SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
THE LEHIGH GROUP INC.
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(Name of Registrant as Specified in Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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THE LEHIGH GROUP INC.
1055 WASHINGTON BLVD.
STAMFORD, CONNECTICUT 06903
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on November 12, 1997
NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders
of The Lehigh Group Inc. ("Lehigh") will be held on November 12, 1997, at The
Chase Manhattan Bank, 410 Park Avenue, New York, New York 10022 at 11:00 a.m.,
Eastern Time (the "Special Meeting"), for the following purposes:
1. To consider and to vote on a proposal to effect a 1-for-30
reverse stock split (the "Reverse Split") of the common stock, par value $.001
per share, of Lehigh (the "Lehigh Common Stock"). Approval of the Reverse Split
will also constitute approval of an amendment to the Restated Certificate of
Incorporation of Lehigh to give effect to the Reverse Split;
2. To consider and to approve The Lehigh Group Inc. Stock Option,
Stock Appreciation Rights and Restricted Stock Plan (the "Stock Option Plan");
and
3. To consider and to approve The Lehigh Group Inc. Incentive
Compensation Plan (the "Incentive Compensation Plan").
4. To transact such other business as may properly come before
the meeting.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
Only stockholders of record at the close of business on October
21, 1997 are entitled to notice of, and to vote at, the meeting and any
adjournments thereof.
All stockholders are invited to attend the Special Meeting in
person. Approval of the Reverse Split will require the affirmative vote of a
majority of the votes to which all of the outstanding shares of Lehigh Common
Stock and Lehigh's Series A Convertible Preferred Stock, par value $.001 (the
"Lehigh Preferred Stock"), voting together as a single class are entitled,
provided, however, that each share of Lehigh Preferred Stock will have 250
votes. Approval of the Stock Option Plan and the Incentive Compensation Plan
will require the affirmative vote of a majority of the votes cast by all
stockholders represented at the Special Meeting and entitled to vote thereon
provided, however, that each share of Lehigh Preferred Stock will have 250
votes.
THE BOARD OF DIRECTORS OF LEHIGH RECOMMENDS THAT STOCKHOLDERS
VOTE TO APPROVE THE REVERSE SPLIT AND THE OTHER MATTERS TO BE PRESENTED AT THE
SPECIAL MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
Robert A. Bruno
Secretary
Stamford, Connecticut
October 21, 1997
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YOUR VOTE IS IMPORTANT
To ensure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. To revoke a proxy, you must
submit to the Secretary of Lehigh prior to voting, either a signed instrument of
revocation or a duly executed proxy bearing a date or time later than the proxy
being revoked. If you attend the meeting, you may vote in person even if you
previously returned a proxy.
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THE LEHIGH GROUP INC.
1055 WASHINGTON BLVD.
STAMFORD, CONNECTICUT 06903
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PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
November 12, 1997
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INTRODUCTION
This Proxy Statement and the accompanying form of proxy are being
furnished in connection with the solicitation of proxies by the Board of
Directors (the "Board of Directors") of The Lehigh Group Inc., a Delaware
corporation ("Lehigh"), to be used at the Special Meeting of Stockholders of
Lehigh to be held on November 12, 1997 at 11:00 a.m. Eastern Time at The Chase
Manhattan Bank, 410 Park Avenue, New York, New York 10022 and at any
adjournments thereof (the "Special Meeting"). The principal executive offices of
Lehigh are located at 1055 Washington Blvd., Stamford, Connecticut 06903. This
Proxy Statement and the accompanying form of proxy is first being mailed to
stockholders of Lehigh on or about October 22.
At the Special Meeting the stockholders of Lehigh will consider
and vote on Proposal No. 1 (the "Reverse Split Proposal"), a proposed 1-for-30
reverse stock split (the "Reverse Split") of the Common Stock, $.001 par value
per share (the "Lehigh Common Stock"), of Lehigh. As a result of the Reverse
Split, each thirty (30) shares of Lehigh Common Stock will be converted into one
(1) share of Lehigh Common Stock and each share of Lehigh's Series A Convertible
Preferred Stock, par value $.001 (the "Lehigh Preferred Stock" and collectively
with the Lehigh Common Stock, the "Stock") which is currently convertible into
250 shares of Lehigh Common Stock and has a like number of votes per share,
voting together with the Lehigh Common Stock, will automatically be adjusted so
that, after the Reverse Split, each such share shall be convertible into 8 1/3
shares of Lehigh Common Stock, and will have a like number of votes per share,
voting together with the Lehigh Common Stock.
Approval of the Reverse Split shall also constitute approval of
an amendment (the "Amendment") to Lehigh's Restated Certificate of
Incorporation, as amended (the "Restated Certificate of Incorporation"), to
provide for such Reverse Split, which amendment shall be filed promptly after
the Special Meeting. The Reverse Split shall be effective upon such filing.
At the Special Meeting, the stockholders of Lehigh will also vote
on Proposal No. 2, the approval of The Lehigh Group Inc. Stock Option, Stock
Appreciation Rights and Restricted Stock Plan (the "Stock Option Plan"),
Proposal No. 3, the approval of The Lehigh Group Inc. Incentive
Compensation Plan (the "Incentive Compensation Plan"), and such other business
as may properly come before the Special Meeting or any adjournments thereof.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on October
21, 1997, the record date (the "Record Date") for the Special Meeting, will be
entitled to notice of, and to vote at, the Special Meeting and any
adjournment(s) thereof. As of the close of business on the Record Date, there
were outstanding 22,553,500 shares of Lehigh Common Stock and 1,037,461 shares
of Lehigh Preferred Stock. Each outstanding share of Lehigh Common Stock is
entitled to one vote and each outstanding share of Lehigh Preferred Stock is
entitled to 250 votes. Such outstanding shares of the Stock present in person or
by Proxy representing one third of the votes to which all of the outstanding
shares of Stock are entitled to vote (provided, however, that each share of
Lehigh Preferred Stock will have 250 votes) is required for a quorum.
At the Special Meeting, approval of the Reverse Split will
require the affirmative vote of a majority of the votes to which all of the
outstanding shares of Lehigh Common Stock and the Lehigh Preferred Stock voting
together as a single class are entitled, provided, however, that each share of
Lehigh Preferred Stock will have 250 votes. Approval of the Stock Option Plan
and the Incentive Compensation Plan will require the affirmative vote of a
majority of the votes cast by all stockholders represented at the Special
Meeting and entitled to vote thereon, provided, however, that each share of
Lehigh Preferred Stock will have 250 votes.
VOTING OF PROXIES
Shares of Stock represented by Proxies that are properly
executed, duly returned and not revoked will be voted in accordance with the
instructions contained therein. If no instructions are contained in a Proxy, the
shares of Stock represented thereby will be voted in favor of the following
proposals: (1) the Reverse Split and the adoption of the Amendment to the
Restated Certificate of Incorporation which will amend the current Restated
Certificate of Incorporation to effect the Reverse Split of the Lehigh Common
Stock; (2) the approval of the Stock Option Plan; (3) the approval of the
Incentive Compensation Plan; and (4) such other business as may properly come
before the Special Meeting or any adjournments thereof. The execution of a Proxy
will in no way affect a stockholder's right to attend the Special Meeting and to
vote in person. Any Proxy executed and returned by a stockholder may be revoked
at any time thereafter by written notice of revocation given to the Secretary of
Lehigh prior to the vote to be taken at the Special Meeting, by execution of a
subsequent Proxy that is presented at the Special Meeting, or by voting in
person at the Special Meeting, in any such case, except as to any matter or
matters upon which a vote shall have been cast pursuant to the authority
conferred by such Proxy prior to such revocation. Broker "non-votes" and the
shares as to which a stockholder abstains are included for purposes of
determining whether a quorum of shares is present at a meeting. A broker
"non-vote" occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received instructions from
the beneficial owner. Broker "non-votes" will have the same legal effect as a
vote against the Reverse Split. However, Broker "non-votes" are not included in
the tabulation of the voting results on issues requiring approval of a majority
of the votes cast, such as approval of the Stock Option Plan and Incentive
Compensation Plan, and, therefore, do not have the effect of votes in opposition
in such tabulations.
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The cost of solicitation of the Proxies being solicited on behalf
of the Board of Directors will be borne by Lehigh. In addition to the use of the
mails, proxy solicitation may be made by telephone, telegraph, overnight courier
and personal interview by officers, directors and employees of Lehigh. Lehigh
will, upon request, reimburse brokerage houses and persons holding Stock in the
names of their nominees for their reasonable expenses in sending soliciting
material to their principals.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS
WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON ARE URGED TO MARK,
SIGN AND DATE THE RESPECTIVE ACCOMPANYING PROXY AND MAIL IT IN THE ENCLOSED
RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, SO
THAT THEIR VOTES CAN BE RECORDED.
PROPOSAL NO. 1--THE REVERSE SPLIT
The stockholders of Lehigh are being asked to approve the Reverse
Split of the Lehigh Common Stock at a 1-to-30 ratio, pursuant to which each
thirty (30) shares of Lehigh Common Stock would be converted into one (1) share
of Lehigh Common Stock. The Lehigh Preferred Stock would not be converted.
However, in accordance with the anti-dilution provisions of the Certificate of
Designation for the Lehigh Preferred Stock (the "Certificate of Designation"),
as currently in effect, each share of Lehigh Preferred Stock, which presently is
convertible into 250 shares of Lehigh Common Stock and has a like number of
votes per share, without any further action would henceforth be convertible into
8 1/3 shares of Lehigh Common Stock and would have a like number of votes per
share. All outstanding Lehigh warrants and options also would be appropriately
adjusted to reflect the Reverse Split.
In order to maintain a trading market for the Lehigh Common
Stock, it is essential that the shares of Lehigh Common Stock be traded on a
national securities exchange, such as the New York Stock Exchange (the "NYSE")
or the American Stock Exchange (the "AMEX"), or be quoted on the National
Association of Securities Dealers Automatic Quotation Service ("NASDAQ").
Currently, the Lehigh Common Stock is traded on the NYSE. However, the Company
has been advised that the Lehigh Common Stock no longer meets the technical
requirements to maintain its listing on the NYSE. The Board of Directors of
Lehigh believes that the NYSE has refrained from delisting the Lehigh Common
Stock only because of Lehigh's pending application to have the Lehigh Common
Stock traded on AMEX. An application to list the Lehigh Common Stock has been
submitted to AMEX and AMEX has indicated in response to Lehigh's application,
that it will require Lehigh to effect the Reverse Split. There can be no
assurance that AMEX will permit the listing of the Lehigh Common Stock on AMEX
unless the Reverse Split is approved, and there can be no assurance that NYSE
will not delist the Lehigh Common Stock if AMEX does not approve Lehigh's
listing application. In such case Lehigh would seek to have the Lehigh Common
Stock quoted on NASDAQ, but there can be no assurance that such application
would be approved or that there would not be a period when the Lehigh Common
Stock was no longer traded on NYSE and not yet quoted on NASDAQ. Unless the
Reverse Split is approved, Lehigh may not satisfy the requirements for listing
on the NASDAQ National Market System or Small-Cap Market. Failure of Lehigh to
satisfy the listing requirements could result in the Lehigh Common Stock trading
on the OTC Bulletin Board or in the "pink sheets" maintained by the National
Quotation Bureau, Inc., which are generally considered to be less efficient
markets.
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If the Reverse Split is approved and the Lehigh Common Stock is
listed on AMEX, the Lehigh Common Stock will be delisted from the NYSE.
The shares of Lehigh Preferred Stock are not convertible until
such time as Lehigh's authorized and unissued shares of Lehigh Common Stock
exceeds the aggregate number of shares of Lehigh Common Stock into which all of
the authorized shares of Lehigh Preferred Stock is convertible, which will
require either an amendment to Lehigh's Certificate of Incorporation to increase
the number of authorized shares of Lehigh Common Stock or a reverse stock split
such as the Reverse Split. If the Reverse Split is approved the Lehigh Preferred
Stock will be immediately convertible into shares of Lehigh Common Stock.
If the Reverse Split is effected, the trading price per share of
Lehigh Common Stock should be expected to increase. NO ASSURANCE CAN BE GIVEN
THAT THE MARKET PRICE OF LEHIGH COMMON STOCK WILL INCREASE PROPORTIONATELY
FOLLOWING THE REVERSE SPLIT.
In order to effect the Reverse Split it will be necessary to file
the Amendment to Lehigh's Restated Certificate of Incorporation, a copy of which
is annexed hereto as Exhibit A. Approval of the Reverse Split will be deemed to
include approval of the Amendment. If the stockholders of Lehigh approve the
Reverse Split, the Amendment will be filed promptly after the Special Meeting
and the Reverse Split will occur immediately upon filing (that date of such
filing being the "Reverse Split Date"). At the same time Lehigh will file an
amendment to the Restated Certificate of Incorporation to change the name of the
corporation from "The Lehigh Group Inc." to "First Medical Group, Inc.," which
amendment was approved by the stockholders of the Special Meeting on July 9,
1997 but which change of name has not yet been effected at the request of the
NYSE. No additional approval to change the name is being sought at the Special
Meeting.
In connection with the Reverse Split, no certificates or scrip
representing fractional shares of Lehigh Common Stock will be issued. If a
fractional share would be issuable to any one holder of Lehigh Common Stock,
then the number of shares into which such Lehigh Common Stock will be
reclassified will be rounded to the next highest number of whole shares of
Lehigh Common Stock.
Approval of the Reverse Split will not affect any stockholder's
percentage ownership of Lehigh or proportionate voting power, except for minor
differences resulting from the rounding up of fractional shares. Because all of
the outstanding shares of Lehigh Common Stock and all of the shares of Lehigh
Preferred Stock, options and warrants to purchase shares will be appropriately
adjusted, the Reverse Split will not affect the proportionate equity interest in
Lehigh that stockholders currently own.
The par value of the Lehigh Common Stock would remain at $0.001
per share following the Reverse Split, and the number of shares of Lehigh Common
Stock outstanding would be reduced. As a consequence, the aggregate par value of
the outstanding Lehigh Common Stock would be reduced, while the aggregate
capital in excess of par value attributable to the outstanding Lehigh Common
Stock for statutory and accounting purposes would be correspondingly increased.
Under Delaware law, the Board of Directors would have the authority, subject to
certain limitations, to transfer some or all of such capital in excess of par
value from capital to surplus. Lehigh has no plans to reduce capital at this
time.
