INTERNATIONAL ASSETS HOLDING CORPORATION
250 Park Avenue South, Suite 200
Winter Park, Florida 32789
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 16, 1999
----------------
TO THE STOCKHOLDERS OF
INTERNATIONAL ASSETS HOLDING CORPORATION
Notice is hereby given that the annual meeting of the stockholders of
International Assets Holding Corporation will be held on Tuesday, February 16,
1999 at 10:00 a.m. local time, at the offices of the Corporation, 250 Park
Avenue South, Suite 200, Winter Park, Florida 32789 for the following purposes:
1. To elect a Board of five Directors to serve until the next
annual meeting and until their successors shall have been
elected and qualified.
2. To approve the action of the Board of Directors in selecting
KPMG Peat Marwick LLP as auditors to audit the financial
statements of International Assets Holding Corporation and
subsidiaries for the period commencing October 1, 1998 and
ending September 30, 1999.
3. To approve a proposal to amend the International Assets
Holding Corporation Stock Option Plan to increase the total
number of shares available for issuance under the Plan from
500,000 to 700,000 shares.
4. The transaction of such other business as may properly be
brought before the meeting.
Stockholders of record at the close of business on January 4, 1999 will be
entitled to vote at the meeting. It is hoped that you will attend the meeting,
but if you cannot do so, please fill in and sign the enclosed proxy, and return
it in the accompanying envelope as promptly as possible. Any stockholder
attending can vote in person even though a proxy has already been returned.
By Order of the Board of Directors
DIEGO J. VEITIA
Chairman
P.S. In order to save your Corporation the additional expense of further
solicitation, please be kind enough to complete and return your proxy card
today.
Winter Park, Florida
January 15, 1999
INTERNATIONAL ASSETS HOLDING CORPORATION
250 Park Avenue South
Suite 200
Winter Park, Florida 32789
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PROXY STATEMENT
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This proxy statement is furnished in connection with the solicitation
by or on behalf of the Board of Directors of International Assets Holding
Corporation (the "Corporation") for use at the Annual Meeting of Stockholders
(the "Annual Meeting") to be held in the offices of the Corporation on Tuesday,
February 16, 1999 at 10:00 a.m. local time. The address of the Corporation is
250 Park Avenue South, Suite 200, Winter Park, Florida 32789.
PROXY SOLICITATION
All proxies in the enclosed form which are properly executed and
returned to the Corporation will be voted as provided for therein at the Annual
Meeting or at any adjournments thereof. A stockholder executing and returning a
proxy has the power to revoke it at any time before it is exercised by giving
written notice of such revocation to the Secretary of the Corporation. Signing
and mailing the proxy will not affect your right to give a later proxy or to
attend the Annual Meeting and vote your shares in person.
The Board of Directors intends to bring before the Annual Meeting the
matters set forth in items 1, 2 and 3 in the foregoing notice. The persons named
in the enclosed proxy and acting thereunder will vote with respect to items 1, 2
and 3 in accordance with the directions of the stockholder as specified on the
proxy card.
If no choice is specified, the shares will be voted IN FAVOR of the
election of the five directors named under item 1; IN FAVOR of ratification
of KPMG Peat Marwick LLP as auditors; and IN FAVOR of the amendment to the
International Assets Holding Corporation Stock Option Plan to increase the
total number of shares available for issuance under the Plan from 500,000 to
700,000. If any other matters are properly presented to the meeting for action,
itis intended that the persons named in the enclosed Proxy and acting thereunder
will vote in accordance with the views of management thereon. This Proxy State-
ment and Form of Proxy are being first sent to stockholders on or about January
15, 1999.
With respect to the election of Directors (Item 1), the five nominees
receiving the greatest number of votes will be elected. The affirmative vote of
a majority of the votes cast at the meeting is required for the ratification of
the selection of independent public accountants (Item 2). The affirmative vote
of a majority of the votes cast at the meeting is required for approval of the
amendment to the International Assets Holding Corporation Stock Option Plan to
increase the total number of shares available for issuance under the Plan from
500,000 to 700,000 shares (Item 3).
Pursuant to Delaware law, abstentions, but not broker non-votes will be
treated as shares present and entitled to vote on the subject matter at the
Annual Meeting. Thus, an abstention will be counted as a "no vote" and a broker
non-vote will in effect reduce the absolute number of affirmative votes needed
for approval.
The Corporation will bear the entire cost of preparing, printing and
mailing this proxy statement, the proxies and any additional materials which may
be furnished to stockholders. Solicitation may be undertaken by
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mail, telephone,telegraph and personal contact. The cost to solicit proxies will
be borne by the Corporation. The Annual Report of the Corporation for its fiscal
year ending September 30, 1998 has been mailed to stockholders with this proxy
statement.
VOTING SECURITIES AND MUNICIPAL HOLDERS THEREOF
Holders of common stock of the Corporation of record at the close of
business January 4, 1999, will be entitled to vote at the Annual Meeting or any
adjournment thereof. As of December 15, 1998, the Corporation had outstanding
1,478,090 shares of common stock. The stockholders are entitled to one vote per
share of common stock on all business to come before the meeting. The
Corporation knows of four entities which own, control, or share dispositive
powers over shares in excess of 5%. As of December 15, 1998, the Diego J. Veitia
Family Trust owns 29.01% of the outstanding common stock. Diego J. Veitia, as
sole beneficiary of the trust and through additional holdings, owns 32.23% of
the outstanding common stock. The IAAC Employee Stock Ownership Plan and Trust
owns 20.91% of the outstanding common stock and Jerome F. Miceli owns 10.35% of
the outstanding common stock. As of December 15, 1998, the officers and
directors of the Corporation as a group beneficially own in the aggregate 44.02%
of the outstanding common stock of the Corporation.
ITEM 1 - ELECTION OF DIRECTORS
At the Annual Meeting five directors, constituting the entire Board of
Directors of the Corporation, are to be elected to hold office until the next
annual meeting or until their successors are elected and shall have qualified.
Each nominee has consented to serve if elected. Officers are elected annually by
the Board of Directors. The age, principal position of each nominee, and the
year they first became a director and officer of the Corporation are as follows:
First First
Became Became
Name Age ( ) and Position Director Officer
----- -------------------- -------- -------
Diego J. Veitia (55) Director, Chairman of the Board and Chief 1987 1987
Executive Officer of the Corporation; Director and
Chairman of the Board of International Assets
Advisory Corp. ("IAAC"), Chairman of the Board and
Chief Executive Officer of Global Assets Advisors,
Inc. ("GAA"), International Asset Management Corp.
("IAMC"), International Financial Products, Inc.
("IFP"; and Chairman of the Board of International
Trader Association, Inc. ("ITA").
Jerome F. Miceli (55) Director, President, Chief Operating Officer 1990 1991
and Treasurer of the Corporation; Director, Chief
Executive Officer, President and Treasurer of
IAAC; Director, President and Treasurer of GAA,
IAMC and IFP; Chief Executive Officer, President
and Treasurer of ITA.
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Stephen A. Saker (52) Director, Vice President and Secretary of the 1990 1991
Corporation; Director, Executive Vice President and
Secretary of IAAC, GAA, IAMC and ITA.
Robert A. Miller, Ph.D. (55) Director of the Corporation 1998 --
Jeffrey L. Rush, M.D. (59) Director of the Corporation 1999, If elected --
Diego J. Veitia founded the Corporation in 1987 to serve as a holding company
for IAAC and other subsidiaries. He has served as Chairman of the Board,
director and Chief Executive Officer of the Corporation since its inception. He
also served as President of the Corporation from 1987 until 1991. Mr. Veitia
founded IAAC in 1981 and has served as Chairman of the Board and director since
that time. Mr. Veitia is also currently serving as Chairman and Chief Executive
Officer of GAA, IAMC, IFP and as Chairman of ITA. Mr. Veitia also serves as
Chairman of Veitia and Associates, Inc., an inactive registered investment
advisor. Mr. Veitia served as Chairman of All Seasons Global Fund, Inc., a
publicly held closed-end management investment company from October 1987 until
October 1996. During the last five years, Mr. Veitia has also served as director
of America's All Seasons Income Fund, Inc., an inactive management investment
company.
