein should be read in conjunction with the year-end
consolidated financial statements and notes thereto included in
Triangle's Annual Report on Form 10-K for the year ended December
31, 1994, and the historical financial statements and notes
thereto of A&S for the year ended December 31, 1994 included in
the Company's Form 8K/A filed with the Securities and Exchange
Commission on May 15, 1995. The results of operations for the
three month periods ended March 31, 1995 and April 2, 1994 are
not necessarily indicative of the results to be expected for any
other interim period or for the entire year.
3. Merger
On March 24, 1995, the Company completed the Merger between
Triangle and A&S. In accordance with the terms of the Merger
Agreement, each share of Triangle's common stock outstanding
prior to the consummation of the Merger remained outstanding.
Each share of A&S's common stock outstanding prior to the Merger
was exchanged for 1,407.565 shares of Triangle's common stock.
Upon consummation of the Merger, the holders of Triangle's common
stock immediately prior to the Merger owned 20% of the Combined
Company's common stock and the holders of A&S's common stock
immediately prior to the Merger owned 80% of the Combined
Company's common stock. For accounting and financial reporting
purposes, the Merger has been treated as a reverse acquisition in
accordance with generally accepted accounting principles, with
A&S being deemed to be acquiring Triangle's net assets in return
for a 20% equity interest in A&S. The name of the Combined
-9-<PAGE>
Company was changed to Audits & Surveys Worldwide, Inc.
Triangle's results of operations have been included in the
consolidated financial statements of the Company subsequent to
the effective date of the Merger. The purchase price has been
allocated among the fair value of Triangle's net assets acquired.
Any excess purchase price, including approximately $1,254,168 of
Merger related expenses, has been charged to paid-in capital.
Accordingly, no goodwill has been recorded in connection with
this transaction.
The following unaudited pro forma summary presents the
consolidated results of operations as if the Merger had occurred
at the beginning of each period presented and does not purport to
be indicative of what would have occurred had the Merger been
completed as of those dates or of results which may occur in the
future.
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995 Apr. 2, 1995
<S> <C> <C>
Revenues $13,313,000 $9,551,000
Income from continuing operations $ 399,000 $ 345,000
Income (loss) from discontinued
operations 6,000 (81,000)
Net income $ 405,000 $ 264,000
Income per share from continuing
operations $ .03 $ .03
(Loss) per share from discontinued
operations .00 (.01)
Net income per share $ .03 $ .02
</TABLE>
4. Commitments and Contingencies
On March 24, 1995, the Company entered into employment and
compensation agreements with its Chief Executive Officer
("CEO"), its President and both of its Executive Vice-
Presidents. The agreement with the CEO provides that he will be
employed for a period of five years at a base salary of $350,000
per annum, plus discretionary bonuses as may be determined by
the Board of Directors. At any time after March 24, 1998, the
CEO may elect to terminate his status as a full-time employee
and become a consultant to the Company for the balance of the
term of his employment agreement and receive a consulting fee
equal to $175,000 per annum. The President and two Executive
Vice-Presidents have each entered into an employment agreement
-10-<PAGE>
for a term of three years at a salary of $300,000, $250,000, and
$195,000 per annum, respectively, as well as discretionary
bonuses as may be determined by the Board of Directors.
On February 6, 1995, the Company entered into a five year
agreement with a supplier whereby the Company will pay
$1,500,000 for retail sales data and other rights as specified
in the agreement. In the event of termination, the amounts owed
to the supplier would be prorated based on the proportion of
sales data received during the period prior to termination. As
of March 31, 1995, the Company has paid the supplier $1,000,000.
The balance of $500,000 is to be paid at a rate of $100,000 a
year over the five year period.
On August 4, 1993, Triangle completed the sale of substantially
all of the assets and properties constituting its mechanics'
hand tool, horseshoe and farrier tool business ("Cooper
Agreement") to Cooper Industries, Inc. ("Cooper"). On February
3, 1995, Triangle was notified by Cooper that Triangle had
allegedly breached certain representations and warranties made
to Cooper in the Cooper Agreement. The alleged breaches
pertained to a representation that Triangle had no knowledge of
the existence of any undisclosed underground storage tanks
("USTs"). In such notice, Cooper advised Triangle that its
damages arising from this breach could be in excess of
$1,000,000, and that Cooper would therefore withhold a
conditional payment of $1,000,000, plus interest, due to
Triangle by February 10, 1995, until the matter was resolved.
On March 9, 1995, Mobil Oil Corporation ("Mobil") notified
Cooper that Mobil believed the USTs in question were left from a
former Mobil service station operation on the same premises, and
that Mobil would, subject to a reservation of its rights, assume
lead responsibilities for investigative and/or remedial
activities at the site. Based in part upon the receipt of this
letter from Mobil, Cooper paid to Triangle the aforesaid
$1,000,000, plus interest, on March 17, 1995, and notified
Triangle that Cooper would hold its claim against Triangle in
abeyance pending final resolution of the matter. Based upon
both Mobil's commitment and the Company's investigation of the
removal and remedial costs likely to be incurred with respect to
the existence of these USTs, the Company does not believe that a
payment, if any, to Cooper by the Company of any damages that
may be suffered by Cooper with respect to the alleged breach'
would be likely to have a material effect on the Company's
consolidated results of operations or financial position.
Furthermore, the Company believes that it has valid defenses to
any potential Cooper claims.
A Triangle subsidiary, Diamond Tool and Horseshoe Co., now
inactive and known as Tri-North, Inc., is one of a large number
of third-party defendants in an action brought by the U.S.
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Environmental Protection Agency. The action involves the
cleanup of the Arrowhead Refinery Superfund site in Minnesota
and the defendants are seeking the right to reimbursement of a
portion of their costs from the third-party defendants. In
prior years, Triangle expensed $100,000, excluding legal costs,
relating to this action. Any further liability with respect to
this action would constitute an Assumed Liability (as defined)
under the terms of the Cooper Agreement described above. Cooper
is obligated to indemnify the Company against any such liability
(including the cost of obtaining a settlement or consent order
releasing the Company from further liability). However, the
final conditional payment due from Cooper of $500,000 (plus
interest thereon) is due when and if the Company obtains a
satisfactory settlement or consent order releasing it from
further liability with respect to this action in accordance with
the Cooper Agreement, which $500,000 is to be reduced by the
amount paid in connection with such a settlement or consent
order. Notwithstanding the fact that the Company's maximum
exposure from this litigation is therefore in effect limited to
the loss of this $500,000 conditional payment, a range of
possible loss cannot be reasonably estimated. The Company's
ultimate liability in this matter is not, however, expected to
have a material effect on the Company's consolidated results of
operations or financial position.
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Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
On March 24, 1995 the Company completed the Merger between Triangle
and A&S. In accordance with the terms of the Merger Agreement, each
share of Triangle's common stock outstanding prior to the
consummation of the Merger remained outstanding. Each share of A&S's
common stock outstanding prior to the Merger was exchanged for
1407.565 shares of Triangle's common stock. Upon consummation of the
Merger, the holders of Triangle's common stock immediately prior to
the Merger owned 20% of the Combined Company's common stock and the
holders of A&S's common stock immediately prior to the Merger owned
80% of the Combined Company's common stock. For accounting and
financial reporting purposes, the Merger has been treated as a
reverse acquisition in accordance with generally accepted accounting
principles, with A&S being deemed to be acquiring Triangle's assets
in return for a 20% equity interest in A&S. The name of the Combined
Company was changed to Audits & Surveys Worldwide, Inc. Triangle's
results of operations have been included in the consolidated
financial statements of the Company subsequent to the effective date
of the Merger. The purchase price has been allocated among the fair
value of Triangle's net assets acquired. Any excess purchase price,
including approximately $1,254,168 of Merger related expenses, has
been charged to paid-in capital. Accordingly, no goodwill has been
recorded in connection with this transaction.
Triangle's operations for the period March 24, 1995 to March 31, 1995
are not significant. For convenience the acquisition has been
recorded as of March 31,1995 for accounting purposes. The following
discussion is therefore applicable only to the Company's operations
(formerly A&S).
Revenues increased in the first three months of 1995 by approximately
$3,762,000 over the comparable period in 1994. Revenues from the
Company's customer satisfaction division increased approximately
$1,392,000 primarily resulting from two major mystery shopping
customer satisfaction surveys. Syndicated revenues from the audit
divisions increased by $1,356,000 due to implementation of a new
study for a major financial services client and for services
performed on other new syndicated studies introduced in the past six
to nine months. The Company's remaining increases in revenue came
from various new and expanding applications in both custom and
tracking services.
Direct costs increased approximately $2,986,000 in the first three
months of 1995 compared with 1994. The additional direct costs stem
from higher volume in the Company's customer
-13-<PAGE>
satisfaction and audit divisions. The international division also
experienced an increase in direct costs due to a change in the mix of
custom research services provided in the first three months of 1995
compared with the previous year.
Selling, general and administrative ("SG&A") expenses increased
approximately $585,000 for the period. Approximately $445,000 of the
increase resulted from higher base compensation for several key
employees upon implementation of new compensation agreements and
additional salaries of new personnel related to generation of the
increased revenues previously discussed. SG&A expenses as a
percentage of revenues decreased from 53% in the first three months
of 1994 to 43% in the comparable three month period of 1995.
Incentive bonuses for the first three months of 1995 were
approximately $215,000 lower than the same period of 1994. The
decrease resulted from the implementation of new compensation
agreements with several key employees whereby base salaries were
increased (see SG&A above) and incentive compensation levels were
simultaneously decreased.
Liquidity and Capital Resources
Cash flow from operations and borrowings under its credit facilities
are the Company's primary sources of funds. The Company's cash flow
and borrowings have been sufficient to provide funds for working
capital, capital expenditures and payment of principal and interest
on indebtness. Working capital (deficiency) as of March 31,1995 was
($888,000) and as of December 31, 1994 was ($2,177,000). The
deficiency at December 31, 1994 was caused primarily by the payment
of approximately $1,124,000 in merger related costs through the
preceding six months and recognition of $595,000 in tax liability as
the Company transitioned from S Corporation to C Corporation status.
The improvement in the Company's working capital (deficiency) as of
March 31, 1995 is due to the additional working capital provided as a
result of the merger with Triangle and to a decrease in the amounts
billed to customers prior to revenue recognition on percentage-of-
completion contracts.
The Company generated approximately $874,000 in cash from investing
activities for the three months ended March 31,1995 as approximately
$1,090,000 in cash received through the Triangle merger was offset by
$141,000 in additional merger related costs.
During the three months ended March 31, 1995, the Company's financing
activities provided $874,000 in cash as short-term borrowings of
$1,200,000 were offset by payments on long-term bank borrowings and
on short-term borrowings from officers of the Company. Cash used in
financing activities for the three months ended April 2, 1994
provided approximately $349,000 as short-term borrowings of $750,000
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were offset by payments on long-term and short-term borrowings and by
distributions of undistributed S corporation dividends.
The Company believes that its current sources of liquidity and
capital resources will be sufficient to fund its working capital
needs and long-term obligations for the foreseeable future.
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PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Stockholders (the "Meeting") of
Triangle, held on March 16, 1995, Triangle's stockholders were asked
to vote on the following four proposals:
4. Election of Directors
To elect four directors, each to hold office until the next
Annual Meeting of Stockholders or until his respective successor is
elected and qualified. The following directors were elected at the
Meeting: H. Arthur Bellows, Jr., Charles E. Bradley; Thomas P.
Howes; and William A. Zebedee. However, in accordance with the terms
of the Merger Agreement, dated August 11, 1995, between Triangle and
A&S, as amended by Amendment No. 1 thereto dated as of October 7,
1994, Amendment No. 2 thereto dated as of January 6, 1995, Amendment
No. 3 thereto dated as of January 31, 1995, and Amendment No. 4
thereto dated as of February 8, 1995 (as so amended, the "Merger
Agreement), and the transactions contemplated thereby, Thomas P.
Howes ceased to be a director of the Company at the time of the
consummation of the Merger.
5. Resolution Authorizing and Approving the Merger
To consider and vote upon the adoption of a resolution
authorizing and approving the Merger. Pursuant to the terms of the
Merger as set forth in the Merger Agreement, each share of the
Triangle's Common Stock outstanding prior to the consummation of the
Merger remained outstanding following consummation of the Merger and
each share of A&S Common Stock outstanding prior to the consummation
of the Merger was exchanged for 1,407.565 shares of the Triangle's
Common Stock. As a result of the consummation of the Merger,
Triangle acquired all of the assets and liabilities of A&S in return
for the issuance to stockholders of A&S of 10,475,804 shares of the
Triangle's Common Stock. Votes in favor of the Merger were also
deemed to include votes in favor of the amendments (the "Amendments")
of certain provisions contained in the Company s Certificate of
Incorporation. The Amendments included: changing the name of the
Company to "Audits & Surveys Worldwide, Inc."; increasing the
authorized number of shares of the Company s Common Stock from
10,000,000 to 30,000,000 and changing the par value of the Company s
Common Stock from $0.50 per share to $0.01 per share. The Amendments
became effective upon the consummation of the Merger.
In addition, pursuant to the terms of the Merger Agreement, the
following designees of A&S became members of the Board of Directors
of the Company: Solomon Dutka; Carl Ravitch; Anthony Timiraos; Sol
Young; William Newman; Robert C. Miller; and Matthew Goldstein. Each
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designee will hold office until the next Annual Meeting of
Stockholders or until his respective successor is elected and
qualified.
6. Adoption of 1994 Stock Option Plan
To consider and vote upon the adoption of the 1994 Stock Option
Plan ("1994 Plan") of the Company. The 1994 Plan allows a stock
option committee to grant qualified and non-qualified options to
purchase up to 650,000 shares of the Company s Common Stock. The
adoption of the 1994 Plan by the Company s stockholders was a
condition precedent to A&S s obligation to consummate the Merger.
The 1994 Plan became effective upon consummation of the Merger.
7. Repeal of Articles TENTH, ELEVENTH and TWELFTH of Certificate
of Incorporation
To consider and vote upon a proposal to repeal Articles TENTH,
ELEVENTH and TWELFTH of the Company's Certificate of Incorporation.
Article TENTH provides for a 66-2/3% stockholder vote to approve any
plan of merger or consolidation of the Company with or into any other
company, any sale, lease, exchange or disposition of all or
substantially all of the assets or property of the Company to or with
another person, corporation or other entity, or involuntary
dissolution of the Company; provided, however, that in each instance,
such vote is only required where such transaction is not approved by
three-fifths of the Board. Article ELEVENTH limits stockholder
action to annual and special meetings (by eliminating the use of
stockholder written consent) and provides for a 66 2/3% stockholder
vote to call a special meeting of stockholders, without altering the
ability of the Board or certain officers to call such a meeting as
provided in the By-laws. Article TWELFTH requires the affirmative
vote of holders of not less than 66-2/3% of the outstanding capital
stock of the Company entitled to vote thereon or a vote of not less
than three-fifths of the Board to amend, alter or repeal any By-law
which is inconsistent with Articles TENTH, ELEVENTH and TWELFTH. The
vote required to repeal Articles TENTH, ELEVENTH and TWELFTH was not
received at the Meeting. Accordingly, such Articles continue in full
force and effect.
Set forth below are the results of each vote brought up at the
Meeting.
1. Election of Directions
Nominee For Against Withhold Authority
H. Arthur Bellows, Jr. 2,030,055 0 18,511
Charles E. Bradley 2,030,055 0 18,511
-17-<PAGE>
Thomas P. Howes 2,030,055 0 18,511
William A. Zebedee 2,030,055 0 18,511
There were no broker nonvotes on this matter.
2. Resolution Authorizing and Approving the Merger
Votes For: 1,644,372
Against: 44,882
Abstentions: 723
Broker Nonvotes: 358,589
3. Adoption of 1994 Stock Option Plan
Votes For: 1,612,731
Against: 68,805
Abstentions: 8,441
Broker Nonvotes: 358,589
4. Repeal of Articles TENTH, ELEVENTH and
TWELFTH of Certificate of Incorporation
Votes For: 1,659,315
Against: 23,768
Abstentions: 6,894
Broker Nonvotes: 358,589
Item 6. Exhibits and Reports on Form 8-K.*
a. Exhibits:
4.1 Restated and Amended Certificate of Incorporation of the
Company.
4.2 Amended and Restated By-laws of the Company.
4.3 Registration Rights Agreement , dated March 24, 1995, among
the Company, H. Arthur Bellows, Jr., Carl Ravitch and the
Estate of Irving I. Roshwalb.
4.4 Shareholders Agreement, dated March 24, 1995, among the
Company, H. Arthur Bellows, Jr., Solomon Dutka, Solomon
* There is no instrument defining the right of holders of
long-term debt of the Company or of any of its subsidiaries
other than where the total amount of securities authorized
thereunder does not exceed 10% of the total assets of the
Company and its subsidiaries on a consolidated basis. In
accordance with paragraph (b)(4)(iii) of Item 601 of
Regulation S-K, the Company agrees to furnish to the
Securities and Exchange Commission, upon request, copies of
any such instrument.
-18-<PAGE>
Dutka Trust for James Dutka, Solomon Dutka Trust for
Michael Dutka, Solomon Dutka Trust for Joyce Dutka, Carl
Ravitch, Anthony Timiraos, Dexter Neadle, Lawrence Karp,
George Fabian, Fred Winkel, Joel S. Klein, William Liebman,
Nagesh Gupta, Thomas Ryan, Joel Dorfman, Josh Libresco,
Donald Pace, Paul Donato, Fred Nicholson and Joel J. Klein.
4.5 Shareholders Agreement, dated February 9, 1995, between The
Triangle Corporation and the Estate of Irving I. Roshwalb.
10.1 1994 Stock Option Plan of The Triangle Corporation.
10.2 Employment agreement, dated March 24, 1995, between the
Company and Solomon Dutka.
10.3 Employment agreement, dated March 24, 1995, between the
Company and H. Arthur Bellows, Jr.
10.4 Employment agreement, dated March 24, 1995, between the
Company and Carl Ravitch.
10.5 Employment agreement, dated March 24, 1995, between the
Company and Anthony Timiraos.
27. Financial Data Schedule
b. Reports on Form 8-K:
The Company filed one report on Form 8-K ("Form 8-K") during the
quarterly period ended March 31, 1995. The date of the Form 8-K
(Date of earliest event reported) was March 24, 1995. The Form 8-K
was filed to disclose: (i) Change in Control of Registrant (Item
1.); Acquisition or Disposition of Assets (Item 2.); and Changes in
Registrant's Certifying Accountant (Item 4.). Pursuant to the
provisions of Item 7(a)(4) and (b)(2) of the Form 8-K the financial
statements of the business acquired and the pro-forma financial
information were not included in the Form 8-K (Item 7.). The audited
financial statements and the pro-forma financial information were
filed with the Securities and Exchange Commission on a Form 8-K/A on
May 15, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
AUDITS & SURVEYS WORLDWIDE, INC.
May 15, 1995 By: /s/ Anthony Timiraos
Date Anthony Timiraos
Executive Vice President-Finance and
Chief Financial Officer
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EXHIBIT 4.1
RESTATED AND AMENDED CERTIFICATE OF INCORPORATION
of
THE TRIANGLE CORPORATION
The Triangle Corporation (the "Corporation"), a corpo-
ration organized and existing under the laws of the State of
Delaware, hereby certifies as follows:
1. (a) The present name of the Corporation is The
Triangle Corporation.
(b) The name under which the Corporation was
originally incorporated was The Triangle Corporation, and the
date of filing of its original Certificate of Incorporation with
the Secretary of State of the State of Delaware was August 21,
1967.
2. The certificate of incorporation of the Corpora-
tion is hereby amended by striking out Articles 1, 3, 4, 5 and 9
thereof and by substituting in lieu thereof new Articles 1, 3,
4, 5 and 9 which are set forth in the Restated and Amended Cer-
tificate of Incorporation hereinafter provided for.
3. The provisions of the certificate of incorpora-
tion of the Corporation as heretofore amended, and as herein
amended, are hereby restated and integrated into the single
instrument which is hereinafter set forth, and which is entitled
Restated and Amended Certificate of Incorporation of Audits &
Surveys Worldwide, Inc., without any further amendments other
than the amendments herein certified and without any discrepancy
between the provisions of the certificate of incorporation as
heretofore amended and the provisions of the said single instru-
ment hereinafter set forth.
4. The amendments and the restatement of the
restatement of the restated certificate of incorporation have
been duly authorized and adopted by the Board of Directors of
the Corporation and duly approved and adopted by the stockhold-
ers of the Corporation in accordance with Sections 242 and 245
of the General Corporation Law of the State of Delaware.
5. The text of the Corporation's certificate of
incorporation, as heretofore amended, is hereby restated and
amended to read as set forth in full as follows:
<PAGE>
RESTATED AND AMENDED CERTIFICATE OF INCORPORATION
of
AUDITS & SURVEYS WORLDWIDE, INC.
FIRST. The name of the corporation is Audits & Sur-
veys Worldwide, Inc.
SECOND. The address of its registered office in the
State of Delaware is Corporation Trust Center, No. 1209 Orange
Street, in the City of Wilmington, County of New Castle. The
name of its registered agent at such address is The Corporation
Trust Company.
THIRD. The nature of the business or purposes to be
conducted or promoted is to engage in any lawful act of activity
for which corporations may be organized under the General Corpo-
ration Law of Delaware presently in effect or as it may here-
after be amended.
FOURTH. The total number of shares of all classes of
stock which the corporation shall have authority to issue is
31,000,000 of which (i) 1,000,000 shall be Preferred Stock, par
value $1 per share; and (ii) 30,000,000 shall be Common Stock,
par value $.01 per share.
A statement of the designations of the authorized
classes of stock or of any series thereof, and the powers, pref-
erences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof,
or of the authority of the board of directors to fix by resolu-
tion or resolutions such designations and other terms not fixed
by the Certificate of Incorporation, is as follows:
1. The Preferred Stock may be issued in one or
more series, from time to time, with each such series
to have such designation, powers, preferences and rel-
ative, participating, optional or other special
rights, and qualifications, limitations or restric-
tions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue of
such series adopted by the board of directors of the
corporation, subject to the limitations prescribed by
law and in accordance with the provisions hereof, the
board of directors being hereby expressly vested with
authority to adopt any such resolution or resolutions.
The authority of the board of directors with respect
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<PAGE>
to each such series shall include, but not be limited
to, the determination or fixing of the following:
(i) The distinctive designation and number
of shares comprising such series, which number
may (except where otherwise provided by the board
of directors in creating such series) be
increased or decreased (but not below the number
of shares then outstanding) from time to time by
like action of the board of directors;
(ii) The dividend rate of such series, the
conditions and times upon which such dividends
shall be payable, the relation which such divi-
dends shall bear to the dividends payable on any
other class or classes of stock or series
thereof, or any other series of the same class,
whether the corporation shall be required to pay
such dividends on specified dates, if funds are
legally available for the payment thereof, or,
whether the payment of such dividends shall be
entirely at the discretion of the board of direc-
tors, whether such dividends shall be payable in
cash or by the issuance of Common or Preferred
Stock of the corporation, and whether dividends
shall be cumulative or non-cumulative;
(iii) Whether or not the shares of such
series shall be subject to redemption by the cor-
poration and the conditions thereof, and the
times, prices and other terms and provisions upon
which the shares of the series may be redeemed;
(iv) Whether or not the shares of the series
shall be subject to the operation of a retirement
or sinking fund to be applied to the purchase or
redemption of such shares and, if such retirement
or sinking fund be established, the annual amount
thereof and the terms and provisions relative to
the operation thereof;
(v) Whether or not the shares of the series
shall be convertible into or exchangeable for
shares of any other class or classes, with or
without par value, or of any other series of the
same class, and, if provision is made for conver-
sion or exchange, the times, prices, rates,
-3-
<PAGE>
adjustments and other terms and conditions of
such conversion or exchange;
(vi) Whether or not the shares of the series
have voting rights, in addition to the voting
rights provided by law, and, if so, subject to
the limitation hereinafter set forth, the terms
of such voting rights;
(vii) The rights of the shares of the series
in the event of voluntary or involuntary liquida-
tion, dissolution, or upon the distribution of
assets of the corporation; and
(viii) Any other powers, preferences and rela-
tive, participating, optional or other special
rights, and qualifications, limitations or
restrictions thereof, of the shares of such
series, as the board of directors may deem advis-
able and as shall not be inconsistent with the
provisions of this Certificate of Incorporation.
