-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KgEXqzBa0UlnVY/9vhwxeEnbVut25bMYboFSH8ldP10+ZzfVP2b+1qn7PuPL63sr Cck4IH2F8mZ1J52chAddUQ== 0000950148-97-001768.txt : 19970708 0000950148-97-001768.hdr.sgml : 19970708 ACCESSION NUMBER: 0000950148-97-001768 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970707 EFFECTIVENESS DATE: 19970707 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARKETING SERVICES GROUP INC CENTRAL INDEX KEY: 0000014280 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 880085608 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-30839 FILM NUMBER: 97636913 BUSINESS ADDRESS: STREET 1: 400 CORPORATE POINTE STREET 2: SUITE 780 CITY: CULVER CITY STATE: CA ZIP: 90230 BUSINESS PHONE: 310-342-28 MAIL ADDRESS: STREET 1: 400 CORPORATE POINTE SUITE 780 CITY: CULVER CITY STATE: CA ZIP: 90280 FORMER COMPANY: FORMER CONFORMED NAME: ALL-COMM MEDIA CORP DATE OF NAME CHANGE: 19950823 FORMER COMPANY: FORMER CONFORMED NAME: SPORTS TECH INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: BRISTOL HOLDINGS INC DATE OF NAME CHANGE: 19920518 S-8 1 FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 7, 1997. REGISTRATION NO. 333____. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 MARKETING SERVICES GROUP, INC. (Exact name of Registrant as specified in charter) Nevada 88-0085608 ------------------------------ ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification Number) 400 Corporate Pointe, Suite 780, Culver City, California 90230-7615 (Address of Principal Executive Offices) Marketing Services Group, Inc. 1991 Stock Option Plan And An Executive Employment Agreement (Full title of the Plans) Scott A. Anderson 400 Corporate Pointe, Suite 780, Culver City, California 90230-7615 (Name And Address Of Agent For Service) (310) 342-2800 (Telephone number, including area code, of agent for service) COPY TO: Alan I. Annex, Esq., Camhy Karlinsky & Stein LLP 1740 Broadway, 16th Floor, New York, NY 10019-4315 CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------- Title of Securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of to be registered registered(1) price per share(2) offering price(2) registration fee - --------------------------------------------------------------------------------------------------------------------- Common stock, $0.01 par value per share 3,991,562 $2.00 - $16.00 $11,308,756 $3,426.90 - ---------------------------------------------------------------------------------------------------------------------
(1) This Registration Statement covers (i) the remaining 2,991,562 shares authorized to be issued under the Marketing Services Group, Inc. 1991 Stock Option Plan (the "Plan") including options granted for 1,981,087 shares which are currently outstanding at exercise prices ranging from $2.00 per share to $16.00 per share and options for 1,010,475 shares which are available for grant, and (ii) 1,000,000 shares authorized to be issued under an Executive Employment Agreement. (2) Estimated solely for calculating the amount of the registration fee, pursuant to Rule 457(h) under the Securities Act of 1933, as amended. Pursuant to Rules 457(c) and (h) of the Securities Act, the proposed maximum offering price per Common Share subject to outstanding options ("Options") issued pursuant to the Plan has been calculated on the basis of the average exercise price of outstanding Options, and the proposed maximum offering price per Common Share available for grant under the Plan that are not subject to outstanding Options has been calculated on the basis of the average high and low price per Common Share, as reported by Nasdaq on July 2, 1997. 2 PART I INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with the Introductory Note to Part I of Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation Of Documents By Reference The following documents, filed with the Securities and Exchange Commission (the "Commission") by Marketing Services Group, Inc., a Nevada Corporation, ("MSGI" or the "Company"), are incorporated herein by reference. (a) Annual report filed on Form 10-K for the fiscal year ended June 30, 1996, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended ( the "Exchange Act"). (b) Quarterly report on Form 10-QSB for the nine months ended March 31, 1997. (c) Quarterly report on Form 10-QSB for the six months ended December 31, 1996. (d) Quarterly report on Form 10-QSB for the three months ended September 30, 1996. (e) Current report on Form 8-K filed on July 2, 1997 regarding change of the Company's name. (f) Current report on Form 8-K filed on November 26, 1996 regarding recapitalization of the Company's capital stock. (g) Current report on Form 8-K filed on October 11, 1996 regarding the acquisition of Metro Services Group, Inc., as amended on November 1, 1996. (h) Current report on Form 8-K filed on August 29, 1996 regarding the sale of its undeveloped land in Laughlin, Nevada, for $952,000. (i) Report on Form 8-A filed on January 15, 1997 regarding registering the Company's Common Stock on the Boston Stock Exchange. (j) The description of MSGI's common stock, $0.01 par value per share (the "Common Stock"), which is contained in MSGI's registration statement filed under the Securities Act on Form SB-2 on October 17, 1996. In addition, all documents filed by MSGI with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all the securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated herein by reference and to be a part hereof from the date of the filing of such documents with the Commission. Item 4. Description Of Securities Not applicable. 