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If the Reverse Split is consummated, as soon as practicable after
the Reverse Split Date Lehigh will send a letter of transmittal to each
stockholder of record on the Reverse Split Date for use in transmitting
certificates representing shares of Lehigh Common Stock ("Old Certificates") to
Lehigh's transfer agent, American Stock Transfer & Trust Company (the "Exchange
Agent"). The letter of transmittal will contain instructions for the surrender
of Old Certificates to the Exchange Agent in exchange for certificates
representing the appropriate number of whole shares of new Lehigh Common Stock
and reflecting the change of name of the corporation. No new certificates will
be issued to a stockholder until such stockholder has surrendered all Old
Certificates together with a properly completed and executed letter of
transmittal to the Exchange Agent.
Upon proper completion and execution of the letter of transmittal
and return thereof to the Exchange Agent, together with all Old Certificates,
stockholders will receive a new certificate or certificates representing the
number of whole shares of new Lehigh Common Stock into which their shares of
Lehigh Common Stock represented by the Old Certificates have been converted as a
result of the Reverse Split and reflecting the change of name of the
corporation. Until surrendered, outstanding Old Certificates held by
stockholders will be deemed for all purposes to represent the number of whole
shares of Lehigh Common Stock to which such stockholders are entitled as a
result of the Reverse Split. Stockholders should not send their Old Certificates
to the Exchange Agent until they have received the letter of transmittal. Shares
not presented for surrender as soon as practicable after the letter of
transmittal is sent shall be exchanged at the first time they are presented for
transfer.
No service charges will be payable by holders of shares of Lehigh
Common Stock in connection with the exchange of certificates, all expenses of
which will be borne by Lehigh.
Under Delaware General Corporation Law, approval of the Reverse
Split requires the affirmative vote of a majority of the votes to which all of
the outstanding shares of Lehigh Common Stock and the Lehigh Preferred Stock
voting together as a single class are entitled, provided, however, that each
share of Lehigh Preferred Stock will have 250 votes.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE PROPOSED REVERSE SPLIT.
PROPOSAL NO. 2 -- APPROVAL OF THE LEHIGH GROUP INC. STOCK OPTION,
STOCK APPRECIATION RIGHTS AND RESTRICTED STOCK PLAN
GENERAL
The Board of Directors has unanimously approved for submission to
a vote of stockholders a proposal to approve the Stock Option Plan in the form
set forth in Appendix B to this proxy statement. THE FOLLOWING DISCUSSION OF THE
STOCK OPTION PLAN IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO APPENDIX B.
The purpose of the Stock Option Plan is to advance the Company's
interests by providing additional incentive to attract and retain in the employ
of the Company and its subsidiaries, qualified and competent persons to provide
management services, to encourage the sense of proprietorship and to stimulate
the active interest of such persons in the development and financial success of
the
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Company and its subsidiaries. The Stock Option Plan provides for the grant of
incentive stock options and nonqualified stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as
well as stock appreciation rights ("Rights") with respect to stock options and
restricted stock ("Restricted Stock") awards.
The Stock Option Plan, which is administered by the Compensation
Committee of the Board of Directors (but can also be administered directly by
the Board of Directors), currently authorizes the issuance of a maximum of
500,000 shares of Lehigh Common Stock (on a post Reverse Split basis), which may
be newly issued shares or previously issued shares held by any subsidiary of the
Company. If any award under the Stock Option Plan terminates, expires
unexercised, or is cancelled, the shares of Lehigh Common Stock that would
otherwise have been issuable pursuant thereto will be available for issuance
pursuant to the grant of new awards.
The purchase price of each share of Lehigh Common Stock
purchasable under an incentive option granted under the Stock Option Plan is to
be determined by the Compensation Committee at the time of grant, but is to not
be less than 100% of the fair market value of a share of Lehigh Common Stock on
the date the option is granted; PROVIDED, HOWEVER, that with respect to an
optionee who, at the time such incentive option is granted, owns more than 10%
of the total combined voting power of all classes of stock of Lehigh or of any
of its subsidiaries, the purchase price per share is to be at least 110% of the
fair market value per share on the date of grant. The term of each option is to
be fixed by the Compensation Committee, but no option is to be exercisable more
than five years after the date such option is granted.
The aggregate fair market value, determined as of the date the
incentive option is granted, of shares of Lehigh Common Stock for which
incentive options are exercisable for the first time to any optionee during any
calendar year under the Stock Option Plan (and/or any other stock options plans
of the Company or any of its subsidiaries) shall not exceed $100,000. The
aggregate number of shares of Lehigh Common Stock subject to options granted
under the Stock Option Plan granted during any calendar year any one director is
not to exceed that number of shares as equals ten percent of the outstanding
shares of the Company for which options may be granted under the Stock Option
Plan.
The Compensation Committee shall have the authority to grant
Rights with respect to all or some of the shares of Lehigh Common Stock covered
by any option, which Rights may be granted together with or subsequent to the
grant of the option. Rights entitle the holder to cash equal to the difference
between an Offer Price Per Share (as defined in the Stock Option Plan) and the
exercise price of the related option if shares of Stock representing 20 percent
or more of the aggregate votes of the Stock voting together as a single class,
provided, however, that each share of Lehigh Preferred Stock will have the
number of votes provided for such share pursuant to its Certificate of
Designation is acquired pursuant to a tender offer or exchange offer. If a Right
is exercised, the related Option is terminated, and if an option terminates or
is exercised, the corresponding Right terminates.
In addition, the Compensation Committee shall have the authority
to award Restricted Stock which entitles the recipient to acquire, at no cost or
for a purchase price determined by the Compensation Committee, shares of Lehigh
Common Stock subject to such restrictions and conditions as the Compensation
Committee may determine at the time of grant. Conditions may be based on
continuing employment and/or achievement of pre-established performance goals
and objectives. A recipient of Restricted Stock shall have the rights of a
stockholder with respect to the voting of the
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Restricted Stock, subject to such other conditions contained in the written
instrument evidencing the Restricted Stock. However, generally Restricted Stock
may not be sold, assigned, transferred, pledged or otherwise encumbered or
disposed of, and, generally, upon the termination of the recipient's employment
with the Company, the Company shall have the right, at the discretion of the
Compensation Committee, to repurchase such Restricted Stock at its purchase
price. Nonetheless, once the pre-established performance goals, objectives and
other conditions have been attained, such shares of Restricted Stock shall no
longer be Restricted Stock and shall be deemed "vested" and will be freely
transferable.
The Board of Directors may amend, suspend, or terminate the Stock
Option Plan, except that no amendment may be adopted that would impair the
rights of any optionee without his consent. Further, no amendment may be adopted
which, without the approval of the stockholders of the Company, would (i)
materially increase the number of shares issuable under the Stock Option Plan,
except as provided in itself, (ii) materially increase the benefits accruing to
optionees under the Stock Option Plan, (iii) materially modify the eligibility
requirements for participation in the Stock Option Plan, (iv) decrease the
exercise price of an incentive option to less than 100% of the fair market value
per share of Lehigh Common Stock on the date of grant or the exercise price of a
nonqualified option to less than 80% of the fair market value per share of
Lehigh Common Stock on the date of grant, or (v) extend the term of any option
beyond that provided for in the Stock Option Plan.
The Compensation Committee may amend the terms of any option
previously granted, prospectively or retroactively, but no such amendment may
impair the rights of any optionee without his consent. The Compensation
Committee may also substitute new options for previously granted options,
including options granted under other plans applicable to the participant and
previously granted options having higher option prices, upon such terms as it
may deem appropriate.
The number of shares of Lehigh Common Stock available under the
Stock Option Plan and the terms of any option or other award granted thereunder
are subject to adjustment in the event of a merger, reorganization,
consolidation, recapitalization, stock dividend, or other change in corporate
structure affecting the shares of Lehigh Common Stock, if the Compensation
Committee determines that such event equitably requires such an adjustment.
As of October 21, 1997, there were no options outstanding under
the Stock Option Plan and no Restricted Stock had been awarded.
Pursuant to applicable policies of the NYSE, stockholder approval
is required for any stock option plan of the Company pursuant to which Lehigh
Common Stock may be acquired by officers or directors, except for warrants or
rights issued generally to security holders of the Company or broadly-based
plans or arrangements including other employees (e.g. ESOPS). In addition,
pursuant to applicable policies of AMEX, stockholder approval is required as a
prerequisite to approval of applications to list additional shares of Lehigh
Common Stock which are reserved for options granted or to be granted to
officers, directors or key employees, regardless of whether or not such
authorization is required by law or by the Company's charter. AMEX requires that
such stockholders' approval be solicited pursuant to a proxy statement
conforming to the proxy rules of the Securities and Exchange Commission ("SEC")
which discloses all of the essential details of the options or of the plan
pursuant to which the options will be granted, provided, however, that such
policy does not preclude the adoption of a stock option plan, or the granting of
options, subject to ratification by stockholders, prior to the filing of an
application for the listing of the shares of Lehigh
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Common Stock reserved for such purpose. However, AMEX will not require
stockholders' approval as a condition to listing shares reserved for the
exercise of options under a plan or arrangement for officers, directors or key
employees provided such incentive arrangements do not authorize the issuance of
more than 5% of the outstanding shares of Lehigh Common Stock in any one year
and provided that all arrangements with respect to the granting of options
adopted without stockholder approval in any five-year period do not authorize,
in the aggregate, the issuance of more than 10% of such Lehigh Common Stock.
Approval by stockholders of the Stock Option Plan by stockholders shall
constitute approval by stockholders of the Stock Option Plan and the grant or
award of any option, Related Right or Restricted Stock under the Stock Option
Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
LEHIGH GROUP INC. STOCK OPTION, STOCK APPRECIATION RIGHTS AND RESTRICTED STOCK
PLAN
PROPOSAL NO. 3 -- APPROVAL OF THE LEHIGH GROUP INC.
INCENTIVE COMPENSATION PLAN
GENERAL
The Board of Directors has unanimously approved for submission to
a vote of stockholders a proposal to approve the Incentive Compensation Plan in
the form set forth in Appendix C to this proxy statement. THE FOLLOWING
DISCUSSION OF THE INCENTIVE COMPENSATION PLAN IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO APPENDIX C.
The purpose of the Stock Option Plan is to advance the Company's
interests by providing additional incentives to those key employees of the
Company who contribute the most to the growth and profitability of the Company
and to encourage such key employees to continue as employees by making their
compensation competitive with compensation opportunities in competing businesses
and industries.
The Incentive Compensation Plan, which is administered by the
Compensation Committee of the Board of Directors (but can also be administered
directly by the Board of Directors), authorizes the Compensation Committee to
determine by March 15 of each year which key employees will be eligible in such
year for incentive compensation pursuant to the Incentive Compensation Plan (the
"Participants") and to establish targets for such fiscal year for the Company's
earnings per share. If the targets are achieved then each Participant will
receive (i) a cash bonus equal to 10% of his base salary for such year, (ii) an
amount of Lehigh Common Stock (the "Stock Bonus") determined by dividing 30% of
his base salary by fifty percent (50%) of the average of the high and low
closing prices for the Lehigh Common Stock during such year (or, if lower, 50%
of the closing sales price on the last trading day of such year), and (iii) a
cash payment sufficient to satisfy such participant's income tax liability with
respect to his Stock Bonus. There is no maximum number of shares of Lehigh
Common Stock which may be awarded under the Incentive Compensation Plan
The Compensation Committee may amend the Incentive Compensation
Plan, except that no amendment may be adopted that would impair the rights of
any Participant with respect to the year in which such amendment has been
adopted.
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The Plan shall terminate on December 31, 2002 except for the
delivery of shares of Lehigh Common Stock and/or cash due to Participants with
respect to such year.
If, prior to the end of the any Fiscal Year, a Participant's
employment terminates on account of (i) death, (ii) retirement, (iii) total and
permanent disability, or (iv) the Company's termination of the Participant
without Cause, the Participant will nonetheless remain eligible to receive
amounts under the Incentive Compensation Plan for such year if the Participant
shall have been an active, full-time employee for a period of at least two years
preceding such termination. In all other cases, the Participant will be
ineligible.
No bonuses or stock have been awarded, or will be awarded, with
respect to 1997 under the Incentive Compensation Plan.
Pursuant to applicable policies of the NYSE, stockholder approval
is required for any stock option plan of the Company pursuant to which Lehigh
Common Stock may be acquired by officers or directors, except for warrants or
rights issued generally to security holders of the Company or broadly-based
plans or arrangements including other employees (e.g. ESOPS). In addition,
pursuant to applicable policies of AMEX, stockholder approval is required as a
prerequisite to approval of applications to list additional shares of Lehigh
Common Stock which are reserved for options granted or to be granted to
officers, directors or key employees, regardless of whether or not such
authorization is required by law or by the Company's charter. AMEX requires that
such stockholders' approval be solicited pursuant to a proxy statement
conforming to the SEC's proxy rules which discloses all of the essential details
of the options or of the plan pursuant to which the options will be granted,
provided, however, that such policy does not preclude the adoption of a stock
option plan, or the granting of options, subject to ratification by
stockholders, prior to the filing of an application for the listing of the
shares of Lehigh Common Stock reserved for such purpose. However, AMEX will not
require stockholders' approval as a condition to listing shares reserved for the
exercise of options under a plan or arrangement for officers, directors or key
employees provided such incentive arrangements do not authorize the issuance of
more than 5% of the outstanding shares of Lehigh Common Stock in any one year
and provided that all arrangements with respect to the granting of options
adopted without stockholder approval in any five-year period do not authorize,
in the aggregate, the issuance of more than 10% of such Lehigh Common Stock.
Approval by stockholders of the Incentive Compensation Plan by stockholders
shall constitute approval by stockholders of the Incentive Compensation Plan and
the award of any Stock Bonus under the Incentive Compensation Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
LEHIGH GROUP INC. INCENTIVE COMPENSATION PLAN
-9-
MANAGEMENT
The table set forth below sets forth information with respect to
the directors and executive officers of Lehigh. Information as to age,
occupation and other directorships has been furnished to Lehigh by the
individual named. Salvatore J. Zizza, Dennis A. Sokol, Melvin Levinson, Elliot
Cole and Richard Berman are currently directors of Lehigh and will serve as
directors until the next annual meeting of stockholders of Lehigh (or until
their respective successors are duly elected and qualified or until their
earlier death, resignation or removal).
DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE CURRENT POSITION
---- --- ----------------
Dennis A. Sokol 52 Chairman of the Board, Chief Executive Officer
and Director of Lehigh and Chairman of the
Board and Chief Executive Officer of FMC
Salvatore J. Zizza 51 Chief Financial Officer, Executive Vice
President, Treasurer and Director of Lehigh
Robert A. Bruno 41 Vice President, General Counsel and Secretary
of Lehigh
Melvin E. Levinson, M.D. 68 Director of Lehigh
Elliot H. Cole 64 Vice Chairman of the Board and Director of
Lehigh
Richard Berman 53 Director of Lehigh
Mr. Sokol has been a director and Chairman of the Board and Chief
Executive Officer of Lehigh since the merger (the "Merger") of a wholly-owned
subsidiary of Lehigh into First Medical Corporation ("FMC") which was
consummated on July 9, 1997. Mr. Sokol has served as the Chairman of the Board
and Chief Executive Officer of FMC since its formation in January 1996. For
information relating to the merger of FMC and Lehigh, see "Certain Relationships
and Related Transactions." Prior to the formation of FMC, Mr. Sokol served as
the Chairman of the Board and Chief Executive Officer of Hospital Corporation
International, Plc., the former international division of Hospital Corporation
of America, Inc., which entity owned and operated hospitals and primary care
facilities in the United Kingdom, Central and Eastern Europe, the Middle East
and Pacific Rim, and American Medical Clinics, Ltd. Mr. Sokol was the founder,
and from 1984 to 1988 served as Chief Executive Officer of Medserv Corporation,
a multifaceted medical service company. Mr. Sokol was the founder, and from 1989
to 1992 served as the Chief Executive Officer, of the American-Soviet Medical
Consortium whose members included Pfizer, Inc., Colgate-Palmolive Company,
Hewlett-Packard Company, MedServ, Amoco Corporation and Federal Express Corp. In
all, Mr. Sokol has over 30 years experience in the medical services industry.
Mr. Zizza has been a director of Lehigh since 1985 (except that
he did not serve as a director during the period from March 15, 1991 through
April 16, 1991) and Executive Vice President and Treasurer since 1997. He was
Chairman of the Board of Lehigh from April 16, 1991 until the Merger, and was
Chief Executive Officer of Lehigh from April 16, 1991 through August 22, 1991
-10-
and President of NICO Inc. ("NICO") from 1983 through August 22, 1991. He also
served as President of Lehigh from October 1985 until April 16, 1991. He is also
a director of the Gabelli Equity Trust, Inc.; The Gabelli Asset Fund; The
Gabelli Growth Fund; The Gabelli Convertible Securities Funds, Inc., The Gabelli
Global MultiMedia Trust Inc. and Initial Acquisition Corp. (a NASDAQ- listed
company). In 1995, Mr. Zizza became Chairman of the Board of The Bethlehem
Corporation (an AMEX company).
Mr. Bruno has served as Vice President and General Counsel of
Lehigh since May 5, 1993 and as Secretary since August 22, 1994. He served on
the Board from March 31, 1994 until July 9, 1997. He also has served as General
Counsel to NICO and its subsidiaries since June 1983 (except he did not serve as
General Counsel to NICO during the period of January 1, 1992 through May 31,
1993).
Dr. Levinson has been a director of Lehigh since July 1997 and
has served as a Co-Vice Chairman of FMC's Board of Directors since its formation
in January 1, 1996. Dr. Levinson was a co-founder of MedExec, Inc., a
wholly-owned subsidiary of FMC ("MedExec"), for which he served as Chairman of
the Board and a director from March 1991 to January 1996. Dr. Levinson was also
a co-founder and former director of HealthInfusion, Inc., a publicly traded
company engaged in the delivery of intravenous home therapy. Dr. Levinson is a
founder and since January 1996 has served as the Chairman of the Board of Scion
International, Inc., a manufacturer of medical devises. Dr. Levinson is
currently an Associate Professor at the University of Miami School of Medicine.
Mr. Cole has been a director of Lehigh since July 1997 and has
served as the Co-Vice Chairman of FMC's Board of Directors since its formation
in January 1996. Mr. Cole is a senior partner in the law firm of Patton Boggs
LLP, Washington, D.C., a firm of approximately 250 lawyers. Mr. Cole has
practiced corporation law and been engaged in Federal matters for more than
thirty-five years. Mr. Cole has served as a trustee of Boston University since
1977 as well as being a member of numerous corporate and not-for-profit boards.
Mr. Berman has been a director of Lehigh since August 1997. Since
1995 Mr. Berman has been the President of Manhattanville College. From 1991 to
1994 he was employed by Howe-Leiws International, initially as President of
North America and subsequently as President and Chief Executive Officer. He also
is a director of HCIA, Inc., Health Insurance Plan of Greater New York, the
Independent College Fund and a Member of the Special Advisory Panel on Empire
Blue Cross/Blue Shield and the New York State Council on Health Care Financing.
No family relationship exists between any of the directors and
executive officers of Lehigh.
All directors will serve until the annual meeting of stockholders
of Lehigh to be held in 1998 and until their respective successors are duly
elected and qualified or until their earlier death, resignation or removal.
Officers are elected annually by the Board of Directors and serve at the
discretion thereof.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
During 1996 the Board of Directors held three meetings which were
attended by all of the directors, except two former directors who each missed
one meeting.
-11-
The Board of Directors has a standing Audit Committee, Executive
Committee and Compensation Committee. The Audit Committee did not meet during
1996. The current members of the Audit Committee are Messrs. Zizza and Berman.
The functions of the Audit Committee include recommending to the Board of
Directors the appointment of the independent public accountants for Lehigh;
reviewing the scope of the audit performed by the independent public accountants
and their compensation therefor; reviewing recommendations to management made by
the independent public accountants and management's responses thereto; reviewing
internal audit procedures and controls on various aspects of corporate
operations and consulting with the independent public accountants on matters
relating to the financial affairs of Lehigh. The Executive Committee of the
Board of Directors held no meetings in 1996. The current members of the
Executive Committee are Messrs. Sokol, Zizza and Cole. The Executive Committee
is authorized (except when the Board of Directors is in session) to exercise all
of the powers of the Board of Directors (except as otherwise provided by law).
The Compensation Committee did not meet in 1996. The current members of the
Compensation Committee are Mr. Cole and Dr. Levinson. The Compensation Committee
is responsible for developing Lehigh's executive compensation policies,
determining the compensation paid to Lehigh's Chief Executive Officer and its
other executive officers and administering the Stock Option Plan and the
Incentive Compensation Plan. See "Board Report on Executive Compensation."
-12-
EXECUTIVE COMPENSATION
The following table sets forth a summary of compensation awarded
to, earned by or paid to the Chief Executive Officer and the other executive
officers of Lehigh whose total annual salary and bonus exceeded $100,000 for
services rendered in all capacities to Lehigh during each of the years ended
December 31, 1996, December 31, 1995 and December 31, 1994:
SUMMARY COMPENSATION TABLE+
Long Term
Compensation
Annual Compensation Awards
------------------- ------
Securities
Underlying
Options
Other Annual (number of All Other
Name and Principal Position Year Salary Bonus Compensation(1) Shares) Compensation (2)
--------------------------- ---- ------ ----- --------------- ------- ----------------
Salvatore J. Zizza (3) 1996 $200,000 0 0 0 $1,272
Chairman of the Board 1995 $200,000 0 0 0 $1,272
1994 $200,000 0 0 10,250,000(3) $ 800
Robert A. Bruno (4) 1996 $150,000 0 0 0 $1,272
Vice President and General 1995 $150,000 0 0 250,000(4) $1,272
Counsel 1994 $100,000 0 0 0 $ 822
Joseph Delowery (5) 1996 $110,784 $1,500 0 0 $1,272
President of HallMark 1995 $110,784 $13,469 0 0 $1,272
1994 0 0 0 0 $1,272
______________
+ Does not include the Chief Executive Officer or other executive
officers of FMC since the Merger was consummated after the end of Fiscal 1996.
For information regarding their compensation, see "Certain Relationships and
Related Transactions"
* Less than $100,000.
(1) As to each individual named, the aggregate amount of personal
benefits not included in the Summary Compensation Table does not
exceed the lesser of $50,000 or 10% of the total annual salary
and bonus reported for the named executive officer.
(2) Represents premiums paid by Lehigh with respect to term life
insurance for the benefit of the named executive officer.
(3) Until the Merger, Mr. Zizza was Chairman of the Board, President
and Chief Executive Officer of Lehigh and at present he is the
Executive Vice President and Treasurer. On August 22, 1994,
Lehigh and Mr. Zizza entered into an employment agreement. Mr.
Zizza and Lehigh amended the terms of Mr. Zizza's employment
agreement effective as of the time of the filing of a Certificate
of Merger with the Secretary of State of Delaware relating to the
Merger (the "Effective Time of the Merger"). In general, as
amended, the employment agreement provides for his employment
through December 31, 2000 at an annual salary of $200,000
(subject to increase, in the discretion of the Board of
Directors, if Lehigh acquires one or more new businesses, to a
level commensurate with the compensation paid to the top
executives of comparable businesses). In addition, Mr. Zizza may
be entitled to a bonus, at the discretion of Lehigh.
-13-
Pursuant to the employment agreement, Lehigh also granted to Mr.
Zizza options to purchase 10,250,000 shares of Lehigh Common
Stock: 4,250,000 exercisable at $.50 per share, 3,000,000
exercisable at $.75 per share, and 3,000,000 exercisable at $1.00
per share. Subsequently Mr. Zizza purchased warrants to purchase
a total of 7,750,000 shares of Lehigh Common Stock: 1,750,000
exercisable at $.50 per share, 3,000,000 at $.75 per share, and
3,000,000 at $1.00 per share. Both the options and the warrants
have an expiration date of August 22, 1999, subject to earlier
termination under certain circumstances in the event of Mr.
Zizza's death or the termination of his employment. The amendment
to Mr. Zizza's employment agreement also provides that Mr.
Zizza's options and warrants to purchase an aggregate of
6,000,000 shares of Lehigh Common Stock at an exercise price of
$.75 per share and options and warrants to purchase an aggregate
of 6,000,000 shares of Lehigh Common Stock at an exercise price
of $1.00 per share were converted into options to purchase 3% of
the total issued and outstanding stock of Lehigh, on a fully
diluted basis (after giving effect to the issuance and conversion
of Lehigh Preferred Stock) at a blended exercise price of $.875
per share. See "Security Ownership of Certain Beneficial Owners
of Lehigh." No compensation expense is expected to be recognized
in connection with the options because the exercise price is
significantly in excess of the market price of the Lehigh Common
Stock. Simultaneously with the effectiveness of the amendment,
Mr. Zizza's options and warrants to purchase 6,000,000 shares of
Lehigh Common Stock at an exercise price of $.50 per share were
cancelled.
(4) On January 1, 1995, Lehigh and Mr. Bruno entered into an
employment agreement. providing for his employment through
December 31, 1999 as Vice President and General Counsel for
Lehigh at an annual salary of $150,000. Pursuant to such
agreement, Mr. Bruno has deferred one-third of his annual salary
until such time as Lehigh's annual revenues exceed $25 million.
In April 1995, Lehigh granted Mr. Bruno an option to purchase
250,000 shares of Lehigh Common Stock at an exercise price of
$.50 per share on or before December 31, 1999.
Mr. Bruno and Lehigh amended the terms of Mr. Bruno's employment
agreement effective as of the Effective Time of the Merger. In
general, the amendment provides that (i) Mr. Bruno's salary be
reduced from $150,000 to $120,000 per year, (ii) no part of Mr.
Bruno's salary be deferred and (iii) the term of the employment
agreement was extended through December 31, 2000.
(5) During 1996, Mr. Delowery could be deemed to be an executive
officer of Lehigh by virtue of his position with HallMark
Electrical Supplies Corp. ("HallMark"). HallMark was Lehigh's
principal operating subsidiary prior to the Merger.
COMPENSATION OF DIRECTORS
Prior to the Merger, Lehigh directors received no compensation
for serving on the Board of Directors other than the reimbursement of reasonable
expenses incurred in attending meetings. Since the consummation of the Merger,
executive directors have continued to receive no compensation; however, each
non-executive director now is entitled to receive annually shares of Lehigh
Common Stock with a fair market value of $10,000 (prorated in 1997 to reflect
the portion of the year following the Merger); as of October 21, 1997, the
non-executive directors had not received any shares for 1997. In April 1996,
Lehigh granted options to purchase 15,000 shares of Lehigh Common Stock at an
exercise price of $.50 per share to a former non-executive officer director and
options to purchase 10,000 shares of Lehigh Common Stock at an exercise price of
$.50 per share to three former non-executive officer directors, two of whom were
members of the Compensation Committee.
OPTIONS
No options were granted during 1996 to the executive officers of
Lehigh named in the Summary Compensation Table or to other employees of Lehigh.
However, four former non-executive officer directors
-14-
were granted stock options in 1996. See "Compensation of Directors." In July
1997, the Board of Directors established, subject to stockholder approval, the
Stock Option Plan and the Incentive Compensation Plan. See "Proposal No. 2 -
Approval of The Lehigh Group Inc. Stock Option, Stock Appreciation Rights and
Restricted Stock Plan" and "Proposal No. 3 - Approval of The Lehigh Group Inc.
Incentive Compensation Plan." No options or shares of Restricted Stock have been
granted under the Stock Option Plan and no bonuses or stock have been awarded,
or will be awarded, with respect to 1997 under the Incentive Compensation Plan.
No options were exercised by the executive officers of Lehigh
named in the Summary Compensation Table during the fiscal year ended December
31, 1996. The following table sets forth the number and dollar value of options
held by such persons on December 31, 1996, none of which were "in the money" at
December 31, 1996.
AGGREGATED OPTION EXERCISES IN
1996 AND YEAR-END OPTIONS
Number of Unexercised Options and Warrants at
Year-End
---------------------------------------------
NAME Exercisable Unexercisable
---- ------------------- -----------------------
Salvatore Zizza 6,000,000(1) 12,000,000(1)
Robert Bruno 250,000(2)
(1) See note 3 of the Summary Compensation Table.
(2) See note 4 of the Summary Compensation Table.