2. The holders of shares of the Preferred Stock
of each series shall be entitled to receive dividends,
in accordance with the provisions of the resolution of
the board of directors creating each series, out of
funds legally available for the payment thereof, at
the rates fixed by the board of directors for such
series, and no more, before any dividends, other than
dividends payable in Common Stock, shall be declared
and paid, or set apart for payment, on the Common
Stock with respect to the same dividend period.
3. Whenever, at any time, dividends on the then
outstanding Preferred Stock as may be required with
respect to any series outstanding shall have been paid
or declared and set apart for payment on the then out-
standing Preferred Stock, and after complying with
respect to any retirement or sinking fund or funds for
any series of Preferred Stock, the board of directors
may, subject to the provisions of the resolution or
resolutions creating any series of Preferred Stock,
declare and pay dividends on the Common Stock.
4. The holders of shares of the Preferred Stock
of each series shall be entitled upon liquidation or
dissolution or upon the distribution of the assets of
-4-
<PAGE>
the corporation to such preferences as provided in the
resolution or resolutions creating such series of Pre-
ferred Stock, and no more, before any distribution of
the assets of the corporation shall be made to the
holders of shares of Common Stock. Whenever the hold-
ers of shares of the Preferred Stock shall have been
paid the full amounts to which they shall be entitled,
the holders of shares of the Common Stock shall be
entitled to share ratably in all assets of the corpo-
ration remaining unless otherwise provided in the res-
olution or resolutions creating such series of Pre-
ferred Stock.
5. At all meetings of the stockholders of the
corporation, the holders of shares of the Common Stock
shall be entitled to one vote for each share of Common
Stock held by them. Except as otherwise provided by a
resolution or resolutions of the board of directors
creating any series of Preferred Stock or by the Gen-
eral Corporation Law of Delaware, the holders of
shares of the Common Stock issued and outstanding
shall have and possess the exclusive right to notice
of stockholders' meetings and the exclusive power to
vote. The holders of shares of the Preferred Stock
issued and outstanding shall,in no event, be entitled
to more than one vote for each share of Preferred
Stock held by them unless otherwise required by law.
6. The Preferred Stock purchased, redeemed or
converted pursuant to any of the provisions of the
resolution of the board of directors creating each
series, shall, at the discretion of the board of
directors, be held in the treasury of the corporation
subject to reissuance, or shall, from time to time, in
the discretion of the board of directors, upon the
filing and recording of such certificate as may be in
accordance with the laws of the State of Delaware, be
returned to the status of authorized and unissued
shares of Preferred Stock, in which event such shares
shall no longer be part of the series created in con-
nection with the original issuance thereof.
7. No holder of the Common Stock or the Pre-
ferred Stock of the corporation shall be entitled as
such, as a matter of right, to subscribe for, or pur-
chase any part of, any new or additional issue of
stock of the corporation of any class or of any issue
-5-
<PAGE>
of securities convertible into stock, or of any war-
rants or rights to purchase stock, whether now or
hereafter authorized and whether issued for money or
for a consideration other than money.
Subject to the provisions of this Article FOURTH,
upon such terms, in such manner and under such condi-
tions, in conformity with law, as may be fixed by the
board of directors, the board of directors shall have
the power to issue bonds, debentures, or other obliga-
tions, either convertible or non-convertible, into the
corporation's stock, and warrants and rights to pur-
chase the corporation's stock.
FIFTH. 1. The business and affairs of the corpora-
tion shall be managed by, or under the direction of, a board of
directors consisting of not less than five (5) nor more than
fifteen (15) persons. The exact number of directors within the
minimum and maximum limitations specified herein shall be fixed
from time to time by resolution of a majority of the whole board
of directors. All directors of the corporation shall hold
office until their respective successors shall be elected and
qualified or until their earlier resignation or removal. The
directors shall have the power, from time to time, to increase
or decrease their own number, within the minimum and maximum
limitations specified herein, by resolution of the board of
directors as hereinabove provided.
2. Directors may be removed from office with or
without cause by the holders of a majority of the outstanding
shares of capital stock of the corporation entitled to vote at
an election of directors.
3. In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly autho-
rized:
To make, alter or repeal the by-laws of the
corporation.
To authorize and cause to be executed mortgages
and liens upon the real and personal property of the
corporation.
To set apart out of any of the funds of the cor-
poration available for dividends a reserve or reserves
-6-
<PAGE>
for any proper purpose and to abolish any such reserve
in the manner in which it was created.
By a majority of the whole board, to designate
one or more committees, each committee to consist of
two or more of the directors of the corporation. The
board may designate one or more directors as alternate
members of any committee, who may replace any absent
or disqualified member at any meeting of the commit-
tee. Any such committee, to the extent provided in
the resolution or in the by-laws of the corporation,
shall have and may exercise the powers of the board of
directors in the management of the business and
affairs of the corporation, and may authorize the seal
of the corporation to be affixed to all papers which
may require it; provided, however, the by-laws may
provide that in the absence or disqualification of any
member of such committee or committees, the member or
members thereof present at any meeting and not dis-
qualified from voting, whether or not he or they con-
stitute a quorum, may unanimously appoint another mem-
ber of the board of directors to act at the meeting in
the place of any such absent or disqualified member.
When and as authorized by the affirmative vote of
the holders of a majority of the stock issued and out-
standing having voting power given at a stockholders'
meeting duly called upon such notice as is required by
statute, or when authorized by the written consent of
the holders of a majority of the voting stock issued
and outstanding, to sell, lease or exchange all or
substantially all of the property and assets of the
corporation, including its good will and its corporate
franchises, upon such terms and conditions and for
such consideration, which may consist in whole or in
part of money or property including shares of stock
in, and/or other securities of, any other corporation
or corporations, as its board of directors shall deem
expedient and for the best interests of the corpora-
tion.
SIXTH. Whenever a compromise or arrangement is pro-
posed between this corporation and its creditors or any class of
them and/or between this corporation and its stockholders or any
class of them, any court of equitable jurisdiction within the
State of Delaware may, on the application in a summary way of
this corporation or of any creditor or stockholder thereof, or
-7-
<PAGE>
on the application of any receiver or receivers appointed for
this corporation under the provisions of Section 291 of Title 8
of the Delaware Code or on the application of trustees in disso-
lution or of any receiver or receivers appointed for this corpo-
ration under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of cred-
itors, and/or of the stockholders or class of stockholders of
this corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number rep-
resenting three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders
of this corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of this corporation as
consequence of such compromise or arrangement, the said compro-
mise or arrangement and the said reorganization shall, if sanc-
tioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corpora-
tion, as the case may be, and also on this corporation.
SEVENTH. Meetings of stockholders may be held within
or without the State of Delaware, as the by-laws may provide.
The books of the corporation may be kept (subject to any provi-
sion contained in the statutes) outside the State of Delaware at
such place or places as may be designated from time to time by
the board of directors or in the by-laws of the corporation.
Elections of directors need not be by written ballot unless the
by-laws of the corporation shall so provide.
EIGHTH. The corporation reserves the right to amend,
alter, change or repeal any provision contained in this certifi-
cate of incorporation, in the manner now or hereafter prescribed
by statute, and all rights conferred upon stockholders herein
are granted subject to this reservation.
NINTH. No director of the corporation shall be liable
to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that the fore-
going shall not eliminate or limit liability of a director (i)
for any breach of such director's duty of loyalty to the corpo-
ration or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of Title 8 of the Del-
aware Code, or (iv) for any transaction from which such director
derived an improper personal benefit. Neither the amendment nor
repeal of this Article Ninth, nor the adoption of any provision
of this Restated Certificate of Incorporation inconsistent with
-8-
<PAGE>
this Article Ninth, shall eliminate or reduce the effect of this
Article Ninth in respect of any matter occurring, or any cause
of action, suit or claim that, but for this Article Ninth would
accrue or arise, prior to such amendment, repeal or adoption of
an inconsistent provision.
TENTH. The affirmative vote of the holders of not
less than 66 2/3% of the outstanding voting stock of the Corpo-
ration shall be required for the approval or authorization of
any (i) plan of merger or consolidation of the Corporation with
or into any other corporation; (ii) any sale, lease, exchange or
disposition of all or substantially all of the property and
assets of the Corporation to or with any other person, corpora-
tion or entity not made in the ordinary course of business; or
(iii) involuntary dissolution of the Corporation or revocation
of voluntary dissolution proceedings; provided, however, if the
Board of Directors shall have approved any transaction described
in clauses (i), (ii) or (iii) above by a resolution adopted by
three-fifths of the Board of Directors then in office and enti-
tled to vote thereon, such 66 2/3% stockholder voting require-
ment shall not be applicable.
ELEVENTH. No action required to be taken or which may
be taken at any annual or special meeting of stockholders of the
Corporation may be taken without a meeting, and the power of the
stockholders to consent in writing, without a meeting, to the
taking of any action is specifically denied. Except as other-
wise required by law, special meetings of stockholders of the
Corporation may be called only by the Board of Directors pursu-
ant to a resolution approved by a majority of the entire Board
of Directors or as otherwise provided in the Corporation's
By-laws.
TWELFTH. Notwithstanding any other provision of this
Restated Certificate of Incorporation or the Corporation's
By-laws (and notwithstanding the fact that some lesser percent-
age may be specified by law, this Restated Certificate of Incor-
poration or the Corporation's By-laws), the Corporation's
By-laws, as they relate to Articles Tenth, Eleventh or Twelfth
hereof, may be amended, altered or repealed, and new By-laws
inconsistent with Articles Tenth, Eleventh or Twelfth hereof may
be enacted only by the affirmative vote of not less than 66-2/3%
of the outstanding shares of capital stock of the Corporation
entitled to vote at a meeting of stockholders duly called for
such purpose, or by a vote of not less than three-fifths of the
entire Board of Directors then in office.
-9-
<PAGE>
STATE OF CONNECTICUT )
: ss.:
COUNTY OF FAIRFIELD )
BE IT REMEMBERED that on this ____ day of ___________,
1995, personally came before me, a Notary Public for the State
of Connecticut, H. Arthur Bellows, Jr., Chairman of the Board of
The Triangle Corporation, a Delaware corporation, and he duly
executed the foregoing Restated and Amended Certificate of
Incorporation before me and acknowledged the said Certificate to
be his act and deed and the act and deed of The Triangle Corpo-
ration and that the facts stated therein are true.
GIVEN under my hand the day and year aforesaid.
_____________________________
Notary Public
-10-
EXHIBIT 4.2
AMENDED AND RESTATED
BY-LAWS
OF
AUDITS & SURVEYS, INC.
(F/K/A THE TRIANGLE CORPORATION)1
ARTICLE I
Stockholders
Section 1.1. Annual Meetings. An annual meeting of
stockholders shall be held for the election of directors at such
date, time and place, either within or without the State of Del-
aware, as may be designated by resolution of the Board of Direc-
tors from time to time. Any other proper business may be trans-
acted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of
stockholders may be called at any time by the Chairman of the
Board, the Vice Chairman of the Board, if any, the President,
the Secretary or an Assistant Secretary when directed to do so
by resolution of the Board at a duly convened meeting of the
Board, or at the request in writing of a majority of the Board,
to be held at such time and place either within or without the
State of Delaware as may be stated in the notice of the meeting.
A special meeting of stockholders shall be called by the Secre-
tary upon the written request, stating the purpose of the meet-
ing, of stockholders who together own of record 66-2/3% of the
outstanding stock of any class entitled to vote at such meeting.
Business transacted at all special meetings shall be confined to
the purposes stated in the notice of meeting.
Section 1.3. Notice of Meetings. Whenever stockhold-
ers are required or permitted to take any action at a meeting, a
written notice of the meeting shall be given which shall state
the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting
is called. Unless otherwise provided by law, the written notice
of any meeting shall be given not less than ten nor more than
sixty days before the date of the meeting to each stockholder
_________________________
1 Adopted August 1967.
Amended May 20, 1987, May 16, 1988 and May 18, 1989.
1
<PAGE>
entitled to vote at such meeting. Except as otherwise expressly
provided by law, no notice of any meeting of stockholders shall
be required to be given to any stockholder who shall attend such
meeting in person or by proxy, or who shall, in person or by
attorney thereunto authorized, waive such notice in writing or
by telegraph, facsimile or cable either before or after such
meeting.
Whenever under the provisions of statutes or of the
certificate of incorporation or of these by-laws, notice is
required to be given to any stockholder, it shall not be neces-
sary that personal notice be given, and such notice may be given
in writing, by mail, by telegraph, by facsimile or by any other
lawful means of communication. Notice by mail shall be
addressed to such stockholder, at his address as it appears on
the records of the corporation, with postage thereon prepaid,
and such notice shall be deemed to be given at the time when the
same shall be deposited in the United States mail.
Section 1.4. Adjournments. Any meeting of stockhold-
ers, annual or special, may adjourn from time to time to recon-
vene at the same or some other place, and notice need not be
given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact
any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty days or if
after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the
meeting.
Section 1.5. Quorum. At each meeting of stockhold-
ers, except where otherwise provided by law or the certificate
of incorporation or these by-laws, the holders of a majority of
the outstanding shares of each class of stock entitled to vote
at the meeting, present in person or by proxy, shall constitute
a quorum. For purposes of the foregoing, two or more classes or
series of stock shall be considered a single class if the hold-
ers thereof are entitled to vote together as a single class at
the meeting. In the absence of a quorum the stockholders so
present may, by majority vote, adjourn the meeting from time to
time in the manner provided by Section 1.4 of these by-laws
until a quorum shall attend. Shares of its own stock belonging
to the corporation or to another corporation, if a majority of
the shares entitled to vote in the election of directors of such
other corporation is held, directly or indirectly, by the corpo-
ration, shall neither be entitled to vote nor be counted for
2
<PAGE>
quorum purposes; provided, however, that the foregoing shall not
limit the right of any corporation to vote stock, including but
not limited to its own stock, held by it in a fiduciary
capacity.
Section 1.6. Organization. Meetings of stockholders
shall be presided over by the Chairman of the Board, or in his
absence by the President, or in his absence by the Vice Chairman
of the Board, if any, or in his absence by a Vice President in
order of seniority, or in the absence of the foregoing persons
by a chairman designated by the Board of Directors, or in the
absence of such designation by a chairman chosen at the meet-
ing. The Secretary shall act as secretary of the meeting, but
in his absence the chairman of the meeting may appoint any per-
son to act as secretary of the meeting.
Section 1.7. Voting; Proxies. Unless otherwise pro-
vided in the certificate of incorporation, each stockholder
entitled to vote at any meeting of stockholders shall be enti-
tled to one vote for each share of stock held by him which has
voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express con-
sent or dissent to corporate action in writing without a meeting
may authorize another person or persons to act for him by proxy,
but no such proxy shall be voted or acted upon after three years
from its date, unless the proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by
attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly exe-
cuted proxy bearing a later date with the Secretary of the cor-
poration. At all meetings of stockholders for the election of
directors a plurality of the votes cast shall be sufficient to
elect. All other elections and questions shall, unless other-
wise provided by law or by the certificate of incorporation or
these by-laws, be decided by the vote of the holders of a major-
ity of the outstanding shares of all classes of stock entitled
to vote thereon present in person or by proxy at the meeting,
provided that (except as otherwise required by law or by the
certificate of incorporation) the Board of Directors may require
a greater vote upon any election or question.
Section 1.8. Inspectors. The Board of Directors
shall, in advance of any meeting of stockholders, appoint one or
more inspectors to act at the meeting and make a written report
thereof. The Board of Directors may designate one or more
3
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persons as alternate inspectors to replace any inspector who
fails to act. If no inspector or alternate is able to act at a
meeting of stockholders, the person presiding at the meeting
shall appoint one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his
duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to
the best of his ability. The inspectors shall ascertain the
number of shares outstanding and the voting power of each,
determine the shares represented at a meeting and the validity
of proxies and ballots, count all votes and ballots, determine
and retain for a reasonable period a record of the disposition
of any challenges made to any determination by the inspectors,
and certify their determination of the number of shares repre-
sented at the meeting, and their count of all votes and ballots.
Section 1.9. Fixing Date for Determination of Stock-
holders of Record. In order that the corporation may determine
the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or entitled to
receive payment of any dividend or other distribution or allot-
ment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for
the purpose of any other lawful action, the Board of Directors
may fix, in advance, a record date, which shall not be more than
sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action. If no
record date is fixed: (1) the record date for determining
stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held; (2) the record date for deter-
mining stockholders entitled to express consent to corporate
action in writing without a meeting, when no prior action by the
Board of Directors is necessary, shall be the day on which the
first written consent is expressed; and (3) the record date for
determining stockholders for any other purpose shall be at the
close of business on the day on which the Board of Directors
adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
Section 1.10. List of Stockholders Entitled to Vote.
The Secretary shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the
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stockholders entitled to vote at the meeting, arranged in alpha-
betical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meet-
ing, or, if not so specified, at the place where the meeting is
to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof and
may be inspected by any stockholder who is present. The stock
ledger shall be the only evidence as to who are the stockholders
entitled to examine the stock ledger, the list of stockholders
or the books of the corporation, or to vote in person or by
proxy at any meeting of stockholders.
Section 1.11. Stockholder Inspection of Corporate
Records. Subject to the provisions of any applicable statute,
the Board of Directors shall have power to determine, from time
to time, whether and to what extent and at what times and places
and under what conditions and regulations the accounts, records,
books and documents of the corporation, or any of them, shall be
open to the inspection of the stockholders; and, except as pro-
vided above or in any such statute, no stockholder shall have
any right to inspect any account, record, book or document of
the corporation.
Section 1.12. Consent of Stockholders in Lieu of
Meeting. Except as may be otherwise provided in the certificate
of incorporation, any action required by law to be taken at any
meeting of stockholders, or any action which may be taken at any
meeting of stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, set-
ting forth the action so taken, shall be signed by the holders
of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in
writing.
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ARTICLE II
Board of Directors
Section 2.1. Number; Qualifications. The business
and affairs of the Corporation shall be managed by its Board of
Directors, consisting of not less than five nor more than fif-
teen persons. The exact number of directors shall be determined
from time to time by resolution of the Board of Directors.
Directors need not be stockholders.
Section 2.2. Election; Resignation; Removal; Vacan-
cies. The directors shall have the power, from time to time, to
increase or decrease their own number, within the minimum and
maximum limitations specified herein and in the certificate of
incorporation, by resolution of the Board as hereinabove pro-
vided. Any director may resign at any time upon written notice
to the corporation. The resignation of any director shall take
effect at the time specified in such notice; and, unless other-
wise specified therein, the acceptance of such resignation shall
not be necessary to make it effective. Any newly-created direc-
torship resulting from an increase in the number of directors
and any vacancy occurring in the Board of Directors for any
cause may be filled by a majority of the remaining members of
the Board of Directors, although such majority is less than a
quorum, or by a plurality of the votes cast at a meeting of
stockholders, and each director so elected shall hold office
until his successor is elected and qualified or until his ear-
lier resignation or removal.
Section 2.3. Regular Meetings. Regular meetings of
the Board of Directors may be held at such places within or
without the State of Delaware and at such times as the Board of
Directors may from time to time determine, and if so determined
notices thereof need not be given.
Section 2.4. Special Meetings. Special meetings of
the Board of Directors may be held at any time or place within
or without the State of Delaware whenever called by the Chairman
of the Board, by the Vice Chairman of the Board, if any, by the
President or a majority of the members of the Board of Direc-
tors. Notice of each such meeting shall be given to each direc-
tor, if sent to him by mail, at least two days before the day on
which the meeting is to be held, or, if sent to him by tele-
graph, cable, facsimile, telephone or personal delivery, at
least 24 hours before the time the meeting is to be held. Each
such notice shall state the time and place of the meeting but
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need not state the purposes thereof, except as otherwise pro-
vided by statute or by these by-laws.
Section 2.5. Notices. Whenever under the provisions
of statutes or of the certificate of incorporation or of these
by-laws, notice is required to be given to any director, it
shall not be necessary that personal notice be given, and such
notice may be given in writing, by mail, addressed to such
director, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be depos-
ited in the United States mail. Notice to directors may also be
given by telegraph,facsimile or cable, and such notice shall be
deemed to be given when the same shall be filed, or in person or
by telephone, and such notice shall be deemed to be given when
the same shall be delivered.
Except as otherwise expressly provided by law, no
notice of any meeting of the Board shall be required to be given
to any director who shall attend such meeting in person or who
shall, in person or by attorney thereunto authorized, waive such
notice in writing or by telegraph, facsimile or cable either
before or after such meeting. No notice of a meeting need be
given if all the directors are present in person. Any business
may be transacted at any meeting of the Board, whether or not
specified in a notice of the meeting.
Section 2.6. Telephonic Meetings Permitted. Members
of the Board of Directors or any committee designated by the
Board may participate in a meeting of such Board or committee by
means of conference telephone or similar communications equip-
ment by means of which all persons participating in the meeting
can hear each other, and participation in a meeting pursuant to
this by-law shall constitute presence in person at such meeting.
Section 2.7. Quorum; Vote Required for Action. At
all meetings of the Board of Directors a majority of the autho-
rized number of directors shall constitute a quorum for the
transaction of business. Except in cases in which the certifi-
cate of incorporation or these by-laws otherwise provide, the
vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of
Directors.
Section 2.8. Organization. Meetings of the Board of
Directors shall be presided over by the Chairman of the Board,
or in his absence by the President, or in his absence by the
Vice Chairman of the Board, if any, or in their absence by a
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chairman chosen at the meeting. The Secretary shall act as sec-
retary of the meeting, but in his absence the chairman of the
meeting may appoint any person to act as secretary of the
meeting.
Section 2.9. Action by Directors by Unanimous Written
Consent. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members
of the Board or of such committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or committee.
Section 2.10. Service of Directors in Other Capaci-
ties. Nothing here contained shall be construed so as to pre-
clude any director from serving the corporation in any other
capacity, or from serving any of its stockholders, subsidiaries
or affiliated corporations in any capacity, and receiving com-
pensation therefor.
ARTICLE III
Committees
Section 3.1. Committees. The Board of Directors may,
by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of one or more
of the directors of the corporation. The Board may designate
one or more directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of a member
of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member
of the Board of Directors to act at the meeting in place of any
such absent or disqualified member. Any such committee, to the
extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs
of the corporation, and may authorize the seal of the corpora-
tion to be affixed to all papers which may require it; but no
such committee shall have power or authority in reference to
amending the certificate of incorporation of the corporation,
adopting an agreement of merger or consolidation, recommending
to the stockholders the sale, lease or exchange of all or sub-
stantially all of the corporation's property and assets,
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recommending to the stockholders a dissolution of the corpora-
tion or a revocation of dissolution, or amending these by-laws;
and, unless the resolution expressly so provides, no such com-
mittee shall have the power or authority to declare a dividend
or to authorize the issuance of stock.
Section 3.2. Committee Rules. Unless the Board of
Directors otherwise provides, each committee designated by the
Board may make, alter and repeal rules for the conduct of its
business. In the absence of such rules each committee shall
conduct its business in the same manner as the Board of Direc-
tors conducts its business pursuant to Article II of these
by-laws.
ARTICLE IV
Officers
Section 4.1. Executive Officers; Election; Qualifica-
tions; Term of Office; Resignation; Removal; Vacancies. The
Board of Directors shall choose a Chairman of the Board, a Pres-
ident, a Treasurer and a Secretary. The Board of Directors may
also choose a Vice Chairman of the Board, one or more Vice Pres-
idents, one or more Assistant Secretaries, a Controller and one
or more Assistant Controllers. Each such officer shall hold
office until the first meeting of the Board of Directors after
the annual meeting of stockholders next succeeding his election,
and until his successor is elected and qualified or until his
earlier resignation or removal. Any officer may resign at any
time upon written notice to the corporation. Any such resigna-
tion shall take effect at the time specified therein; and,
unless otherwise specified therein, the acceptance of such res-
ignation shall not be necessary to make it effective. The Board
of Directors may remove any officer with or without cause at any
time. Any number of offices may be held by the same person.
Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise may be filled for the unex-
pired portion of the term by the Board of Directors at any regu-
lar or special meeting.
Section 4.2. The Chairman of the Board. The Chairman
of the Board shall be a member of the Board and shall preside at
its meetings and at all meetings of stockholders. He shall,
subject to the direction and under the supervision of the Board,
be the chief executive officer of the corporation and shall have
general charge of the business and affairs of the corporation.
He shall have power in the name of the corporation and on its
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behalf to execute any and all deeds, mortgages, contracts,
agreements and other instruments in writing. He shall employ
and discharge employees and agents of the corporation, except
such as shall hold their offices by appointment of the Board,
but he may delegate these powers to other officers as to employ-
ees under their immediate supervision. He shall see that the
acts of the executive officers conform to the policies of the
corporation as determined by the Board and shall have such pow-
ers and perform such other duties as may from time at time be
assigned to him by the Board.
Section 4.3. The President. The President shall,
subject to the direction and under the supervision of the Chair-
man of the Board and the Board, be the chief operating officer
of the corporation and shall have such powers and perform such
duties as generally pertain to the office of President, as well
as such further powers and duties as may be assigned to him by
the Chairman of the Board or by the Board. In the absence of
the Chairman of the Board, the President shall preside at all
meetings of the Board of Directors and of the stockholders.
Section 4.4. The Vice Chairman of the Board. The
Vice Chairman of the Board, if any, shall be a member of the
Board. If the offices of Chairman of the Board and President
are vacant, or if the Chairman of the Board and the President
are absent, he shall preside at meetings of the stockholders and
of the Board. He shall have such powers and perform such duties
as may be assigned to him by the Chairman of the Board or by the
Board.
Section 4.5. Vice Presidents. Each Vice President
shall have such powers and perform such duties as the Board, the
Chairman of the Board, the Vice Chairman of the Board, if any,
or the President may from time to time prescribe, and shall per-
form such other duties as may be prescribed in these By-Laws.
In the absence or inability to act of the Chairman of the Board,
the Vice Chairman of the Board, if any, and the President, the
Vice President next in order as designated by the Board or, in
the absence of such designation, senior in length of service in
such capacity, who shall be present and able to act, shall per-
form all the duties and may exercise any of the powers of the
President, subject to the control of the Board. The performance
of any duty by a Vice President shall be conclusive evidence of
his power to act. Except where by law the signature of the
President is required, each of the Vice Presidents shall possess
the same power as the President to sign all certificates, con-
tracts, obligations and other instruments of the corporation.
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Section 4.6. Secretary. The Secretary shall record
all the proceedings of the meetings of the stockholders and
directors and of any committees in a book to be kept for that
purpose; he shall see that all notices are duly given in accor-
dance with the provisions of these by-laws or as required by
law, he shall be custodian of the records of the corporation; he
shall see that the corporate seal is affixed to all documents
the execution of which, on behalf of the corporation, under its
seal, it duly authorized, and when so affixed may attest the
same; and, in general, he shall perform all duties incident to
the office of secretary of a corporation, and such other duties
as, from time to time, may be assigned to him by the Chairman of
the Board or the Board of Directors or as may be provided by
law.
Section 4.7. Treasurer. The Treasurer shall have
charge of and be responsible for all funds, securities, receipts
and disbursements of the corporation, and shall deposit or cause
to be deposited, in the name of the corporation, all moneys or
other valuable effects in such banks, trust companies or other
depositories as shall, from time to time, be selected by or
under authority of the Board of Directors; if required by the
Board of Directors, he shall give a bond for the faithful dis-
charge of his duties, with such surety or sureties as the Board
of Directors may determine; he shall keep or cause to be kept
full and accurate records of all receipts and disbursements in
books of the corporation and shall render to the Board of Direc-
tors, whenever requested, an account of the financial condition
of the corporation; and, in general, he shall perform all the
duties incident to the office of treasurer of a corporation, and
such other duties as, from time to time, may be assigned to him
by the Chairman of the Board or the Board of Directors or as may
be provided by law.
Section 4.8. Controller. The Controller shall be the
chief accounting officer of the corporation. He shall keep or
cause to be kept all books of account and accounting records of
the corporation and shall keep and maintain, or cause to be kept
and maintained, adequate and correct accounts of the properties
and business transactions of the corporation. He shall prepare
or cause to be prepared appropriate financial statements for the
corporation; and, in general, shall perform all the duties inci-
dent to the office of controller of a corporation, and such
other duties as, from time to time, may be assigned to him by
the Chairman of the Board or the Board of Directors or as may be
provided by law.
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Section 4.9. Assistant Treasurers. In the absence or
inability of the Treasurer to act, any Assistant Treasurer may
perform all the duties and exercise all of the powers of the
Treasurer, subject to the control of the Board. The performance
of any such duty shall be conclusive evidence of his power to
act. An Assistant Treasurer shall also perform such other
duties as the Chairman of the Board or the Treasurer or the
Board may from time to time assign to him.
Section 4.10. Assistant Secretaries. In the absence
or inability of the Secretary to act, any Assistant Secretary
may perform all the duties and exercise all the powers of the
Secretary, subject to the control of the Board. The performance
of any such duty shall be conclusive evidence of his power to
act. An Assistant Secretary shall also perform such other
duties as the Chairman of the Board or the Secretary or the
Board may from time to time assign to him.
Section 4.11. Other Officers. The Board of Directors
may from time to time appoint such other officers, agents or
employees and may delegate to them such powers and duties as it
may deem desirable.
Section 4.12. Salaries; Service in Other Capacities.
The salaries of the officers shall be fixed from time to time by
the Board of Directors. Nothing contained herein shall preclude
any officer from serving the corporation in any other capacity,
including that of director, or from serving any of its stock-
holders, subsidiaries or affiliated corporations in any capac-
ity, and receiving a proper compensation therefor.
ARTICLE V
Stock
Section 5.1. Certificates. Every holder of stock
shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board, the Vice Chair-
man of the Board, if any, the President or a Vice President, and
by the Treasurer or an Assistant Treasurer, the Controller or an
Assistant Controller, or the Secretary or an Assistant Secre-
tary, of the corporation, certifying the number of shares owned
by him in the corporation. If such certificate is countersigned
(1) by a transfer agent other than the corporation or its
employee, or (2) by a registrar other than the corporation or
its employee, any other signature on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who
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has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such offi-
cer, transfer agent or registrar at the date of issue.
If the corporation shall be authorized to issue more
than one class of stock or more than one series of any class,
the designations, preferences and relative, participating,
optional or other special rights of each class of stock or
series thereof and the qualifications, limitations or restric-
tions of such preferences and/or rights shall be set forth in
full or summarized on the face or back of the certificate which
the corporation shall issue to represent such class or series of
stock, provided that, except in the case of restrictions on
transfers of securities which are required to be noted on the
certificate, in lieu of the foregoing requirements, there may be
set forth on the face or back of the certificate which the cor-
poration shall issue to represent such class or series of stock,
a statement that the corporation will furnish without charge to
each stockholder who so requests the designations, preferences
and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 5.2. Lost, Stolen or Destroyed Stock Certifi-
cates. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certif-
icates theretofore issued by the corporation alleged to have
been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate of stock to
be lost, stolen or destroyed. When authorizing such issue of a
new certificate or certificates, the Board of Directors may, in
its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to
give the corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the corpo-
ration with respect to the certificate alleged to have been
lost, stolen or destroyed. Proper evidence of such loss, theft
or destruction shall be procured, if required, by the Board.
Section 5.3. Issuance of New Certificates. Upon sur-
render to the corporation or the transfer agent of the corpora-
tion of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to trans-
fer, it shall be the duty of the corporation to issue a new
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certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 5.4. Rights of Registered Stockholders. The
corporation shall be entitled to recognize the exclusive right
of a person registered on its books as the owner of shares to
receive payment of any dividend or other distribution or allot-
ment of any rights, or to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of
any other lawful action and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by
the laws of Delaware.
ARTICLE VI
Contracts, Loans, Checks, Deposits, Etc.
Section 6.1. Signatures. All contracts and agree-
ments authorized by the Board of Directors, and all checks,
drafts, bills of exchange or other orders for the payment of
money, issued in the name of the corporation, shall be signed by
such person or persons and in such manner as may from time to
time be designated by the Board of Directors, which designation
may be general or confined to specific instances; and unless so
designated by the Board of Directors or in these by-laws, no
officer, agent or employee shall have any power or authority to
bind the corporation by any contract or engagement or to pledge
its credit or to render it liable pecuniarily for any purpose or
for any amount.
Section 6.2. Authorization. No loan shall be con-
tracted on behalf of the corporation, and no evidence of indebt-
edness shall be issued in its name, unless authorized by the
Board of Directors. Such authorization may be general or con-
fined to specific instances. Loans so authorized by the Board
of Directors may be effected at any time for the corporation
from any bank, trust company or other institution, or from any
firm, corporation or individual. All bonds, debentures, notes
and other obligations or evidences of indebtedness of the corpo-
ration issued for such loans shall be made, executed and deliv-
ered as the Board of Directors shall authorize. When so autho-
rized by the Board of Directors any part of or all the proper-
ties, including contract rights, assets, business or good will
of the corporation, whether then owned or thereafter acquired,
may be mortgaged, pledged, hypothecated or conveyed or assigned
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in trust as security for the payment of such bonds, debentures,
notes and other obligations or evidences of indebtedness of the
corporation, and of the interest thereon, by instruments exe-
cuted and delivered in the name of the corporation.
Section 6.3. Deposit of Funds. All funds of the cor-
poration not otherwise employed shall be deposited from time to
time to the credit of the corporation in such banks, trust com-
panies or other depositaries as the Board of Directors may
select. The Board of Directors may make such special rules and
regulations with respect to such bank accounts, not inconsistent
with the provisions of these by-laws, as it may deem expedient.
For the purpose of deposit and for the purpose of collection for
the account of the corporation, checks, drafts and other orders
for the payment of money which are payable to the order of the
corporation shall be endorsed, assigned and delivered by such
person or persons and in such manner as may from time to time be
designated by the Board of Directors.
Section 6.4. Appointment of Attorneys and Agents.
Unless otherwise provided by resolution adopted by the Board of
Directors, the Chairman of the Board, the Vice Chairman of the
Board, if any, the President or any Vice President may from time
to time appoint an attorney or attorneys, or an agent or agents,
to exercise in the name and on behalf of the corporation the
powers and rights which the corporation may have as the holder
of stock or other securities in any other corporation to vote or
to consent in respect of such stock or other securities; and the
Chairman of the Board, the Vice Chairman of the Board, if any,
the President or any Vice President may instruct the person or
persons so appointed as to the manner of exercising such powers
and rights and the Chairman of the Board, the Vice Chairman of
the Board, if any, the President or any Vice President may exe-
cute or cause to be executed in the name and on behalf of the
corporation and under its corporate seal, or otherwise, all such
written proxies, powers of attorney or other written instruments
as he may deem necessary in order that the corporation may exer-
cise such powers and rights.
ARTICLE VII
Indemnification
Section 7.1. Actions, Suits or Proceedings Other than
by or in the Right of the Corporation. The corporation shall
indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action,
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suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation) by reason of the fact that he is or was or has
agreed to become a director, officer, employee or agent of the
corporation, or is or was serving or has agreed to serve at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have
been taken or omitted in such capacity, against expenses,
including, without limitation, expenses of investigations, judi-
cial or administrative proceedings or appeals, amounts paid in
settlement by or on behalf of the indemnitee, attorneys' fees
and disbursements and any expenses of establishing a right to
indemnification under this Article VII (the "Expenses"), judg-
ments, fines and penalties actually and reasonably incurred by
him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, con-
viction, or upon a plead of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or pro-
ceeding, had reasonable cause to believe that his conduct was
unlawful.
Section 7.2. Actions or Suits by or in the Right of
the Corporation. The corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was or has agreed to become a
director, officer, employee or agent of the corporation, or is
or was serving or has agreed to serve at the request of the cor-
poration as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enter-
prise, or by reason of any action alleged to have been taken or
omitted in such capacity, against Expenses, judgments, fines or
penalties actually and reasonably incurred by him or on his
behalf in connection with the defense or settlement of such
action or suit and any appeal therefrom, if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or
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matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action
or suit was brought shall determine upon application that,
despite the adjudication of such liability but in view of all
the circumstances of the case, such person is fairly and reason-
ably entitled to indemnity for such costs, charges and expenses
which the Court of Chancery of Delaware or such other court
shall deem proper.
Section 7.3. Indemnification for Expenses of Success-
ful Party. Notwithstanding the other provisions of this Article
VII, to the extent that a director, officer, employee or agent
of the corporation has been successful on the merits or other-
wise, including, without limitation, the dismissal of an action
without prejudice, in defense of any action, suit or proceeding
referred to in Sections 7.1 and 7.2, or in defense of any claim,
issue or matter therein, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his
behalf in connection therewith.
Section 7.4. Determination of Right to Indemnifica-
tion. Any indemnification under Sections 7.1 and 7.2 (unless
ordered by a court) shall be paid by the corporation upon a
determination made (1) by the Board by a majority vote of a quo-
rum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable,
or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or
(3) by the stockholders, that indemnification of the director,
officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth
in Sections 7.1 and 7.2.
Section 7.5. Advancement of Expenses. Expenses
incurred by a person referred to in Sections 7.1 and 7.2 in
defending a civil or criminal action, suit or proceeding shall
be paid by the corporation in advance at the written request of
a director, officer, employee or agent, if such person shall
undertake to repay such amount to the extent that it is ulti-
mately determined that such person was not entitled to such
indemnification; provided, however, such an undertaking shall
not be secured and shall be accepted without reference to such
person's financial ability to make such repayment and shall not
be claimable against such person's spouse or children. The
Board may, in the manner set forth above in Section 7.4, and
upon approval of such director, officer, employee or agent of
the corporation, authorize the corporation's counsel to
17
<PAGE>
represent such person, in any action, suit or proceeding,
whether or not the corporation is a party to such action, suit
or proceeding.
Section 7.6. Procedure for Indemnification. Any
indemnification under Sections 7.1, 7.2 and 7.3 or advance of
Expenses under Section 7.5 shall be made promptly, and in any
event within 45 days, upon the written request of the director,
officer, employee or agent. The right to indemnification or
advancement of Expenses as granted by this Article VII shall be
enforceable by the director, officer, employee or agent in any
court of competent jurisdiction, if the corporation denies such
request, in whole or in part, or if no disposition thereof is
made within 45 days. Such person's Expenses incurred in connec-
tion with successfully establishing such right to indemnifica-
tion, in whole or in part, in any such action shall also be
indemnified by the corporation. It shall be a defense to any
such action (other than an action brought to enforce a claim for
the advancement of Expenses under Section 7.5 where the required
undertaking, if any, has been received by the corporation) that
the claimant has not met the standard of conduct set forth in
Sections 7.1 or 7.2, but the burden of proving such defense
shall be on the corporation. Neither the failure of the corpo-
ration (including its Board, its independent legal counsel, and
its stockholders) to have made a determination prior to the com-
mencement of such action that indemnification of the claimant is
proper in the circumstances because such person has met the
applicable standard of conduct set forth in Sections 7.1 and
7.2, nor the fact that there has been an actual determination by
the corporation (including its Board, its independent legal
counsel, and its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the
applicable standard of conduct.
Section 7.7. Other Rights. The indemnification and
advancement of Expenses provided by, or granted pursuant to,
this Article VII shall not be deemed exclusive of any other
rights to which a person seeking indemnification or advancement
of Expenses may be entitled under any law (common or statutory),
agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity
and as to action in another capacity while holding office or
while employed by or acting as agent for the corporation.
Section 7.8. Insurance. The corporation shall pur-
chase and maintain insurance on behalf of any person who is or
was or has agreed to become a director, officer, employee or
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agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and
incurred by him or on his behalf in any such capacity, or aris-
ing out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability
under the provisions of this Article VII, provided that such
insurance is available on acceptable terms, which determination
shall be made by a vote of a majority of the entire Board.
Section 7.9. Continuation of Right to Indemnifica-
tion. The indemnification and advancement of Expenses provided
by, or granted pursuant to, this Article VII shall continue as
to a person who has ceased to be a director, officer, employee
or agent, and shall inure to the benefit of the estate, heirs,
executors and administrators of such person.
Section 7.10. Amendment of Article VII. Neither the
amendment nor repeal of this Article VII, nor the adoption or
amendment of any other provision of these by-laws inconsistent
with this Article VII, shall apply to or affect in any respect
the applicability of this Article VII with respect to any act or
failure to act that occurred prior to such amendment, repeal or
adoption.
Section 7.11. Savings Clause. If this Article VII or
any portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, then the corporation shall
nevertheless indemnify each director, officer, employee and
agent of the corporation as to Expenses, judgments, fines and
penalties with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative,
including an action by or in the right of the corporation, to
the full extent permitted by any applicable portion of this
Article VII that shall not have been invalidated and to the full
extent permitted by applicable law.
ARTICLE VIII
Miscellaneous
Section 8.1. Fiscal Year. The fiscal year of the
corporation shall be determined by resolution of the Board of
Directors.
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Section 8.2. Seal. The corporate seal shall have the
name of the corporation inscribed thereon and shall be in such
form as may be approved from time to time by the Board of
Directors.
Section 8.3. Interested Directors; Quorum. No con-
tract or transaction between the corporation and one or more of
its directors or officers, or between the corporation and any
other corporation, partnership, association or other organiza-
tion in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the
director or officer is present at or participates in the meeting
of the Board or committee thereof which authorizes the contract
or transaction, or solely because his or their votes are counted
for such purpose, if: (1) the material facts as to his rela-
tionship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the commit-
tee, and the Board or committee in good faith authorizes the
contract or transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) the material facts as to
his relationship or interest and as to the contract or transac-
tion are disclosed or are known to the stockholders entitled to
vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (3) the
contract or transaction is fair as the corporation as of the
time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders. Common or
interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a com-
mittee which authorizes the contract or transaction.
Section 8.4. Form of Records. Any records maintained
by the corporation in the regular course of its business,
including its stock ledger, books of account, and minute books,
may be kept on, or be in the form of, punch cards, magnetic
tape, photographs, microphotographs, or any other information
storage device, provided that the records so kept can be con-
verted into clearly legible form within a reasonable time. The
corporation shall so convert any records so kept upon the
request of any person entitled to inspect the same.
Section 8.5. Amendment of By-Laws. These by-laws may
be altered or repealed at any regular meeting of the stockhold-
ers or of the Board of Directors or at any special meeting of
the stockholders or of the Board of Directors if notice of such
alteration or repeal is contained in the notice of such special
20
<PAGE>
meeting. The penultimate sentence of Section 1.2 may be altered
or repealed only by the affirmative vote of stockholders who
together own of record not less than 66-2/3% of the outstanding
stock entitled to vote at such meeting or by the Board of
Directors.
21
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made as of
February 9, 1995 by and among Solomon Dutka ("Dutka"), the
Estate of Irving Roshwalb (the "Estate"), H. Arthur Bellows, Jr.
("Bellows") (Dutka, the Estate and Bellows being referred to
herein from time to time each individually as a "Shareholder"
and collectively as the "Shareholders") and The Triangle
Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H:
Whereas, Dutka and the Estate will acquire shares of
common stock, par value $.01 per share, of the Company (the
"Common Stock") as a result of a merger (the "Merger") of Audits
and Surveys, Inc., a New York corporation ("A&S") into the
Company pursuant to a Merger Agreement dated as of August 10,
1994, as amended to date, by and between A&S and the Company
(the "Merger Agreement");
Whereas, Bellows is currently a holder of Common Stock
of the Company and will continue to be a holder of Common Stock
of the Company following the Merger;
Whereas, the Shareholders and the Company desire to
provide certain registration rights in connection with the
Common Stock; and
Whereas, at the effective time of the Merger the
Company will change its name to "Audits & Surveys Worldwide,
Inc.";
Now, Therefore, in consideration of the premises and
of the mutual covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound hereby, agree as follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.01. Demand Registration. (a) The Company
agrees that upon receipt of a written request therefor from
<PAGE>
Dutka alone or together with Estate in accordance with and
subject to the provisions of this Article I (a "Demand
Request"), the Company shall, as promptly as practicable
thereafter, file with the Securities and Exchange Commission
(the "SEC") a registration statement (a "Registration
Statement") under the Securities Act of 1933, as amended (the
"Securities Act") to register for distribution to the public the
Common Stock specified in the Demand Request and thereafter
shall file such amendment or amendments to such Registration
Statement as shall be necessary to cause the same to become
effective and to remain effective for the period specified in
Section 1.01(b). If the applicable requirements therefor are
met, the Registration Statement shall be filed on Form S-3;
otherwise the Registration Statement shall be filed on such form
as the Company may be entitled or required to utilize under the
rules and regulations of the SEC then in effect. Subject to the
provisions of Section 1.01(c), Dutka and the Estate shall be
entitled to have only one Registration Statement declared and
kept effective for the period specified in Section 1.01(b).
(b) The Demand Request shall be for the registration
of not less than 900,000 and not more than 3,250,000 shares of
Common Stock, which numbers shall be proportionally adjusted to
reflect any stock dividend, subdivision, reclassification,
recapitalization, split-up, combination or exchange of shares or
the like. Except as otherwise specified in this Agreement, the
Company shall be obligated to obtain and maintain the
effectiveness of the Registration Statement for one hundred and
eighty (180) days, which period shall be extended by the length
of any period or periods of market standoff pursuant to Section
1.10. The Demand Request may be made at any time commencing six
months after the effective time of the Merger.
(c) The Demand Request will be deemed not to have
been made (i) if at any time prior to the effective date of the
Registration Statement the Shareholder or Shareholders who made
the Demand Request advise the Company in writing that he or they
are withdrawing such Demand Request, that such withdrawal is
based upon a good faith belief that market conditions are
adverse for an offering of his, it or their shares of Common
Stock and that he, it or they will reimburse the Company for its
or their respective fees and expenses incurred to such date in
preparing such Registration Statement or (ii) in accordance with
Section 1.03 or Section 1.06.
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Section 1.02. Piggyback Registration. In the event
that the Company has received a Demand Request from Dutka alone
or together with the Estate or if the Company determines in its
sole discretion to register any of its Shares of Common Stock
for its own account (a "Primary Offering"), the Company shall
promptly give each Shareholder written notice (a "Notice") of
its intent to file a Registration Statement, the underwriter
therefor (if any) and the number of shares of Common Stock of
the Company, Dutka, or the Estate to be registered subject to
the provisions of this Article I (including the underwriting
requirements of Section 1.08). If, within fifteen (15) days
after the Company gives the Shareholders a Notice, the Company
receives from any Shareholder a written request to include in
such Registration Statement shares of Common Stock of the
Company owned by him, specifying the number of shares of Common
Stock to be so included (a "Piggyback Request"), the Company
will include in such Registration Statement such number of
shares of Common Stock or such lesser number of shares of Common
Stock as the underwriter of such offering reasonably and in good
faith determines will not materially and adversely affect such
offering, as provided in Section 1.03.