2 3 Item 5. Interests of Named Experts and Counsel The validity of the Common Stock offered hereby has been passed upon for the Company by Lionel Sawyer & Collins, Las Vegas, Nevada. Item 6. Indemnification Of Directors And Officers The Restated Articles provide that Directors and officers of the Company shall not be personally liable to the Company or its stockholders for damages for breach of fiduciary duty as a Director or officer, except for (i) acts or omissions which involve intentional misconduct, fraud, or a knowing violation of law or (ii) the payment of dividends in violation of the provisions of Chapter 78 of the NRS. The Restated Articles further provide that, if the NRS is amended to authorize corporate action further eliminating or limiting the personal liability of Directors and officers, then the liability of a Director or officer of the Company shall be eliminated or limited to the full extent permitted by the NRS. Any repeal or modification of all or any portion of the limitation on liability contained in the Restated Articles by the stockholders of the Company shall not adversely affect any right or protection of a Director or officer of the Company with respect to any acts or omissions occurring prior to the time of such repeal or modification. The By-Laws provide for indemnification of the officers and Directors of the Company, as the case may be, against any liability, cost or expense incurred by such Director or officer by reason of the fact that such person is or was a Director, officer, employee or agent of the Company, except to the extent that such indemnification is prohibited by Chapter 78 of the NRS. Section 78.751 of the NRS provides that a corporation may, and in certain cases, must, indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding (other than certain actions by, or in right of, the Corporation), by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, and, in the case of a non-derivative action, judgments, fines and amounts paid in settlement, actually and reasonably incurred by such person, in connection with the action, suit or proceeding, if, in either type of action, such person acted in good faith and in a manner which such person reasonably believed to be in, or not opposed to, the best interests of the corporation. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in, or not opposed to, the best interests of the corporation and that, with respect to any criminal action or proceeding, such person had reasonable cause to believe that such person's conduct was unlawful. Indemnification may not be made, in a derivative action, for any claim, issue or matter as to which such a person had been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation, or for amounts paid in settlement to the corporation, unless, and only to the extent that, the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. The Company's By-Laws provide that the expenses of officers and Directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred, and in advance of the final disposition of the action, upon receipt of an undertaking by, or on behalf of, the Director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that such person is not entitled to be indemnified by the corporation, unless ordered by a court or advanced (as 3 4 described above), any indemnification must be made by the corporation, only as authorized in the specific case, upon a determination that the indemnification of the Director, officer, employee or agent is proper in the circumstances. The determination must be made either by the stockholders, or by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to the act, suit or proceeding. If a majority vote of a quorum consisting of Directors who were not parties to the act, suit or proceeding so orders, or if a quorum consisting of Directors who were not parties to the act, suit or proceeding cannot be obtained, the determination must be made by independent legal counsel in a written opinion. Insofar as indemnification for Directors, officers and controlling persons of the Company with respect to liabilities arising under the Securities Act may be granted pursuant to the provisions described above, or otherwise, the Company has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Item 7. Exemption From Registration Claimed Not applicable Item 8. Exhibits Exhibit No. ----------- 4.1 The Marketing Services Group, Inc. 1991 Stock Option Plan 4.2 Executive Employment Agreement 5.1 Opinion of Lionel Sawyer & Collins 23.1 Consent of Lionel Sawyer & Collins (contained in the Opinion filed as Exhibit 5.1) 23.2 Consent of Coopers & Lybrand, LLP Item 9. Undertakings 1. MSGI hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; 4 5 provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (b) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (d) That, for purposes of determining any liability under the Securities Act, each filing of MSGI's Annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (e) That, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of MSGI pursuant to the foregoing provisions, or otherwise, MSGI has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by MSGI of expenses incurred or paid by a director, officer or controlling person of MSGI in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, MSGI will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 5 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Culver City, State of California, on July 2, 1997. MARKETING SERVICES GROUP, INC. By: /s/ J. Jeremy Barbera ---------------------------- J. JEREMY BARBERA CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 2, 1997. Signature Title --------- ----- /s/ J. Jeremy Barbera Chairman Of The Board And Chief Executive Officer - ----------------------------- (Principal Executive Officer) J. JEREMY BARBERA /s/ Scott Anderson Chief Financial Officer (Principal Financial And - ----------------------------- Accounting Officer) SCOTT ANDERSON /s/ Alan I. Annex Director - ----------------------------- ALAN I. ANNEX /s/ S. James Coppersmith Director - ----------------------------- S. JAMES COPPERSMITH /s/ Seymour Jones Director - ----------------------------- SEYMOUR JONES /s/ C. Anthony Wainwright Director - ----------------------------- C. ANTHONY WAINWRIGHT 6 EX-4.1 2 EXHIBIT 4.1 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 7, 1997. REGISTRATION NO. 333____. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 MARKETING SERVICES GROUP, INC. (Exact name of Registrant as specified in charter) Nevada 88-0085608 ------------------------------ ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification Number) 400 Corporate Pointe, Suite 780, Culver City, California 90230-7615 (Address of Principal Executive Offices) Marketing Services Group, Inc. 1991 Stock Option Plan And An Executive Employment Agreement (Full title of the Plans) Scott A. Anderson 400 Corporate Pointe, Suite 780, Culver City, California 90230-7615 (Name And Address Of Agent For Service) (310) 342-2800 (Telephone number, including area code, of agent for service) COPY TO: Alan I. Annex, Esq., Camhy Karlinsky & Stein LLP 1740 Broadway, 16th Floor, New York, NY 10019-4315 CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------- Title of Securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of to be registered registered(1) price per share(2) offering price(2) registration fee - --------------------------------------------------------------------------------------------------------------------- Common stock, $0.01 par value per share 3,991,562 $2.00 - $16.00 $11,308,756 $3,426.90 - ---------------------------------------------------------------------------------------------------------------------
(1) This Registration Statement covers (i) the remaining 2,991,562 shares authorized to be issued under the Marketing Services Group, Inc. 1991 Stock Option Plan (the "Plan") including options granted for 1,981,087 shares which are currently outstanding at exercise prices ranging from $2.00 per share to $16.00 per share and options for 1,010,475 shares which are available for grant, and (ii) 1,000,000 shares authorized to be issued under an Executive Employment Agreement. (2) Estimated solely for calculating the amount of the registration fee, pursuant to Rule 457(h) under the Securities Act of 1933, as amended. Pursuant to Rules 457(c) and (h) of the Securities Act, the proposed maximum offering price per Common Share subject to outstanding options ("Options") issued pursuant to the Plan has been calculated on the basis of the average exercise price of outstanding Options, and the proposed maximum offering price per Common Share available for grant under the Plan that are not subject to outstanding Options has been calculated on the basis of the average high and low price per Common Share, as reported by Nasdaq on July 2, 1997. 2 PART I INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with the Introductory Note to Part I of Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation Of Documents By Reference The following documents, filed with the Securities and Exchange Commission (the "Commission") by Marketing Services Group, Inc., a Nevada Corporation, ("MSGI" or the "Company"), are incorporated herein by reference. (a) Annual report filed on Form 10-K for the fiscal year ended June 30, 1996, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended ( the "Exchange Act"). (b) Quarterly report on Form 10-QSB for the nine months ended March 31, 1997. (c) Quarterly report on Form 10-QSB for the six months ended December 31, 1996. (d) Quarterly report on Form 10-QSB for the three months ended September 30, 1996. (e) Current report on Form 8-K filed on July 2, 1997 regarding change of the Company's name. (f) Current report on Form 8-K filed on November 26, 1996 regarding recapitalization of the Company's capital stock. (g) Current report on Form 8-K filed on October 11, 1996 regarding the acquisition of Metro Services Group, Inc., as amended on November 1, 1996. (h) Current report on Form 8-K filed on August 29, 1996 regarding the sale of its undeveloped land in Laughlin, Nevada, for $952,000. (i) Report on Form 8-A filed on January 15, 1997 regarding registering the Company's Common Stock on the Boston Stock Exchange. (j) The description of MSGI's common stock, $0.01 par value per share (the "Common Stock"), which is contained in MSGI's registration statement filed under the Securities Act on Form SB-2 on October 17, 1996. In addition, all documents filed by MSGI with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all the securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated herein by reference and to be a part hereof from the date of the filing of such documents with the Commission. Item 4. Description Of Securities Not applicable. 