BOARD REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for developing Lehigh's
executive compensation policies, determining the compensation paid to Lehigh's
Chief Executive Officer and its other executive officers and administering the
Stock Option Plan and the Incentive Compensation Plan. The Compensation
Committee did not meet in 1996 since all executives are paid pursuant to
previously executed employment agreements and the report is the report of the
entire Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Until the meeting on July 9, 1997 at which the current Board of
Directors was elected, Anthony Amhurst and Charles Gargano were members of the
Compensation Committee and were directors. Currently, Mr. Cole and Dr. Levinson
are members of the Compensation Committee and are directors. There are no
compensation committee interlock relationships to be disclosed pursuant to Item
402 of Regulation S-K.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 9, 1997 at a Special Meeting (the "Special Meeting") of
stockholders of the Lehigh Group, Inc. ("Lehigh"), the stockholders of Lehigh
approved the merger (the "Merger") pursuant to the terms of the Agreement and
Plan of Merger dated as of October 29, 1996 (the "Merger Agreement") among
Lehigh, First Medical Corporation ("FMC") and Lehigh Management Corp., a
wholly-owned subsidiary of Lehigh ("Merger Sub"). On the same day, Merger Sub
was merged with and into FMC and each outstanding share of common stock of FMC
(the "FMC Common Stock"), was exchanged for (i) 1,127.675 shares of Lehigh's
Common Stock, par value $.001 per share ("Lehigh Common Stock"), and (ii)
103.7461 shares of Lehigh's Series A Convertible
-15-
Preferred Stock, par value $.001 per share (the "Lehigh Preferred Stock"), each
of which is convertible into 250 shares of Lehigh Common Stock and has a like
number of votes per share, voting together with the Lehigh Common Stock. Prior
to the Merger, FMC held approximately 25.4% of the outstanding shares of Lehigh
Common Stock which were acquired through two series of transactions.
There were outstanding 10,000 shares of FMC Common Stock
immediately prior to the Merger. These shares were exchanged for a total of (i)
11,276,750 shares of Lehigh Common Stock and (ii) 1,037,461 shares of Lehigh
Preferred Stock. As a result of the Merger, holders of Lehigh Common Stock
immediately prior the Merger and former FMC stockholders each own 50% of the
issued and outstanding shares of Lehigh Common Stock immediately following the
Merger. In the event that all of the shares of Lehigh Preferred Stock issued to
the former FMC stockholders are converted into Lehigh Common Stock, holders of
Lehigh Common Stock immediately prior to the Merger and former FMC stockholders
would own approximately 4% and 96%, respectively, of the outstanding Lehigh
Common Stock.
In addition, under the terms of the Merger Agreement, Lehigh will
be renamed "First Medical Group, Inc.," and following the Merger, Dennis Sokol,
the Chairman of the Board and Chief Executive Officer of FMC, became the
Chairman and Chief Executive Officer of Lehigh, Salvatore Zizza, the Chairman of
the Board, President and Chief Executive Officer of Lehigh, became Executive
Vice President and Treasurer and Mr. Bruno continued as Vice President and
Secretary. Mr. Bruno, Richard Bready, Charles Gargano, Anthony Amhurst and
Salvatore Salibello, five of the six members of the Board of Directors were not
nominated for re-election, and at the Special Meeting Mr. Sokol, Melvin
Levinson, Elliot Cole and Paul Murphy, four members of FMC's board of directors,
were elected to replace them.
FMC and Generale De Sante International, plc ("GDS") are parties
to a Subscription Agreement, dated June 11, 1996, pursuant to which GDS paid
$5,000,000 in order to acquire a variety of ownership interests in FMC and its
subsidiaries, including 10% of the shares of FMC Common Stock (which were
automatically exchanged pursuant to the Merger for shares of Lehigh Common Stock
and Lehigh Preferred Stock) and shares of FMC's 9% Series A Convertible
Preferred Stock (the "FMC Preferred Stock") convertible into 10% of the shares
of FMC Common Stock, which shares of FMC Preferred Stock were converted
following the Merger. Consequently, when GDS converted its shares of FMC
Preferred Stock, GDS received shares of Lehigh Common Stock and Lehigh Preferred
Stock. Together with the shares of Lehigh Common Stock and Lehigh Preferred
Stock issued for the FMC Common Stock, these shares would give GDS a total of
approximately 23% ownership interest and voting power of Lehigh.
For information regarding the employment arrangements and options
of Messrs. Zizza and Bruno, see notes 3 and 4 to the Summary Compensation Table
and note 3 to the table regarding Security Ownership of Certain Beneficial
Owners of Lehigh.
On January 1, 1996, FMC and Dr. Levinson, who is a director of
Lehigh, entered into an agreement for the period commencing January 1, 1996 and
terminating December 31, 1998 and providing for a payment of $100,000 (subject
to increase in accordance with the consumer price index) annually during the
period.
FMC and Dennis A. Sokol, the Chairman of the Board, Chief
Executive Officer and Director of Lehigh and Chairman of the Board and Chief
Executive Officer of FMC, have an oral agreement whereby FMC has agreed to pay
Mr. Sokol an annual salary of $300,000 per year for his services as FMC's
Chairman of the Board and Chief Executive Officer. At the discretion of the
Compensation Committee of the Board of FMC, Mr. Sokol may be awarded an annual
bonus.
Lehigh and Elliot Cole, the Vice Chairman of the Board and
Director of Lehigh, have an oral agreement whereby Lehigh has agreed to pay Mr.
Cole an annual salary of $60,000 per year for his services as Lehigh's Vice
Chairman of the Board.
-16-
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the regulations of the SEC thereunder require Lehigh's
executive officers and directors, and persons who own more than ten percent of a
registered class of Lehigh's equity securities, to file reports of initial
ownership and changes in ownership with the SEC and the NYSE. Such officers,
directors and ten-percent stockholders are also required by SEC rules to furnish
Lehigh with copies of all Section 16(a) forms they file. Based solely on its
review of the copies of such forms received by it, or written representations
from certain reporting persons that no other reports were required for such
persons, Lehigh believes that, during or with respect to the period from January
1, 1996 to December 31, 1996, all Section 16(a) filing requirements applicable
to its executive officers, directors and ten-percent stockholders were complied
with.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF LEHIGH
The following table indicates the number of shares of Lehigh
Common Stock and Lehigh Preferred Stock beneficially owned as of October 21,
1997 by (i) each person (including any "group," as that term is used in Section
13(d)(3) of the Exchange Act) known to Lehigh to be the beneficial owner of more
than 5% of the Lehigh Common Stock or the Lehigh Preferred Stock, (ii) each
director and nominee for director of Lehigh, (iii) each of the executive
officers named in the Summary Compensation Table set forth above and (iv) all
directors and executive officers of Lehigh as a group. Unless otherwise
indicated, the address of each person listed below is Lehigh's principal
executive offices.
-17-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF LEHIGH
Lehigh Common Stock(1) Lehigh Preferred Stock
-------------------------------------------- --------------------------------------------------
Amount and Nature of Amount and Nature of
Name of Beneficial Owner Beneficial Ownership(2) Percent of Class Beneficial Ownership(2) Percent of Class
- ------------------------------ ----------------------- ------------------- --------------------------- --------------------
Generale De Sante 2,559,822 11.35% 235,504 22.70%
International PLC
4 Cornwall Terrace
London NW1 4QP
ENGLAND
SAJH Partners 2,121,157(3) 9.41% 195,146(3) 18.81%
Salvatore J. Zizza 8,735,630(4) 28.15% -- --
Robert A. Bruno 312,760(5) 1.38% -- --
Dennis A. Sokol 603,306(6) 2.68% 55,504(6) 5.35%
Melvin E. Levinson 558,199 2.48% 51,354 4.95%
Elliot H. Cole 401,452 1.78% 36,934 3.56%
Richard Berman __ -- -- --
All executive officers
and directors as a group
(7 persons) 15,292,326(7) 57.23%(7) 574,442 55.37%
- ------------------------------------------------------------------------------------------------------------------------------------
* Less than 1%.
(1) Does not include shares of Lehigh Common Stock which are obtainable
upon the conversion of shares of Lehigh Preferred Stock since the
shares are not convertible until such time as Lehigh's authorized and
unissued shares of Lehigh Common Stock exceeds the aggregate number of
shares of Lehigh Common Stock into which all of the authorized shares
of Lehigh Preferred Stock is convertible, which will require either an
amendment to Lehigh's Certificate of Incorporation to increase the
number of authorized shares of Lehigh Common Stock or a reverse stock
split such as the Reverse Split.
(2) Except as otherwise indicated, each of the persons listed above has
sole voting and investment power with respect to all shares shown in
the table as beneficially owned by such person.
(3) Dennis Sokol is the Managing Partner of SAJH Partners and has a 1%
partnership interest in the partnership and consequently could be
deemed under Rule 13d-3 of the Exchange Act to have beneficial
ownership of such shares. Mr. Sokol disclaims ownership of all such
shares other than as a result of his 1% partnership interest.
(4) Includes options to purchase 8,480,128 shares of Lehigh Common Stock
for $.875 per share, which options were received on July 9, 1997, when
(i) Mr. Zizza's options and warrants to purchase 12,000,000 shares of
Lehigh Common Stock, half exercisable at $.75 per share and half
exercisable at $1.00 per share, were converted into options to purchase
three percent of the total issued and outstanding stock of Lehigh on a
fully diluted basis immediately after the merger (after giving effect
to the issuance of Lehigh Common Stock and the issuance and conversion
of Lehigh Preferred Stock
-18-
pursuant to the Merger Agreement) and (ii) Mr. Zizza's options and
warrants to purchase 6,000,000 shares of Lehigh Common Stock at an
exercise price of $.50 per share were cancelled. See note 3 of the
Summary Compensation Table.
(5) Includes options to purchase 250,000 shares of Common Stock at $.50 per
share. See note 4 of the Summary Compensation Table.
(6) Excludes shares as indicated in note (3) above.
(7) Includes shares as indicated in notes (4) and (5) above. Excludes
shares as indicated in note (3) above.
ANNUAL REPORT
Lehigh's Annual Report on Form 10-K for the year ended December
31, 1996, including financial statements, was previously distributed. If, for
any reason, you did not receive your copy of the Annual Report, please advise
Lehigh and another will be sent to you.
INDEPENDENT AUDITORS
The Board of Directors's selection of BDO Seidman, LLP to be the
independent auditors of Lehigh for the year ending December 31, 1996 was
previously ratified by Lehigh's stockholders. A representative of BDO Seidman,
LLP is not expected to be available at the Special Meeting.
STOCKHOLDER PROPOSALS
Stockholder proposals in respect of matters to be acted upon at
Lehigh's 1998 Annual Meeting of Stockholders should be received by Lehigh on or
before March 1, 1998 in order that they may be considered for inclusion in
Lehigh's proxy materials.
OTHER MATTERS
So far as it is known, there is no business other than that
described above to be presented for action by the stockholders at the Special
Meeting, but it is intended that Proxies will be voted upon any other matters
and proposals that may legally come before the Special Meeting, or any
adjustments thereof, in accordance with the discretion of the persons named
therein.
By Order of the Board of Directors
Robert A. Bruno
Secretary
Dated: Stamford, Connecticut
October 21, 1997
APPENDIX A
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
THE LEHIGH GROUP INC.
THE LEHIGH GROUP INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "General Corporation Law"), does hereby certify:
FIRST: That the Certificate of Incorporation of the
Corporation was filed with the Secretary of State on June 29, 1928 under the
name Lehigh Valley Corporation; and
SECOND: That the Corporation filed a Restated Certificate of
Incorporation (the "Restated Certificate") with the Delaware Secretary of State
on November 21, 1968, which Restated Certificate has been amended numerous
times, most recently on December 20, 1994 (as so amended, the "Amended
Certificate"); and
THIRD: That, pursuant to the provisions of Section 242(b) of
the General Corporation Law, the Board of Directors of the Corporation duly
adopted resolutions setting forth a proposed amendment to the Amended
Certificate, declared said proposed amendment to be advisable and directed that
it be submitted to the stockholders of the Corporation for their approval; and
FOURTH: That thereafter, pursuant to the provisions of Section
242(b) of the General Corporation Law, the stockholders of the Corporation by
affirmative vote of a majority of the votes to which all of the outstanding
shares of the Corporation's Common Stock, par value $.001 per share, and the
Corporation's Series A Convertible Preferred Stock, par value $.001 (the
"Preferred Stock"), voting together as a single class are entitled (provided,
however, that each share of Preferred Stock has 250 votes), such Common Stock
and Preferred Stock being the only classes of the Corporation's stock entitled
to vote thereon, duly adopted the following resolution setting forth the
proposed amendment:
RESOLVED, that the Restated Certificate of
Incorporation of the Corporation, be and it hereby is amended
by deleting the first paragraph of the existing Article FOURTH
in its entirety and by substituting the following new first
paragraph to such Article FOURTH in lieu thereof:
"FOURTH: CAPITAL STOCK. The total number of shares of
all classes of stock that the Corporation shall have the
authority to issue is 105,000,000 shares, of which 5,000,000
shares shall be Preferred Stock, par value $.001 per share,
and 100,000,000 shares shall be Common Stock, par value $.001
per share. Upon the filing of this Certificate of Amendment,
each 30 issued and outstanding shares of Common Stock shall
automatically, without any further action by the holder
thereof or by the Corporation, shall be and hereby are
reclassified and deemed to be one validly issued, fully paid
and nonassessable share of Common Stock (and each 30 shares of
Common Stock held as treasury shares shall automatically,
without any further action by the Corporation, be reclassified
and deemed to be one such treasury share). No certificates or
scrip representing fractional shares of Common Stock shall be
issued by reason hereof. Fractional shares will be rounded to
the next highest whole number."
FIFTH: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by its duly authorized officer this ___ day of ______,
1997.
THE LEHIGH GROUP INC.
By______________________________
Name____________________________
Its_____________________________
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Appendix B
THE LEHIGH GROUP INC.
STOCK OPTION,
STOCK APPRECIATION RIGHTS AND RESTRICTED STOCK PLAN
I. PURPOSE
The purpose of the Stock Option, Stock Appreciation Rights and
Restricted Stock Plan (the "Plan") is to promote the interests of The Lehigh
Group Inc. (the "Company") and its stockholders by providing a means by which
competent officers, key employees, [consultants], and Directors, including
employee-Directors (hereinafter sometimes referred to as "key employees" or
"optionees"), of the Company or of any subsidiary corporation or parent
corporation of the Company now existing or hereafter formed or acquired who are
responsible for the continued growth of the Company, can acquire a proprietary
interest in the Company, and thus create in such key employees an increased
interest in and a greater concern for the welfare of the Company and its
stockholders.
The Company intends that the Plan meet the requirements of Rule 16B-3
("Rule 16b-3") promulgated under the Securities Exchange Ace of 1934, as amended
(the "Exchange Act") and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16B-3 by officers and directors of
the Company pursuant to the Plan will be exempt from the operation of Section
16(b) of the Exchange Act. Further, the Plan is intended to satisfy the
performance- based compensation exception to the limitation on the Company's tax
deductions imposed by Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). In all cases, the terms, provisions, conditions and
limitations of the Plan shall be construed and interpreted consistent with the
Company's intent as stated in this Article I.