Section 1.03. Allocation of Common Stock Included in
Registration Statement. In case the Company files a
Registration Statement either as a Primary Offering or pursuant
to a Demand Request, with or without a Piggyback Request (in
either event, a "Request"), which is underwritten, if the
underwriter shall advise the Company and the Shareholder or
Shareholders whose shares of Common Stock of the Company are
being included therein (individually, a "Selling Shareholder"
and collectively, the "Selling Shareholders") in writing, that
(i) the inclusion in any Registration Statement pursuant to this
Agreement of some or all of the shares of Common Stock sought to
be registered by the Selling Shareholders creates a substantial
risk that the per share proceeds from the offer of such shares
of Common Stock will be reduced or (ii) the number of shares of
Common Stock sought to be registered is too large a number to be
reasonably sold, then the number of shares of Common Stock
sought to be registered by each Shareholder (other than the
Estate) shall first be reduced pro rata based upon the
percentage of the shares of Common Stock which each such
Shareholder requested be included in the Registration Statement
and then, if necessary, the number of shares of Common Stock
which the Estate requested be included in the Registration
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<PAGE>
Statement shall be reduced. If the reduction in the number of
shares of Common Stock exceeds 15%, the Shareholder or
Shareholders who made the Demand Request may withdraw the Demand
Request within twenty-four (24) hours after having been advised
of such reduction.
Section 1.04. Obligation of the Shareholders. Any
Request shall express the Shareholders' present intent to offer
for public distribution pursuant to the prospectus included in
the Registration Statement the number of shares of Common Stock
included in the Request and contain an undertaking by the
Shareholder to provide all such information and materials and to
take all such actions as may be required in order to comply and
permit the Company to comply with all applicable laws and the
requirements of the SEC and to obtain acceleration of and
maintain effectiveness of the Registration Statement as required
by this Article I.
Section 1.05. Obligations of the Company. The
Company shall:
(a) use its best efforts to have the Registration
Statement declared effective as promptly as reasonably
practicable except as provided in Section 1.06 and shall
promptly notify the Selling Shareholders and such other persons
as the Selling Shareholders designate, if any, and confirm such
advice in writing (i) when such Registration Statement becomes
effective, (ii) when any post-effective amendment to such
Registration Statement becomes effective, (iii) when any request
is made by the SEC for any amendment or supplement to such
Registration Statement or any prospectus relating thereto or for
additional information, and (iv) when such Registration
Statement must be supplemented or amended;
(b) make available for inspection and copying by any
underwriters participating in any disposition of Common Stock
and any attorney, accountant or other agent retained by any
Selling Shareholder or underwriter, all financial and other
records reasonably necessary to permit such persons to
demonstrate that they have conducted a "reasonable
investigation", as that term is used in Section 11 of the
Securities Act, of matters described in the Registration
Statement and cause the appropriate officers of the Company to
supply all such information reasonably requested by the Selling
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<PAGE>
Shareholders, the underwriters or their agents in connection
therewith;
(c) use its best efforts to qualify, not later than
the effective date of such Registration Statement, the shares of
Common Stock being registered under such "blue sky" or other
state securities laws as the Selling Shareholders may reasonably
request; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction other than New York State or to
execute or file any general consent to service of process under
the laws of any such jurisdiction where it is not so subject;
(d) furnish to the Selling Shareholders such number
of copies of the Registration Statement, each amendment thereto,
the prospectus included in each such Registration Statement and
each amendment thereto, each amendment or supplement to any
prospectus and such other documents as the Selling Shareholders
may reasonably request in order to facilitate the disposition of
the Common Stock being registered; and
(e) for a period of at least one hundred and eighty
(180) days from the effective date of such Registration
Statement, subject to extension for any period during which
Selling Shareholders are not permitted to sell their shares of
Common Stock thereunder, use its best efforts to keep such
Registration Statement current and promptly amend or supplement
such Registration Statement or the prospectus relating thereto
to the extent necessary to permit the completion within said
period, in compliance with the Securities Act, of the sale or
distribution of the shares of Common Stock being registered. If
at any time the SEC should institute or threaten to institute
any proceedings for the purpose of issuing a stop order
suspending the effectiveness of any such Registration Statement,
the Company will promptly notify the Selling Shareholders
thereof and will use all reasonable efforts to prevent the
issuance of any such stop order or to obtain the withdrawal
thereof as soon as possible. The Company will promptly advise
the Selling Shareholders of any order or communication of any
public board or body addressed to the Company suspending or
threatening to suspend the qualification of any of the shares of
Common Stock being registered for sale in any jurisdiction or of
any other reason for the suspension of sales of Common Stock in
any jurisdiction.
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<PAGE>
Section 1.06. Conditions to the Obligations of the
Company. the Company shall be entitled to postpone, for up to
one hundred and eighty (180) days, the preparation or filing of
any Registration Statement otherwise required to be prepared and
filed by it pursuant to this Agreement and the satisfaction of
its obligations under Section 1.05, if the Company would be
required to prepare any financial statements other than those it
customarily prepares or if the Board of Directors of the Company
determines in its reasonable business judgment that such
registration and offering would interfere with any material
financing, acquisition, corporate reorganization or other
material corporate transaction or material development involving
the Company and if the Company promptly gives the Shareholder or
Shareholders who made the Demand Request written notice of such
determination; provided that in any such event, the Company
shall use all reasonable efforts to minimize the duration of the
postponement. If the Company shall so postpone the filing of a
Registration Statement, the Shareholder or Shareholders who made
the Demand Request shall have the right to withdraw such Request
by giving written notice to the Company within twenty (20) days
after the receipt of the notice of postponement, in which event
the Demand Request shall be deemed to have not been made. The
Company shall have the right in its sole discretion to withdraw
any Registration Statement which covers in whole or in part a
Primary Offering.
Section 1.07. Expenses of Registration. All expenses
(other than underwriting or brokerage discounts and commissions
and transfer taxes) incurred in connection with a Registration
Statement and the "blue sky" qualifications related thereto,
including without limitation, all registration and qualification
fees, printers' and accounting fees and fees and disbursements
of counsel for the Company, shall be borne by the Company;
except that the Company will not bear fees or expenses of any
attorney, accountant or other person retained by a Shareholder
unless that person has also been retained by the Company to
render like services to it in connection with the Registration
Statement.
Section 1.08. Underwriting Requirements. The Company
shall have the right to require that any offering of shares of
Common Stock pursuant to a Request be underwritten. The Company
shall have the right to approve (such approval not to be
unreasonably withheld or delayed) the underwriter or
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<PAGE>
underwriters, including the managing or lead underwriter or
underwriters, who are to undertake any offering of shares of
Common Stock of the Company with respect to which Dutka and the
Estate have registration rights pursuant to Section 1.01 hereof.
The Company shall have the right in its sole discretion to
select the underwriter or underwriters, including the managing
or lead underwriter or underwriters, who are to undertake any
Primary Offering, including one which contains shares of Common
Stock offered for sale by the Selling Shareholders. No
Shareholder may participate in any underwritten offering
hereunder unless such Shareholder agrees to sell his shares of
Common Stock on the basis provided in any underwriting arrange-
ments approved by the Company and completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such
underwriting arrangements.
Section 1.09. Indemnification. In the event any
shares of Common Stock are included in a Registration Statement
pursuant to this Article I, to the extent permitted by law, the
Company will indemnify and hold harmless the Shareholders, any
underwriter (as defined in the Securities Act) for the Company
or acting on behalf of the Shareholders, each Shareholder and
each person, if any, who is a director, officer, agent, partner
or shareholder of, or who controls, any Shareholder or such
underwriter, against losses, claims, damages or liabilities
customarily indemnified against in secondary offerings,
underwritten or not, as the case may be. In addition, each
Shareholder whose shares of Common Stock are included in a
Registration Statement agrees, to the extent permitted by law,
severally but not jointly, to indemnify and hold harmless the
Company, any underwriter, each other Shareholder whose shares of
Common Stock are included in such Registration Statement and
each person, if any, who is a director, officer, agent, partner
or shareholder of, or who controls, the Company, such
underwriter or such other Shareholders, against losses, claims,
damages or liabilities with respect to information provided by
such Shareholder in writing specifically for inclusion in the
Registration Statement. The indemnification provided for in
this Section 1.09 shall, at the Company's option, be pursuant to
either the underwriting agreement (if any) or a separate
indemnification agreement and shall include equitable
contribution based upon considerations of relative fault in the
manner and to the extent customarily provided.
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<PAGE>
Section 1.10. Market Stand-Off Agreement. If
requested by the Company and an underwriter, or as otherwise
required by applicable law, no Shareholder shall sell any
securities of the Company (other than those included in the
Registration Statement) from such request through and including
the one hundred eighty (180) day period following the effective
date of the Registration Statement, provided that all other
executive officers and directors of the Company enter into
similar agreements. The obligations described in this Section
1.10 shall not apply to a Registration Statement relating solely
to employee benefit plans or a registration statement relating
solely to a Rule 145 transaction. The Company may impose
stop-transfer instructions with respect to the securities
subject to the foregoing restrictions until the end of such one
hundred eighty (180) day period. The Company agrees not to
offer or sell any shares of its Common Stock (or securities
convertible into or exercisable for shares of its Common Stock)
in an underwritten registered public offering for a like period
if requested by any underwriter of any offering of shares of
Common Stock effected by a Registration Statement pursuant to a
Request.
Section 1.11. Limitations on Dutka and Bellows.
Notwithstanding anything to the contrary contained herein,
neither Dutka nor Bellows may include in any Registration
Statement filed under this Agreement more than 20% of the number
of shares of Common Stock owned by him at the effective time of
the Merger and giving effect thereto. The foregoing limitation
shall expire on the earlier of (i) the second anniversary of the
effective time of the Merger or (ii) the termination without
cause of such person's employment by the Corporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties of
Shareholders. Each Shareholder hereby represents and warrants
to the other parties hereto as follows:
(a) Such Shareholder has full legal right,
power, authority and capacity to enter into and perform this
Agreement. This Agreement is a valid and binding obligation of
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<PAGE>
such Shareholder enforceable against such Shareholder in
accordance with its terms, except that such enforcement may be
subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(b) Neither the execution and delivery of this
Agreement by such Shareholder nor the consummation by such
Shareholder of the transactions contemplated hereby conflicts
with or constitutes a violation of or default under any statute,
law, rule, regulation, order or decree applicable to such
Shareholder, or any contract, commitment, agreement, arrangement
or restriction of any kind to which such Shareholder is a party
or by which such Shareholder is bound.
Section 2.02. Representations and Warranties of the
Company. The Company hereby represents and warrants to the
other parties hereto as follows:
(a) The Company has full legal right, power and
authority to enter into and perform this Agreement. The
execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on behalf of the Company. This Agreement is a valid and
binding obligation of the Company enforceable against the
Company in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(b) Neither the execution and delivery of this
Agreement by the Company nor the consummation by the Company of
the transactions contemplated hereby conflicts with or
constitutes a violation of or default under the Certificate of
Incorporation or By-Laws of the Company, any statute, law, rule,
regulation, order or decree applicable to the Company, or any
contract, commitment, agreement, arrangement or restriction of
any kind to which the Company is a party or by which the Company
or any of its assets are bound.
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<PAGE>
ARTICLE III
MISCELLANEOUS
Section 3.01. Entire Agreement. This Agreement
constitutes the entire understanding of the parties with respect
to the subject matter hereof.
Section 3.02. Enforcement. (a) The Shareholders and
the Company each acknowledge and agree that irreparable damage
would occur if any of the provisions of this Agreement were not
complied with in accordance with their specific terms.
Accordingly, each of the parties will be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically its provisions in any court of the
United States or any state having jurisdiction, this being in
addition to any other remedy to which they may be entitled at
law or in equity.
(b) No failure or delay on the part of any party in
the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or
privilege.
Section 3.03. Governing Law. This Agreement will be
governed by and construed and enforced in accordance with the
internal laws of the State of New York without giving effect to
the conflict of laws principles thereof.
Section 3.04. Severability. If any provision of this
Agreement is held by a court of competent jurisdiction to be
unenforceable, the remaining provisions of this Agreement shall
remain in full force and effect.
Section 3.05. Headings. Descriptive headings are for
convenience of reference only and will not control or affect the
meaning or construction of any provision of this Agreement.
Section 3.06. Counterparts. This Agreement may be
executed in two or more counterparts, and each such executed
counterpart will be an original instrument.
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Section 3.07. Notices. All notices, consents,
requests, instructions, approvals and other communications
provided for in this Agreement and all legal process in regard
to this Agreement will be validly given, made or served, if in
writing and delivered personally, by telecopy (except for legal
process) or sent by overnight delivery service providing a
receipt for delivery or by registered mail postage paid.
If to the Company, to it at:
650 Avenue of the Americas
New York, NY 10011
212-637-9700
212-243-5748 (fax)
If to Dutka, to him at:
2600 Netherland Avenue
Riverdale, NY 10463
718-543-1567
If to the Estate, to it at:
9 Sycamore Drive
Great Neck, NY 11021
516-466-3679
If to Bellows, to him at:
15 Upper Cross Road
Greenwich, CT 06831
203-869-7024
or to such other address or telecopy number as any party may,
from time to time, designate in a written notice given in a like
manner. Notice by telecopy shall be deemed delivered on the
date telephone confirmation of receipt is given.
Section 3.08. Assignment; No Third-Party
Beneficiaries. Except as expressly provided in this Agreement,
this Agreement and the rights, duties and obligations hereunder
may not be assigned or delegated by any party without the prior
written consent of the Company and the Shareholders, except it
shall be assignable to, and binding upon, any successor to the
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<PAGE>
business of the Company, the Estate, or beneficiaries of Dutka
or Bellows, the beneficiaries of the Estate, and Allan Roshwalb.
Any other assignment or delegation of rights, duties or
obligations hereunder made without the prior written consent of
the Company and the Shareholders shall be void and of no effect.
This Agreement is intended for the benefit of and is enforceable
only by the Company and the Shareholders and shall be binding
upon the Shareholders, the Company, the respective estates and
legal representatives of each Shareholder and any successor of
the Company.
Section 3.09. Term. This Agreement is being signed
in contemplation of the Merger Agreement, shall become operative
upon the effective time of the Merger and shall continue in full
force and effect until the completion and/or the expiration of
the respective rights and obligations herein. In the event the
Merger Agreement is terminated, this Agreement shall terminate
upon the termination of the Merger Agreement.
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<PAGE>
In Witness Whereof, the parties hereto have caused
this Agreement to be executed as of the date first referred to
above.
The Triangle Corporation
By: /s/H. Arthur Bellows___________
Name: H. Arthur Bellows
Title: Chairman and President
/s/ Solomon Dutka_________________
Solomon Dutka
Estate of Irving Roshwalb
By: /s/Marilyn Roshwalb____________
Name: Marilyn Roshwalb
Title: Executrix
/s/H. Arthur Bellows, Jr._________
H. Arthur Bellows, Jr.
-13-
EXHIBIT 4.4
SHAREHOLDERS AGREEMENT
This Shareholders Agreement ("Agreement"), dated as of March
24, 1995, by and between Audits & Surveys Worldwide, Inc., a
Delaware corporation (the "Surviving Corporation"), H. Arthur
Bellows, Jr., (the "Surviving Corporation Shareholder"), Solomon
Dutka, Solomon Dutka Trust for James Dutka, Solomon Dutka Trust
for Michael Dutka, Solomon Dutka Trust for Joyce Dutka, Carl
Ravitch, Anthony Timiraos, Dexter Neadle, Lawrence Karp, George
Fabian, Fred Winkel, Joel S. Klein, William Liebman, Nagesh
Gupta, Thomas Ryan, Joel Dorfman, Josh Libresco, Donald Pace,
Paul Donato, Fred Nicholson, Joel J. Klein, (each, individually a
"Shareholder" and collectively the "Shareholders").
WITNESSETH
WHEREAS, the Surviving Corporation and Audits & Surveys,
Inc., a New York corporation (the "Merging Corporation"), are
parties to a Merger Agreement, dated August 10, 1994 (the "Merger
Agreement"); and
WHEREAS, it is a condition to the Surviving Corporation's
obligation to close the transaction contemplated by the Merger
Agreement that each shareholder of the Merging Corporation (other
than the Estate of Irving Roshwalb) execute and deliver this
Shareholders Agreement, and the Merging Corporation's obligation
to close the transactions contemplated by the Merger Agreement
that the Surviving Corporation Shareholder execute and deliver
this Shareholders Agreement; and
WHEREAS, the Shareholders, collectively, are the legal and
beneficial owners of all of the Merging Corporation Capital Stock
currently outstanding (other than the Merging Corporation Capital
Stock owned by the Estate of Irving Roshwalb);
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements hereinafter set forth, the
undersigned hereby agree as follows:
SECTION 1. Defined Terms. All capitalized terms used
herein and not otherwise defined herein shall have the respective
meanings attributed thereto in the Merger Agreement.
SECTION 2. Covenant Not to Sell. Each Shareholder and the
Surviving Corporation Shareholder, severally, hereby agrees that,
-1-
<PAGE>
from the Effective Time and the occurrence of the Merger through
and until the second anniversary thereof (such period being
hereinafter referred to as the "Restrictive Period"), he shall
not sell, or in any other way directly or indirectly transfer,
convey, assign, distribute, encumber or otherwise dispose of any
Surviving Corporation Common Stock received as Share
Consideration (or, in the case of the Surviving Corporation
Shareholder, the Surviving Corporation Common Stock owned by the
Surviving Corporation Shareholder at the Effective Time);
provided, however, that (i) Solomon Dutka and the Surviving
Corporation Shareholder may, pursuant to the Registration Rights
Agreement, sell such shares of Surviving Corporation Common Stock
pursuant to a registration effected under the Securities Act in
accordance with said Registration Rights Agreement, (ii) in the
event that any Shareholder's employment is terminated by the
Surviving Corporation without cause, or by virtue of death or
disability, prior to the second anniversary of the Effective
Date, the restrictions of this Section 2 shall no longer be
applicable to such shareholder, and (iii) in the event that the
Surviving Corporation Shareholder's employment with the Surviving
Corporation ceases for any reason whatsoever prior to the second
anniversary of the Effective Date, the restrictions of this
Section 2 shall no longer be applicable to such shareholder.
Nothing contained herein shall preclude the Surviving Corporation
Shareholder or any Shareholder from making bona fide gifts of
shares of Surviving Corporation Common Stock; provided, however,
that the donee thereof shall remain bound by the provisions of
Sections 2, 3 and 4 as long as, and to the extent that, donor was
so bound, and all donees will execute and deliver a copy of this
Shareholders Agreement to the Surviving Corporation Shareholder
to evidence such binding effect.
SECTION 3. Voting Agreement. Each of the undersigned
Shareholders agrees to Vote any and all shares of Surviving
Corporation Common Stock owned by him from time to time as
follows: (i) for so long as the Surviving Corporation
Shareholder remains an employee of the Surviving Corporation, for
the election of the Surviving Corporation Shareholder to the
Surviving Corporation's Board of Directors; and (ii) at the
Surviving Corporation's 1995 and 1996 annual meetings of
shareholders, or in connection with any consents of shareholders
to elect directors solicited prior to the Surviving Corporation's
1997 annual meeting of shareholders, for the election to the
Surviving Corporation's Board of Directors of three nominees
(inclusive of the Surviving Corporation Shareholder, if he is a
Director pursuant to clause (i) above or otherwise) to be
designated from time to time by the Surviving Corporation
Shareholder (or, in the event that the Surviving Corporation
Shareholder is deceased prior to such time, by the Surviving
Corporation's Directors last designated by the Surviving
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<PAGE>
Corporation Shareholder). For purposes of this Section 3 only,
the term "Vote" shall mean and include (i) voting said shares of
Surviving Corporation Common Stock, whether by person or by
proxy, at any meeting of the Surviving Corporation's shareholders
at which an election of directors is being held, and (ii)
executing any written consents of shareholders of the Surviving
Corporation holding a majority of the Surviving Corporation
Capital Stock then outstanding as are reasonably requested by the
Surviving Corporation Shareholder to effect the provisions of
this Section 3.
SECTION 4. Restrictive Legend.
Each certificate representing shares of the Surviving
Corporation Common Stock which, as of the Effective Time, will be
held by a Shareholder or the Surviving Corporation Shareholder,
shall be endorsed with a legend in substantially the following
form:
"THE SALE OR TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
SHAREHOLDERS AGREEMENT DATED AS OF March 24, 1995 CONTAINING
RESTRICTIONS UPON SALE OR TRANSFER. A COPY OF SAID
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION."
Following the termination of the Restrictive Period,
upon the request of any Shareholder or the Surviving Corporation
Shareholder, the Surviving Corporation shall cause said
certificate to be reissued without the aforesaid legend.
SECTION 5. Miscellaneous.
(a) This Agreement shall be governed by, and construed
in accordance with, the applicable laws pertaining in the State
of New York (other than those that would defer to the substantive
laws of another jurisdiction).
(b) This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and
assigns, legal representatives and heirs; provided, however, that
the provisions of Section 3 hereof shall not bind subsequent
purchasers for value of shares of Surviving Corporation Common
Stock.
(c) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original,
but all of which taken together shall constitute one and the same
instrument.
-3-
<PAGE>
(d) Each party hereto acknowledges and agrees that the
other parties would be irreparably damaged in the event any
provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached. Each party
agrees that the others shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this
Agreement and to specifically enforce this Agreement and the
terms and provisions hereof in any action instituted in any court
having jurisdiction over the party and/or the matter, in addition
to any other remedy to which the aggrieved party may be entitled
at equity or at law.
(e) Each and every modification and amendment of this
Agreement shall be in writing and signed by the parties hereto
who at the time are shareholders or the Surviving Corporation,
and any waiver of, or consent to any departure from, any term or
provision of this Agreement shall be in writing and signed by
each affected party hereto.
(f) Upon the Effective Time, all provisions contained
in prior shareholders agreements between and among the
Shareholders and the Merging Corporation insofar as they relate
to (i) restrictions on sale of Merging Corporation Capital Stock
while the Shareholder is an employee of the Merging Corporation;
(ii) obligations of the Shareholder to offer to sell his Merging
Corporation Capital Stock in the event of his termination of
employment by the Merging Corporation; (iii) obligations of the
Shareholder's estate to sell Shareholder's Merging Corporation
Capital Stock in the event of the Shareholder's death; (iv)
obligations of the Merging Corporation or any of the other
Shareholders to purchase any of the Shareholder's Merging
Corporation Capital Stock; and (v) pre-emptive rights or rights
of first offer in favor of any of the Shareholders, shall cease
and be of no further force or effect, and any and all rights of
any party thereunder to enforce such provisions shall cease and
expire.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
AUDITS & SURVEYS WORLDWIDE, INC.
By: /s/ Anthony Timiraos
Name: Anthony Timiraos
Title: Treasurer
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<PAGE>
/s/ Solomon Dutka
Solomon Dutka
SOLOMON DUTKA TRUST FOR JAMES DUTKA
By: /s/ Anthony Timiraos
Name: Anthony Timiraos
Title: Trustee
SOLOMON DUTKA TRUST FOR MICHEL DUTKA
By: /s/ Anthony Timiraos
Name: Anthony Timiraos
Title: Trustee
SOLOMON DUTKA TRUST FOR JOYCE DUTKA
By: /s/ Anthony Timiraos
Name: Anthony Timiraos
Title: Trustee
/s/ Carol Ravitch
Carl Ravitch
/s/ Anthony Timiraos
Anthony Timiraos
/s/ Dexter Neadle
Dexter Neadle
/s/ Lawrence Karp
Lawrence Karp
/s/ George Fabian
George Fabian
/s/ Fred Winkel
Fred Winkel
-5-
<PAGE>
/s/ Joel S. Klein
Joel S. Klein
/s/ William Liebman
William Liebman
/s/ Nagesh Gupta
Nagesh Gupta
/s/ Thomas Ryan
Thomas Ryan
/s/ Joel Dofman
Joel Dorfman
/s/ Josh Libresco
Josh Libresco
/s/ Donald Pace
Donald Pace
/s/ Paul Donato
Paul Donato
/s/ Fred Nicholson
Fred Nicholson
/s/ Joel J. Klein
Joel J. Klein
/s/ H. Arthur Bellows, Jr.
H. Arthur Bellows, Jr.
-6-
EXHIBIT 4.5
SHAREHOLDERS AGREEMENT
This Shareholders Agreement ("Agreement"), dated as of as of
February 9, 1995, by and between The Triangle Corporation, a
Delaware corporation (the "Surviving Corporation"), and the
Estate of Irving Roshwalb ("Shareholder").