Jerome F. Miceli has been a director of the Corporation since 1990 and has
served as President, Chief Operating Officer and Treasurer of the Corporation
since 1991. Mr. Miceli has also served as President, Chief Executive Officer,
Treasurer and director of IAAC since 1990. Mr. Miceli also currently serves as
President, Treasurer and Director of GAA, IAMC and IFP. Mr. Miceli also serves
as Chief Executive Officer, President and Treasurer of ITA. In addition, from
December 1990 until October 1996, Mr. Miceli served as Treasurer and director of
All Seasons Global Fund Inc., a publicly held closed-end management investment
company. Mr. Miceli is also President of Veitia and Associates, Inc., an
inactive registered investment advisor.
Stephen A. Saker has been a director of the Corporation since 1990 and has
served as Secretary and Vice President of the Corporation since 1991. Mr. Saker
has also served as director, Executive Vice President and Secretary of IAAC
since 1985. Mr. Saker currently serves as Executive Vice President, Secretary
and Director of GAA, IAMC and ITA. Since November 1991, Mr. Saker has served as
Vice President and Secretary of Veitia and Associates, Inc. Mr. Saker also
served as Secretary and director of All Seasons Global Fund, Inc. from October
1987 until October 1996.
Robert A. Miller, Ph.D. became a director of the Corporation in February, 1998.
Dr. Miller has served as President of Nazareth College in Rochester, New York
since 1998. Dr. Miller previously served as the Academic Vice President of
Queens College in Charlotte, North Carolina from 1994 to 1998. In addition, Dr.
Miller served as Provost of Antioch University in Ohio from 1991 to 1994. Dr.
Miller served as a director of All Seasons Global Fund, Inc., a publicly held
closed-end management investment company from 1988 until 1996.
Jeffrey L. Rush, M.D. is nominated as a director and has not previously served
the Corporation. Dr. Rush is a graduate of Dartmouth and State University New
York Medical School in 1966. He has been a Board Certified Radiologist since
1972. Dr. Rush served as Chairman of the Radiology Dept. at Alvarado Medical
Center, San Diego, CA from 1972 - 1994. In addition, he served on the Advisory
Board, National Medical Enterprises (Tenet Health) from 1982 - 1990. Dr. Rush
presently serves as Chairman of Pacific Medical Building, LP, a developer and
owner of medical office buildings and clinics. He has served in that capacity
since 1991.
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DIRECTOR REMUNERATION
Members of the Board of Directors who are not officers or employees of
the Corporation were paid an annual fee of $21,000 for the 1997 and 1998
calendar years comprised of (i) $15,000 which is deposited in quarterly
installments into an individual brokerage account set up for each such director
with IAAC for the purchase of common stock of the Corporation in the open
market, and (ii) $6,000 payable in cash in quarterly installments of $1,500
each. In addition to the annual fee, outside directors also receive $500 for
each board meeting attended. Such directors were also reimbursed for expenses
relating to their attendance at meetings during the 1998 fiscal year. The
quarterly fee portion for stock purchases for one director was redirected for
cash payment for the quarters ended June 1998 and September 1998.
MEETINGS OF THE BOARD
There were five regularly scheduled meetings of the Board of Directors
during fiscal year 1998. The Board has established Audit and Compensation
committees. Mr. Elmer L. Jacobs served as Chairman of the Audit Committee during
fiscal year 1998 and the other member was Robert A. Miller. Robert A. Miller
served as Chairman of the Compensation Committee during fiscal year 1998 and
Elmer L. Jacobs was the other member. The Audit Committee met in November, 1998,
which was after the fiscal year end of September 30, 1998. No incumbent director
attended fewer than 75% of the aggregate of (1) the total number of meetings of
the board of directors held during fiscal year 1997 and (2) the total number of
meetings held by all committees of the board on which he served during fiscal
year 1998.
ITEM 2 - APPROVAL OF APPOINTMENT OF AUDITORS
The Audit Committee of the Board has selected KPMG Peat Marwick LLP as
independent public accountants to audit the financial statements of the
Corporation and certain of its subsidiaries for the fiscal year 1999. The Board
has endorsed this appointment and it is being presented to the stockholders for
approval.
KPMG Peat Marwick LLP has audited the financial statements of the
Corporation since 1990. Services that have been provided by KPMG Peat Marwick
LLP include: (1) regular audits of the Corporation's consolidated financial
statements, assistance in SEC filings, and consultation on accounting and
financial reporting matters; (2) audits of the financial statements of certain
subsidiary companies to meet regulatory requirements; and (3) timely quarterly
reviews and income tax preparation and consulting.
Representatives of KPMG Peat Marwick LLP will be present at the
Meeting, will have an opportunity to make statements if they desire, and will be
available to respond to appropriate questions.
If the stockholders do not approve the appointment of KPMG Peat Marwick
LLP, the Audit Committee will select another firm of auditors for the ensuing
year.
YOUR DIRECTORS RECOMMEND THAT STOCKHOLDERS VOTE FOR THE APPOINTMENT OF KPMG
PEAT MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS.
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ITEM 3 - AMENDMENT TO INTERNATIONAL ASSETS
HOLDING CORPORATION STOCK OPTION PLAN
GENERAL
On October 31, 1998, the Corporation's Board of Directors approved an
amendment effective October 31, 1998 to the International Assets Holding
Corporation Stock Option Plan, as amended (the "Plan") and approved its
submission to the shareholders for their approval. The Plan was initially
adopted by the Board of Directors on January 23, 1993, and approved by the
shareholders on November 10, 1993. The Plan was subsequently amended effective
December 28, 1995 to increase the number of shares available for issuance under
the Plan from 250,000 to 500,000 shares. The proposed amendment to the Plan
increases the number of shares available for issuance under the Plan from
500,000 to 700,000 shares. As of January 6, 1999, the closing price for the
Corporation's common stock on the National Association of Securities Dealers
Automated Quotation System was $1.50 per share.
PLAN DESCRIPTION
The following summary describes briefly the principal features of the
Plan, which is attached as Exhibit A to this Proxy Statement. This summary does
not purport to be complete and is subject to and qualified in its entirety by
the provisions of the Plan.
PURPOSE
The purpose of the Plan is to advance the growth and development of the
Corporation by affording an opportunity to directors, executives, consultants
and key employees of the Corporation and its affiliates to purchase shares of
the Corporation's common stock and to provide incentives for them to put forth
maximum efforts for the success of the Corporation's business.
ELIGIBILITY
The Plan provides that awards may be granted to directors, consultants,
officers, and executive, managerial, and other key employees of the Corporation
or any parent or subsidiary of the Corporation. Non-employee directors or
consultants of the Corporation are eligible to receive awards only of
Nonqualified Options (as defined below). Approximately 35 employees of the
Corporation and its subsidiaries are eligible to participate in the Plan.
STOCK SUBJECT TO THE PLAN
The current total number of shares of stock which may be issued by the
Corporation to all optionees under the Plan is 500,000 shares and will increase
to 700,000 shares upon shareholder approval of the proposed amendment to the
Plan. If and to the extent an option granted under the Plan expires or
terminates for any reason whatsoever, in whole or in part, the shares (or
remaining shares) of stock subject to that particular option shall again be
available for grant under the Plan.
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ADMINISTRATION
The Plan is to be administered by the Board of Directors of the
Corporation (the "Board"); provided, however, that the Board may from time to
time appoint a Compensation Committee consisting of not less than two directors
and delegate to such Committee full power and authority to take any action
required or permitted to be taken by the Board under the Plan. The Board may
issue incentive stock options ("Incentive Options") within the meaning as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or options that do not qualify as Incentive Options ("Nonqualified
Options"). In addition, the Board shall have the discretion to determine the
employees, directors and consultants to whom options are to be granted and the
number of shares subject to the options.