The stock options ("Options"), restricted stock ("Restricted Stock")
and stock appreciation rights ("Rights") offered pursuant to the Plan are a
matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any key employee.
The Company, by means of the Plan, seeks to retain the services of
persons now holding key positions and to secure the services of persons capable
of filling such positions.
The Options granted under the Plan are intended to be either incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
Code or Options that do not meet the requirements for Incentive Options
("Nonqualified Options"), but
the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
The Plan is intended to provide participants with stock-based incentive
compensation which is not subject to the deduction limitation rules prescribed
under Section 162(m) of the Code, and should be construed to the extent possible
as providing for remuneration which is "performance-based compensation" within
the meaning of Section 162(m) of the Code and the regulations promulgated
thereunder.
II. SHARES SUBJECT TO THE PLAN
The total number of shares of Common Stock of the Company, $.001 par
value per share (the "Common Stock"), which may be (i) purchased pursuant to the
exercise of Options granted under the Plan or (ii) acquired pursuant to the
exercise of Rights granted under the Plan or pursuant to the award of Restricted
Stock granted under the Plan shall not exceed, in the aggregate, 500,000 shares
of Common Stock (the "Shares") as of the Effective Date (as hereinafter
defined). The term "Shares" shall include any securities, cash or other property
into which Shares may be changed through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, issuance of rights to subscribe or
change in capital structure. The maximum number of Shares that may be subject to
Options and related Rights or Restricted Stock granted under the Plan to any
individual in any calendar year shall not exceed 100,000, and the method of
counting such Shares shall conform to any requirements applicable to
performance-based compensation under Section 162(m) of the Code.
Shares which may be acquired under the Plan may be either authorized
but unissued shares of Common Stock, shares of Common Stock held in the
Company's treasury, or both, at the discretion of the Company. If and to the
extent that (i) Options granted under the Plan expire or terminate without
having been exercised and (ii) Restricted Stock granted under the Plan is
repurchased or forfeited, Shares subject to such expired or terminated Options
and related Rights or repurchased or forfeited Restricted Stock shall be
available for new grants of Options and related Rights and Restricted Stock
under the Plan, provided that the grant and the terms of such new Options and
related Rights and Restricted Stock shall in all respects comply with applicable
legal requirements. Notwithstanding the above, however, the expiration or
termination of Options and related Rights and repurchased or forfeited Shares
shall not increase the reserve of [ ] Shares for grants to key employees.
Except as provided in Article XXI hereof, the Company may, from time to
time during the period beginning [July 9, 1997] (the "Effective Date") and
ending on the fifth anniversary of the
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Effective Date (the "Termination Date"), grant to key employees of the Company,
or of any subsidiary corporation or parent corporation of the Company now
existing or hereafter formed or acquired, Options and related Rights and
Restricted Stock under the terms hereinafter set forth. Notwithstanding the
foregoing, Options, Rights and/or Restricted Stock granted or awarded hereunder
on or after the Effective Date shall be valid and binding, subject to the
approval of the Plan by the stockholders on or before the first anniversary of
the Effective Date.
As used in the Plan, the terms "subsidiary corporation" and "parent
corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 425(f) and 424(e) of the Code.
III. ADMINISTRATION
The Board of Directors of the Company (the "Board of Directors") shall
designate a committee for the administration of matters relating to Restricted
Stock and Options to be granted to key employees (the "Committee"), whether
Incentive or Nonqualified Options or both, and related Rights. The Committee
shall consist of two or more Directors. Each member of the Committee shall be a
"non-employee director" within the meaning of Rule 16b-3, or any successor rule
or regulation promulgated under the Exchange Act and shall also be an "outside
director" under Section 162(m) of the Code. A majority of the members of the
Committee shall constitute a quorum, and the act of a majority of the members of
the Committee shall be the act of the Committee. Any member of the Committee may
be removed at any time either with or without cause by resolution adopted by the
Board of Directors, and any vacancy on the Committee may at any time be filled
by resolution adopted by the Board of Directors.
Subject to the express provisions of the Plan, the Committee shall have
the authority, in its discretion, to determine the key employees to whom
Options, Rights and Restricted Stock shall be granted, the number of Shares
which shall be subject to each Option, Right or Restricted Stock award, the
purchase price of each Share which shall be subject to an Option, Right or
Restricted Stock, the period(s) during which such Options or Rights shall be
exercisable (whether in whole or in part) or the terms of any Restricted Stock
award, and the other terms and provisions thereof. In determining the key
employees to whom Options, Rights or Restricted Stock shall be granted and the
number of Shares for which Options, Rights or Restricted Stock shall be granted
to each such employee, the Committee shall consider the length of service, the
amount of earnings, and the responsibilities and duties of such employee;
PROVIDED, HOWEVER, that no employee shall be granted Incentive Options in any
calendar year to purchase shares of Common Stock which exceed the maximum
allotment prescribed in Article V hereof.
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Subject to the express provisions of the Plan, the Committee also shall
have the authority to construe the Plan and Options, Rights and Restricted Stock
granted or awarded hereunder, to amend the Plan and Options, Rights and
Restricted Stock granted or awarded hereunder, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of the respective Options (which need not be identical), Rights
(which need not be identical) and Restricted Stock (which need not be identical)
and to make all other determinations necessary or advisable for administering
the Plan.
The Committee also shall have the authority to require, in its
discretion, that the key employee agree, at the time of the grant of an Option
and of a related Right not to sell or otherwise dispose of Shares acquired
pursuant to the exercise of an Option or Right, as the case may be, granted
under the Plan for a period of six (6) months following the date of grant.
The determination of the Committee on matters referred to in this
Article III shall be conclusive.
In the event that for any reason the Committee is unable to act or if
the Committee at the time of any grant, award or other acquisition under the
Plan of Options, Rights, Restricted Stock or Common Stock as hereinafter defined
does not consist of two or more Non-Employee Directors, or if there shall be no
such Committee, then the Plan shall be administered by the Board or a committee
composed solely of two or more persons that, at the time of such exercise, are
"non-employee directors" within the meaning of Rule 16b-3 and also are "outside
directors" under Section 162(m) of the Code and any such grant, award or other
acquisition may be approved or ratified in any other manner contemplated by
subparagraph (d) of Rule 16b-3; PROVIDED, however, that options granted to the
Company's Chief Executive Officer or to any of the Company's other four most
highly compensated officers that are intended to qualify as performance-based
compensation under Section 162(m) of the Code may only be granted by the
Committee.
The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Board of
Directors or by the Committee in the engagement of such counsel, consultant or
agent shall be paid by the Company. No member or former member of the Committee
or of the Board of Directors shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted hereunder.
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IV. ELIGIBILITY
Incentive Options and related Rights may be granted only to employees
of the Company or of any subsidiary corporation or parent corporation of the
Company, except members of the Committee and except as hereinafter provided, and
shall not be granted to any officer or Director who is not also such an
employee.
Nonqualified Options, related Rights and Restricted Stock may be
granted or awarded only to key employees of the Company or of any subsidiary
corporation or parent corporation of the Company, except members of the
Committee and except as hereinafter provided.
Any person who has been granted an Option, Right or Restricted Stock
hereunder may be granted or awarded an additional Option or Options, Right or
Rights, or additional Restricted Stock if the Committee shall so determine.
An Incentive Option shall not be granted to any person who, at the time
such Incentive Option is granted, owns securities of the Company or any parent
corporation of the Company which possess more than ten percent (10%) of the
total combined voting power of all classes of shares of the Company or of any
parent corporation of the Company, unless (i) the exercise price per share is
not less than one hundred ten percent (110%) of the fair market value per share
on the date such Option is granted [and (ii) such Option by its terms is not
exercisable after the expiration of five (5) years from the date such Option is
granted]. In determining share ownership of any such person, the rules of
Section 424(d) of the Code shall be applied and the Committee may rely on
representations of fact made to it by the key employee and believed by it to be
true.
V. MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS
The aggregate fair market value (determined at the time the Incentive
Option is granted) of the stock with respect to which Incentive Options are
exercisable for the first time by such optionee during any calendar year (under
all such plans of the Company and its parent and subsidiary corporations) shall
not exceed $100,000.
VI. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Option granted hereunder
shall be such amount as the Committee shall, in its best judgment, determine;
PROVIDED, HOWEVER, that, subject to Article IV hereof, the price of any
Incentive Option shall not be less than one hundred percent (100%) of the fair
market value per Share on the date the Option is granted.
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The "fair market value" is determined as follows: if the Common Stock
is listed on a national securities exchange in the United States on a given
date, the fair market value per share of Common Stock shall be deemed to be the
closing sale price at which the Common Stock is sold on such national securities
exchange on such date. If the Common Stock is listed on a national securities
exchange in the United States on such date but the Common Stock is not traded on
such date, or such national securities exchange is not open for business on such
date, the fair market value per share of Common Stock shall be determined as of
the closest preceding date on which such exchange shall have been open for
business and the shares of Common Stock were traded. If the Common Stock is
listed on more than one national securities exchange in the United States on any
such date, the Committee shall determine which national securities exchange
shall be used for the purpose of determining the fair market value per share of
Common Stock.
If at such date the shares of Common Stock are not listed on a national
securities exchange in the United States but the shares are quoted on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
Stock Market the fair market value per share of Common Stock shall be deemed to
be the closing sales price on such date. If the Common Stock is not quoted on
such date, or NASDAQ is not providing quotations on such date, the fair market
value per share of Common Stock shall be determined as of the closest preceding
date on which NASDAQ shall have been providing quotations and the shares of
Common Stock were traded.
If at such date a public market exists for the shares but the shares of
Common Stock are not listed on a national securities exchange in the United
States or quoted on NASDAQ, the fair market value per share of Common Stock
shall be deemed to be the mean between the closing bid and asked quotations in
the over-the-counter market for the Common Stock in the United States on such
date. If there are no bid and asked quotations for the shares of Common Stock on
such date, the fair market value per share of Common Stock shall be deemed to be
the mean between the closing bid and asked quotations in the over-the-counter
market in the United States for the shares of Common Stock on the closest date,
preceding such date, for which such quotations are available.
If at such date a public market exists for the shares but the shares of
Common Stock are not listed on a national securities exchange in the United
States or quoted on NASDAQ and such bid and asked prices shall not be available,
the fair market value per share of Common Stock shall be deemed to be as
reported by any nationally recognized quotation service selected by the Company,
or as determined by the Committee in a manner consistent with the provisions of
the Code. Anything in this Article VI to the contrary notwithstanding, in no
event shall the purchase price of a share of Common Stock be less than the
minimum price permitted
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under rules and policies of the rules and policies of the national securities
exchange on which the shares of Common Stock are listed.
The exercise price for each Option shall be subject to adjustment as
provided in Article XIII below.
The Company shall cause such stock certificates to be issued only when
it shall have received the full purchase price for the Shares in cash, certified
check, bank draft or money order; PROVIDED, HOWEVER, that in lieu of cash,
certified check, bank draft or money order, at the discretion of the Committee,
the holder of an Option may exercise his Option, in whole or in part, (i) by
delivering to the Company, Common Stock (in proper form for transfer and
accompanied by all requisite stock transfer tax stamps or cash in lieu thereof)
owned by such holder for at least six months (and, in the case of shares of
Common Stock acquired upon the exercise of Incentive Options, for the holding
periods required under Section 424 of the Code) and having a fair market value
equal to the cash exercise price applicable to that portion of the Option being
exercised by the delivery of such shares of Common Stock, the fair market value
of the shares of Common Stock so delivered to be determined in accordance with
this Article VI or as may be required in order to comply with or to conform to
the requirements of any applicable laws or regulations; or (ii) through the
written election of the optionee to have Shares withheld from the Shares
otherwise to be received upon the exercise of an Option and having a fair market
value equal to the cash exercise price applicable to the portion of the Option
being exercised by the withholding of such Shares, the fair market value of the
Shares so withheld to be determined in accordance with this Article VI or as may
be required in order to comply with or to conform to the requirements of any
applicable laws or regulations.
Notwithstanding the foregoing, the Company in its sole discretion may,
on an individual basis or pursuant to a general program established in
connection with this Plan, lend money to an optionee, guarantee a loan to an
optionee, or otherwise assist an optionee to obtain the cash necessary to
exercise all or a portion of an Option granted hereunder or to pay any tax
liability of the optionee attributable to such exercise. If the exercise price
is paid in whole or part with optionee's promissory note, such note shall (i)
provide for full recourse to the maker, (ii) be collateralized by the pledge of
the Shares that the optionee purchases upon exercise of such Option, (iii) bear
interest at the prime rate of the Company's principal lender, and (iv) contain
such other terms as the Board of Directors in its sole discretion shall
reasonably require.
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VII. USE OF PROCEEDS
The cash proceeds from the sale of Shares subject to the Options
granted hereunder are to be added to the general funds of the Company and used
for its general purposes as the Board of Directors shall determine.
VIII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Except as otherwise provided below, and subject to the provision of
Article V, a holder of an Option may exercise such Option with respect to one
hundred percent (100%) of the aggregate number of Shares, or any portion
thereof, subject to the Option.
Subject to the provisions of Article IV, the term of each Option shall
be fixed by the Committee, but no Option shall be exercisable more than five
years after the date such Option is granted, which period may extend beyond the
Termination Date.
To the extent that an Option is not exercised within the period of
exercisability specified therein, it shall expire as to the then unexercised
part. If any Option granted hereunder shall terminate prior to the Termination
Date, the Committee shall have the right to use the Shares as to which such
Option shall not have been exercised to grant one or more additional Options to
any eligible employee (in which case, such new Option may be either Incentive or
Nonqualified, as determined by the Committee) or Restricted Stock, but any such
grant of an additional Option or Restricted Stock shall be made prior to the
close of business on the Termination Date.
In no event shall an Option granted hereunder be exercised for a
fraction of a share.
IX. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the optionee as to
all or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Secretary of the Company at the principal business
office of the Company, specifying the number of Shares to be purchased and
accompanied by payment of the purchase price in accordance with Article VI
hereof.
An optionee shall have the right to dividends and other rights of a
stockholder with respect to shares of Common Stock purchased upon exercise of an
Option after (i) the optionee has given written notice of exercise and has paid
in full for such shares and (ii) becomes a stockholder of record with respect
thereto.