WITNESSETH
WHEREAS, the Surviving Corporation and Audits & Surveys,
Inc., a New York corporation (sometimes referred to as the
"Merging Corporation"), are parties to a Merger Agreement, dated
August 10, 1994, as amended to date (the "Merger Agreement"); and
WHEREAS, the Shareholder is the legal and beneficial owner
of certain shares of the Merging Corporation Capital Stock
currently outstanding;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements hereinafter set forth, the
undersigned hereby agree as follows:
SECTION 1. Defined Terms. All capitalized terms used
herein and not otherwise defined herein shall have the respective
meanings attributed thereto in the Merger Agreement.
SECTION 2. Voting Agreement. Upon the effectiveness of the
Merger, compliance by Audits and Surveys, Inc. (and the
Surviving Corporation, after the effectiveness of the Merger)
with the payment obligations set forth in a certain letter
agreement dated the date hereof among Audits and Surveys, Inc.,
the Shareholder, and Marilyn Roshwalb, and for so long as the
Shareholder owns shares in the Surviving Corporation, the
undersigned Shareholder agrees to Vote any and all shares of
Surviving Corporation Common Stock owned by it from time to time
as follows: (i) for so long as Arthur Bellows, Jr.
("Bellows")remains an employee of the Surviving Corporation, for
the election of Bellows to the Surviving Corporation's Board of
Directors; and (ii) at the Surviving Corporation's 1995 and 1996
annual meetings of shareholders, or in connection with any
consents of shareholders to elect directors solicited prior to
the Surviving Corporation's 1997 annual meeting of shareholders,
for the election to the Surviving Corporation's Board of
Directors of three nominees (inclusive of Bellows, if he is a
Director pursuant to clause (i) above or otherwise) to be
designated from time to time by Bellows (or, in the event that
Bellows is deceased prior to such time, by the
<PAGE>
Surviving Corporation's Directors last designated by Bellows).
For purposes of this Section 2 only, the term "Vote" shall mean
and include (i) voting said shares of Surviving Corporation
Common Stock, whether by person or by proxy, at any meeting of
the Surviving Corporation's shareholders at which an election of
directors is being held, and (ii) executing any written consents
of shareholders of the Surviving Corporation holding a majority
of the Surviving Corporation Capital Stock then outstanding as
are reasonably requested by Bellows to effect the provisions of
this Section 2.
SECTION 3. Miscellaneous.
(a) This Agreement shall be governed by, and construed
in accordance with, the applicable laws pertaining in the State
of New York (other than those that would defer to the substantive
laws of another jurisdiction).
(b) This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and
assigns, legal representatives and heirs.
(c) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original,
but all of which taken together shall constitute one and the same
instrument.
(d) Each party hereto acknowledges and agrees that the
other parties would be irreparably damaged in the event any
provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached. Each party
agrees that the others shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this
Agreement and to specifically enforce this Agreement and the
terms and provisions hereof in any action instituted in any court
having jurisdiction over the party and/or the matter, in addition
to any other remedy to which the aggrieved party may be entitled
at equity or at law.
(e) Each and every modification and amendment of this
Agreement shall be in writing and signed by the parties hereto
who at the time are shareholders or the Surviving Corporation,
and any waiver of, or consent to any departure from, any term or
provision of this Agreement shall be in writing and signed by
each affected party hereto.
(f) Upon the Effective Time of the Merger, all
provisions contained in prior shareholders agreements between the
Shareholders and the Merging Corporation insofar as they relate
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<PAGE>
to (i) restrictions on sale of Merging Corporation Capital Stock
while the Shareholder is an employee of the Merging Corporation;
(ii) obligations of the Shareholder to offer to sell his Merging
Corporation Capital Stock in the event of his termination of
employment by the Merging Corporation; (iii) obligations of the
Shareholder's estate to sell Shareholder's Merging Corporation
Capital Stock in the event of the Shareholder's death; (iv)
obligations of the Merging Corporation or any of the other
Shareholders to purchase any of the Shareholder's Merging
Corporation Capital Stock; and (v) pre-emptive rights or rights
of first offer in favor of any of the Shareholders, shall cease
and be of no further force or effect, and any and all rights of
any party thereunder to enforce such provisions shall cease and
expire.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
THE TRIANGLE CORPORATION
By: /s/ H. Arthur Bellows, Jr.____
Name: H. Arthur Bellows, Jr.
Its: Chairman and President
ESTATE OF IRVING ROSHWALB
By: /s/ Marilyn Roshwalb__________
Name: Marilyn Roshwalb
Its: Executrix
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EXHIBIT 10.1
1994 STOCK OPTION PLAN
of
THE TRIANGLE CORPORATION
1. PURPOSES OF THE PLAN. This stock option plan
(the "Plan") is designed to provide an incentive to key employ-
ees (including directors and officers who are key employees) and
to consultants, advisors and directors who are not employees of
The Triangle Corporation, a Delaware corporation (the "Com-
pany"), and its present and future subsidiary corporations, as
defined in Paragraph 19 ("Subsidiaries"), and to offer an addi-
tional inducement in obtaining the services of such individuals.
The Plan provides for the grant of "incentive stock options"
("ISOs") within the meaning of Section 422 of the Internal Reve-
nue Code of 1986, as amended (the "Code"), and nonqualified
stock options ("NQSOs"), but the Company makes no warranty as to
the qualification of any option as an "incentive stock option"
under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provi-
sions of Paragraph 12, the aggregate number of shares of Common
Stock, $.50 par value per share, of the Company ("Common Stock")
for which options may be granted under the Plan shall not exceed
5% fully diluted. Such shares of Common Stock may, in the dis-
cretion of the Board of Directors of the Company (the "Board of
Directors"), consist either in whole or in part of authorized
but unissued shares of Common Stock or shares of Common Stock
held in the treasury of the Company. The Company shall at all
times during the term of the Plan reserve and keep available
such number of shares of Common Stock as will be sufficient to
satisfy the requirements of the Plan. Subject to the provisions
of Paragraph 13, any shares of Common Stock subject to an option
which for any reason expires, is cancelled or is terminated
unexercised or which ceases for any reason to be exercisable
shall again become available for the granting of options under
the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be
administered by a committee of the Board of Directors (the "Com-
mittee") consisting of not less than two directors, each of whom
shall be a "disinterested person" within the meaning of Rule
16b-3 (or any successor rule or regulation) promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). A majority of the members of the Committee shall consti-
tute a quorum, and the acts of a majority of the members present
at any meeting at which a quorum is present, and any acts
approved in writing by all members without a meeting, shall be
the acts of the Committee.
Subject to the express provisions of the Plan, the
Committee shall have the authority, in its sole discretion, to
<PAGE>
determine the key employees who shall receive Employee Options
(as defined in Paragraph 19), the consultants and advisors who
shall receive Consultant Options (as defined in Paragraph 19),
and the directors who shall receive Outside Director Options (as
defined in Paragraph 19); the times when they shall receive
options; whether an Employee Option shall be an ISO or a NQSO;
the number of shares of Common Stock to be subject to each
option; the term of each option; the date each option shall
become exercisable; whether an option shall be exercisable in
whole, in part or in installments, and, if in installments, the
number of shares of Common Stock to be subject to each install-
ment; whether the installments shall be cumulative; the date
each installment shall become exercisable and the term of each
installment; whether to accelerate the date of exercise of any
installment; whether shares of Common Stock may be issued on
exercise of an option as partly paid, and, if so, the dates when
future installments of the exercise price shall become due and
the amounts of such installments; the exercise price of each
option; the form of payment of the exercise price; the fair mar-
ket value of a share of Common Stock; whether to restrict the
sale or other disposition of the shares of Common Stock acquired
upon the exercise of an option and to waive any such restric-
tion; whether to subject the exercise of all or any portion of
an option to the fulfillment of contingencies as specified in
the contract referred to in Paragraph 11 (the "Contract"),
including without limitation, contingencies relating to entering
into a covenant not to compete with the Company and its Parent
(as defined in Paragraph 19) and Subsidiaries, to financial
objectives for the Company, a Subsidiary, a division, a product
line or other category, and/or the period of continued employ-
ment of the optionee with the Company or its Subsidiaries, and
to determine whether such contingencies have been met; the
amount, if any, necessary to satisfy the Company's obligation to
withhold taxes or other amounts; with the consent of the
optionee, to cancel or modify an option, provided such option as
modified would be permitted to be granted on such date under the
terms of the Plan; to construe the respective Contracts and the
Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; and to make all other determinations nec-
essary or advisable for administering the Plan. The determina-
tions of the Committee on the matters referred to in this Para-
graph 3 shall be conclusive.
No member or former member of the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any option granted hereunder. In addi-
tion, each member and former member of the Committee shall be
indemnified and held harmless by the Company from and against
any liability, claim for damages and expenses in connection
therewith by reason of any action or failure to act under or in
connection with the Plan or any option granted hereunder to the
fullest extent permitted with respect to directors under the
-2-
<PAGE>
Company's certificate of incorporation, by-laws and applicable
law.
4. ELIGIBILITY. The Committee may from time to
time, consistent with the purposes of the Plan, grant (a)
Employee Options to key employees (including officers and direc-
tors who are key employees) of the Company or any of its Subsid-
iaries, (b) Consultant Options to consultants and advisors of
the Company or any of its Subsidiaries, and (c) Outside Director
Options to directors of the Company who at the time of grant are
neither common law employees of the Company or of any of its
Subsidiaries nor a member of the Committee. Such options
granted shall cover such number of shares of Common Stock as the
Committee may determine; provided, however, that the maximum
number of shares subject to Employee Options that may be granted
to any individual during any calendar year under the Plan shall
not exceed 100,000 shares; and provided further that the aggre-
gate market value (determined at the time the option is granted)
of the shares of Common Stock for which any eligible employee
may be granted ISOs under the Plan or any other plan of the Com-
pany, or of a Parent or a Subsidiary of the Company, which are
exercisable for the first time by such optionee during any cal-
endar year shall not exceed $100,000. The $100,000 ISO limita-
tion shall be applied by taking ISOs into account in the order
in which they were granted. Any option (or the portion thereof)
granted in excess of such amount shall be treated as a NQSO.
5. EXERCISE PRICE. The exercise price of the shares
of Common Stock under each option shall be determined by the
Committee; provided, however, that the exercise price of an ISO
shall not be less than the fair market value of the Common Stock
subject to such option on the date of grant; and provided fur-
ther that if, at the time an ISO is granted, the optionee owns
(or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of
all classes of stock of the Company, of any of its Subsidiaries
or of a Parent, the exercise price of such ISO shall not be less
than 110% of the fair market value of the Common Stock subject
to such ISO on the date of grant.
The fair market value of a share of Common Stock on
any day shall be (a) if the principal market for the Common
Stock is a national securities exchange, the average between the
high and low sales prices per share of the Common Stock on such
day as reported by such exchange or on a consolidated tape
reflecting transactions on such exchange, (b) if the principal
market for the Common Stock is not a national securities
exchange and the Common Stock is quoted on the National Associa-
tion of Securities Dealers Automated Quotations System
("NASDAQ"), and (i) if actual sales price information is avail-
able with respect to the Common Stock, the average between the
high and low sales prices per share of the Common Stock on such
-3-
<PAGE>
day on NASDAQ, or (ii) if such information is not available, the
average between the highest bid and the lowest asked prices per
share for the Common Stock on such day on NASDAQ, or (c) if the
principal market for the Common Stock is not a national securi-
ties exchange and the Common Stock is not quoted on NASDAQ, the
average between the highest bid and lowest asked prices per
share for the Common Stock on such day as reported on the NASDAQ
OTC Bulletin Board Service, National Quotation Bureau, Incorpo-
rated or a comparable service; provided that if clauses (a), (b)
and (c) of this Paragraph are all inapplicable, or if no trades
have been made or no quotes are available for such day, the fair
market value of a share of Common Stock shall be determined by
the Committee by any method consistent with applicable regula-
tions adopted by the Treasury Department relating to stock
options. The determination of the Committee shall be conclusive
in determining the fair market value of the Common Stock.
6. TERM. The term of each option granted pursuant
to the Plan shall be such term as is established by the Commit-
tee, in its sole discretion, at or before the time such option
is granted; provided, however, that the term of each ISO granted
pursuant to the Plan shall be for a period not exceeding 10
years from the date of grant thereof, and provided further that
if, at the time an ISO is granted, the optionee owns (or is
deemed to own under Section 424(d) of the Code) stock possessing
more than 10% of the total combined voting power of all classes
of stock of the Company, of any of its Subsidiaries or of a Par-
ent, the term of the ISO shall be for a period not exceeding
five years from the date of grant. Options shall be subject to
earlier termination as hereinafter provided.
7. EXERCISE. An option (or any part or installment
thereof), to the extent then exercisable, shall be exercised by
giving written notice to the Company at its principal office
stating which option is being exercised, specifying the number
of shares of Common Stock as to which such option is being exer-
cised and accompanied by payment in full of the aggregate exer-
cise price therefor (or the amount due on exercise if the Con-
tract permits installment payments) (a) in cash or by certified
check, or (b) if the applicable Contract permits, with previ-
ously acquired shares of Common Stock having an aggregate fair
market value, on the date of exercise, equal to the aggregate
exercise price of all options being exercised, or with any com-
bination of cash, certified check or shares of Common Stock. In
such case, the fair market value of the Common Stock shall be
determined in accordance with Paragraph 5.
The Committee may, in its discretion, permit payment
of the exercise price of an option by delivery by the optionee
of a properly executed notice, together with a copy of his
irrevocable instructions to a broker acceptable to the Committee
to deliver promptly to the Company the amount of sale or loan
-4-
<PAGE>
proceeds sufficient to pay such exercise price. In connection
therewith, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.
A person entitled to receive Common Stock upon the
exercise of an option shall not have the rights of a stockholder
with respect to such shares of Common Stock until the date of
issuance of a stock certificate to him for such shares; pro-
vided, however, that until such stock certificate is issued, any
option holder using previously acquired shares of Common Stock
in payment of an option exercise price shall continue to have
the rights of a stockholder with respect to such previously
acquired shares.
In no case may a fraction of a share of Common Stock
be purchased or issued under the Plan.
8. TERMINATION OF RELATIONSHIP. Except as may
otherwise be expressly provided in the applicable Contract, any
holder of an Employee Option whose employment with the Company
(and its Parent and Subsidiaries) has terminated for any reason
other than his death or Disability (as defined in Paragraph 19)
may exercise such option, to the extent exercisable on the date
of such termination, at any time within three months after the
date of termination, but not thereafter and in no event after
the date the option would otherwise have expired; provided, how-
ever, that if his employment is terminated either (a) for cause,
or (b) without the consent of the Company, such option shall
terminate immediately. Except as may otherwise be expressly
provided in the applicable Contract, Employee Options granted
under the Plan shall not be affected by any change in the status
of the holder so long as he continues to be an employee or a
consultant or advisor of the Company, its Parent or any of the
Subsidiaries (regardless of having been transferred from one
corporation to another).
For the purposes of the Plan, an employment relation-
ship shall be deemed to exist between an individual and a corpo-
ration if, at the time of the determination, the individual was
an employee of such corporation for purposes of Section 422(a)
of the Code. As a result, an individual on military, sick leave
or other bona fide leave of absence shall continue to be consid-
ered an employee for purposes of the Plan during such leave if
the period of the leave does not exceed 90 days, or, if longer,
so long as the individual's right to reemployment with the Com-
pany (or a related corporation) is guaranteed either by statute
or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute
or by contract, the employment relationship shall be deemed to
have terminated on the 91st day of such leave.
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<PAGE>
Except as may otherwise be expressly provided in the
applicable Contract, the holder of a Consultant Option whose
consulting or advisory relationship with the Company (and its
Parent and Subsidiaries) has terminated for any reason may exer-
cise such option to the extent exercisable on the date of such
termination, at any time within three months after the date of
termination, but not thereafter and in no event after the date
the option would otherwise have expired; provided, however, that
if such relationship was terminated either (a) for cause or (b)
without the consent of the Company (other than as a result of
the death or Disability of the holder or a key employee of the
holder), such option shall terminate immediately. Except as may
otherwise be expressly provided in the applicable Contract, Con-
sultant Options granted under the Plan shall not be affected by
a change in the relationship with the holder, so long as the
holder of the option continues to be a consultant of the Com-
pany, its Parent or any of its Subsidiaries (regardless of hav-
ing ceased to be a consultant for any other of such
corporations).
Except as may otherwise be expressly provided in the
applicable Contract, the holder of an Outside Director Option
whose directorship with the Company has terminated for any rea-
son other than his death or Disability may exercise such option,
to the extent exercisable on the date of such termination, at
any time within three months after the date of termination, but
not thereafter and in no event after the date the option would
otherwise have expired; provided, however, that if his director-
ship shall be terminated for cause, such option shall terminate
immediately.
Nothing in the Plan or in any option granted under the
Plan shall confer on any person any right to continue in the
employ or as a consultant or advisor of the Company, its Parent
or any of its Subsidiaries, or as a director of the Company, or
interfere in any way with any right of the Company, its Parent
or any of its Subsidiaries to terminate the holder's relation-
ship at any time for any reason whatsoever without liability to
the Company, its Parent or any of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as
may otherwise be expressly provided in the applicable Contract,
if an optionee dies (a) while he is employed by the Company, its
Parent or any of its Subsidiaries, (b) within three months after
the termination of his employment (unless such termination was
for cause or without the consent of the Company) or (c) within
one year following the termination of his employment by reason
of Disability, his Employee Option may be exercised, to the
extent exercisable on the date of his death, by his Legal Repre-
sentative (as defined in Paragraph 19), at any time within one
year after death, but not thereafter and in no event after the
date the option would otherwise have expired. Except as may
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<PAGE>
otherwise be expressly provided in the applicable Contract, any
optionee whose employment has terminated by reason of Disability
may exercise his Employee Option, to the extent exercisable upon
the effective date of such termination, at any time within one
year after such date, but not thereafter and in no event after
the date the option would otherwise have expired.
The termination of a Consultant Option as a result of
the death or Disability of the holder of the option (or a key
employee thereof) shall be governed by Paragraph 8.
Except as may otherwise be expressly provided in the
applicable Contract, if an optionee dies (a) while he is a
director of the Company, (b) within three months after the ter-
mination of his directorship with the Company (unless such ter-
mination was for cause) or (c) within one year after the termi-
nation following the termination of his directorship by reason
of Disability, his Outside Director Options may be exercised, to
the extent exercisable on the date of his death, by his Legal
Representative at any time within one year after death, but not
thereafter and in no event after the date the option would
otherwise have expired. Except as may otherwise be expressly
provided in the applicable Contract, an optionee whose director-
ship with the Company has terminated by reason of Disability,
may exercise his Outside Director Options, to the extent exer-
cisable on the effective date of such termination, at any time
within one year after such date, but not thereafter and in no
event after the date the option would otherwise have expired.
10. COMPLIANCE WITH SECURITIES LAWS. The Committee
may require, in its discretion, as a condition to the exercise
of any option that either (a) a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock to be issued upon such
exercise shall be effective and current at the time of exercise,
or (b) there is an exemption from registration under the Securi-
ties Act for the issuance of shares of Common Stock upon such
exercise. Nothing herein shall be construed as requiring the
Company to register shares subject to any option under the Secu-
rities Act.
The Committee may require the optionee to execute and
deliver to the Company his representations and warranties, in
form and substance satisfactory to the Committee, that (a) the
shares of Common Stock to be issued upon the exercise of the
option are being acquired by the optionee for his own account,
for investment only and not with a view to the resale or distri-
bution thereof, and (b) any subsequent resale or distribution of
shares of Common Stock by such optionee will be made only pursu-
ant to (i) a Registration Statement under the Securities Act
which is effective and current with respect to the shares of
Common Stock being sold, or (ii) a specific exemption from the
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<PAGE>
registration requirements of the Securities Act, but in claiming
such exemption, the optionee shall prior to any offer of sale or
sale of such shares of Common Stock provide the Company with a
favorable written opinion of counsel, in form and substance sat-
isfactory to the Company, as to the applicability of such exemp-
tion to the proposed sale or distribution.
In addition, if at any time the Committee shall deter-
mine in its discretion that the listing or qualification of the
shares of Common Stock subject to such option on any securities
exchange or under any applicable law, or the consent or approval
of any governmental regulatory body, is necessary or desirable
as a condition to, or in connection with, the granting of an
option or the issue of shares of Common Stock thereunder, such
option may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to
the Committee.
11. STOCK OPTION CONTRACTS. Each option shall be
evidenced by an appropriate Contract which shall be duly exe-
cuted by the Company and the optionee, and shall contain such
terms and conditions not inconsistent herewith as may be deter-
mined by the Committee.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Not-
withstanding any other provisions of the Plan, in the event of
any change in the outstanding Common Stock by reason of a stock
dividend, recapitalization, merger in which the Company is the
surviving corporation, split-up, combination or exchange of
shares or the like, the aggregate number and kind of shares sub-
ject to the Plan, the aggregate number and kind of shares sub-
ject to each outstanding option and the exercise price thereof,
and the maximum number of shares subject to Employee Options
that may be granted to any individual in any calendar year,
shall be appropriately adjusted by the Board of Directors, whose
determination shall be conclusive.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan
was adopted by the Board of Directors on August 7, 1994. No
option may be granted under the Plan after August 6, 2004. The
Board of Directors, without further approval of the Company's
stockholders, may at any time suspend or terminate the Plan, in
whole or in part, or amend it from time to time in such respects
as it may deem advisable, including, without limitation, in
order that ISOs granted hereunder meet the requirements for
"incentive stock options" under the Code, to comply with the
provisions of Rule 16b-3 promulgated the Exchange Act or Section
162(m) of the Code, and to conform to any change in applicable
law or to regulations or rulings of administrative agencies;
provided, however, that no amendment shall be effective without
the requisite prior or subsequent stockholder approval which
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<PAGE>
would (a) except as contemplated in Paragraph 12, increase the
maximum number of shares of Common Stock for which options may
be granted under the Plan, (b) materially increase the benefits
to participants under the Plan or (c) change the eligibility
requirements for individuals entitled to receive options hereun-
der. No termination, suspension or amendment of the Plan shall,
without the consent of the holder of an existing option affected
thereby, adversely affect his rights under such option. The
power of the Committee to construe and administer any options
granted under the Plan prior to the termination or suspension of
the Plan nevertheless shall continue after such termination or
during such suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option
granted under the Plan shall be transferable otherwise than by
will or the laws of descent and distribution, and options may be
exercised, during the lifetime of the holder thereof, only by
him or his legal representatives. Except to the extent provided
above, options may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of
law or otherwise) and shall not be subject to execution, attach-
ment or similar process.
15. WITHHOLDING TAXES. The Company may withhold cash
and/or shares of Common Stock to be issued with respect thereto
having an aggregate fair market value equal to the amount which
it determines is necessary to satisfy its obligation to withhold
Federal, state and local income taxes or other amounts incurred
by reason of the grant or exercise of an option, its disposi-
tion, or the disposition of the underlying shares of Common
Stock. Alternatively, the Company may require the holder to pay
to the Company such amount, in cash, promptly upon demand. The
Company shall not be required to issue any shares of Common
Stock pursuant to any such option until all required payments
have been made. Fair market value of the shares of Common Stock
shall be determined in accordance with Paragraph 5.