GENERAL CONDITIONS
The Plan sets forth certain general conditions relating to the options
that may be granted thereunder: (a) the maximum term of any Incentive Option
shall be 10 years; (b) an option shall be exercisable only as long as optionee
is in "continuous employment" with the Corporation as such term is defined in
the Plan or is continually on the Board of Directors of the Corporation, or any
parent subsidiary or successor thereof except as expressly permitted by the
Plan; and (c) an option granted under the Plan shall not be assignable or
transferable other than by will or the laws of descent and distribution.
STOCK OPTIONS
The option price of stock options granted under the Plan shall not be
less than 100% of the fair market value of the stock on the date the option is
granted. The option price of stock options granted under the Plan to any
individual who possesses more than 10% of the combined voting power of all
classes of common stock of the Corporation shall not be less than 110% of the
fair market value of the stock on the date the option is granted.
Options shall become exercisable as provided by the Board in the
Option Agreement. An option shall terminate upon the occurrence of the following
conditions: (a) the expiration of one year after termination of employment by
death or disability; (b) immediately upon termination for cause; (c) the
expiration of 90 days after termination of employment for a reason other than
death, disability or cause; or (d) the expiration of 90 days after the removal
or resignation of the optionee from the Board.
The Plan contains certain additional conditions applicable to options
designated as Incentive Options. Incentive Options may be granted only to
employees. No employee may be granted Incentive Options exercisable for the
first time in any calendar year in which Incentive Options have an aggregate
fair market value of stock (determined for each Incentive Option at its date of
grant) in excess of $100,000. An Incentive Option granted to an employee who
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the corporation shall have a per-share exercise price of not
less than 110% of the fair market value of the stock on the date the option is
granted.
Payment of the exercise price may be made in cash, by certified bank
check, in shares of the Corporation's common stock or any combination of the
foregoing. At the discretion of the Board, the Corporation may also accept a
promissory note, secured or unsecured, in the amount of the option price.
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PLAN TERMINATION AND AMENDMENT
Under its terms, the Plan will terminate on January 23, 2003.
Furthermore, the Plan may be amended or terminated at any time by the Board. Any
termination shall not affect any award then outstanding. Amendments to the Plan
may be made without shareholder approval, except as such shareholder approval
may be required by law or the rules of a national securities exchange, or if the
amendment would increase the number of shares that may be issued under the Plan,
or modify the requirements as to eligibility for participation in the Plan.
BENEFITS TO CERTAIN EMPLOYEES AND EMPLOYEE GROUPS
As of December 15, 1998, a total of 442,500 options have been granted
under the Plan and are outstanding. Set forth below is a summary as of December
15, 1998 of options which have been granted to those executive officers named in
the Summary Compensation Table, all executive officers as a group, all current
directors who are not executive officers as a group, and the group of all
employees who are not executive officers.
PLAN BENEFITS
NAME NUMBER OF OPTION SHARES
Diego J. Veitia 110,000
Jerome F. Miceli 110,000
Stephen A. Saker 65,000
Executive Officers As A Group 285,000
Current Directors Who are Not
Executive Officers As A Group 37,500
Employees Who Are Not Executive
Officers As A Group 115,000
No Options were exercised during the fiscal year ended September 30, 1998.
Because grants of a portion of the Corporation's securities under the
Plan will occur at a future date, the actual benefits that may be received by or
allocated to Corporation employees under the Plan cannot be fully determined at
this time. Notwithstanding the foregoing, if the amendment to the Plan
increasing the number of shares available for issuance under the Plan from
500,000 to 700,000 shares is approved by the shareholders, the Board has
determined that stock options will be granted effective November 2, 1998, to
those executive officers named in the Summary Compensation Table as set forth
below.
NAME NUMBER OF OPTION SHARES
Diego J. Veitia 100,000
Jerome F. Miceli 100,000
Stephen A. Saker 20,000
Executive Officers As a Group 220,000
FEDERAL TAX TREATMENT OF OPTIONS
If an option is granted to an employee in accordance with the terms of
the Plan, no income will be recognized by such employee at the time the option
is granted.
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Generally, on exercise of a Nonqualified Option, the amount by which
the fair market value of the shares of the stock on the date of exercise exceeds
the purchase price of such shares will be taxable to the optionee as ordinary
income, and will be deductible for tax purposes by the Corporation in the year
in which the optionee recognizes the ordinary income. The disposition of shares
acquired upon exercise of a Nonqualified Option under the Plan will ordinarily
result in long-term or short-term capital gain or loss (depending on the
applicable holding period) in an amount equal to the difference between the
amount realized on such disposition and the sum of the purchase price and the
amount of ordinary income recognized in connection with the exercise of the
Nonqualified Option.
Section 16(b) of the Exchange Act generally subjects executive
officers, directors and 10% shareholders of the Corporation to potential
liability if they both buy and sell shares of the Corporation's stock within a
six-month period. In the case of employees who are subject to these rules,
generally, unless the employee elects otherwise, the relevant date for measuring
the amount of ordinary income to be recognized upon the exercise of a
Nonqualified Option will be the later of (i) the date the six-month period
following the date of grant lapses and (ii) the date of exercise of the
Nonqualified Option.
Generally, upon exercise of an Incentive Option, an employee will not
recognize any income and the Corporation will not be entitled to a deduction for
tax purposes. However, the difference between the purchase price and the fair
market value of the shares of stock received on the date of exercise will be
treated as a positive adjustment in determining alternative minimum taxable
income, which may subject the employee to the alternative minimum tax. The
disposition of shares acquired upon exercise of an Incentive Option under the
Plan will ordinarily result in long-term or short-term capital gain or loss
(depending on the applicable holding period). Generally, however, if the
employee disposes of shares of stock acquired upon exercise of an Incentive
Option within two years after the date of grant or within one year after the
date of exercise (a "disqualifying disposition"), the employee will recognize
ordinary income, and the Corporation will be entitled to a deduction for tax
purposes, in the amount of the excess of the fair market value of the shares on
the date of exercise over the purchase price (or, in certain circumstances, the
gain on sale, if less). Any excess of the amount realized by the holder on the
disqualifying disposition over the fair market value of the shares on the date
of exercise of the Incentive Option will ordinarily constitute capital gain. In
the case of an employee subject to the Section 16(b) restrictions discussed
above, the relevant date in measuring the employee's ordinary income and the
Corporation's tax deduction in connection with any such disqualifying
disposition will normally be the later of (i) the date the six-month period
after the date of grant lapses or (ii) the date of exercise of the Incentive
Option.
If an option is exercised through the use of stock previously owned by
the employee, such exercise generally will not be considered a taxable
disposition of the previously owned shares and, thus, no gain or loss will be
recognized with respect to such shares upon such exercise. However, if the
previously owned shares were acquired through the exercise of an Incentive
Option or other tax-qualified stock option and the holding period requirement
for those shares was not satisfied at the time they were used to exercise an
Incentive Option, such use would constitute a disqualifying disposition of such
previously owned shares resulting in the recognition of ordinary income (but,
under proposed Treasury Regulations, not any additional capital gain) in the
amount described above. If any otherwise qualifying Incentive Option becomes
first exercisable in any one year for shares having a value in excess of
$100,000 (grant date value), the portion of the option in respect of such excess
shares will be treated as a Nonqualified Option.
YOUR DIRECTORS RECOMMEND THAT STOCKHOLDERS VOTE FOR THE AMENDMENT TO THE
INTERNATIONAL ASSETS HOLDING CORPORATION STOCK OPTION PLAN.
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ITEM 4 - TRANSACTION OF OTHER BUSINESS
The Board of Directors does not know of any other business which will
be presented for consideration at the Meeting. If any other business does
properly come before the Meeting or any adjournment thereof, the proxy holders
will vote in regard thereto according to the discretion of management insofar as
such proxies are not limited to the contrary.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table is a three-year summary of the compensation awarded or paid
to, earned by, the Corporation's Chief Executive Officer and its most highly
compensated executive officers whose total cash compensation exceeded $100,000
during the Corporation's last completed fiscal year.