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X. STOCK APPRECIATION RIGHTS; RESTRICTED STOCK AWARDS
A. STOCK APPRECIATION RIGHTS
(1) The Committee shall have the authority in its sole discretion to
grant a Right with respect to all or some of the Shares covered by any Option
("Related Option"). A Right granted with respect to an Option may be granted
together with or subsequent to the grant of the Related Option.
(2) For the purposes of this Article X(A), the following definitions
shall apply:
(a) The term "Offer" shall mean any tender offer or exchange
offer for shares of Common Stock and Series A Convertible Preferred Stock of the
Company (the "Preferred Stock") representing 20 percent or more of the aggregate
votes of such stock voting together as a single class (provided, however, that
each share of Preferred Stock will have the number of votes provided for such
share pursuant to the Certificate of Designation for such Preferred Stock),
other than one made by the Company; provided that the corporation, person or
other entity making the Offer acquires shares of Common Stock and Preferred
Stock representing 20 percent or more of the aggregate votes of such stock
voting together as a single class (provided, however, that each share of
Preferred Stock will have the number of votes provided for such share pursuant
to the Certificate of Designation for such Preferred Stock) pursuant to such
Offer.
(b) The term "Offer Price Per Share" shall mean the highest
price per Share (or in the case the Offer is only to acquire Preferred Stock,
the highest price per share of Preferred Stock divided by the number of shares
of Common Stock into which each share of Preferred Stock is convertible) paid in
any Offer that is in effect at any time during the period beginning on the 60th
day prior to the date on which a Right is exercised and ending on the date on
which the Right is exercised. Any securities or properties that are a part or
all of the consideration paid or to be paid for Shares (or in the case the Offer
is only to acquire Preferred Stock, the highest price per share of Preferred
Stock divided by the number of shares of Common Stock into which each share of
Preferred Stock is convertible) in the Offer shall be valued in determining the
Offer Price Per Share at the higher of (i) the valuation placed on such
securities or properties by the corporation, person or other entity making such
Offer or (ii) the valuation placed on such securities or properties by the
Committee.
(c) The term "Right" shall mean a right granted under this
Plan that shall entitle the holder thereof to an amount in cash equal to the
Spread in the event an Offer is made.
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(d) The term "Spread" shall mean with respect to each Right an
amount equal to the product computed by multiplying (i) the excess of (A) the
Offer Price Per Share over (B) the option price per Share of the Related Option,
by (ii) the number of Shares with respect to which such Right is being
exercised.
(3) To exercise a Right the holder shall:
(a) given written notice thereof to the Company, specifying
the Right being exercised and the number of Shares with respect to which such
Right is being exercised.
(b) if requested by the Company, deliver within a reasonable
time the agreement evidencing the Right being exercised and any Option agreement
to which such Right relates to the Company's Secretary who shall endorse or
cause to be endorsed thereon a notation of such exercise and return all
agreements to the holder.
(4) As soon as practicable after the exercise of a Right, the Company
shall pay the holder thereof in cash an amount equal to the Spread; provided,
however, the Company may in its sole discretion withhold from such cash any
amount necessary to satisfy the Company's obligation for Federal or state
withholding taxes with respect to such exercise.
(5) A Right may be exercised only during the period beginning on the
first day following the date of expiration of the Offer and ending on the 30th
day following such date; provided, that a Right may be exercised only if and to
the extent that its Related Option is eligible to be exercised on the date of
the exercise of the Right.
(6) Upon the exercise of a Right, its Related Option shall be
terminated to the extent of the number of Shares covered by such Option, with
respect to which the Option was eligible to be exercised and with respect to
which such Right was exercised; notwithstanding any other provisions of this
Plan, no new Options shall be granted under this Plan with respect to such
Shares.
(7) Upon the exercise or termination of a Related Option, the Right
with respect to such Related Option shall terminate to the extent of the number
of Shares as to which the Option was exercised or terminated.
(8) A Right shall be transferable only when the Related Option is
transferable, and under the same conditions and shall be transferred when such
Related Option is transferred.
(9) Each Right shall be on such terms and conditions not inconsistent
with this Plan as the Committee may determine and
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shall be evidenced by a written agreement executed by the Company and the
optionee receiving the Right.
(10) The holder of a Right shall have no rights as a stockholder with
respect to Shares subject to a Related Option.
(11) Notwithstanding any provision in this Article (A) to the contrary,
a Right may be exercised only after (a) the Company has been subject to the
reporting requirements of section 12 of the Exchange Act, for one year and has
filed all reports and statements required to be filed pursuant to that section
during such year, and (b) the Right has been outstanding for six months (except
in the event of the death or disability of the optionee).
B. RESTRICTED STOCK AWARDS
A Restricted Stock award entitles the recipient to acquire, at no cost
or for a purchase price determined by the Committee, Shares subject to such
restrictions and conditions as the Committee may determine at the time of grant.
Conditions may be based on continuing employment and/or achievement of
pre-established performance goals and objectives.
Any person who is granted Restricted Stock (a "Restricted Stock
Recipient") shall have no rights with respect to such Restricted Stock unless
the Restricted Stock Recipient shall have accepted the Restricted Stock within
60 days (or such shorter period as the Committee may specify) following the
award date by making payment to the Company, if required, by certified or bank
check or other instrument or form of payment acceptable to the Committee in an
amount equal to the specified purchase price, if any, of the Shares covered by
the Restricted Stock and by executing and delivering to the Company a written
instrument that sets forth the terms and conditions of the Restricted Stock in
such form as the Committee shall determine.
Upon complying with the paragraph above, a Restricted Stock Recipient
shall have the rights of a stockholder with respect to the voting of the
Restricted Stock, subject to such other conditions contained in the written
instrument evidencing the Restricted Stock. Unless the Committee shall otherwise
determine, certificates evidencing the Restricted Stock shall remain in the
possession of the Company until such Restricted Stock is vested as provided in
such written agreement.
Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of except as specifically provided herein. Upon
the termination of employment of any key employee with the Company, any
subsidiary corporation and any parent corporation of the Company for any reason
except death or becoming totally disabled (as described in Section 105(d)(4) of
the Code), the Company shall have the right, at the discretion of
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the Committee, to repurchase such Restricted Stock at its purchase price, or to
require forfeiture of such Restricted Stock to the Company if acquired at no
cost, from the Restricted Stock Recipient or the Restricted Stock Recipient's
legal representative. The Company must exercise such right of repurchase or
forfeiture not later than the 90th day following such termination of employment
(unless otherwise specified in the written instrument evidencing the Restricted
Stock).
The Committee at the time of grant shall specify the date or dates
and/or the attainment of pre-established performance goals, objectives and other
conditions on which the non-transferability of the Restricted Stock and the
Company's right of repurchase or forfeiture shall lapse. Subsequent to such date
or dates and/or the attainment of such pre-established performance goals,
objectives and other conditions, the Shares on which all restrictions have
lapsed shall no longer be Restricted Stock and shall be deemed "vested." A
Restricted Stock Recipient shall also become vested in all of his or her
Restricted Stock upon his or her termination of employment for reason of death
or becoming totally disabled (as described in former Section 105(d)(4) of the
Code).
The written instrument evidencing Restricted Stock may require or
permit the immediate payment, waiver, deferral or investment of dividends paid
on the Restricted Stock.
XI. NONTRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS
Neither an Incentive Option nor a related Right granted hereunder shall
be transferable otherwise than by will, the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act of 1986, as amended, or the
rules and regulations promulgated thereunder. Any Incentive Option or related
Right granted hereunder shall be exercisable, during the lifetime of the holder,
only by such holder or by such holder's guardian or legal representative.
Nonqualified Options and related rights may be transferable only to the extent
authorized by the Committee in respect of a particular grant. Any attempt to
transfer, assign, pledge or otherwise dispose of, or to subject to execution,
attachment or similar process, any Option or related Right contrary to the
provisions hereof shall be void and ineffective and shall give no right to the
purported transferee.
XII. TERMINATION OF EMPLOYMENT
Upon termination of employment of any key employee with the Company and
all subsidiary corporations and any parent corporation of the Company, any
Option or Right previously granted to the key employee shall to the extent not
theretofore exercised, terminate and become null and void, except that:
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(a) Unless otherwise determined by the Committee at grant, if
any key employee's employment with or service to the Company or any Subsidiary
terminates by reason of death, the Option or related Right may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the key employee under the will of the key employee,
for a period of one year after the date of such death or until the expiration of
the stated term of such Option or related Right as provided under the Plan,
whichever period is shorter;
(b) Unless otherwise determined by the Committee at grant, if
any key employee's employment with or service to the Company or any Subsidiary
terminates by reason of total and permanent disability (as described in former
Section 105(d)(4) of the Code), any Option or related Right held by such key
employee may thereafter be exercised, to the extent it was exercisable at the
time of termination due to disability (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be exercised after
[30] days after the date of such termination of employment or service or the
expiration of the stated term of such Option or related Right, whichever period
is shorter; provided, however, that, if the key employee dies within such [30]
day period, any unexercised Option or related Right held by such key employee
shall thereafter be exercisable to the extent to which it was exercisable at the
time of death for a period of one year after the date of such death or for the
stated term of such Option or related Right, whichever period is shorter;
(c) Unless otherwise determined by the Committee at grant, if
any key employee's employment with or service to the Company or any Subsidiary
terminates by reason of retirement (at such age or upon such conditions as shall
be specified by the Committee), any Option or related Right held by such key
employee may thereafter be exercised to the extent it was exercisable at the
time of such retirement (or on such accelerated basis as the Committee shall
determine at or after grant), but may not be exercised after [30] days after the
date of such termination of employment or service or the expiration of the
stated term of such Option or related Right, whichever period is shorter;
provided, however, that, if the key employee dies within such [30] day period,
any unexercised Option or related Right held by such key employee shall
thereafter be exercisable, to the extent to which it was exercisable at the time
of death, for a period of one year after the date of such death or for the
stated term of such Option or related Right, whichever period is shorter; and
(d) Unless otherwise determined by the Committee at grant, if
any key employee's employment with or service to the Company or any Subsidiary
terminates for any reason other than death, disability or retirement, the Option
or related Right shall
-13-
thereupon terminate, except that the portion of any Option or related Right that
was exercisable on the date of such termination of employment may be exercised
for the lesser of 30 days after the date of termination or the balance of such
Option or related Right's term if the employment or service with the Company or
any Subsidiary is terminated by the Company or such Subsidiary without cause
(the determination as to whether termination was for cause to be made by the
Committee).
In no event, however, shall any person be entitled to exercise any
Option after the expiration of the period of exercisability of such Option as
specified therein.
If an Option or related Right granted hereunder shall be exercised by
the legal representative of a deceased employee or former employee, or by a
person who acquired an Option or Right hereunder by bequest or inheritance or by
reason of the death of any employee or former employee, written notice of such
exercise shall be accompanied by a certified copy of letters testamentary or by
equivalent proof of the right of such legal representative or other person to
exercise such Option or Right.
For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and the Company (or any parent or
subsidiary corporation) if, at the time of the determination, the individual was
an "employee" of the Company (or any parent or subsidiary corporation) for
purposes of Section 422(a) of the Code. If an individual is on leave of absence
taken with the consent of the corporation by which such individual was employed,
or is on active military service, and is determined to be an "employee" for
purposes of the exercise of an Option or Right, such individual shall not be
entitled to exercise such Option or Right during such period and while the
employment relationship is treated as continuing intact unless such individual
shall have obtained the prior written consent of such corporation, which consent
shall be signed by the Chairman of the Board, the President, an executive
vice-president or other duly authorized officer of such corporation.
A termination of employment shall not be deemed to occur by reason of
(i) the transfer of a key employee from employment by the Company to employment
by a subsidiary corporation or a parent corporation of the Company or (ii) the
transfer of a key employee from employment by a subsidiary corporation or a
parent corporation of the Company to employment by the Company or by another
subsidiary or parent corporation of the Company.
XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
Notwithstanding any other provision contained herein, in the event of
any change in the Shares subject to the Plan or to any Option or Right granted
under the Plan (through merger,
-14-
consolidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, or exchange of shares) and
with respect to other dilutive or anti-dilutive events appropriate adjustments
shall be made by the Committee as to the maximum number of Shares subject to the
Plan available for Options, Rights or Restricted Stock, the maximum number of
Shares for which Options, Rights or Restricted Stock may be granted to any one
employee, and the number of Shares and price per Share subject to outstanding
Options or Rights as shall be equitable to prevent dilution or enlargement of
rights under the Options, Rights or Restricted Stock, and the determination of
the Committee as to these matters shall be conclusive; PROVIDED, HOWEVER, that
(i) any such adjustment with respect to an Incentive Option and any related
Right shall comply with the rules of Section 425(a) of the Code, and (ii) in no
event shall any adjustment be made which would render any Incentive Option
granted hereunder other than an Incentive Option for purposes of Section 422A of
the Code.
XIV. RIGHT TO TERMINATE EMPLOYMENT OR DIRECTORSHIP
The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the employment
or directorship of any holder of any Option, Right or Restricted Stock; nor
shall it impose any obligation on the part of any holder of Options, Rights or
Restricted Stock to remain in the employ, or to remain a director, of the
Company or of any subsidiary corporation or parent corporation thereof.
XV. PURCHASE FOR INVESTMENT; SECURITIES ACT REGISTRATION; TRANSFER OF
INCENTIVE OPTION SHARES
Except as hereafter provided, the holder of Options, Rights or
Restricted Stock granted or awarded hereunder shall, upon any exercise hereof,
execute and deliver to the Company a written statement, in form satisfactory to
the Company, in which such holder represents and warrants that such holder is
purchasing or acquiring the Shares issued or awarded hereunder for such holder's
own account, for investment only and not with a view to the resale or
distribution thereof, and agrees that any subsequent resale or distribution of
any of such Shares shall be made only pursuant to either (a) a Registration
Statement on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being sold, or (b) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption the holder shall, prior to any offer of sale or sale of such Shares,
obtain a prior favorable written opinion, in form and substance satisfactory to
the Company, from counsel for or approved by the Company, as to the application
of such exemption thereto. The foregoing restriction shall not apply
-15-
to (i) issuance by the Company so long as the Shares being issued are registered
under the Securities Act and a prospectus in respect thereof is current or (ii)
reofferings of Shares by affiliates of the Company (as defined in Rule 405 or
any successor rule or regulation promulgated under the Securities Act) if the
Shares being reoffered are registered under the Securities Act and a prospectus
in respect thereof is current.