Notwithstanding anything in the Plan or in any Con-
tract to the contrary, the Company may not withhold shares of
Common Stock to satisfy the tax withholding consequences of the
exercise of an option by a holder who is subject to the report-
ing requirements of Section 16(a) of the Exchange Act (as it
constitutes a deemed exercise of a stock appreciation right
("SAR") under Rule 16b-3 under the Exchange Act), unless (a) the
Company has filed all periodic reports and statements required
to be filed by it pursuant to Section 13(a) of the Exchange Act
for at least one year prior to the date of such exercise, (b)
the Company on a regular basis releases for publication quar-
terly and annual summary statements of sales and earnings in the
manner contemplated in the rules promulgated under Section 16 of
the Exchange Act, (c) except when the date of exercise of such
SAR is automatic or fixed in advance under the Plan and is
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<PAGE>
outside the control of the holder, the election by such holder
to receive cash in full or partial settlement of the SAR, as
well as the exercise of the SAR for cash, is made during the
period beginning on the third business day following the date of
release of the summary statements referred to in clause (b) and
ending on the 12th business day following such date, and (d) the
option has been held for at least six months from the date of
grant to the date of cash settlement.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may
endorse such legend or legends upon the certificates for shares
of Common Stock issued upon exercise of an option under the Plan
and may issue such "stop transfer" instructions to its transfer
agent in respect of such shares as it determines, in its discre-
tion, to be necessary or appropriate to (a) prevent a violation
of, or to perfect an exemption from, the registration require-
ments of the Securities Act, (b) implement the provisions of the
Plan or any agreement between the Company and the optionee with
respect to such shares of Common Stock, or (c) permit the Com-
pany to determine the occurrence of a "disqualifying disposi-
tion," as described in Section 421(b) of the Code, of the shares
of Common Stock transferred upon the exercise of an ISO granted
under the Plan.
The Company shall pay all issuance taxes with respect
to the issuance of shares of Common Stock upon the exercise of
an option granted under the Plan, as well as all fees and
expenses incurred by the Company in connection with such
issuance.
17. USE OF PROCEEDS. The cash proceeds from the sale
of shares of Common Stock pursuant to the exercise of options
under the Plan shall be added to the general funds of the Com-
pany and used for such corporate purposes as the Board of Direc-
tors may determine.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CER-
TAIN CONSTITUENT CORPORATIONS. Anything in this Plan to the
contrary notwithstanding, the Board of Directors may, without
further approval by the stockholders, substitute new options for
prior options of a Constituent Corporation (as defined in Para-
graph 19) or assume the prior options of such Constituent Corpo-
ration.
19. DEFINITIONS.
(a) Subsidiary. The term "Subsidiary" shall
have the same definition as "subsidiary corporation" in Section
424(f) of the Code.
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<PAGE>
(b) Parent. The term "Parent" shall have the
same definition as "parent corporation" in Section 424(e) of the
Code.
(c) Constituent Corporation. The term "Constit-
uent Corporation" shall mean any corporation which engages with
the Company, its Parent or any Subsidiary in a transaction to
which Section 424(a) of the Code applies (or would apply if the
option assumed or substituted were an ISO), or any Parent or any
Subsidiary of such corporation.
(d) Disability. The term "Disability" shall
mean a permanent and total disability within the meaning of Sec-
tion 22(e)(3) of the Code.
(e) Employee Option. The term "Employee Option"
shall mean an option granted pursuant to the Plan to an individ-
ual who, at the time of grant, is a key employee of the Company
or a Subsidiary of the Company.
(f) Consultant Option. The term "Consultant
Option" shall mean a NQSO granted pursuant to the Plan to a per-
son who, at the time of grant, is a consultant or advisor of the
Company or a Subsidiary of the Company, and at such time is nei-
ther a common law employee of the Company or any of its Subsid-
iaries nor a director of the Company.
(g) Outside Director Option. The term "Outside
Director Option" shall mean a NQSO granted pursuant to the Plan
to a director of the Company who, at the time of the grant, is
neither a common law employee of the Company or any of its Sub-
sidiaries nor a member of the Committee.
(h) Legal Representative. The term "Legal Rep-
resentative" shall mean, with respect to an optionee, his execu-
tor, administrator or other person at the time entitled by law
to his rights under an option granted pursuant to the Plan.
20. GOVERNING LAW. The Plan, such options as may be
granted hereunder and all related matters shall be governed by,
and construed in accordance with, the laws of the State of Dela-
ware, without regard to conflict of law provisions.
21. PARTIAL INVALIDITY. The invalidity or illegality
of any provision herein shall not affect the validity of any
other provision.
22. STOCKHOLDER APPROVAL. The Plan shall be subject
to approval by a majority of the votes present in person or by
proxy at the next duly held meeting of the Company's stockhold-
ers at which a quorum is present. No options granted hereunder
may be exercised prior to such approval, provided that the date
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<PAGE>
of grant of any options granted hereunder shall be determined as
if the Plan had not been subject to such approval. Notwith-
standing the foregoing, if the Plan is not approved by a vote of
the stockholders of the Company on or before August 6, 1995, the
Plan and any options granted hereunder shall terminate.
-12-
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of March 24, 1995,
between Audits & Surveys Worldwide, Inc., a Delaware corporation
having an address at 650 Avenue of the Americas, New York, New
York 10011 (the "Company"), and Solomon Dutka, an individual
residing at 2600 Netherland Avenue, Riverdale, New York 10463
("Employee").
W I T N E S S E T H :
WHEREAS, Employee has been employed by the Company for
more than 40 years; and
WHEREAS, the Company desires that Employee continue to
be employed by it and render services to it, and Employee is
willing to be so employed and to render such services to the
Company, all upon the terms and subject to the conditions con-
tained herein.
NOW, THEREFORE, in consideration of the mutual cove-
nants and agreements contained herein, and other good and valu-
able consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Employment. Subject to and upon the terms and
conditions contained in this Agreement, the Company hereby
agrees to continue to employ Employee and Employee agrees to
continue in the employ of the Company, for the period set forth
in Paragraph 2 hereof, to render to the Company, its affiliates
and/or subsidiaries the services described in Paragraph 3
hereof.
2. Term. Employee's term of employment under this
Agreement shall be five (5) years, commencing on March 24, 1995
and shall continue for a period through and including March 24,
2000, unless extended in writing as hereinbelow provided or ear-
lier terminated or converted to a consulting agreement pursuant
to the terms and conditions set forth herein (the "Employment
Term"). Such term shall be extended for successive one (1) year
terms unless either party hereto gives written notice to the
other of its desire to terminate this Agreement at least ninety
(90) days prior to the commencement of any such extension.
<PAGE>
3. Duties. (a) Employee shall serve as a principal
executive of the Company subject to the authority of the Board
of Directors of the Company. If elected by the Board of Direc-
tors, Employee will serve as the Chairman of the Board and Chief
Executive Officer of the Company. Employee shall perform all
duties and services incident to the positions held by him.
(b) Employee agrees to abide by all By-laws and
policies of the Company promulgated from time to time by the
Company.
4. Exclusive Services and Best Efforts. Employee
agrees to devote his best efforts, energies and skill to the
discharge of the duties and responsibilities attributable to his
position, and to this end, he will devote his full time and
attention during regular business hours to the business and
affairs of the Company, subject to the provisions of the last
sentence of subparagraph 11(b) hereof.
5. Compensation. As compensation for his services
and covenants hereunder, Employee shall receive a salary ("Sal-
ary"), payable pursuant to the Company's normal payroll proce-
dures in place from time to time, at the rate of $350,000 per
annum less all necessary and required federal, state and local
payroll deductions, and such bonuses as may be determined from
time to time by the Board of Directors of the Company.
6. Business Expenses. Employee shall be reimbursed
for, and entitled to advances (subject to repayment to the Com-
pany if not actually incurred by Employee) with respect to, only
those business expenses incurred by him (a) which are reasonable
and necessary for Employee to perform his duties under this
Agreement in accordance with policies established from time to
time by the Company, and (b) for which Employee has submitted
vouchers and/or receipts.
7. Employee Benefits. (a) During the Employment
Term, Employee shall be entitled to such insurance, disability
and health and medical benefits and be entitled to participate
in such retirement plans or programs as are from time to time
generally made available to executive employees of the Company
pursuant to the policies of the Company; provided that Employee
shall be required to comply with the conditions attendant to
coverage by such plans and shall comply with and be entitled to
benefits only in accordance with the terms and conditions of
such plans. The Company may withhold from any benefits payable
to Employee all federal, state, local and other taxes and
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<PAGE>
amounts as shall be permitted or required to be withheld pursu-
ant to any applicable law, rule or regulation.
(b) Employee shall be entitled to vacation in
accordance with the Company's policy in effect for executive
staff, which shall be taken at such time or times as shall be
mutually agreed upon with the Company.
8. Consulting. (a) At any time after _______,
1998, Employee may elect to terminate his status as a full-time
employee of the Company and become a consultant to the Company
for the balance of the Employment Term. Such election shall be
made by notice to the Company in accordance with the procedures
set forth in Paragraph 16 hereof and shall be effective on the
date designated in such notice.
(b) As a consultant, Employee will make himself
available from time to time, at times to be agreed upon by the
Company and Employee, to render advisory or consultative ser-
vices to the Company in connection with the Company's business
and affairs. It is understood that as a consultant, Employee is
not expected to be on regular or full time call and that Employ-
ee's services as a consultant may be rendered by personal con-
sultation at his residence or office or by correspondence
through mail, telephone or telecopy or other modes of communica-
tions at times, including evenings and weekends, most convenient
to him.
(c) For such consulting and advisory services,
the Company agrees to pay Employee a consulting fee at an annual
rate equal to 50% of his Salary, such payments to be made in
equal monthly installments, payable on the first day of each
month, less all necessary and required federal, state and local
payroll deductions.
(d) Employee, while a consultant pursuant to the
foregoing provisions of this Paragraph 8, shall continue to be
entitled to receive expense reimbursement and, to the extent
permitted under the terms of said plans, all insurance and other
benefits to which Employee is entitled pursuant to Paragraphs 6
and 7 hereof.
9. Death and Disability. (a) The Employment Term
(and any consulting arrangement under Paragraph 8 hereof) shall
terminate on the date of Employee's death, in which event
Employee's Salary (or consulting fee, as the case may be), reim-
bursable expenses and benefits owing to Employee through the
date of Employee's death shall be paid to his estate.
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<PAGE>
Employee's estate will not be entitled to any other compensation
upon termination of this Agreement pursuant to this subparagraph
9(a).
(b) If, during the Employment Term, in the opin-
ion of a duly licensed physician selected by the Company,
Employee, because of physical or mental illness or incapacity,
shall become substantially unable to perform the duties and ser-
vices required of him under this Agreement for a period, of 120
consecutive days or 180 days in the aggregate during any
nine-month period, the Company may, upon at least ten (10) days'
prior written notice given at any time after the expiration of
such 120 or 180-day period, as the case may be, to Employee of
its intention to do so, terminate his employment as of such date
as may be set forth in the notice. In case of such termination,
Employee shall be entitled to receive his Salary, reimbursable
expenses and benefits owing to Employee through the date of ter-
mination. Employee will not be entitled to any other compensa-
tion upon termination of his employment pursuant to this
subparagraph 9(b), except that, upon such notice of disability
termination, Employee shall be deemed to have elected to become
a consultant to the Company for two (2) years or the remaining
balance of the Employment Term, whichever is less.
10. Termination. The Company may terminate the
employment of Employee for cause, as such term is interpreted by
the courts of New York. Upon such termination, the Company
shall be released from any and all further obligations under
this Agreement, except that the Company shall be obligated to
pay Employee his Salary, reimbursable expenses and benefits
owing to Employee through the day on which Employee is termi-
nated. Employee will not be entitled to any other compensation
upon termination of this Agreement pursuant to this Paragraph 10
nor will he be entitled to elect thereafter to become a consul-
tant to the Company.
11. Disclosure of Information and Restrictive Cove-
nant. Employee acknowledges that, by his employment, he has
been and will be in a confidential relationship with the Company
and will have access to confidential information and trade
secrets of the Company, its subsidiaries and affiliates. Confi-
dential information and trade secrets include, but are not lim-
ited to, customer, supplier and client lists, panels and inter-
viewers, price lists, marketing, strategies and procedures,
operational techniques, business plans and systems, quality con-
trol procedures and systems, special projects and survey and
market research, including projects, research and reports for
any entity or client, and any other records, files, drawings,
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<PAGE>
discoveries, applications, data and information concerning the
business of the Company and its customers and clients which are
not in the public domain. Employee agrees that in consideration
of the execution of this Agreement by the Company:
(a) Employee will not, during the term of this
Agreement or at any time thereafter, use, or disclose to any
third party, trade secrets or confidential information of the
Company, including, but not limited to, confidential information
or trade secrets belonging or relating to the Company, its sub-
sidiaries, affiliates, customers and clients or proprietary pro-
cedures of the Company, its subsidiaries, affiliates, customers
and clients. Proprietary procedures shall include, but shall
not be limited to, all information which is known or intended to
be known only by employees of the Company, its subsidiaries and
affiliates or others in a confidential relationship with the
Company or its subsidiaries and affiliates which relates to
business matters.
(b) Employee will not, during the term of this
Agreement, directly or indirectly, under any circumstance other
than at the direction and for the benefit of the Company, engage
in or participate in any business activity, including, but not
limited to, acting as a director, officer, employee, agent,
independent contractor, partner, consultant, licensor or
licensee, franchisor or franchisee, proprietor, syndicate mem-
ber, shareholder or creditor or with a person having any other
relationship with any other business, company, firm, occupation
or business activity, that is, directly or indirectly, competi-
tive with any business carried on by the Company or any of its
subsidiaries or affiliates during the term of this Agreement.
The ownership by Employee of 3% or less of the issued and out-
standing shares of a class of securities which is traded on a
national securities exchange or in the over-the-counter market,
shall not cause Employee to be deemed a shareholder under this
subparagraph 11(b) or constitute a breach of Paragraph 4 hereof.
(c) Employee will not, during the term of this
Agreement and for a period of three (3) years thereafter, on his
behalf or on behalf of any other business enterprise, directly
or indirectly, under any circumstance other than at the direc-
tion and for the benefit of the Company, solicit or induce any
creditor, customer, client, supplier, officer, employee or agent
of the Company or any of its subsidiaries or affiliates to sever
his or its relationship with or leave the employ of any of such
entities.
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<PAGE>
(d) Nothing contained in this Paragraph 11 shall
be construed as prohibiting Employee from being engaged by a
client or customer of the Company upon his termination of
employment by the Company.
(e) It is expressly agreed by Employee that the
nature and scope of each of the provisions set forth above in
this Paragraph 11 are reasonable and necessary. If, for any
reason, any aspect of the above provisions as it applies to
Employee is determined by a court of competent jurisdiction to
be unreasonable or unenforceable, the provisions shall only be
modified to the minimum extent required to make the provisions
reasonable and/or enforceable, as the case may be. Employee
acknowledges and agrees that his services are of unique char-
acter and expressly grants to the Company or any subsidiary or
affiliate of the Company or any successor of any of them, the
right to enforce the above provisions through the use of all
remedies available at law or in equity, including, but not lim-
ited to, injunctive relief.
(f) This Paragraph 11 and Paragraphs 12, 13 and
14 hereof shall survive the expiration or termination of this
Agreement for any reason.
12. Company Property. (a) Any patents, inventions,
discoveries, applications or processes designed, devised,
planned, applied, created, discovered or invented by Employee in
the course of Employee's employment under this Agreement and
which pertain to any aspect of the Company's or its subsidiar-
ies' or affiliates' business shall be the sole and absolute
property of the Company, and Employee shall promptly report the
same to the Company and promptly execute any and all documents
reasonably requested to assure the Company the full and complete
ownership thereof.
(b) All records, files, lists, including com-
puter generated lists, drawings, documents, equipment and simi-
lar items relating to the Company's business which Employee
shall prepare or receive from the Company shall remain the Com-
pany's sole and exclusive property. Upon termination of this
Agreement, Employee shall promptly return to the Company all
property of the Company in his possession. Employee further
represents that he will not copy or cause to be copied, print
out or cause to be printed out any software, documents or other
materials originating with or belonging to the Company.
Employee additionally represents that, upon termination of his
employment with the Company, he will not retain in his posses-
sion any such software, documents or other materials.
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<PAGE>
13. Remedy. It is mutually understood and agreed
that Employee's services are special, unique, unusual, extraor-
dinary and of an intellectual character giving them a peculiar
value, the loss of which cannot be reasonably or adequately com-
pensated in damages in an action at law. Accordingly, in the
event of any breach of this Agreement by Employee, including,
but not limited to, the breach of the non-disclosure, non-
solicitation and non-compete clauses under Paragraph 11 hereof,
the Company shall be entitled to equitable relief by way of
injunction or otherwise in addition to any damages which the
Company may be entitled to recover. In addition, the Company
shall be entitled to reimbursement from Employee, upon request,
of any and all reasonable attorneys' fees and expenses incurred
by it in enforcing any term or provision of this Agreement.
14. Representations and Warranties of Employee. (a)
In order to induce the Company to enter into this Agreement,
Employee hereby represents and warrants to the Company as fol-
lows: (i) Employee has the legal capacity and unrestricted
right to execute and deliver this Agreement and to perform all
of his obligations hereunder; (ii) the execution and delivery of
this Agreement by Employee and the performance of his obliga-
tions hereunder will not violate or be in conflict with any
fiduciary or other duty, instrument, agreement, document,
arrangement or other understanding to which Employee is a party
or by which he is or may be bound or subject; and (iii) Employee
is not a party to any instrument, agreement, document, arrange-
ment or other understanding with any person (other than the Com-
pany) requiring or restricting the use or disclosure of any con-
fidential information or the provision of any employment, con-
sulting or other services.
(b) Employee hereby agrees to indemnify and hold
harmless the Company from and against any and all losses, costs,
damages and expenses (including, without limitation, its reason-
able attorneys' fees) incurred or suffered by the Company
resulting from any breach by Employee of any of his representa-
tions or warranties set forth in subparagraph 14(a) hereof.
15. Waiver of Jury Trial and Consent to New York
Jurisdiction and Venue. In any action, suit or proceeding in
any jurisdiction brought against the Employee by the Company, or
vice versa, the Employee and the Company each waive trial by
jury. The Employee hereby consents and agrees that the Supreme
Court of the State of New York for the County of New York and
the United States District Court for the Southern District of
New York each shall have personal jurisdiction and proper venue
with respect to any dispute between the Employee and the
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<PAGE>
Company. In any dispute with the Company, the Employee will not
raise, and hereby expressly waives, any objection or defense to
any such jurisdiction as an inconvenient forum.
16. Notice. Except as otherwise expressly provided,
any notice, request, demand or other communication permitted or
required to be given under this Agreement shall be in writing,
shall be sent by one of the following means to the Employee at
his address set forth on the first page of this Agreement and to
the Company at its address set forth on the first page of this
Agreement, attention: Mr. Anthony Timiraos, Chief Financial
Officer, with a copy to Parker Chapin Flattau & Klimpl, 1211
Avenue of the Americas, New York, New York 10036, Attention:
James Alterbaum, Esq. (or to such other address as shall be des-
ignated hereunder by notice to the other parties and persons
receiving copies, effective upon actual receipt) and shall be
deemed conclusively to have been given: (i) on the first busi-
ness day following the day timely deposited with Federal Express
(or other equivalent national overnight courier) or United
States Express Mail, with the cost of delivery prepaid or for
the account of the sender; (ii) on the fifth business day fol-
lowing the day duly sent by certified or registered United
States mail, postage prepaid and return receipt requested; or
(iii) when otherwise actually received by the addressee on a
business day (or on the next business day if received after the
close of normal business hours or on any non-business day).
17. Interpretation, Headings. The parties acknowl-
edge and agree that the terms and provisions of this Agreement
have been negotiated, shall be construed fairly as to all par-
ties hereto, and shall not be construed in favor of or against
any party. The section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
18. Successors and Assigns; Assignment; Intended
Beneficiaries. Neither this Agreement, nor any of Employee's
rights, powers, duties or obligations hereunder, may be assigned
by Employee. This Agreement shall be binding upon and inure to
the benefit of Employee and his heirs and legal representatives
and the Company and its successors. Successors of the Company
shall include, without limitation, any corporation or corpora-
tions acquiring, directly or indirectly, all or substantially
all of the assets of the Company, whether by merger, consolida-
tion, purchase, lease or otherwise, and such successor shall
thereafter be deemed "the Company" for the purpose hereof.
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<PAGE>
19. No Waiver by Action, Cumulative Rights, Etc. Any
waiver or consent from the Company respecting any term or provi-
sion of this Agreement or any other aspect of the Employee's
conduct or employment shall be effective only in the specific
instance and for the specific purpose for which given and shall
not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of the Com-
pany at any time or times to require performance of, or to exer-
cise any of its powers, rights or remedies with respect to, any
term or provision of this Agreement or any other aspect of the
Employee's conduct or employment in no manner (except as other-
wise expressly provided herein) shall affect the Company's right
at a later time to enforce any such term or provision.
20. Counterparts; New York Governing Law; Amendments,
Entire Agreement. This Agreement may be executed in two
counterpart copies, each of which may be executed by one of the
parties hereto, but all of which, when taken together, shall
constitute a single agreement binding upon all of the parties
hereto. This Agreement and all other aspects of the Employee's
employment shall be governed by and construed in accordance with
the applicable laws pertaining in the State of New York (other
than those that would defer to the substantive laws of another
jurisdiction). Each and every modification and amendment of
this Agreement shall be in writing and signed by the parties
hereto, and any waiver of, or consent to any departure from, any
term or provision of this Agreement shall be in writing and
signed by each affected party hereto. This Agreement contains
the entire agreement of the parties and supersedes all prior
representations, agreements and understandings, oral or other-
wise, between the parties with respect to the matters contained
herein.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
AUDITS & SURVEYS WORLDWIDE, INC.
By: /s/ Anthony Timiraos_________
Name: Anthony Timiraos
Title: Treasurer
/s/ Solomon Dutka__________
Solomon Dutka
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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of March 24, 1995,
between Audits & Surveys Worldwide, Inc., a Delaware corporation
having an address at 650 Avenue of the Americas, New York, New
York 10011 (the "Company"), and H. Arthur Bellows, Jr., an indi-
vidual residing at 15 Upper Cross Road, Greenwich, Connecticut
06831 ("Employee").
W I T N E S S E T H :
WHEREAS, Employee has been employed by the Company for
more than 27 years; and
WHEREAS, the Company desires that Employee continue to
be employed by it and render services to it, and Employee is
willing to be so employed and to render such services to the
Company, all upon the terms and subject to the conditions con-
tained herein.
NOW, THEREFORE, in consideration of the mutual cove-
nants and agreements contained herein, and other good and valu-
able consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Employment. Subject to and upon the terms and
conditions contained in this Agreement, the Company hereby
agrees to continue to employ Employee and Employee agrees to
continue in the employ of the Company, for the period set forth
in Paragraph 2 hereof, to render to the Company, its affiliates
and/or subsidiaries the services described in Paragraph 3
hereof.
2. Term. Employee's term of employment under this
Agreement shall be three (3) years, commencing on March 24, 1995
and shall continue for a period through and including March 24,
1998, unless extended in writing as hereinbelow provided or ear-
lier terminated pursuant to the terms and conditions set forth
herein (the "Employment Term"). Such term shall be extended for
successive one (1) year terms unless either party hereto gives
written notice to the other of its desire to terminate this
Agreement at least ninety (90) days prior to the commencement of
any such extension.
<PAGE>
3. Duties. (a) Employee shall serve as a senior
executive of the Company subject to the authority of the Board
of Directors and Chief Executive Officer of the Company. If
elected by the Board of Directors, Employee will serve as the
President and Chief Operating Officer of the Company. Employee
shall perform all duties and services incident to the positions
held by him. As long as Employee is employed by the Company,
the Company will use its best efforts to cause him to be elected
as a director of the Company.
(b) Employee agrees to abide by all By-laws and
policies of the Company promulgated from time to time by the
Company.
4. Exclusive Services and Best Efforts. Employee
agrees to devote his best efforts, energies and skill to the
discharge of the duties and responsibilities attributable to his
position, and to this end, he will devote his full time and
attention during regular business hours to the business and
affairs of the Company, subject to the provisions of the last
sentence of subparagraph 11(b) hereof.
5. Compensation. As compensation for his services
and covenants hereunder, Employee shall receive a salary ("Sal-
ary"), payable pursuant to the Company's normal payroll proce-
dures in place from time to time, at the rate of $300,000 per
annum less all necessary and required federal, state and local
payroll deductions, and such bonuses as may be determined from
time to time by the Board of Directors of the Company.