Long-Term Compensation
Name and
Principal Annual RESTRICTED COMMON STOCK LONG TERM
Position Compensation (1) STOCK UNDER INCENTIVE ALL OTHER (2)
YEAR SALARY BONUS AWARD ($) OPTIONS (#) PAYOUTS COMPENSATION
Diego J. Veitia, 1998 $140,004 $ - $ - - $ - $3,325
Director, Chairman 1997 $136,590 $152,531 $ - - $ - $7,477
of the Board and 1996 $132,612 $155,790 $ - 110,000 $ - $11,036
Chief Executive
Officer
Jerome F. Miceli, 1998 $140,004 $ - $ - - $ - $ 475
Director, Treasurer, 1997 $136,590 $182,531 $ - - $ - $ 5,974
President and Chief 1996 $132,612 $175,790 $ - 70,000 $ - $ 6,347
Operating Officer
Stephen A. Saker, 1998 $166,446 $ - $ - - $ - $ -
Director, Vice 1997 $194,780 $ 12,000 $ - - $ - $ 5,441
President and 1996 $177,046 $ 35,000 $ - 35,000 $ - $ 5,869
Secretary
- -------------------------------------------------------------------------------
(1) For fiscal years ended September 30, 1998, 1997 and 1996, the
dollar value of other annual compensation for each individual named in
the above table did not exceed the lesser of $50,000 or 10% of total
salary and bonus.
(2) All other compensation is comprised of Corporation contributions to
the Corporation's Employee Stock Ownership Plan with 401(k) features,
Retirement Savings Plan and payments for personal income tax
preparation fees. The Corporation did not make any contributions to the
Employee Stock Ownership Plan and the Retirement Savings Plan for the
fiscal year ended September 30, 1998. However, forfeitures related to
terminated participants may be available for reallocation to eligible
participants who were employed by the Corporation on December 31, 1998.
These forfeitures are subject to allocation by the two plans based on
calendar year end employee 401k contributions and total calendar year
end compensation.
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STOCK OPTIONS AND STOCK APPRECIATION RICHTS (SAR)
The Plan was adopted by the Board of Directors of the Corporation in
January, 1993 and approved by the stockholders in November, 1993. The
shareholders approved an amendment to the Plan to increase the number of shares
available for issuance under the Plan from 250,000 to 500,000 shares effective
December 28, 1995. The Plan permits the granting of awards to employees of the
Corporation and its subsidiaries in the form of stock options of the
Corporation's common stock. Stock options granted under the Plan may be
Incentive Options meeting the requirements of Section 422 of the Code, or
Non-qualified Options which do not meet the requirements of Section 422.
The Plan is administered by the Board or a committee thereof. The Plan
gives broad powers to the Board to administer and interpret the Plan, including
the authority to select the individuals to be granted options and rights and to
prescribe the particular form and conditions of each option or right granted.
All options are granted at an exercise price equal to the fair market value or
110 percent of the fair market value of the Corporation's common stock on the
date of the grant. Awards may be granted pursuant to the Plan through January,
2003. The Plan may be terminated earlier by the Board at its sole discretion.
No Stock Appreciation Rights (SAR) have been granted by the Corporation.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
There were no options granted to executive officers during the 1998
fiscal year.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table summarizes stock options exercised, the aggregate
number of exercisable and unexercisable options and the value of unexercised
in-the-money stock option at fiscal year end 1998 for the named executive
officers. No stock options were exercised during the 1998 fiscal year.
EXECUTIVE OFFICER NUMBER OF VALUE NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES REALIZED($) UNEXERCISED STOCK OPTIONS AT IN-THE-MONEY
ACQUIRED SEPTEMBER 30, 1998 STOCK OPTIONS AT SEPTEMBER 30,
ON EXERCISE EXERCISABLE/UNEXERCISABLE 1998(1)
EXERCISABLE/UNEXERCISABLE
Diego J. Veitia - $ - 44,000 / 66,000 $ - / $ -
Jerome F. Miceli - $ - 68,000 / 42,000 $ - / $ -
Stephen A. Saker - $ - 44,000 / 21,000 $ - / $ -
(1) The values shown report the difference between the exercise price of
unexercised in-the-money options and the closing market price of the underlying
Common Stock at September 30, 1998. Options are in-the-money if the fair market
value of the Common Stock exceeds price of the option. No options were
in-the-money based on the last reported closing price of $1.75 per share as of
September 30, 1998.
Employment Agreements
On March 25, 1994 the Corporation entered into a five-year employment
agreement with each of Messrs. Veitia and Miceli. Pursuant to the agreement with
Mr. Veitia, he will devote a portion of his business time to the Corporation as
Chairman of the Board and Chief Executive Officer. The agreement with Mr. Miceli
provides
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that he will devote substantially all of his business time to the
Corporation as President, Chief Operating Officer and Treasurer. The agreements
with Messrs. Veitia and Miceli may be extended by mutual agreement and provide
for base annual salaries of $125,000 each (increasing on an annual basis by the
change in the consumer price index). In addition, the agreements provide for a
bonus to each executive in an amount equal to 10% of the Corporation's
consolidated pre-tax earnings, monthly automobile allowances of $500 and
reimbursement for costs and expenses associated with the preparation of the
executive's personal income tax return.
In the event of termination of the agreements by the Corporation other
than for cause (as defined therein) or if the executive resigns as a result of a
breach by the Corporation, the agreements provide for payments to such
individuals in an amount equal to 100% of their total compensation for 24 months
following the date of termination. In addition, upon termination of the
agreements by the Corporation prior to their expiration, other than for cause
(as defined therein) or if the executive resigns as a result of a breach by the
Corporation, the Corporation has agreed, at the option of the executive, to the
extent such payments may be made under applicable law, to repurchase within 60
days of such termination at market value (average of bid and asked prices) all
shares of stock of the Corporation owned by the executives, including ESOP
shares, which amount to approximately 578,000 common shares as of September 30,
1998. In addition, Messrs. Veitia and Miceli have 220,000 option shares granted
of which 112,000 are vested at September 30, 1998. The agreements with Messrs.
Veitia and Miceli also contain nondisclosure and noncompetition provisions.
EMPLOYEE INVESTMENT/RETIREMENT PLANS
The International Assets Advisory Corporation Employee Stock Ownership
Plan and Trust (the "ESOP"), which became effective on December 30, 1992, is an
employee stock ownership plan with profit sharing and 401(k) features.
Generally, all employees of the Corporation and its subsidiaries with one year
of eligible service are members of the ESOP. Benefits under the employee stock
ownership feature of the ESOP, which gradually vest over seven years, and
benefits under the 401(k) feature of the ESOP, which with respect to employee
contributions are fully vested at all times, are paid upon death, disability,
retirement or termination of employment. Corporation contributions to the
employee stock ownership portion of the ESOP are determined at the discretion of
the Board of Directors. The Corporation did not make a contribution to the
employee stock ownership portion of the ESOP for the 1998 fiscal year. All ESOP
common stock contributions have been allocated to eligible employees as of
September 30, 1998.
The 401(k) portion of the ESOP allows employees to contribute up to the
greater of ten percent of their gross income or the maximum amount of their
gross income allowable under current Internal Revenue Code Regulations, to the
plan. The plan does not mandate a matching contribution by the Corporation, but
provides that the Corporation may make discretionary contributions. The
Corporation did not make a contribution to the profit sharing feature of the
ESOP for the 1998 fiscal year.
The Corporation's Retirement Savings Plan, which became effective
January 1, 1995, is a profit sharing plan. All employees who have completed one
year of continuous service and who have attained the age of twenty-one are
eligible for the Retirement Savings Plan. Contributions to the Retirement
Savings Plan may be made at the sole discretion of the Corporation. The
Corporation did not make a contribution to the Retirement Savings Plan for the
1998 fiscal year.
12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Corporation's Common Stock as of December 15, 1998,
by (i) each person known by the Corporation to own more than 5% of the Common
Stock, (ii) each director of the Corporation, (iii) each of the most highly
compensated executive officers whose total cash compensation exceeded $100,000
during the Corporation's last completed fiscal year and (iv) all executive
officers and directors of the Corporation as a group. All shares are directly
owned by the individual unless otherwise indicated.