The stock option agreement evidencing any Incentive Options granted
under this Plan shall provide that if the optionee makes a disposition, within
the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any share or shares of Common Stock issued to him upon exercise
of an Incentive Option granted under the Plan within the two-year period
commencing on the day after the date of the grant of such Incentive Option or
within a one-year period commencing on the day after the date of transfer of the
share or shares to him pursuant to the exercise of such Incentive Option, he
shall, within 10 days after such disposition, notify the Company thereof and
immediately deliver to the Company any amount of United States federal income
tax withholding required by law.
XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
Upon any exercise of an Option or related Right which may be granted
hereunder or upon the vesting of Restricted Stock which may be awarded hereunder
and, in the case of an Option, payment of the purchase price in accordance with
Article VI hereof, a certificate or certificates for the Shares as to which the
Option or related Right has been exercised or for the Shares as to which the
Restricted Stock has vested shall be issued by the Company in the name of the
person exercising the Option or related Right or possessing the vested
Restricted Stock and shall be delivered to or upon the order of such person or
persons.
The Company may endorse such legend or legends upon the certificates of
Shares issued upon exercise of an Option or Right or the vesting of Restricted
Stock granted hereunder, and the Committee may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares, as such Committee,
in its discretion, determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of any agreement between the
Company and the optionee or grantee with respect to such Shares, or (iii) permit
the Company to determine the occurrence of a disqualifying disposition, as
described in Section 421(b) of the Code, of Shares transferred upon exercise of
an Incentive Option granted under the Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares, as well as all fees and expenses necessarily
incurred by the Company in connection with
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such issuance or transfer, except fees and expenses which may be necessitated by
the filing or amending of a Registration Statement under the Securities Act,
which fees and expenses shall be borne by the recipient of the Shares unless
such Registration Statement has been filed by the Company for its own corporate
purposes (and the Company so states) in which event the recipient of the Shares
shall bear only such fees and expenses as are attributable solely to the
inclusion of such Shares in the Registration Statement.
All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.
XVII. WITHHOLDING TAXES
The Company may require a key employee exercising a Nonqualified Option
or a related Right granted hereunder to reimburse the Company for any taxes
required by any government to be withheld or otherwise deducted and paid by the
Company in respect of the issuance of Shares. In lieu thereof, the Company shall
have the right to withhold the amount of such taxes from any other sums due or
to become due from the Company to the employee upon such terms and conditions as
the Committee shall prescribe.
XVIII. CHANGE OF CONTROL
Upon the occurrence of a Hostile Change of Control or a Change of
Control as defined in this section:
(i) each outstanding Option and related Rights shall
automatically become fully exercisable notwithstanding any provision to
the contrary herein; and
(ii) restrictions and conditions on all Restricted Stock
awards shall automatically be deemed waived, and the recipients of such
Restricted Stock awards shall become entitled to receipt of the
certificates evidencing the Restricted Stock, unless the Committee
(provided the Committee is composed of the persons who were members
thereof prior to a Hostile Change of Control) shall otherwise expressly
provide.
A "Hostile Change in Control" means a transaction, event or election
constituting a "Change in Control" (as hereinafter defined) which was not
approved by at least two-thirds of the members of the Board of Directors of the
Company in office immediately prior to the Change in Control.
A "Change in Control" of the Company means and includes each and all of
the following occurrences:
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(i) Any business combination, including but not limited to a
merger of the Company, which has been approved by the requisite vote of
the stockholders;
(ii) The acquisition by any person or "group" of persons (as
defined under Section 13(d) of the Exchange Act), directly or
indirectly, of twenty-five percent (25%) or more of the combined voting
power of the outstanding shares of the Company entitled to vote
generally in the election of Directors;
(iii) Individuals who at the beginning of any period beginning
on or after the Effective Date of three (3) consecutive years
constitute the entire Board of Directors of the Company shall for any
reason during such period cease to constitute a majority thereof; or
(iv) A change in control that would be required to be reported
as such under the Exchange Act and/or the exercise by a person or group
of "control" of the Company within the meaning of Section 2(9) of the
Investment Company Act of 1940, as amended.
If a Hostile Change in Control which would otherwise result in the
abrogation of the hardship requirement and of the prior or simultaneous exercise
of the Options requirement, will, in the nonreviewable judgment of the
Committee, be deemed to constitute a "golden parachute" as same is defined under
Section 280G of the Internal Revenue Code of 1986 ("Section 280G"), the
Committee shall reduce the number of Shares which may otherwise be issued as a
result of the exercise of the Right, to the extent necessary to avoid Section
280G treatment as a "golden parachute." Notwithstanding such an adjustment,
however, the Company makes no warranty as to the avoidance of Section 280G
treatment.
XIX. LISTING OF SHARES AND RELATED MATTERS
If at any time the Board of Directors shall determine in its discretion
that the listing, registration or qualification of the Shares covered by the
Plan upon any national securities exchange or under any state or federal law, or
the consent or approval of any governmental or regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares under the Plan, no Shares shall be delivered unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board of Directors.
XX. AMENDMENT OF THE PLAN
The Board of Directors or the Committee may, from time to time, amend
the Plan; PROVIDED, HOWEVER, that no amendment shall be
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made, without the approval of the stockholders of the Company if (i) such
approval is required by the Code in respect of Incentive Options or under Rule
16b-3 with respect to any Options granted pursuant to this Plan or (ii) if such
amendment would (a) materially increase the number of shares that may be issued
under the Plan, except as is provided in Article XIII; (b) materially increase
the benefits accruing to the optionee under the Plan; (c) materially modify the
requirements as to eligibility for participation in the Plan; (d) decrease the
exercise price of an [Incentive] Option to less than 100% of the Fair Market
Value per share of Common Stock on the date of grant thereof [or the exercise
price of a Nonqualified Option to less than 80% of the Fair Market Value per
share of Common Stock on the date of grant thereof]; or (e) extend the term of
any Option beyond that provided for in Article VIII. Notwithstanding the
foregoing, amendments by the Directors or the Committee, to conform to or comply
with changes in the Code or Rule 16b-3 may be adopted without stockholder
approval (unless such approval is required by the Code). The rights and
obligations under any Option or Right granted before amendment of the Plan or
any unexercised portion of such Option or Right shall not be adversely affected
by amendment of the Plan or the Option or Right without the consent of the
holder of the Option or Right.
XXI. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan.
The Plan, unless sooner terminated by action of the Board of Directors, shall
terminate at the close of business on the Termination Date. An Option, Right or
Restricted Stock award may not be granted while the Plan is suspended or after
it is terminated. Rights and obligations under any Option, Right or Restricted
Stock award granted while the Plan is in effect shall not be altered or impaired
by suspension or termination of the Plan, except upon the consent of the person
to whom the Option or Right was granted. The power of the Committee to construe
and administer any Options, Rights or Restricted Stock award granted prior to
the termination or suspension of the Plan under Article III shall nevertheless
continue after such termination or during such suspension.
[XXII. GOVERNMENT REGULATIONS; GOVERNING LAW
The Plan, and the grant, award and exercise of Options, Rights and
Restricted Stock hereunder, and the obligation of the Company to sell and
deliver shares under such Options, Rights and Restricted Stock shall be subject
to all applicable laws, rules and regulations, and to such approvals by any
governmental agencies, national securities exchanges and interdealer quotation
systems as may be required.
The Plan, such Options, Rights and Restricted Stock awards as may be
granted hereunder and all related matters shall be
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governed by, and construed and enforced in accordance with, the laws of
Delaware, from time to time obtaining.]
XXIII. EFFECTIVE DATE
The Plan shall become effective at 5:00 P.M., Eastern time, on the
Effective Date, the date on which the Plan is adopted, subject to approval by
the stockholders of the Company on or before the first anniversary of the
Effective Date.
XXIV. EXCULPATION
No member of the Board of Directors or the Committee, or any officer or
employee of the Company acting on behalf of the Board of Directors or the
Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board of Directors or the Committee and each and any officer or
employee of the Company acting on their behalf shall, to the extent permitted by
law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.
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Appendix C
THE LEHIGH GROUP INC.
INCENTIVE COMPENSATION PLAN
(effective as of [________________], 1997)
Article 1
Establishment of the Plan
1.1 PLAN NAME. The name of the Plan is The Lehigh Group Inc. Incentive
Compensation Plan."
1.2 ESTABLISHMENT AND NAME OF THE PLAN. As of [___________], 1997, The
Lehigh Group Inc. Incentive Compensation Plan (the "Plan") was established by
The Lehigh Group Inc. (the "Company") to provide for the payment of certain
incentive compensation to certain eligible employees of the Company.
1.3 PURPOSES OF THE PLAN. The purposes of the Plan are to provide
additional incentives to those key employees of the Company and its Subsidiaries
who contribute the most to the growth and profitability of the Company and to
encourage such key employees to continue as employees by making their
compensation competitive with compensation opportunities in competing businesses
and industries.
The Company intends that the Plan meet the requirements of Rule 16B-3
("Rule 16B-3") promulgated under the Securities Exchange Ace of 1934, as amended
(the "Exchange Act") and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16B-3 by officers and directors of
the Company pursuant to the Plan will be exempt from the operation of Section
16(b) of the Exchange Act. Further, the Plan is intended to satisfy the
performance-based compensation exception to the limitation on the Company's tax
deductions imposed by Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). In all cases, the terms, provisions, conditions and
limitations of the Plan shall be construed and interpreted consistent with the
Company's intent as stated in this Article 1.
Article 2
Funding
2.1 FUNDING. The Plan is an unfunded employee benefit arrangement that
provides benefits to a select group of employees of the Company. No assets have
been or will be segregated into a trust or otherwise for purposes of paying
benefits hereunder. Benefits payable under the Plan are paid as needed solely
from the general assets of the Company.
2.2 PLAN BENEFITS ARE UNSECURED. No participant shall, by virtue of the
Plan, have any interests in any specific asset or assets of the Company. All
benefits payable pursuant to this Plan are unsecured contractual obligations of
the Company, and Participants are general creditors of the Company.
Article 3
Definitions
3.1 DEFINITIONS. Whenever used in the Plan, the following terms shall
have the respective meaning set forth below:
(a) "Act: means the Securities Act of 1933, as amended from time to
time.
(b) "Board" means the board of directors of the Company.
(c) "Cause" means (i) the willful failure or refusal of the Participant
to perform the duties or render the services assigned to him from time to time
by the Board (except during reasonable vacation periods or sick leave), (ii)
gross misconduct by the Participant in the performance of his duties as an
employee of the Company or a Subsidiary, (iii) the charging or indictment of the
Participant, for his connection with a felony, (iv) the association, directly or
indirectly, of the Participant, for his profit or financial benefit, with any
person, firm, partnership, association, entity or corporation that competes, in
any material way, with the Company, (v) the disclosing or using of any material
trade secret or confidential information of the Company or a Subsidiary at any
time by the Participant, except as required in connection with his duties to the
Company, (vi) the breach by the Participant of his fiduciary duty or duty of
trust to the Company, or (vii) any breach by the Participant of any of the terms
or provisions of any employment agreement between the Company or a Subsidiary
and the Participant, which breach is not cured within ten (10) business days of
notice by the Company or Subsidiary, as the case may be.
(d) "Committee" means the Compensation Committee of the Board or any
other committee that may be designated by the full Board to administer this
Plan; [provided, however, that each such committee shall consist solely of two
or more directors, each of whom is a Non-Employee Director within the meaning of
Rule 16b- 3(b)(3)(i) promulgated under the Exchange Act and shall also be an
"outside director" under Section 162(m) of the Code.]
(e) "Common Stock" means the Company's common stock, par value $.001
per share.
(f) "Compensation" means the annual base salary of the Participant,
inclusive of any salary payments contributed by such Participant to any employee
benefit plan or otherwise deferred,
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but exclusive of the value of any fringe benefits and of any bonuses of any
actual or targeted payments under this Plan or any other incentive or bonus plan
or program maintained by the Company from time to time.
(g) ["Conversion Formula" means dividing an amount by fifty percent
(50%) of the lesser of (i) the average of the high and low Market Values for the
Common Stock during the preceding Fiscal Year, and (ii) the Market Value on the
last trading day of such preceding Fiscal Year.]
(h) "Fiscal Year" means the year ended December 31, or such other
fiscal year as may be adopted by the Company from time to time.
(i) "Market Value" on any date of reference shall mean the Closing
Price of the Common Stock, on the business day immediately preceding such date,
unless the Committee in its sole discretion shall determine otherwise in a fair
and uniform manner. For this purpose, the Closing Price of the Common Stock on
any business day shall be (i) if the Common Stock is listed or admitted for
trading on the New York Stock Exchange ("NYSE"), the closing or last reported
sale price of Common Stock on the NYSE, as reported in any newspaper of general
circulation, or, if not so listed or admitted on the NYSE, the closing or last
reported sale price of Common Stock on the American Stock Exchange ("AMEX"), as
reported in any newspaper of general circulation, or, if not so listed or
admitted on NYSE or AMEX, on any United States national securities exchange, or
if actual transactions are otherwise reported, on a consolidated transaction
reporting system, the closing or last reported sale price of Common Stock on
such exchange or reporting system, as reported in any newspaper of general
circulation, (ii) if the Common Stock is not so listed or admitted for trading,
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the mean between
the closing high bid and low asked quotations for such day of Common Stock on
such system, or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
(j) "Earnings Per Share" means the earnings per share, computed in
accordance with generally accepted accounting principles, as determined by the
Company's independent certified public accountants and after giving effect to
any and all expenses and other charges to be recognized in the applicable Fiscal
Year by reason of this Plan and the payments and issuances of Common Stock
required pursuant hereto. Once determined and
-3-
used for purposes of establishing the bonuses payable hereunder, Earnings Per
Share shall not be adjusted for any restatement of prior years' earnings.
(k) "Participant" means any officer of the Company or any of its
Subsidiaries who is selected or approved by the Committee, in its sole
discretion, to receive incentive compensation hereunder with respect to one or
more Fiscal Years. The Committee will inform such employees in writing of their
status as Participants under the Plan. No member of the Committee shall be
eligible to participate in the Plan. Notwithstanding anything herein to the
contrary, an employee shall be a Participant hereunder only with respect to the
Fiscal Year(s) specified in writing by the Committee, and there is no
requirement that a Participant for any Fiscal Year be designated as a
Participant for any subsequent Fiscal Year. Except as expressly provided in
Section 8.8 hereof, each selected Participant must be an employee of the Company
at the end of the Fiscal Year in order to receive the bonuses in Article 4
hereof with respect to such year.