6. Business Expenses. Employee shall be reimbursed
for, and entitled to advances (subject to repayment to the Com-
pany if not actually incurred by Employee) with respect to, only
those business expenses incurred by him (a) which are reasonable
and necessary for Employee to perform his duties under this
Agreement in accordance with policies established from time to
time by the Company, and (b) for which Employee has submitted
vouchers and/or receipts.
7. Employee Benefits. (a) During the Employment
Term, Employee shall be entitled to such insurance, disability
and health and medical benefits and be entitled to participate
in such retirement plans or programs as are from time to time
generally made available to executive employees of the Company
pursuant to the policies of the Company; provided that Employee
shall be required to comply with the conditions attendant to
coverage by such plans and shall comply with and be entitled to
benefits only in accordance with the terms and conditions of
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<PAGE>
such plans. The Company may withhold from any benefits payable
to Employee all federal, state, local and other taxes and
amounts as shall be permitted or required to be withheld pursu-
ant to any applicable law, rule or regulation.
(b) Employee shall be entitled to vacation in
accordance with the Company's policy in effect for executive
staff, which shall be taken at such time or times as shall be
mutually agreed upon with the Company.
8. Death and Disability. (a) The Employment Term
shall terminate on the date of Employee's death, in which event
Employee's Salary, reimbursable expenses and benefits owing to
Employee through the date of Employee's death shall be paid to
his estate. Employee's estate will not be entitled to any other
compensation upon termination of this Agreement pursuant to this
subparagraph 8(a).
(b) If, during the Employment Term, in the opin-
ion of a duly licensed physician selected by the Company,
Employee, because of physical or mental illness or incapacity,
shall become substantially unable to perform the duties and ser-
vices required of him under this Agreement for a period, of 120
consecutive days or 180 days in the aggregate during any
nine-month period, the Company may, upon at least ten (10) days'
prior written notice given at any time after the expiration of
such 120 or 180-day period, as the case may be, to Employee of
its intention to do so, terminate his employment as of such date
as may be set forth in the notice. In case of such termination,
Employee shall be entitled to receive his Salary, reimbursable
expenses and benefits owing to Employee through the date of ter-
mination. Employee will not be entitled to any other compensa-
tion upon termination of his employment pursuant to this
subparagraph 9(b).
9. Termination for Cause. The Company may terminate
the employment of Employee for cause, as such term is inter-
preted by the courts of New York. Upon such termination, the
Company shall be released from any and all further obligations
under this Agreement, except that the Company shall be obligated
to pay Employee his Salary, reimbursable expenses and benefits
owing to Employee through the day on which Employee is termi-
nated. Employee will not be entitled to any other compensation
upon termination of this Agreement pursuant to this Paragraph 9.
-3-
<PAGE>
10. Termination Other than for Cause. (a) The Com-
pany may terminate the employment of Employee with or without
cause and Employee may terminate his employment by the Company
with or without "Good Reason" (as defined in subparagraph 10(c)
hereof).
(b) In the event the Company terminates the
employment of Employee with or without cause and in the event
Employee terminates his employment with or without Good Reason,
the Company shall pay to Employee, in a single, lump-sum pay-
ment, within thirty (30) days after the Company or Employee has
given the other notice of termination, an amount equal to
Employee's Salary, reimbursable expenses and benefits owing to
Employee through the date on which Employee's employment is ter-
minated. In addition, in the event of termination by the Com-
pany without cause or by the Employee with Good Reason, Employee
shall receive the following: (i) an amount equal to the product
of Employee's annual Salary then in effect (without regard to
any purported or attempted reduction thereof by the Company)
multiplied by the number of years remaining in the Payment
Period (as defined below) payable at the same times as the Sal-
ary would have been paid to Employee during the Payment Period
if Employee's employment was not so terminated and (ii) any ben-
efits which Employee would have been entitled to receive had his
employment continued during the balance of the Employment Term
provided that the provisions of the plans under which such bene-
fits are offered then permit the same to be offered to Employee.
(c) For purposes of this Agreement, the term
"Payment Period" shall be the period commencing on the date that
Employee's employment is terminated pursuant to this Paragraph
10 and continuing until the first anniversary of such termina-
tion or the remaining term of this Agreement, whichever is
greater. For purposes of this Agreement, the term "Good Reason"
shall mean a material diminution in the duties or responsibili-
ties of Employee, the assignment to Employee of duties or
responsibilities which are inconsistent with his status or then
held position with the Company or a material breach by the Com-
pany of this Agreement which has not been cured within 10 days
after written notice thereof has been given to the Company by
Employee or, if such breach is not curable within such 10 day
period, the Company has failed to take action to commence the
cure thereof within such 10 day period or has failed thereafter
to continue to take such action in an expeditious manner.
(d) Notwithstanding anything in this Agreement
to the contrary, if any of the payments provided for in this
Agreement, together with any other payments which Employee has
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<PAGE>
the right to receive from the Company or any corporation which
is a member of an "affiliated group" (as defined in Section
1504(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), without regard to Section 1504(b) of the Code) of which
the Company is a member, would constitute a "parachute payment"
(as defined in Section 280G(b)(2) of the Code), the payments
pursuant to this Agreement shall be reduced to the largest
amount as will result in no portion of such payments being sub-
ject to the excise tax imposed by Section 4999 of the Code. The
determination as to whether any reduction in the payments under
this Agreement pursuant to this subparagraph 10(d) is necessary
shall be made by the independent public accountants of the Cor-
poration at the time and such determination shall be conclusive
and binding on the Company and the Employee with respect to
their respective treatment of such payments for tax reporting
purposes.
(e) Any amounts payable to Employee under this
Paragraph 10 shall be reduced by any compensation received by
Employee for services rendered during the period commencing one
year after the effective date of the termination of his employ-
ment and ending on the last day of the Payment Period by virtue
of his being hired on a full-time basis by another employer or
by virtue of his being self-employed on a full-time basis, with-
out regard to the actual date on which such compensation is
received by Employee.
11. Disclosure of Information and Restrictive Cove-
nant. Employee acknowledges that, by his employment, he has
been and will be in a confidential relationship with the Company
and will have access to confidential information and trade
secrets of the Company, its subsidiaries and affiliates. Confi-
dential information and trade secrets include, but are not lim-
ited to, customer, supplier and client lists, panels and inter-
viewers, price lists, marketing, strategies and procedures,
operational techniques, business plans and systems, quality con-
trol procedures and systems, special projects and survey and
market research, including projects, research and reports for
any entity or client, and any other records, files, drawings,
discoveries, applications, data and information concerning the
business of the Company and its customers and clients which are
not in the public domain. Employee agrees that in consideration
of the execution of this Agreement by the Company:
(a) Employee will not, during the term of this
Agreement or at any time thereafter, use, or disclose to any
third party, trade secrets or confidential information of the
Company, including, but not limited to, confidential information
-5-
<PAGE>
or trade secrets belonging or relating to the Company, its sub-
sidiaries, affiliates, customers and clients or proprietary pro-
cedures of the Company, its subsidiaries, affiliates, customers
and clients. Proprietary procedures shall include, but shall
not be limited to, all information which is known or intended to
be known only by employees of the Company, its subsidiaries and
affiliates or others in a confidential relationship with the
Company or its subsidiaries and affiliates which relates to
business matters.
(b) Employee will not, during the term of this
Agreement and for a period of one year thereafter, directly or
indirectly, under any circumstance other than at the direction
and for the benefit of the Company, engage in or participate in
any business activity, including, but not limited to, acting as
a director, officer, employee, agent, independent contractor,
partner, consultant, licensor or licensee, franchisor or fran-
chisee, proprietor, syndicate member, shareholder or creditor or
with a person having any other relationship with any other busi-
ness, company, firm, occupation or business activity, that is,
directly or indirectly, competitive with any business carried on
by the Company or any of its subsidiaries or affiliates during
the term of this Agreement. The ownership by Employee of 3% or
less of the issued and outstanding shares of a class of securi-
ties which is traded on a national securities exchange or in the
over-the-counter market, shall not cause Employee to be deemed a
shareholder under this subparagraph 11(b) or constitute a breach
of Paragraph 4 hereof.
(c) Employee will not, during the term of this
Agreement and for a period of three (3) years thereafter, on his
behalf or on behalf of any other business enterprise, directly
or indirectly, under any circumstance other than at the direc-
tion and for the benefit of the Company, solicit or induce any
creditor, customer, client, supplier, officer, employee or agent
of the Company or any of its subsidiaries or affiliates to sever
his or its relationship with or leave the employ of any of such
entities.
(d) Nothing contained in this Paragraph 11 shall
be construed as prohibiting Employee from being engaged by a
client or customer of the Company upon his termination of
employment by the Company.
(e) It is expressly agreed by Employee that the
nature and scope of each of the provisions set forth above in
this Paragraph 11 are reasonable and necessary. If, for any
reason, any aspect of the above provisions as it applies to
-6-
<PAGE>
Employee is determined by a court of competent jurisdiction to
be unreasonable or unenforceable, the provisions shall only be
modified to the minimum extent required to make the provisions
reasonable and/or enforceable, as the case may be. Employee
acknowledges and agrees that his services are of unique char-
acter and expressly grants to the Company or any subsidiary or
affiliate of the Company or any successor of any of them, the
right to enforce the above provisions through the use of all
remedies available at law or in equity, including, but not lim-
ited to, injunctive relief.
(f) This Paragraph 11 and Paragraphs 12, 13 and
14 hereof shall survive the expiration or termination of this
Agreement for any reason.
12. Company Property. (a) Any patents, inventions,
discoveries, applications or processes designed, devised,
planned, applied, created, discovered or invented by Employee in
the course of Employee's employment under this Agreement and
which pertain to any aspect of the Company's or its subsidiar-
ies' or affiliates' business shall be the sole and absolute
property of the Company, and Employee shall promptly report the
same to the Company and promptly execute any and all documents
reasonably requested to assure the Company the full and complete
ownership thereof.
(b) All records, files, lists, including com-
puter generated lists, drawings, documents, equipment and simi-
lar items relating to the Company's business which Employee
shall prepare or receive from the Company shall remain the Com-
pany's sole and exclusive property. Upon termination of this
Agreement, Employee shall promptly return to the Company all
property of the Company in his possession. Employee further
represents that he will not copy or cause to be copied, print
out or cause to be printed out any software, documents or other
materials originating with or belonging to the Company.
Employee additionally represents that, upon termination of his
employment with the Company, he will not retain in his posses-
sion any such software, documents or other materials.
13. Remedy. It is mutually understood and agreed
that Employee's services are special, unique, unusual, extraor-
dinary and of an intellectual character giving them a peculiar
value, the loss of which cannot be reasonably or adequately com-
pensated in damages in an action at law. Accordingly, in the
event of any breach of this Agreement by Employee, including,
but not limited to, the breach of the non-disclosure, non-
solicitation and non-compete clauses under Paragraph 11 hereof,
-7-
<PAGE>
the Company shall be entitled to equitable relief by way of
injunction or otherwise in addition to any damages which the
Company may be entitled to recover. In addition, the Company
shall be entitled to reimbursement from Employee, upon request,
of any and all reasonable attorneys' fees and expenses incurred
by it in enforcing any term or provision of this Agreement.
14. Representations and Warranties of Employee. (a)
In order to induce the Company to enter into this Agreement,
Employee hereby represents and warrants to the Company as fol-
lows: (i) Employee has the legal capacity and unrestricted
right to execute and deliver this Agreement and to perform all
of his obligations hereunder; (ii) the execution and delivery of
this Agreement by Employee and the performance of his obliga-
tions hereunder will not violate or be in conflict with any
fiduciary or other duty, instrument, agreement, document,
arrangement or other understanding to which Employee is a party
or by which he is or may be bound or subject; and (iii) Employee
is not a party to any instrument, agreement, document, arrange-
ment or other understanding with any person (other than the Com-
pany) requiring or restricting the use or disclosure of any con-
fidential information or the provision of any employment, con-
sulting or other services.
(b) Employee hereby agrees to indemnify and hold
harmless the Company from and against any and all losses, costs,
damages and expenses (including, without limitation, its reason-
able attorneys' fees) incurred or suffered by the Company
resulting from any breach by Employee of any of his representa-
tions or warranties set forth in subparagraph 14(a) hereof.
15. Waiver of Jury Trial and Consent to New York
Jurisdiction and Venue. In any action, suit or proceeding in
any jurisdiction brought against the Employee by the Company, or
vice versa, the Employee and the Company each waive trial by
jury. The Employee hereby consents and agrees that the Supreme
Court of the State of New York for the County of New York and
the United States District Court for the Southern District of
New York each shall have personal jurisdiction and proper venue
with respect to any dispute between the Employee and the Com-
pany. In any dispute with the Company, the Employee will not
raise, and hereby expressly waives, any objection or defense to
any such jurisdiction as an inconvenient forum.
16. Notice. Except as otherwise expressly provided,
any notice, request, demand or other communication permitted or
required to be given under this Agreement shall be in writing,
shall be sent by one of the following means to the Employee at
-8-
<PAGE>
his address set forth on the first page of this Agreement and to
the Company at its address set forth on the first page of this
Agreement, Attention: Mr. Solomon Dutka, Chief Executive Offi-
cer, with a copy to Parker Chapin Flattau & Klimpl, 1211 Avenue
of the Americas, New York, New York 10036, Attention: James
Alterbaum, Esq. (or to such other address as shall be designated
hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt) and shall be deemed con-
clusively to have been given: (i) on the first business day
following the day timely deposited with Federal Express (or
other equivalent national overnight courier) or United States
Express Mail, with the cost of delivery prepaid or for the
account of the sender; (ii) on the fifth business day following
the day duly sent by certified or registered United States mail,
postage prepaid and return receipt requested; or (iii) when
otherwise actually received by the addressee on a business day
(or on the next business day if received after the close of nor-
mal business hours or on any non-business day).
17. Interpretation, Headings. The parties acknowl-
edge and agree that the terms and provisions of this Agreement
have been negotiated, shall be construed fairly as to all par-
ties hereto, and shall not be construed in favor of or against
any party. The section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
18. Successors and Assigns; Assignment; Intended
Beneficiaries. Neither this Agreement, nor any of Employee's
rights, powers, duties or obligations hereunder, may be assigned
by Employee. This Agreement shall be binding upon and inure to
the benefit of Employee and his heirs and legal representatives
and the Company and its successors. Successors of the Company
shall include, without limitation, any corporation or corpora-
tions acquiring, directly or indirectly, all or substantially
all of the assets of the Company, whether by merger, consolida-
tion, purchase, lease or otherwise, and such successor shall
thereafter be deemed "the Company" for the purpose hereof.
19. No Waiver by Action, Cumulative Rights, Etc. Any
waiver or consent from the Company respecting any term or provi-
sion of this Agreement or any other aspect of the Employee's
conduct or employment shall be effective only in the specific
instance and for the specific purpose for which given and shall
not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of the Com-
pany at any time or times to require performance of, or to exer-
cise any of its powers, rights or remedies with respect to, any
-9-
<PAGE>
term or provision of this Agreement or any other aspect of the
Employee's conduct or employment in no manner (except as other-
wise expressly provided herein) shall affect the Company's right
at a later time to enforce any such term or provision.
20. Counterparts; New York Governing Law; Amendments,
Entire Agreement. This Agreement may be executed in two
counterpart copies, each of which may be executed by one of the
parties hereto, but all of which, when taken together, shall
constitute a single agreement binding upon all of the parties
hereto. This Agreement and all other aspects of the Employee's
employment shall be governed by and construed in accordance with
the applicable laws pertaining in the State of New York (other
than those that would defer to the substantive laws of another
jurisdiction). Each and every modification and amendment of
this Agreement shall be in writing and signed by the parties
hereto, and any waiver of, or consent to any departure from, any
term or provision of this Agreement shall be in writing and
signed by each affected party hereto. This Agreement contains
the entire agreement of the parties and supersedes all prior
representations, agreements and understandings, oral or other-
wise, between the parties with respect to the matters contained
herein, including but not limited to any and all rights which
Employee may have under a letter agreement dated June 12, 1990
between Employee and the Company as amended by an Agreement
dated November 13, 1993 between Employee and the Company.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
AUDITS & SURVEYS WORLDWIDE, INC.
By: /s/ Solomon Dutka
Name: Solomon Dutka
Title: Chairman and CEO
/s/ H. Arthur Bellows, Jr.
H. Arthur Bellows, Jr.
-10-
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of March 24, 1995,
between Audits & Surveys Worldwide, Inc., a Delaware corporation
having an address at 650 Avenue of the Americas, New York, New
York 10011 (the "Company"), and Carl Ravitch, an individual
residing at 2602 Woodsview Drive, Bensalem, PA 19020
("Employee").
W I T N E S S E T H :
WHEREAS, Employee has been employed by the Company for
more than 27 years; and
WHEREAS, the Company desires that Employee continue to
be employed by it and render services to it, and Employee is
willing to be so employed and to render such services to the
Company, all upon the terms and subject to the conditions con-
tained herein.
NOW, THEREFORE, in consideration of the mutual cove-
nants and agreements contained herein, and other good and valu-
able consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Employment. Subject to and upon the terms and
conditions contained in this Agreement, the Company hereby
agrees to continue to employ Employee and Employee agrees to
continue in the employ of the Company, for the period set forth
in Paragraph 2 hereof, to render to the Company, its affiliates
and/or subsidiaries the services described in Paragraph 3
hereof.
2. Term. Employee's term of employment under this
Agreement shall be three (3) years, commencing on March 24, 1995
and shall continue for a period through and including March 24,
1998, unless extended in writing as hereinbelow provided or ear-
lier terminated pursuant to the terms and conditions set forth
herein (the "Employment Term"). Such term shall be extended for
successive one (1) year terms unless either party hereto gives
written notice to the other of its desire to terminate this
Agreement at least ninety (90) days prior to the commencement of
any such extension.
<PAGE>
3. Duties. (a) Employee shall serve as the senior
marketing executive of the Company subject to the authority of
the Board of Directors and Chief Executive Officer of the Com-
pany. If elected by the Board of Directors, Employee will serve
as the Executive Vice President and Chief Marketing Officer of
the Company. Employee shall perform all duties and services
incident to the positions held by him.
(b) Employee agrees to abide by all By-laws and
policies of the Company promulgated from time to time by the
Company.
4. Exclusive Services and Best Efforts. Employee
agrees to devote his best efforts, energies and skill to the
discharge of the duties and responsibilities attributable to his
position, and to this end, he will devote his full time and
attention during regular business hours to the business and
affairs of the Company, subject to the provisions of the last
sentence of subparagraph 10(b) hereof.
5. Compensation. As compensation for his services
and covenants hereunder, Employee shall receive a salary ("Sal-
ary"), payable pursuant to the Company's normal payroll proce-
dures in place from time to time, at the rate of $250,000 per
annum less all necessary and required federal, state and local
payroll deductions, and such bonuses as may be determined from
time to time by the Board of Directors of the Company.
6. Business Expenses. Employee shall be reimbursed
for, and entitled to advances (subject to repayment to the Com-
pany if not actually incurred by Employee) with respect to, only
those business expenses incurred by him (a) which are reasonable
and necessary for Employee to perform his duties under this
Agreement in accordance with policies established from time to
time by the Company, and (b) for which Employee has submitted
vouchers and/or receipts.
7. Employee Benefits. (a) During the Employment
Term, Employee shall be entitled to such insurance, disability
and health and medical benefits and be entitled to participate
in such retirement plans or programs as are from time to time
generally made available to executive employees of the Company
pursuant to the policies of the Company; provided that Employee
shall be required to comply with the conditions attendant to
coverage by such plans and shall comply with and be entitled to
benefits only in accordance with the terms and conditions of
such plans. The Company may withhold from any benefits payable
to Employee all federal, state, local and other taxes and
-2-
<PAGE>
amounts as shall be permitted or required to be withheld pursu-
ant to any applicable law, rule or regulation.
(b) Employee shall be entitled to vacation in
accordance with the Company's policy in effect for executive
staff, which shall be taken at such time or times as shall be
mutually agreed upon with the Company.
8. Death and Disability. (a) The Employment Term
shall terminate on the date of Employee's death, in which event
Employee's Salary, reimbursable expenses and benefits owing to
Employee through the date of Employee's death shall be paid to
his estate. Employee's estate will not be entitled to any other
compensation upon termination of this Agreement pursuant to this
subparagraph 8(a).
(b) If, during the Employment Term, in the opin-
ion of a duly licensed physician selected by the Company,
Employee, because of physical or mental illness or incapacity,
shall become substantially unable to perform the duties and ser-
vices required of him under this Agreement for a period, of 120
consecutive days or 180 days in the aggregate during any
nine-month period, the Company may, upon at least ten (10) days'
prior written notice given at any time after the expiration of
such 120 or 180-day period, as the case may be, to Employee of
its intention to do so, terminate his employment as of such date
as may be set forth in the notice. In case of such termination,
Employee shall be entitled to receive his Salary, reimbursable
expenses and benefits owing to Employee through the date of ter-
mination. Employee will not be entitled to any other compensa-
tion upon termination of his employment pursuant to this
subparagraph 8(b).
9. Termination. The Company may terminate the
employment of Employee for cause, as such term is interpreted by
the courts of New York. Upon such termination, the Company
shall be released from any and all further obligations under
this Agreement, except that the Company shall be obligated to
pay Employee his Salary, reimbursable expenses and benefits
owing to Employee through the day on which Employee is termi-
nated. Employee will not be entitled to any other compensation
upon termination of this Agreement pursuant to this Paragraph 9.
10. Disclosure of Information and Restrictive Cove-
nant. Employee acknowledges that, by his employment, he has
been and will be in a confidential relationship with the Company
and will have access to confidential information and trade
secrets of the Company, its subsidiaries and affiliates.
-3-
<PAGE>
Confidential information and trade secrets include, but are not
limited to, customer, supplier and client lists, panels and
interviewers, price lists, marketing, strategies and procedures,
operational techniques, business plans and systems, quality con-
trol procedures and systems, special projects and survey and
market research, including projects, research and reports for
any entity or client, and any other records, files, drawings,
discoveries, applications, data and information concerning the
business of the Company and its customers and clients which are
not in the public domain. Employee agrees that in consideration
of the execution of this Agreement by the Company:
(a) Employee will not, during the term of this
Agreement or at any time thereafter, use, or disclose to any
third party, trade secrets or confidential information of the
Company, including, but not limited to, confidential information
or trade secrets belonging or relating to the Company, its sub-
sidiaries, affiliates, customers and clients or proprietary pro-
cedures of the Company, its subsidiaries, affiliates, customers
and clients. Proprietary procedures shall include, but shall
not be limited to, all information which is known or intended to
be known only by employees of the Company, its subsidiaries and
affiliates or others in a confidential relationship with the
Company or its subsidiaries and affiliates which relates to
business matters.
(b) Employee will not, during the term of this
Agreement, directly or indirectly, under any circumstance other
than at the direction and for the benefit of the Company, engage
in or participate in any business activity, including, but not
limited to, acting as a director, officer, employee, agent,
independent contractor, partner, consultant, licensor or
licensee, franchisor or franchisee, proprietor, syndicate mem-
ber, shareholder or creditor or with a person having any other
relationship with any other business, company, firm, occupation
or business activity, that is, directly or indirectly, competi-
tive with any business carried on by the Company or any of its
subsidiaries or affiliates during the term of this Agreement.
The ownership by Employee of 3% or less of the issued and out-
standing shares of a class of securities which is traded on a
national securities exchange or in the over-the-counter market,
shall not cause Employee to be deemed a shareholder under this
subparagraph 10(b) or constitute a breach of Paragraph 4 hereof.
(c) Employee will not, during the term of this
Agreement and for a period of three (3) years thereafter, on his
behalf or on behalf of any other business enterprise, directly
or indirectly, under any circumstance other than at the
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<PAGE>
direction and for the benefit of the Company, solicit or induce
any creditor, customer, client, supplier, officer, employee or
agent of the Company or any of its subsidiaries or affiliates to
sever his or its relationship with or leave the employ of any of
such entities.
(d) Nothing contained in this Paragraph 10 shall
be construed as prohibiting Employee from being engaged by a
client or customer of the Company upon his termination of
employment by the Company.