NAME AND ADDRESS OF NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES (1) (2) CLASS
The Diego J. Veitia Family Trust (3) 428,859 29.01%
Diego J. Veitia (3)(4)(5) 497,729 32.23%
The IAAC Employee Stock Ownership
Plan and Trust (3) 309,033 20.91%
Jerome F. Miceli (3)(6)(7) 161,403 10.35%
Stephen A. Saker (3)(8) 51,000 3.34%
Robert A. Miller (3) 5,600 .38%
Elmer L. Jacobs (3)(9) 34,970 2.34%
All directors and executive
officers as a group (10) 746,183 44.02%
(5 persons)
- ---------------------------------------------------------------------------
(1) Except as otherwise stated, all stockholders have sole voting and
investment power with respect to the shares of Common Stock set forth opposite
their respective names.
(2) Includes shares that can be acquired within 60 days from the date
hereof upon the exercise of warrants or options or conversion of convertible
securities. Shares subject to issuance upon the exercise of options or warrants
or other rights to acquire shares are deemed outstanding for purposes of
computing the percentage owned by each person but are not deemed to be
outstanding for the purpose of computing the outstanding percentage of any other
persons.
(3) 250 Park Avenue South, Suite 200, Winter Park, Florida 32789.
(4) Includes 428,859 shares held by The Diego J. Veitia Family Trust (the
"Trust"). Mr. Veitia is Chairman of the Board of the Corporation and the
settlor, sole trustee and primary beneficiary of the Trust and, as such, may be
deemed the beneficial owner of the shares held by the Trust under rules and
regulations promulgated by the SEC.
(5) Includes 66,000 shares subject to a partially exercisable option from
the Corporation. (6) Includes 4,519 shares subject to a presently
exercisable option from the Trust.
(7) Includes 40,000 shares subject to one fully exercisable option from
the Corporation and 42,000 shares subject to a partially exercisable options
from the Corporation.
(8) Includes 30,000 shares subject to one fully exercisable option from
the Corporation and 21,000 shares subject to a partially exercisable options
from the Corporation.
(9) Includes 18,000 shares subject to two partially exercisable options
from the Corporation.
(10) Includes 70,000 shares subject to fully exercisable options
and 147,000 shares subject to partially exercisable options in the favor of
Messrs. Veitia, Miceli, Saker and Jacobs, from the Corporation.
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COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Pursuant to Section 16(a) of the Exchange Act and the rules issued
thereunder, the Corporation's executive officers, directors and owners of in
excess of 10% of the issued and outstanding common stock are required to file
with the SEC reports of ownership and changes in ownership of the common stock
of the Corporation. Copies of such reports are required to be furnished to the
Corporation. Based solely on the review of such reports furnished to the
Corporation, the Corporation believes that during fiscal year 1998, all of its
executive officers and directors complied with the Section 16(a) requirements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended September 30, 1998, the Board of Directors of
the Corporation approved the reimbursement of approximately $39,000 of expenses
incurred in connection with responding to issues raised during a Securities and
Exchange Commission ("SEC") inspection of an affiliated company.
The Corporation believes that all prior transactions between the
Corporation and its officers, directors or other affiliates of the Corporation
were on terms no less favorable than could have been obtained from unaffiliated
third parties on an arm's-length basis. However, as the requisite conditions of
competitive, free-market dealings may not exist, the foregoing transactions
cannot be presumed to have been carried out on an arm's-length basis, nor upon
terms no less favorable than had unaffiliated parties been involved.
OTHER MATTERS
STOCKHOLDER PROPOSALS
Any stockholder desiring to present a proposal for consideration at
the 2000 Annual Meeting of Stockholders, should submit such proposal in writing
so that it is received by the Corporation at 250 Park Avenue South, Suite 200,
Winter Park, Florida 32789, by not later than September 12, 1999.
AVAILABILITY OF 10-KSB
The Corporation will provide to shareholders, without charge, a copy
of the Corporation's Annual Report on Form 10-KSB upon written request. Such
requests should be submitted to Jonathan C. Hinz, Chief Accounting Officer,
International Assets Holding Corporation, 250 Park Avenue South, Suite 200,
Winter Park, Florida 32789. Exhibits to Form 10-KSB will also be provided upon
specific request.
Diego J. Veitia
Chairman
January 15, 1999
14
EXHIBIT A
INTERNATIONAL ASSETS HOLDING CORPORATION
STOCK OPTION PLAN AS AMENDED 12/28/95
International Assets Holding Corporation, a Delaware corporation (the
"Company"), hereby adopts a stock option plan (the "Plan") for its key
employees, officers, directors and consultants, in accordance with the following
terms and conditions.
1. PURPOSE OF THE PLAN. The purpose of the Plan is to advance the growth
and development of the Company by affording an opportunity to executives,
consultants and key employees of the Company as well as directors of the Company
and its affiliates to purchase shares of the Company's common stock and to
provide incentives for them to put forth maximum efforts for the success of the
Company's business. The Plan is intended to permit certain designated stock
options granted under the Plan to qualify as incentive stock options under
Section 422A of the Internal Revenue Code of 1986.
2. DEFINITIONS. For purposes of this Plan, the following capitalized
terms shall have the meanings set forth below:
(a) "Board of Directors" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as currently in
effect or as hereafter amended.
(c) "Company" means International Assets Holding Corporation, a
Delaware corporation.
(d) "Eligible Employee" means all directors, consultants, officers, and
executive, managerial, and other key employees of the Company or any Parent or
Subsidiary. In order to be eligible for an Incentive Stock Option, a director or
a consultant must also be a common law employee of the Company as provided in
Section 422A of the Code; however, in order to be eligible for a Nonqualified
Stock Option, a director or consultant need not be a common law employee of the
Company.
(e) "Incentive Stock Option(s)" means a stock option granted to an
Eligible Employee to purchase shares of Stock which is intended to qualify as an
"incentive stock option," as defined in Section 422A of the Code.
(f) "Nonqualified Stock Option(s)" means a stock option granted to an
Eligible Employee to purchase shares of Stock which is not intended to qualify
as an "incentive stock option" as defined in Section 422A of the Code.
(g) "Option" means any unexercised and unexpired Incentive Stock Option
or Nonqualified Stock Option issued under this Plan, or any portion thereof
remaining unexercised and unexpired.
1
(h) "Option Agreement" means a written agreement by and between the
Company and an optionee setting forth the terms and conditions of the Option
granted by the Board of Directors to such Optionee.
(i) "Optionee" means any Eligible Employee who is granted an Option as
provided in the Plan.
(j) "Parent" means any present or future "parent corporation" of the
Companyas such term is defined in Section 425 (e) of the Code and which the
Board ofDirectors of the Company has elected to be covered by the Plan.
(k) "Plan" shall mean the Company's Stock Option Plan.
(1) "Stock" means authorized and unissued shares of the Company's
Common Stock, $.01 par value per share, or treasury shares of such class.
(m) "Subsidiary" means any present or future "subsidiary
corporation" of the Company, as such term is defined in Section 425(f) of the
Code and which the Board of Directors has elected to be covered by the Plan.
(n) where applicable, the terms used in this Plan have the same meaning
as the terms used in the Code and the regulations and rulings issued thereunder
and pursuant thereto, with reference to Options.
3. STOCK SUBJECT TO OPTION.
(a) TOTAL NUMBER OF SHARES. The total number of shares of Stock which
may be issued by the Company to all Optionees under this Plan is 500,000 (as
amended 12/28/95 and approved by shareholders 2/15/96) shares. The total number
of shares of Stock which may be so issued may be increased only by a resolution
adopted by the Board of Directors and approved by the shareholders of the
Company.
(b) EXPIRED OPTIONS. If any Option granted under this Plan is
terminated or expires for any reason whatsoever, in whole or in part, the shares
(or remaining shares) of Stock subject to that particular Option shall again be
available for grant under this Plan.