(l) "Subsidiary" means any corporation, partnership or other
organization the majority of the outstanding voting stock or voting power of
which is owned, directly or indirectly, by the Company.
3.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
any masculine terminology used herein shall also include the feminine and
neuter, and the definition of any term herein used in the singular may also
include the plural.
Article 4
Mandatory Bonuses
4.1 COMMON STOCK AND 10% CASH BONUS. For each Year in which the Company
achieves Earnings Per Share equal to or in excess of the target amount of
Earnings Per Share established for such Fiscal Year by the Committee pursuant to
Section 5.4 hereof ("Target Earnings Per Share"), each Participant for such
Fiscal Year shall receive (a) a cash bonus in an amount equal to ten percent
(10%) of such Participant's Compensation for such Fiscal Year (the "10% Cash
Bonus") and (b) the number of whole shares of Common Stock determined by
applying the Conversion Formula to thirty percent (30%) of such Participant's
Compensation for such Fiscal Year: provided, however, that the maximum number of
Bonus Shares that may be awarded under the Plan to any individual in any
calendar year shall not exceed 100,000, and the method of counting such Shares
shall conform to any requirements applicable to performance-based compensation
under Section 162(m) of the Code. Fractional shares shall be paid in cash based
on the Market Value for the Common Stock on the last day of such Fiscal Year.
The shares of Common Stock required to be delivered
-4-
to a Participant pursuant of this Section 4.1 are sometimes referred to herein
as the "Bonus Shares".
4.2 ADDITIONAL CASH BONUS. Within five business days of the Company's
delivery to Participant of Bonus Shares pursuant to Sections 4.1 and 7.1.
hereof, the Company shall pay to such Participant the 10% Cash Bonus and a cash
bonus (the "Additional Cash Bonus") in an amount equal to the result obtained by
dividing (A) the product of (i) fifty percent (50%), multiplied by (ii) the
Market Value of the Bonus Shares on the day preceding delivery of such shares,
multiplied by (iii) the Participant Tax Rate (as hereinafter defined) for the
year in which the Additional Cash Bonus is to be paid, by (B) one minus the
Participant Tax Rate for the year in which the Additional Cash Bonus is to be
paid.
4.3 CONTINGENT CASH BONUS. If at any time after delivery of Bonus
Shares, a Participant is required to pay an additional federal income tax,
penalties and/or interest (an "Additional Assessment") by reason of the Internal
Revenue Service asserting that the actual fair market value of such Bonus Shares
exceeds the product of (i) fifty percent (50%) multiplied by (ii) the Market
Value, on the date of delivery, of such Bonus Shares then the Company shall pay
to such Participant an additional cash bonus in an amount equal to the result
obtained by dividing (A) the Additional Assessment, by (B) one minus the
Participant Tax Rate for the year in which such payment is to be made.
4.4 PARTICIPANT TAX RATE. For purposes hereof, the term "Participant
Tax Rate" means the actual marginal combined federal and state income tax rate
applicable to a Participant in the year in which a payment is to be made,
expressed as a decimal and as estimated by the Company in good faith.
Article 5
Plan Administration
5.1 GENERAL. The Committee shall administer the Plan. The Committee has
the authority to control and manage the administration and operation of the
Plan, which shall include, but not be limited to, the authority to (i) amend the
Plan in accordance with Section 6.1 hereof, (ii) from time to time as it may
deem appropriate, determine those persons that are Participants in the Plan,
(iii) interpret the Plan, and (iv) adopt such rules and regulations under the
Plan as it deems appropriate; provided, however, that no interpretation, rule or
regulation shall be inconsistent with the provisions or stated purposes of the
Plan.
5.2 ASSISTANCE. The Committee may engage the services of other persons
to render advice with regard to its responsibilities under the Plan and to
assist it in the
-5-
administration of the Plan. These persons may include, but not be limited to,
accountants, attorneys and consultants.
5.3 FINALITY AND METHOD OF COMMITTEE DECISIONS. Any determination,
decision or action of the Committee with respect to the construction,
interpretation, administration or application of the Plan shall be final,
conclusive and binding upon all Participants and any and all claiming under or
through the Participants. Any and all decisions or determinations of the
Committee shall be made either (i) by a majority vote of the members of the
Committee at a meeting, or (ii) without a meeting by the unanimous written
approval of the members of the Committee.
5.4 SPECIFIC DETERMINATIONS OF COMMITTEE. Not later than March 15 of
each Fiscal Year, the Committee, for purposes of administering the Plan, shall
meet and determine and approve (i) the Target Earnings Per Share for Such Fiscal
Year (and, at the option of the Committee, any subsequent Fiscal Year), and (ii)
the Participants for such Fiscal Year (unless otherwise required by any
contractual obligation of the Company).
Article 6
Amendment and Termination
6.1 AMENDMENT. The Committee shall have the right at any time and from
time to time to alter, modify or amend (in whole or in part) any or all of the
provisions of the Plan as it may deem appropriate in its sole discretion;
provided, however, that no amendment or modification may diminish any right of
any Participant with respect to the Fiscal Year in which such amendment or
modification has been adopted.
6.2 TERMINATION. The Plan shall terminate on December 31, _____ except
for the delivery of shares of Common Stock and/or cash due to Participants with
respect to the Fiscal Year in which such termination date is included. Any
decision to offer this or any other similar plan in the future, and to seek
stockholder approval thereof, is within the sole discretion of the Board, and
will be made at such time and upon such terms as the Board deems to be in the
best interest of the Company and its employees.
Article 7
Issuance of Common Stock
7.1 TIME OF DELIVERY. Stock certificates evidencing the Bonus Shares to
be delivered pursuant to Article 4 hereof shall be delivered on, and dated,
March 15 (or, if not a business day, the next business day following) of the
year immediately subsequent to the Fiscal Year to which the Bonus Shares relate.
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7.2 CONDITIONS TO ISSUANCE. As a condition of any issuance of Shares
pursuant to this Plan, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with the Act or any other Federal or state securities law or
regulation including, but not limited to, such Participant representing and
warranting that such Participant is acquiring the Common Stock awarded hereunder
for such holder's own account, for investment only and not with a view to the
resale or distribution thereof, and agrees that any subsequent resale or
distribution of any of such Common Stock shall be made only pursuant to either
(a) a Registration Statement on an appropriate form under the Act, which
Registration Statement has become effective and is current with regard to the
Common Stock being sold, or (b) a specific exemption from the registration
requirements of the Act, but in claiming such exemption the holder shall, prior
to any offer of sale or sale of such Common Stock, obtain a prior favorable
written opinion, in form and substance satisfactory to the Company, from counsel
for or approved by the Company, as to the application of such exemption thereto.
7.3 RIGHTS AS A STOCKHOLDER. No Participant shall have rights as a
stockholder with respect to any shares of Common Stock to be delivered pursuant
to this Plan until such shares have actually been delivered.
7.4 REGISTERED HOLDER. Shares of Common Stock to be delivered to a
Participant under the Plan will be registered in the name of the Participant, or
if the Participant has designated a beneficiary in accordance with Section 8.1
hereof, by written notice to the Company at least ten (10) business days prior
to the delivery of such shares, in the name of the beneficiary for such
Participant.
Article 8
Miscellaneous
8.1 DESIGNATION OF BENEFICIARY. A Participant may file a written
designation of a beneficiary who is to receive any shares of Common Stock and
cash due to the Participant under the Plan in the event of such Participant's
death prior to delivery to him of such shares and cash. Such designation of
beneficiary may be changed by the Participant at any time by written notice.
Upon the death of a Participant and upon receipt by the Company of proof deemed
adequate by it of the identity and existence at the Participant's death of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such shares of Common Stock and cash to such beneficiary. In the event of the
death of a Participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such Participant's death, the
Company shall deliver such shares of Common Stock and cash to the executor or
administrator of the
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estate of the Participant. The Company shall not be liable for any distribution
made of such shares and cash contrary to the provision of any will or other
testamentary disposition made by such Participant, or because of the provisions
of law concerning intestacy, or otherwise. No designated beneficiary shall,
prior to the death of the Participant by whom he has been designated, acquire an
interest in the shares of cash due to the Participant under the Plan.
8.2 LEGAL PROCEEDINGS. The Company will pay all reasonable attorneys'
and other related legal fees and expenses incurred by any Participant in any
legal proceeding brought to enforce his rights hereunder if and only if the
Participant prevails in such action.
8.3 WITHHOLDING OF TAXES. To the extent required by law, the Company
may withhold any federal, state, or local taxes from all cash payments made
under the Plan, including FICA taxes. In the case of payments in Common Stock,
the Participant or other person receiving such Common Stock shall be required to
pay to the Company the amount of any such taxes which the Company is required to
withhold with respect to such Common Stock.
8.4 NO RIGHT TO CONTINUING EMPLOYMENT OR BENEFITS. The Plan does not
constitute and shall not be deemed a contract of employment. Participant in the
Plan does not give any Participant the right to be retained in the employ of the
Company.
8.5 PLAN BENEFITS MAY NOT BE ASSIGNED. No Participant may assign,
pledge, transfer, encumber or otherwise alienate any interest or benefit in this
Plan prior to actual receipt thereof except (i) to the extent of a designation
of a beneficiary pursuant to Section 8.1 hereof, or (ii) in the absence of such
designation or if such beneficiary does not survive the Participant, by will or
under the laws of descent and distribution, and any attempt to do so will be
null and void.
8.6 GOVERNING LAW. This Plan shall be governed by and construed under
the laws of the State of [Delaware].
8.7 EXPENSES. All expenses of administering the Plan shall be borne by
the Company.
8.8 TERMINATION OF EMPLOYMENT.
(a) If, prior to the end of the any Fiscal Year, a
Participant's employment terminates by reason of (i) death, (ii) retirement [at
age 62 or thereafter], (iii) total and permanent disability (as determined under
the applicable insurance plan), or (iv) the Company's termination of the
Participant without Cause, and the Participant would have subsequently become
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entitled to receive Bonus Shares with respect to such Fiscal Year if his
employment had not terminated, delivery of the Bonus Shares and payment of the
10% Cash Bonus and Additional Cash Bonus shall nonetheless be made if the
Participant shall have been an active, full-time employee for a period of at
least two years preceding such termination.
(b) If a Participant's employment terminates when he is not
entitled to receive Bonus Shares under the Plan pursuant to the preceding clause
(a), his rights to receive Bonus Shares, the 10% Cash Bonus and Additional Cash
Bonus shall be forfeited unless the Committee shall determine otherwise in its
sole discretion.
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PROXY FOR HOLDERS OF COMMON STOCK
THE LEHIGH GROUP INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS -- NOVEMBER 12, 1997
The undersigned hereby appoints Salvatore J. Zizza and Robert A. Bruno,
and each of them, proxies of the undersigned with full power of substitution to
vote all of the undersigned's Common Stock, par value $ .001 per share (the
"Common Stock"), as indicated hereon, of THE LEHIGH GROUP INC. ("Lehigh") at the
Special Meeting of Stockholders to be held November 12, 1997 at The Chase
Manhattan Bank, 410 Park Avenue, New York, New York 10022 and at any
adjournments thereof, upon all matters that may properly come before the Special
Meeting, including the matters described in the Proxy Statement furnished
herewith, subject to the directions indicated below:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
1. The 1-for-30 reverse stock split (the "Reverse Split") of the Common Stock of
Lehigh.
----- ----- -----
FOR | | AGAINST | | ABSTAIN | |
----- ----- -----
2. The approval of The Lehigh Group Inc. Stock Option, Stock Appreciation
Rights and Restricted Stock Plan.
----- ----- -----
FOR | | AGAINST | | ABSTAIN | |
----- ----- -----
3. The approval of The Lehigh Group Inc. Incentive Compensation Plan.
----- ----- -----
FOR | | AGAINST | | ABSTAIN | |
----- ----- -----
4. The transaction of such other business as may properly come before
the meeting.
PLEASE CHECK IF YOU PLAN TO ATTEND THE MEETING -----
| |
-----
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3, IF NO INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO
INSTRUCTION IS GIVEN.
All as set forth in the Proxy Statement for this
Special Meeting of Stockholders.
Dated_________________________________________, 1997
_______________________________________________(L.S.)
_______________________________________________(L.S.)
Signature of Stockholder(s)
Please sign your name as it appears on this Proxy. If
executed by a corporation a duly authorized officer
should sign. Partners, executors, trustees, guardians
or attorneys should so indicate when signing. If
shares are held jointly, EACH holder should sign.
PROXY FOR HOLDERS OF SERIES A CONVERTIBLE PREFERRED STOCK
THE LEHIGH GROUP INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS -- NOVEMBER 12, 1997
The undersigned hereby appoints Salvatore J. Zizza and Robert A. Bruno,
and each of them, proxies of the undersigned with full power of substitution to
vote all of the undersigned's Series A Convertible Preferred Stock, par value $
.001 per share, as indicated hereon, of THE LEHIGH GROUP INC. ("Lehigh") at the
Special Meeting of Stockholders to be held November 12, 1997 at The Chase
Manhattan Bank, 410 Park Avenue, New York, New York 10022 and at any
adjournments thereof, upon all matters that may properly come before the Special
Meeting, including the matters described in the Proxy Statement furnished
herewith, subject to the directions indicated below:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
1. The 1-for-30 reverse stock split (the "Reverse Split") of the Common
Stock, par value $.001 per share, of Lehigh.
----- ----- -----
FOR | | AGAINST | | ABSTAIN | |
----- ----- -----
2. The approval of The Lehigh Group Inc. Stock Option, Stock Appreciation
Rights and Restricted Stock Plan.
----- ----- -----
FOR | | AGAINST | | ABSTAIN | |
----- ----- -----
3. The approval of The Lehigh Group Inc. Incentive Compensation Plan.
----- ----- -----
FOR | | AGAINST | | ABSTAIN | |
----- ----- -----
4. The transaction of such other business as may properly come before
the meeting.
PLEASE CHECK IF YOU PLAN TO ATTEND THE MEETING -----
| |
-----
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3, IF NO INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO
INSTRUCTION IS GIVEN.
All as set forth in the Proxy Statement for this
Special Meeting of Stockholders.
Dated ________________________________________, 1997
_______________________________________________(L.S.)
_______________________________________________(L.S.)
Signature of Stockholder(s)
Please sign your name as it appears on this Proxy. If
executed by a corporation a duly authorized officer
should sign. Partners, executors, trustees, guardians
or attorneys should so indicate when signing. If
shares are held jointly, EACH holder should sign.
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