(e) It is expressly agreed by Employee that the
nature and scope of each of the provisions set forth above in
this Paragraph 10 are reasonable and necessary. If, for any
reason, any aspect of the above provisions as it applies to
Employee is determined by a court of competent jurisdiction to
be unreasonable or unenforceable, the provisions shall only be
modified to the minimum extent required to make the provisions
reasonable and/or enforceable, as the case may be. Employee
acknowledges and agrees that his services are of unique char-
acter and expressly grants to the Company or any subsidiary or
affiliate of the Company or any successor of any of them, the
right to enforce the above provisions through the use of all
remedies available at law or in equity, including, but not lim-
ited to, injunctive relief.
(f) This Paragraph 10 and Paragraphs 11, 12 and
13 hereof shall survive the expiration or termination of this
Agreement for any reason.
11. Company Property. (a) Any patents, inventions,
discoveries, applications or processes designed, devised,
planned, applied, created, discovered or invented by Employee in
the course of Employee's employment under this Agreement and
which pertain to any aspect of the Company's or its subsidiar-
ies' or affiliates' business shall be the sole and absolute
property of the Company, and Employee shall promptly report the
same to the Company and promptly execute any and all documents
reasonably requested to assure the Company the full and complete
ownership thereof.
(b) All records, files, lists, including com-
puter generated lists, drawings, documents, equipment and simi-
lar items relating to the Company's business which Employee
shall prepare or receive from the Company shall remain the Com-
pany's sole and exclusive property. Upon termination of this
Agreement, Employee shall promptly return to the Company all
property of the Company in his possession. Employee further
-5-
<PAGE>
represents that he will not copy or cause to be copied, print
out or cause to be printed out any software, documents or other
materials originating with or belonging to the Company.
Employee additionally represents that, upon termination of his
employment with the Company, he will not retain in his posses-
sion any such software, documents or other materials.
12. Remedy. It is mutually understood and agreed
that Employee's services are special, unique, unusual, extraor-
dinary and of an intellectual character giving them a peculiar
value, the loss of which cannot be reasonably or adequately com-
pensated in damages in an action at law. Accordingly, in the
event of any breach of this Agreement by Employee, including,
but not limited to, the breach of the non-disclosure, non-
solicitation and non-compete clauses under Paragraph 10 hereof,
the Company shall be entitled to equitable relief by way of
injunction or otherwise in addition to any damages which the
Company may be entitled to recover. In addition, the Company
shall be entitled to reimbursement from Employee, upon request,
of any and all reasonable attorneys' fees and expenses incurred
by it in enforcing any term or provision of this Agreement.
13. Representations and Warranties of Employee. (a)
In order to induce the Company to enter into this Agreement,
Employee hereby represents and warrants to the Company as fol-
lows: (i) Employee has the legal capacity and unrestricted
right to execute and deliver this Agreement and to perform all
of his obligations hereunder; (ii) the execution and delivery of
this Agreement by Employee and the performance of his obliga-
tions hereunder will not violate or be in conflict with any
fiduciary or other duty, instrument, agreement, document,
arrangement or other understanding to which Employee is a party
or by which he is or may be bound or subject; and (iii) Employee
is not a party to any instrument, agreement, document, arrange-
ment or other understanding with any person (other than the Com-
pany) requiring or restricting the use or disclosure of any con-
fidential information or the provision of any employment, con-
sulting or other services.
(b) Employee hereby agrees to indemnify and hold
harmless the Company from and against any and all losses, costs,
damages and expenses (including, without limitation, its reason-
able attorneys' fees) incurred or suffered by the Company
resulting from any breach by Employee of any of his representa-
tions or warranties set forth in subparagraph 13(a) hereof.
14. Waiver of Jury Trial and Consent to New York
Jurisdiction and Venue. In any action, suit or proceeding in
-6-
<PAGE>
any jurisdiction brought against the Employee by the Company, or
vice versa, the Employee and the Company each waive trial by
jury. The Employee hereby consents and agrees that the Supreme
Court of the State of New York for the County of New York and
the United States District Court for the Southern District of
New York each shall have personal jurisdiction and proper venue
with respect to any dispute between the Employee and the Com-
pany. In any dispute with the Company, the Employee will not
raise, and hereby expressly waives, any objection or defense to
any such jurisdiction as an inconvenient forum.
15. Notice. Except as otherwise expressly provided,
any notice, request, demand or other communication permitted or
required to be given under this Agreement shall be in writing,
shall be sent by one of the following means to the Employee at
his address set forth on the first page of this Agreement and to
the Company at its address set forth on the first page of this
Agreement, Attention: Mr. Solomon Dutka, Chief Executive Offi-
cer, with a copy to Parker Chapin Flattau & Klimpl, 1211 Avenue
of the Americas, New York, New York 10036, Attention: James
Alterbaum, Esq. (or to such other address as shall be designated
hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt) and shall be deemed con-
clusively to have been given: (i) on the first business day
following the day timely deposited with Federal Express (or
other equivalent national overnight courier) or United States
Express Mail, with the cost of delivery prepaid or for the
account of the sender; (ii) on the fifth business day following
the day duly sent by certified or registered United States mail,
postage prepaid and return receipt requested; or (iii) when
otherwise actually received by the addressee on a business day
(or on the next business day if received after the close of nor-
mal business hours or on any non-business day).
16. Interpretation, Headings. The parties acknowl-
edge and agree that the terms and provisions of this Agreement
have been negotiated, shall be construed fairly as to all par-
ties hereto, and shall not be construed in favor of or against
any party. The section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
17. Successors and Assigns; Assignment; Intended
Beneficiaries. Neither this Agreement, nor any of Employee's
rights, powers, duties or obligations hereunder, may be assigned
by Employee. This Agreement shall be binding upon and inure to
the benefit of Employee and his heirs and legal representatives
and the Company and its successors. Successors of the Company
-7-
<PAGE>
shall include, without limitation, any corporation or corpora-
tions acquiring, directly or indirectly, all or substantially
all of the assets of the Company, whether by merger, consolida-
tion, purchase, lease or otherwise, and such successor shall
thereafter be deemed "the Company" for the purpose hereof.
18. No Waiver by Action, Cumulative Rights, Etc. Any
waiver or consent from the Company respecting any term or provi-
sion of this Agreement or any other aspect of the Employee's
conduct or employment shall be effective only in the specific
instance and for the specific purpose for which given and shall
not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of the Com-
pany at any time or times to require performance of, or to exer-
cise any of its powers, rights or remedies with respect to, any
term or provision of this Agreement or any other aspect of the
Employee's conduct or employment in no manner (except as other-
wise expressly provided herein) shall affect the Company's right
at a later time to enforce any such term or provision.
19. Counterparts; New York Governing Law; Amendments,
Entire Agreement. This Agreement may be executed in two
counterpart copies, each of which may be executed by one of the
parties hereto, but all of which, when taken together, shall
constitute a single agreement binding upon all of the parties
hereto. This Agreement and all other aspects of the Employee's
employment shall be governed by and construed in accordance with
the applicable laws pertaining in the State of New York (other
than those that would defer to the substantive laws of another
jurisdiction). Each and every modification and amendment of
this Agreement shall be in writing and signed by the parties
hereto, and any waiver of, or consent to any departure from, any
term or provision of this Agreement shall be in writing and
signed by each affected party hereto. This Agreement contains
the entire agreement of the parties and supersedes all prior
representations, agreements and understandings, oral or other-
wise, between the parties with respect to the matters contained
herein.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
AUDITS & SURVEYS WORLDWIDE, INC.
By: /s/ Anthony Timiraos
Name: Anthony Timiraos
Title: Treasurer
/s/ Carl Ravitch
Carl Ravitch
-9-
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of March 24, 1995,
between Audits & Surveys Worldwide, Inc., a Delaware corporation
having an address at 650 Avenue of the Americas, New York, New
York 10011 (the "Company"), and Anthony Timiraos, an individual
residing at 67 Newfield Drive, Stamford, Connecticut 06905
("Employee").
W I T N E S S E T H :
WHEREAS, Employee has been employed by the Company for
more than 5 years; and
WHEREAS, the Company desires that Employee continue to
be employed by it and render services to it, and Employee is
willing to be so employed and to render such services to the
Company, all upon the terms and subject to the conditions con-
tained herein.
NOW, THEREFORE, in consideration of the mutual cove-
nants and agreements contained herein, and other good and valu-
able consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Employment. Subject to and upon the terms and
conditions contained in this Agreement, the Company hereby
agrees to continue to employ Employee and Employee agrees to
continue in the employ of the Company, for the period set forth
in Paragraph 2 hereof, to render to the Company, its affiliates
and/or subsidiaries the services described in Paragraph 3
hereof.
2. Term. Employee's term of employment under this
Agreement shall be three (3) years, commencing on March 24, 1995
and shall continue for a period through and including March 24,
1998, unless extended in writing as hereinbelow provided or ear-
lier terminated pursuant to the terms and conditions set forth
herein (the "Employment Term"). Such term shall be extended for
successive one (1) year terms unless either party hereto gives
written notice to the other of its desire to terminate this
Agreement at least ninety (90) days prior to the commencement of
any such extension.
<PAGE>
3. Duties. (a) Employee shall serve as the senior
financial executive of the Company subject to the authority of
the Board of Directors and Chief Executive Officer of the Com-
pany. If elected by the Board of Directors, Employee will serve
as an Executive Vice President, Treasurer and Chief Financial
Officer of the Company. Employee shall perform all duties and
services incident to the positions held by him.
(b) Employee agrees to abide by all By-laws and
policies of the Company promulgated from time to time by the
Company.
4. Exclusive Services and Best Efforts. Employee
agrees to devote his best efforts, energies and skill to the
discharge of the duties and responsibilities attributable to his
position, and to this end, he will devote his full time and
attention during regular business hours to the business and
affairs of the Company, subject to the provisions of the last
sentence of subparagraph 10(b) hereof.
5. Compensation. As compensation for his services
and covenants hereunder, Employee shall receive a salary ("Sal-
ary"), payable pursuant to the Company's normal payroll proce-
dures in place from time to time, at the rate of $195,000 per
annum less all necessary and required federal, state and local
payroll deductions, and such bonuses as may be determined from
time to time by the Board of Directors of the Company.
6. Business Expenses. Employee shall be reimbursed
for, and entitled to advances (subject to repayment to the Com-
pany if not actually incurred by Employee) with respect to, only
those business expenses incurred by him (a) which are reasonable
and necessary for Employee to perform his duties under this
Agreement in accordance with policies established from time to
time by the Company, and (b) for which Employee has submitted
vouchers and/or receipts.
7. Employee Benefits. (a) During the Employment
Term, Employee shall be entitled to such insurance, disability
and health and medical benefits and be entitled to participate
in such retirement plans or programs as are from time to time
generally made available to executive employees of the Company
pursuant to the policies of the Company; provided that Employee
shall be required to comply with the conditions attendant to
coverage by such plans and shall comply with and be entitled to
benefits only in accordance with the terms and conditions of
such plans. The Company may withhold from any benefits payable
to Employee all federal, state, local and other taxes and
-2-
<PAGE>
amounts as shall be permitted or required to be withheld pursu-
ant to any applicable law, rule or regulation.
(b) Employee shall be entitled to vacation in
accordance with the Company's policy in effect for executive
staff, which shall be taken at such time or times as shall be
mutually agreed upon with the Company.
8. Death and Disability. (a) The Employment Term
shall terminate on the date of Employee's death, in which event
Employee's Salary, reimbursable expenses and benefits owing to
Employee through the date of Employee's death shall be paid to
his estate. Employee's estate will not be entitled to any other
compensation upon termination of this Agreement pursuant to this
subparagraph 8(a).
(b) If, during the Employment Term, in the opin-
ion of a duly licensed physician selected by the Company,
Employee, because of physical or mental illness or incapacity,
shall become substantially unable to perform the duties and ser-
vices required of him under this Agreement for a period, of 120
consecutive days or 180 days in the aggregate during any
nine-month period, the Company may, upon at least ten (10) days'
prior written notice given at any time after the expiration of
such 120 or 180-day period, as the case may be, to Employee of
its intention to do so, terminate his employment as of such date
as may be set forth in the notice. In case of such termination,
Employee shall be entitled to receive his Salary, reimbursable
expenses and benefits owing to Employee through the date of ter-
mination. Employee will not be entitled to any other compensa-
tion upon termination of his employment pursuant to this
subparagraph 8(b).
9. Termination. The Company may terminate the
employment of Employee for cause, as such term is interpreted by
the courts of New York. Upon such termination, the Company
shall be released from any and all further obligations under
this Agreement, except that the Company shall be obligated to
pay Employee his Salary, reimbursable expenses and benefits
owing to Employee through the day on which Employee is termi-
nated. Employee will not be entitled to any other compensation
upon termination of this Agreement pursuant to this Paragraph 9.
10. Disclosure of Information and Restrictive Cove-
nant. Employee acknowledges that, by his employment, he has
been and will be in a confidential relationship with the Company
and will have access to confidential information and trade
secrets of the Company, its subsidiaries and affiliates.
-3-
<PAGE>
Confidential information and trade secrets include, but are not
limited to, customer, supplier and client lists, panels and
interviewers, price lists, marketing, strategies and procedures,
operational techniques, business plans and systems, quality con-
trol procedures and systems, special projects and survey and
market research, including projects, research and reports for
any entity or client, and any other records, files, drawings,
discoveries, applications, data and information concerning the
business of the Company and its customers and clients which are
not in the public domain. Employee agrees that in consideration
of the execution of this Agreement by the Company:
(a) Employee will not, during the term of this
Agreement or at any time thereafter, use, or disclose to any
third party, trade secrets or confidential information of the
Company, including, but not limited to, confidential information
or trade secrets belonging or relating to the Company, its sub-
sidiaries, affiliates, customers and clients or proprietary pro-
cedures of the Company, its subsidiaries, affiliates customers
and clients. Proprietary procedures shall include, but shall
not be limited to, all information which is known or intended to
be known only by employees of the Company, its subsidiaries and
affiliates or others in a confidential relationship with the
Company or its subsidiaries and affiliates which relates to
business matters.
(b) Employee will not, during the term of this
Agreement, directly or indirectly, under any circumstance other
than at the direction and for the benefit of the Company, engage
in or participate in any business activity, including, but not
limited to, acting as a director, officer, employee, agent,
independent contractor, partner, consultant, licensor or
licensee, franchisor or franchisee, proprietor, syndicate mem-
ber, shareholder or creditor or with a person having any other
relationship with any other business, company, firm, occupation
or business activity, that is, directly or indirectly, competi-
tive with any business carried on by the Company or any of its
subsidiaries or affiliates during the term of this Agreement.
The ownership by Employee of 3% or less of the issued and out-
standing shares of a class of securities which is traded on a
national securities exchange or in the over-the-counter market,
shall not cause Employee to be deemed a shareholder under this
subparagraph 10(b) or constitute a breach of Paragraph 4 hereof.
(c) Employee will not, during the term of this
Agreement and for a period of three (3) years thereafter, on his
behalf or on behalf of any other business enterprise, directly
or indirectly, under any circumstance other than at the
-4-
<PAGE>
direction and for the benefit of the Company, solicit or induce
any creditor, customer, client, supplier, officer, employee or
agent of the Company or any of its subsidiaries or affiliates to
sever his or its relationship with or leave the employ of any of
such entities.
(d) Nothing contained in this Paragraph 10 shall
be construed as prohibiting Employee from being engaged by a
client or customer of the Company upon his termination of
employment by the Company.
(e) It is expressly agreed by Employee that the
nature and scope of each of the provisions set forth above in
this Paragraph 10 are reasonable and necessary. If, for any
reason, any aspect of the above provisions as it applies to
Employee is determined by a court of competent jurisdiction to
be unreasonable or unenforceable, the provisions shall only be
modified to the minimum extent required to make the provisions
reasonable and/or enforceable, as the case may be. Employee
acknowledges and agrees that his services are of unique char-
acter and expressly grants to the Company or any subsidiary or
affiliate of the Company or any successor of any of them, the
right to enforce the above provisions through the use of all
remedies available at law or in equity, including, but not lim-
ited to, injunctive relief.
(f) This Paragraph 10 and Paragraphs 11, 12 and
13 hereof shall survive the expiration or termination of this
Agreement for any reason.
11. Company Property. (a) Any patents, inventions,
discoveries, applications or processes designed, devised,
planned, applied, created, discovered or invented by Employee in
the course of Employee's employment under this Agreement and
which pertain to any aspect of the Company's or its subsidiar-
ies' or affiliates' business shall be the sole and absolute
property of the Company, and Employee shall promptly report the
same to the Company and promptly execute any and all documents
reasonably requested to assure the Company the full and complete
ownership thereof.
(b) All records, files, lists, including com-
puter generated lists, drawings, documents, equipment and simi-
lar items relating to the Company's business which Employee
shall prepare or receive from the Company shall remain the Com-
pany's sole and exclusive property. Upon termination of this
Agreement, Employee shall promptly return to the Company all
property of the Company in his possession. Employee further
-5-
<PAGE>
represents that he will not copy or cause to be copied, print
out or cause to be printed out any software, documents or other
materials originating with or belonging to the Company.
Employee additionally represents that, upon termination of his
employment with the Company, he will not retain in his posses-
sion any such software, documents or other materials.
12. Remedy. It is mutually understood and agreed
that Employee's services are special, unique, unusual, extraor-
dinary and of an intellectual character giving them a peculiar
value, the loss of which cannot be reasonably or adequately com-
pensated in damages in an action at law. Accordingly, in the
event of any breach of this Agreement by Employee, including,
but not limited to, the breach of the non-disclosure, non-
solicitation and non-compete clauses under Paragraph 10 hereof,
the Company shall be entitled to equitable relief by way of
injunction or otherwise in addition to any damages which the
Company may be entitled to recover. In addition, the Company
shall be entitled to reimbursement from Employee, upon request,
of any and all reasonable attorneys' fees and expenses incurred
by it in enforcing any term or provision of this Agreement.
13. Representations and Warranties of Employee. (a)
In order to induce the Company to enter into this Agreement,
Employee hereby represents and warrants to the Company as fol-
lows: (i) Employee has the legal capacity and unrestricted
right to execute and deliver this Agreement and to perform all
of his obligations hereunder; (ii) the execution and delivery of
this Agreement by Employee and the performance of his obliga-
tions hereunder will not violate or be in conflict with any
fiduciary or other duty, instrument, agreement, document,
arrangement or other understanding to which Employee is a party
or by which he is or may be bound or subject; and (iii) Employee
is not a party to any instrument, agreement, document, arrange-
ment or other understanding with any person (other than the Com-
pany) requiring or restricting the use or disclosure of any con-
fidential information or the provision of any employment, con-
sulting or other services.
(b) Employee hereby agrees to indemnify and hold
harmless the Company from and against any and all losses, costs,
damages and expenses (including, without limitation, its reason-
able attorneys' fees) incurred or suffered by the Company
resulting from any breach by Employee of any of his representa-
tions or warranties set forth in subparagraph 13(a) hereof.
14. Waiver of Jury Trial and Consent to New York
Jurisdiction and Venue. In any action, suit or proceeding in
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<PAGE>
any jurisdiction brought against the Employee by the Company, or
vice versa, the Employee and the Company each waive trial by
jury. The Employee hereby consents and agrees that the Supreme
Court of the State of New York for the County of New York and
the United States District Court for the Southern District of
New York each shall have personal jurisdiction and proper venue
with respect to any dispute between the Employee and the Com-
pany. In any dispute with the Company, the Employee will not
raise, and hereby expressly waives, any objection or defense to
any such jurisdiction as an inconvenient forum.
15. Notice. Except as otherwise expressly provided,
any notice, request, demand or other communication permitted or
required to be given under this Agreement shall be in writing,
shall be sent by one of the following means to the Employee at
his address set forth on the first page of this Agreement and to
the Company at its address set forth on the first page of this
Agreement, Attention: Mr. Solomon Dutka, Chief Executive Offi-
cer, with a copy to Parker Chapin Flattau & Klimpl, 1211 Avenue
of the Americas, New York, New York 10036, Attention: James
Alterbaum, Esq. (or to such other address as shall be designated
hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt) and shall be deemed con-
clusively to have been given: (i) on the first business day
following the day timely deposited with Federal Express (or
other equivalent national overnight courier) or United States
Express Mail, with the cost of delivery prepaid or for the
account of the sender; (ii) on the fifth business day following
the day duly sent by certified or registered United States mail,
postage prepaid and return receipt requested; or (iii) when
otherwise actually received by the addressee on a business day
(or on the next business day if received after the close of nor-
mal business hours or on any non-business day).
16. Interpretation, Headings. The parties acknowl-
edge and agree that the terms and provisions of this Agreement
have been negotiated, shall be construed fairly as to all par-
ties hereto, and shall not be construed in favor of or against
any party. The section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
17. Successors and Assigns; Assignment; Intended
Beneficiaries. Neither this Agreement, nor any of Employee's
rights, powers, duties or obligations hereunder, may be assigned
by Employee. This Agreement shall be binding upon and inure to
the benefit of Employee and his heirs and legal representatives
and the Company and its successors. Successors of the Company
-7-
<PAGE>
shall include, without limitation, any corporation or corpora-
tions acquiring, directly or indirectly, all or substantially
all of the assets of the Company, whether by merger, consolida-
tion, purchase, lease or otherwise, and such successor shall
thereafter be deemed "the Company" for the purpose hereof.
18. No Waiver by Action, Cumulative Rights, Etc. Any
waiver or consent from the Company respecting any term or provi-
sion of this Agreement or any other aspect of the Employee's
conduct or employment shall be effective only in the specific
instance and for the specific purpose for which given and shall
not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of the Com-
pany at any time or times to require performance of, or to exer-
cise any of its powers, rights or remedies with respect to, any
term or provision of this Agreement or any other aspect of the
Employee's conduct or employment in no manner (except as other-
wise expressly provided herein) shall affect the Company's right
at a later time to enforce any such term or provision.
19. Counterparts; New York Governing Law; Amendments,
Entire Agreement. This Agreement may be executed in two
counterpart copies, each of which may be executed by one of the
parties hereto, but all of which, when taken together, shall
constitute a single agreement binding upon all of the parties
hereto. This Agreement and all other aspects of the Employee's
employment shall be governed by and construed in accordance with
the applicable laws pertaining in the State of New York (other
than those that would defer to the substantive laws of another
jurisdiction). Each and every modification and amendment of
this Agreement shall be in writing and signed by the parties
hereto, and any waiver of, or consent to any departure from, any
term or provision of this Agreement shall be in writing and
signed by each affected party hereto. This Agreement contains
the entire agreement of the parties and supersedes all prior
representations, agreements and understandings, oral or other-
wise, between the parties with respect to the matters contained
herein.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
AUDITS & SURVEYS WORLDWIDE, INC.
By: /s/ H. Arthur Bellows, Jr.
Name:
Title:
/s/ Anthony Timiraos
Anthony Timiraos
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information for Audits & Surveys Worldwide, Inc.
extracted from the Balance Sheet and Statement of Income for the period ended
March 31, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000099703
<NAME> AUDITS & SURVEYS WORLDWIDE, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 399,642
<SECURITIES> 0
<RECEIVABLES> 8,907,048
<ALLOWANCES> (128,985)
<INVENTORY> 0
<CURRENT-ASSETS> 12,632,387
<PP&E> 4,954,008
<DEPRECIATION> (2,484,599)
<TOTAL-ASSETS> 19,233,555
<CURRENT-LIABILITIES> 13,519,920
<BONDS> 467,819
<COMMON> 130,948
0
0
<OTHER-SE> 3,806,014
<TOTAL-LIABILITY-AND-EQUITY> 19,233,555
<SALES> 0
<TOTAL-REVENUES> 13,312,846
<CGS> 0
<TOTAL-COSTS> 6,357,864
<OTHER-EXPENSES> 6,137,786
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59,592
<INCOME-PRETAX> 929,167
<INCOME-TAX> 362,297
<INCOME-CONTINUING> 566,870
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 566,870
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