4. ADMINISTRATION OF THE PLAN.
(a) BOARD OF DIRECTORS. This Plan shall be administered by the Board of
Directors who may, from time to time, issue orders or adopt resolutions, not
inconsistent with the provisions of the Plan, to interpret the provisions and
supervise the administration of the Plan. All determinations shall be by the
affirmative vote of a majority of the members of the Board of Directors at a
meeting, or reduced to writing and signed by all of the members of the Board of
Directors. Subject to the Company's Bylaws, all decisions made by the Board of
Directors in selecting Optionees, establishing the number of shares and terms
applicable to each Option, and in construing the provisions of this Plan shall
be final, conclusive and binding on all persons, including the Company,
shareholders, Optionees, and purchasers of shares pursuant to this Plan. No
member of the Board of Directors shall be liable for any action or determination
made in good faith with respect to the Plan or an Option granted hereunder.
2
(b) COMPENSATION COMMITTEE. The Board of Directors may from time to
time appoint a Compensation Committee, consisting of not less than two (2)
directors (the "Committee"). The Board of Directors may delegate to such
Committee full power and authority to take any action required or permitted to
be taken by the Board of Directors under this Plan, subject to restrictions on
affiliate participation under the Securities Exchange Act of 1934, pertaining
to, among other things, Section 16(b). The Board of Directors may from time to
time, at its sole discretion, remove members from or add members to the
Committee. Vacancies may be filled by the Board of Directors only. Where the
context requires, the Board of Directors shall mean the Committee, if appointed,
for matters dealing with administration of the Plan.
(c) COMPLIANCE WITH INTERNAL REVENUE CODE. The Board of Directors (or
committee if appointed) shall at all times administer this Plan and make
interpretations hereunder in such a manner that Options granted hereunder
designated as Incentive Stock Options will meet the requirements of Section 422A
of the Code.
5. SELECTION OF OPTIONEES.
(a) DISCRETION OF THE BOARD OF DIRECTORS. In determining which Eligible
Employees shall be offered Options, as well as the terms thereof, the Board of
Directors shall evaluate, among other things, (i) the duties and
responsibilities of Eligible Employees, (ii) their past and prospective
contributions to the success of the Company, (iii) the extent to which they are
performing and will continue to perform outstanding services for the benefit of
the Company, and (iv) such other factors as the Board of Directors deems
relevant.
(b) LIMITATION ON GRANT OF 0PTIONS. An Incentive Stock Option may not
be granted to any optionee if the grant of such Option to such Optionee would
otherwise cause the aggregate fair market value (determined at the time the
Option is granted) of the Stock for which Options are exercisable for the first
time by such Optionee under all incentive stock option plans of the Company
during any calendar year to exceed $100,000. Nonqualified Stock Options may be
granted to Eligible Employees at the sole discretion of the Board of Directors.
6. OPTION AGREEMENT. Subject to the provisions of this Plan, each
Option granted to an Optionee shall be set forth in an Option Agreement upon
such terms and conditions as the Board of Directors determines, including a
vesting schedule. Each such Option Agreement shall incorporate the provisions of
this Plan by reference. The date of the grant of an Option is the date specified
in the Option Agreement. Any Option Agreement shall clearly identify such
Options as Incentive Stock Options or Nonqualified Stock Options.
7. OPTION PRICES.
(a) DETERMINATION OF OPTION PRICE. The option price for Stock shall not
be less than one hundred- percent (100%) of the fair market value of the Stock
on the date of the grant of such Option. The option price for Stock granted to
an Eligible Employee who possesses more than ten percent (10%) of the total
combined voting power of all classes of common stock of the Company shall not be
less than one hundred ten percent (110%) of the fair market value of the Stock
on the date of the grant of such Option.
3
(b) DETERMINATION OF FAIR MARKET VALUE. For the purpose of this Plan,
the fair market value of the Stock on the date of granting an Option shall be
determined by the Board of Directors in accordance with the applicable
regulations under the Code.
(c) DETERMINATION OF STOCK OWNERSHIP. For purposes of paragraphs 7 and
8, an Optionee's common stock ownership shall be determined by taking into
account the rules of constructive ownership set forth in Section 425(d) of the
Code.
8. TERM OF OPTION. The term of an Option may vary within the sole dis-
cretion of the Board of Directors, provided, however, that the term of an
Incentive Stock Option granted to an Eligible Employee shall not exceed ten (10)
years from the date of grant of such Incentive Stock Option. An Incentive Stock
Option may be cancelled only in connection with the termination of employment or
death of the Optionee (as more particularly described in paragraph 9 hereof). A
Nonqualified Stock Option may be cancelled only in connection with the term-
ination of employment (or consulting contract) or death of an Optionee, or the
removal or resignation of an Optionee who is a director.
9. EXERCISE OF OPTION.
(a) LIMITATION ON EXERCISE OF OPTION. Except as otherwise provided
herein, the Board of Directors, in its sole discretion, may limit an Option
by restricting its exercise in whole or in part to specified vesting periods
or until specified conditions have occurred. The vesting periods and any
restrictions will be set forth in the Option Agreement.
(b) EXERCISE PRIOR TO CANCELLATION. An Option shall be exercisable only
during the term of the Option as long as the Optionee is in "Continuous
Employment" with the Company or is continually on the Board of Directors of the
Company or any Parent, Subsidiary, or any successor thereof . Notwithstanding
the preceding sentence, as long as the Option's term has not expired, an Option
which is otherwise exercisable in accordance with its provisions shall be
exercisable;
(i) for a period ending ninety (90) days after the Optionee
has terminated his Continuous Employment with the Company, unless the Optionee
was terminated for cause by the Company in which case the Option terminates on
notice of termination of employment; or
(ii) for a period ending ninety (90) days after the removal or
resignation of the Optionee from the Board of Directors, which such Optionee has
served; or
(iii) by the estate of the Optionee, within one (1) year after
the date of the Optionee's death, if the Optionee should die while in the Contin
uous Employmentof the Company or while serving on the Board of Directors of
the Company or any Parent, Subsidiary, or any successor thereof; or
(iv) within one (1) year after the Optionee's employment with
the Company terminates, if the Optionee becomes disabled during Continuous
Employment with the Company and such disability is the cause of termination.
For purposes of this Plan, the term "Continuous Employment" shall mean
the absence of any interruption or termination of employment (or termination of
a consulting contract) by the Company or any Parent or Subsidiary which now
exists or hereafter is organized or acquired by
4
the Company. Continuous Employment with the Company shall not be considered
interrupted in the case of sick leave, military leave, or any other leave of
absence approved by the Company or in the case of transfers between locations of
the Company or between any Parent or Subsidiary, or successor thereof. The term
"cause" as used in this subparagraph 9(b) shall mean: (i) commission of a felony
or a charge of theft, dishonesty, fraud or embezzlement; (ii) failure to adhere
to Company's reasonable directives and policies, willful disobedience or
insubordination; (iii) disclosing to a competitor or other unauthorized person,
proprietary information, confidences or trade secrets of the Company or any
Parent or Subsidiary; (iv) recruitment of Company or any Parent or Subsidiary
personnel on behalf of a competitor or potential competitor of the Company, any
Parent or Subsidiary, or any successor thereof; or (v) solicitation of business
on behalf of a competitor or potential competitor of the Company, any Parent or
Subsidiary, or any successor thereof.
(c) METHOD OF EXERCISING AN OPTION. Subject to the provisions of any
particular Option, including any provisions relating to vesting of an Option, an
Optionee may exercise an Option, in whole or in part, by written notice to the
Company stating in such written notice the number of shares of Stock such
Optionee elects to purchase under the Option, and the time of the delivery
thereof, which time shall be at least fifteen (15) days after the giving of such
notice, unless an earlier date shall have been mutually agreed upon. Upon
receipt of such written notice, the Company shall provide the Optionee with that
information required by the applicable state and federal securities laws. If,
after receipt of such information, the Optionee desires to withdraw such notice
of exercise, the Optionee may withdraw such notice of exercise by notifying the
Company, in writing, prior to the time set forth for delivery of the shares of
Stock. In no event may an Option be exercised after the expiration of its term.
An Optionee is under no obligation to exercise an Option or any part thereof.
(d) PAYMENT FOR OPTION STOCK. The exercise of any option shall be
contingent upon receipt by the Company of cash or certified bank check to its
order, shares of the Company's Common Stock, or any combination of the foregoing
in an amount equal to the full option price of the shares of Stock being
purchased. For purposes of this paragraph 9, shares of the Company's Common
Stock that are delivered in payment of the option price shall be valued at their
fair market value, as determined under the provisions of the Plan. In the
alternative, the Board of Directors may, but is not required to, accept a
promissory note, secured or unsecured, in the amount of the option price made by
the Optionee on terms and conditions satisfactory to the Board of Directors.
(e) NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of Stock is greater than the
full option price of such share of Stock (at the date of calculation as set
forth below), in lieu of exercising any Option for cash, the Board of Directors,
in its sole discretion, may allow the Optionee to elect to receive Stock equal
to the value (as determined below) of the Option (or the portion thereof being
exercised) by surrender of such Option at the principal office of the Company
together with the properly endorsed Notice of Exercise of Option, in which event
the Company shall issue to the Optionee a number of shares of Stock computed
using the following formula:
X = Y (A-B)
A
5
Where X = the number of shares of Stock to be issued to the Optionee
Y = the number of shares of Stock purchasable under the
Option or, if only a portion of the Option is being
exercised, the portion of the Option being exercised
(at the date of such calculation)
A = the fair market value of one share of the Company's Stock
(on the, date a properly completed and executed Notice of
Exercise of Option is delivered to the Company)
B = the full Option price of one share of Stock being
purchased (as adjusted to the date of such calculation)
For purposes of the above calculation, fair market value of one share of Stock
shall be determined by the Company's Board of Directors in good faith; provided;
however, that where there is a public market for the Company's Stock, the fair
market value per share shall be the average of the closing bid and asked prices
of the Company's Stock quoted in the Over-The-Counter Market Summary or the
closing price quoted on the NASDAQ National Market System or on any exchange on
which the Stock is listed, whichever is applicable, as published in the Western
Edition of the Wall Street Journal (or, if not so reported, as otherwise
reported by the NASDAQ System) for the five (5) trading days prior to the date
of determination of fair market value.
(f) DELIVERY OF STOCK TO OPTIONEE. Provided the Optionee has delivered
proper notice of exercise and full payment of the option price, the Company
shall undertake and follow all necessary procedures to make prompt delivery of
the number of shares of Stock which the Optionee elects to purchase at the time
specified in such notice. Such delivery, however, may be postponed at the sole
discretion of the Company to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any governmental agency,
stock exchange or regulatory authority. As a condition to the issuance of shares
of Stock, the Company may require such additional payments from the Optionee as
may be required to allow the Company to withhold any income taxes which the
Company deems necessary to insure the Company that it can comply with any
federal or state income tax withholding requirements.
10. NONTRANSFERABILITY OF 0PTIONS. Except as otherwise provided in
paragraph 9(b)(iii) and (iv) hereof, an Option granted to an Optionee may be
exercised only during such Optionee's lifetime by such Optionee. An Option may
not be sold, exchanged, assigned, pledged, encumbered, hypothecated or otherwise
transferred except by will or by the laws of descent and distribution. No Option
or any right thereunder shall be subject to execution, attachment or similar
process by any creditors of the Optionee. Upon any attempted assignment,
transfer, pledge, hypothecation or other encumbrance of any Option contrary to
the provisions hereof, such Option and all rights thereunder shall immediately
terminate and shall be null and void with respect to the transferee or assignee.
11. COMPLIANCE WITH THE SECURITIES LAWS.
(a) Optionee's Written Statement. The Board of Directors may, in its
sole discretion, require that at the time an Optionee elects to exercise his
Option, he shall furnish a written statement to the Company that he is acquiring
such shares of Stock for investment purposes only and that he has no intention
of reselling or otherwise disposing of such Stock, along with a written
acknowledgment that the Option and the shares of Stock pertaining to the Option
are not registered
6
under the Securities Act of 1933, as amended (the "Act"), the Florida securities
laws, or any other state securities laws. In the event that shares of Stock
subject to the Option are registered with the Securities and Exchange
Commission, an optionee shall no longer be required to comply with this
subparagraph 11(a).
(b) REGISTRATION REQUIREMENTS. If at any time the Board of Directors
determines, in its sole discretion, that the listing, registration or
qualification of the shares of Stock subject to the Option upon any securities
exchange or under any state or federal securities laws, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the issuance or purchase of shares
thereunder, then the Option may not be exercised, in whole or in part, unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained (and the same shall have been free of any conditions not
acceptable to the Board of Directors).
(c) RESTRICTIONS ON TRANSFER OF SHARES. Subject to the Company's
repurchase agreement and right of first refusal, as more particularly set forth
in paragraph 14 hereof, the shares of Stock acquired by an Optionee pursuant to
the exercise of an Option hereunder shall be freely transferable; provided,
however, that such shares of Stock may not be sold, transferred, pledged or
hypothecated, unless (i) a registration statement covering the securities is
effective under the Act and appropriate state securities laws, or (ii) an
opinion of counsel, satisfactory to the Company, that such sale, transfer,
pledge or hypothecation may legally be made without registration of such shares
under federal or state securities laws has been received by the Company.
(d) RESTRICTIVE LEGEND. In order to enforce the restrictions imposed
upon shares of Stock under this Plan, the Company shall make appropriate
notation in its stock records or, if applicable, shall issue an appropriate
stock transfer instruction to the Company's stock transfer agent. In addition,
the Company may cause a legend or legends to be placed on any certificates
representing shares of Stock issued pursuant to this Plan, which legend or
legends shall make appropriate reference to such restrictions in substantially
the following form:
"The shares of Common Stock evidenced by this certificate have
been issued under the International Assets Holding Corporation
Stock Option Plan (the "Plan") and are subject to the terms
and provisions of such Plan.
These shares have not been registered under the Securities Act
of 1933, as amended (the"Act"), the Florida Securities and
Investor Protection Act or any other state securities laws,
and, therefore, cannot be sold unless they are subsequently
registered under the Act and any applicable state securities
laws or an exemption from registration is available.
These shares are subject to a repurchase agreement and right
of first refusal as set forth in the Stock Option Agreement
dated ______________, by and between the shareholder and
International Assets Holding Corporation and any sale,
transfer, gift, pledge, or encumbrance of these shares is
subject to this repurchase agreement and right of first
refusal."
12. CHANGES IN CAPITAL STRUCTURE OF COMPANY . In the event of a capital
adjustment resulting from a stock dividend, stock split, reclassification,
recapitalization, or by reason of a merger, consolidation, or other
reorganization in which the Company is the surviving corporation,
7
the Board of Directors shall make such adjustment, if any, as it may deem
appropriate in the number and kind of shares authorized by this Plan, or in the
number, option price and kind of shares covered by the Options granted. The
Company shall give notice of any adjustment to each Optionee and such adjustment
shall be deemed conclusive. The foregoing adjustments and the manner of
application of the foregoing provisions shall be determined solely by the Board
of Directors, and any such adjustment may provide for the elimination of
fractional shares.
13. REORGANIZATION, DISSOLUTION OR LIQUIDATION. In the event of the
dissolution or liquidation of the Company, or any merger or combination in which
the Company is involved, in which the Company is not a surviving corporation, or
a transfer by the Company of substantially all of its assets or property to
another corporation, or in the event any other corporation acquires control of
the Company in a reorganization within the meaning of Section 368(a) of the
Code, all outstanding Options shall thereupon terminate, unless such Options are
assumed or substitutes therefor are issued (within the meaning of Section 425(a)
of the Code) by the surviving or acquiring corporation in any such merger,
combination or other reorganization. Notwithstanding the previous sentence, the
Company shall give at least fifteen (15) days written notice of such transaction
to holders of unexercised Options prior to the effective date of such merger,
combination, reorganization, dissolution or liquidation. The Board of Directors,
in its sole discretion, may elect to accelerate the vesting schedules of all
Options previously issued upon such notice, and the holders thereof may exercise
such Options prior to such effective date, notwithstanding any time limitation
previously placed on the exercise of such Options.
14. OPTION TO REPURCHASE; RIGHT OF FIRST REFUSAL.
(a) Company's Option. Any Stock purchased pursuant to this Plan shall
be subject to an option to repurchase such Stock by the Company until the
Company becomes publicly held. Such option may be exercised by the Company
during said period only in the event of the voluntary termination of employment
or the involuntary termination of employment of the Optionee (except in the
event of a sale or liquidation of the Company in an acquisition), or in the
event of the resignation or removal of the Optionee from the Board of Directors
of the Company or any Parent, Subsidiary or successor thereof. The Company must
elect to exercise the option to repurchase within sixty (60) days following the
termination of the Optionee, otherwise such option shall expire. In order to
exercise the option, the Company must notify the Optionee of its intent to
exercise its option by mailing a notice to the Optionee or the representative of
the Optionee's estate at the last address contained in the Company's files for
such Optionee. Such notice shall state that the Company intends to exercise its
option and shall state the purchase price per share which will be paid by the
Company and the date on which such option will be exercised, which date will not
be earlier than ten (10) days following the date of mailing said notice nor
later than sixty (60) days following the date (the "Termination Date") of
termination of employment, resignation or removal from the Board of Directors,
or death of the Optionee, as the case may be. Such purchase price shall be the
fair market value of the Stock as determined by the Board of Directors as of the
Termination Date. The purchase price shall be evidenced by a promissory note,
bearing interest at the applicable federal rate under Section 1274(d) of the
Code. Payments on said note shall be made in three (3) equal annual installments
commencing six (6) months after the Termination Date.
(b) Right of First Refusal. Until the Company becomes publicly held,
the Company will have the irrevocable right, privilege, and option to purchase
any Stock purchased by the Optionee pursuant to an option at any time when the
Optionee or any subsequent holder of said Stock ("Holder") receives a bona fide
offer to purchase part or all of said Stock by any other party,
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which offer is acceptable to such Optionee or Holder, at the same price and upon
the same terms as such other party offers for the Stock or at fair market value
of the Stock as determined by the Board of Directors, whichever price is lower.
If the Optionee or Holder objects to the fair market value set by the Board of
Directors, the Optionee has the right to have the Stock appraised by a
qualified, independent appraiser with the cost of such appraisal to be paid by
the Optionee or Holder. After such appraisal, the Company shall have the option
to purchase the Stock on the terms of the bona fide offer or the appraisal,
whichever is less. The Optionee or Holder will, upon receipt of such an offer,
notify the Board of Directors of such offer and provide the Board with a copy of
the written offer signed by the offeror, and the Company will then be allowed
thirty (30) days from the date the Board of Directors receives such notice, not
counting the day of receiving the same, within which to notify the Optionee or
Holder of the Company's intention to exercise this option. Thereafter, the
Company shall enter into an agreement in writing with the Optionee or Holder
within fifteen (15) days to effectuate the purchase. Payment shall be deemed to
have been made by the Company, its successor or assignee, upon the deposit of a
check for the full purchase price in the U.S. Mail, addressed to the Optionee at
the Optionee's last known address. Any Optionee or Holder shall not sell the
Stock to any other party until he has conformed to the requirements of this
paragraph 14 and the Company has failed or refused to exercise its option. This
right of first refusal will continue until the Company becomes publicly held. As
used in this paragraph 14, "Optionee" shall include the executor or
administrator of the estate of the Optionee or the person to whom the Stock
shall pass by will or by the laws of descent and distribution.
(c) DELIVERY OF STOCK CERTIFICATES. Upon receipt of any notice,
pursuant to paragraphs 14(a) or 14(b) hereof from the Company, the Optionee
shall deliver the certificate(s) representing such shares of Stock to the
Company within ten (10) days from the date of such notice, along with a properly
executed stock power authorizing the Company to transfer said shares to the
Company, its successor or assignee.
15. ESCROW. In order to enforce the restrictions imposed upon shares
under this Plan, the Board of Directors or Stock Option Plan Committee may
require any Optionee to enter into an Escrow Agreement providing that the
certificates representing shares issued pursuant to this Plan shall remain in
the physical custody of an escrow holder until any or all of such restrictions
have terminated.
16. APPLICATION OF FUNDS. All proceeds received by the Company from the
exercise of Options shall be paid into its treasury and such proceeds shall be
used for general corporate purposes.
17. OPTIONEE'S RIGHTS AS A HOLDER OF SHARES.
(a) PRIOR TO EXERCISE. No Optionee or his legal representatives,
legatees or distributees, as the case may be, will be, or will be deemed to be,
a holder of any share of Stock subject to an Option unless and until stock
certificates of such shares of Stock are issued to such person or persons
pursuant to the terms of this Plan. Except as otherwise provided in paragraph 12
of this Plan, no adjustment shall be made for dividends or other rights for
which the record date occurs prior to the date such stock certificate is issued.
(b) DIVIDENDS. Purchasers of Stock pursuant to this Plan will be
entitled, after issuance of their stock certificates, to any dividends that may
be declared and paid on the shares of Stock registered in their names. A stock
certificate representing dividends declared and paid in shares
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of Stock shall be issued and delivered to the purchaser after such shares have
been registered in the purchaser's name. Such stock certificate shall bear the
legends set forth above and shall be subject to the provisions of this Plan, the
Option Agreement and any escrow arrangement.
(c) VOTING RIGHTS. Purchasers of shares of the Stock shall be entitled
to receive all notices of meetings and exercise all voting rights of a
shareholder with respect to the shares of Stock purchased.
18. AMENDMENT AND TERMINATION OF THE PLAN.
(a) DISCRETION OF THE BOARD OF DIRECTORS. The Board of Directors may
amend or terminate this Plan at any time; provided, however, that (i) any such
amendment or termination shall not adversely affect the rights of Optionees who
were granted Options prior thereto, (ii) any such amendment shall not result in
a "modification" of any Option within the meaning of Section 425(h) of the Code
and (iii) any amendment which increases the total number of shares of Stock
covered by this Plan or changes the definition of Eligible Employee shall be
subject to obtaining the approval of the Company's shareholders.
(b) AUTOMATIC TERMINATION. This Plan shall terminate ten (10) years
after its approval by the shareholders of the Company or its adoption by the
Board of Directors, whichever is earlier, unless the Board of Directors shall,
in its discretion, elect to terminate this Plan at an earlier date. Options may
be granted under this Plan at any time and from time to time prior to
termination of the Plan under this subparagraph 18(b). Any Option outstanding at
the time the Plan is terminated under this subparagraph 18(b) shall remain in
effect until the Option is exercised or expires.
19. MISCELLANEOUS.
(a) NOTICES. All notices and elections by an Optionee shall be in
writing and delivered in person or by mail to the President or Treasurer of the
Company at the principal office of the Company.
(b) EFFECTIVE DATE OF THE PLAN. The effective date of this Plan shall
be the earlier of the date on which the Board adopts the Plan, or the date of
its approval by the shareholders of the Company.
(c) EMPLOYMENT. Nothing in the Plan or in any option granted hereunder,
or in any Stock option Agreement relating thereto shall confer upon any employee
of the Company or any Subsidiary, or any successor thereof, the right to
continue in the employ of the Company or any Subsidiary.
(d) PLAN BINDING. The Plan shall be binding upon the successors and
assigns of the Company.
(e) GENDER. Whenever used herein, nouns in the singular shall include
the plural, and the masculine pronoun shall include the feminine gender.
(f) HEADINGS. Captioned headings of paragraphs and subparagraphs hereof
are inserted for convenience and reference, and constitute no part of the Plan.
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(g) APPLICABLE LAW. The validity, interpretation and enforcement of
this Plan are governed in all respects by the laws of the State of Florida and
the United States of America.
Adopted by the Board of Directors on January 23, 1993.
Adopted by the Shareholders on November 10, 1993.
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