2 3 Item 5. Interests of Named Experts and Counsel The validity of the Common Stock offered hereby has been passed upon for the Company by Lionel Sawyer & Collins, Las Vegas, Nevada. Item 6. Indemnification Of Directors And Officers The Restated Articles provide that Directors and officers of the Company shall not be personally liable to the Company or its stockholders for damages for breach of fiduciary duty as a Director or officer, except for (i) acts or omissions which involve intentional misconduct, fraud, or a knowing violation of law or (ii) the payment of dividends in violation of the provisions of Chapter 78 of the NRS. The Restated Articles further provide that, if the NRS is amended to authorize corporate action further eliminating or limiting the personal liability of Directors and officers, then the liability of a Director or officer of the Company shall be eliminated or limited to the full extent permitted by the NRS. Any repeal or modification of all or any portion of the limitation on liability contained in the Restated Articles by the stockholders of the Company shall not adversely affect any right or protection of a Director or officer of the Company with respect to any acts or omissions occurring prior to the time of such repeal or modification. The By-Laws provide for indemnification of the officers and Directors of the Company, as the case may be, against any liability, cost or expense incurred by such Director or officer by reason of the fact that such person is or was a Director, officer, employee or agent of the Company, except to the extent that such indemnification is prohibited by Chapter 78 of the NRS. Section 78.751 of the NRS provides that a corporation may, and in certain cases, must, indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding (other than certain actions by, or in right of, the Corporation), by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, and, in the case of a non-derivative action, judgments, fines and amounts paid in settlement, actually and reasonably incurred by such person, in connection with the action, suit or proceeding, if, in either type of action, such person acted in good faith and in a manner which such person reasonably believed to be in, or not opposed to, the best interests of the corporation. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in, or not opposed to, the best interests of the corporation and that, with respect to any criminal action or proceeding, such person had reasonable cause to believe that such person's conduct was unlawful. Indemnification may not be made, in a derivative action, for any claim, issue or matter as to which such a person had been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation, or for amounts paid in settlement to the corporation, unless, and only to the extent that, the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. The Company's By-Laws provide that the expenses of officers and Directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred, and in advance of the final disposition of the action, upon receipt of an undertaking by, or on behalf of, the Director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that such person is not entitled to be indemnified by the corporation, unless ordered by a court or advanced (as 3 4 described above), any indemnification must be made by the corporation, only as authorized in the specific case, upon a determination that the indemnification of the Director, officer, employee or agent is proper in the circumstances. The determination must be made either by the stockholders, or by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to the act, suit or proceeding. If a majority vote of a quorum consisting of Directors who were not parties to the act, suit or proceeding so orders, or if a quorum consisting of Directors who were not parties to the act, suit or proceeding cannot be obtained, the determination must be made by independent legal counsel in a written opinion. Insofar as indemnification for Directors, officers and controlling persons of the Company with respect to liabilities arising under the Securities Act may be granted pursuant to the provisions described above, or otherwise, the Company has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Item 7. Exemption From Registration Claimed Not applicable Item 8. Exhibits Exhibit No. ----------- 4.1 The Marketing Services Group, Inc. 1991 Stock Option Plan 4.2 Executive Employment Agreement 5.1 Opinion of Lionel Sawyer & Collins 23.1 Consent of Lionel Sawyer & Collins (contained in the Opinion filed as Exhibit 5.1) 23.2 Consent of Coopers & Lybrand, LLP Item 9. Undertakings 1. MSGI hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; 4 5 provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (b) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (d) That, for purposes of determining any liability under the Securities Act, each filing of MSGI's Annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (e) That, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of MSGI pursuant to the foregoing provisions, or otherwise, MSGI has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by MSGI of expenses incurred or paid by a director, officer or controlling person of MSGI in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, MSGI will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 5 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Culver City, State of California, on July 2, 1997. MARKETING SERVICES GROUP, INC. By: /s/ J. Jeremy Barbera ---------------------------- J. JEREMY BARBERA CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 2, 1997. Signature Title --------- ----- /s/ J. Jeremy Barbera Chairman Of The Board And Chief Executive Officer - ----------------------------- (Principal Executive Officer) J. JEREMY BARBERA /s/ Scott Anderson Chief Financial Officer (Principal Financial And - ----------------------------- Accounting Officer) SCOTT ANDERSON /s/ Alan I. Annex Director - ----------------------------- ALAN I. ANNEX /s/ S. James Coppersmith Director - ----------------------------- S. JAMES COPPERSMITH /s/ Seymour Jones Director - ----------------------------- SEYMOUR JONES /s/ C. Anthony Wainwright Director - ----------------------------- C. ANTHONY WAINWRIGHT 6 7 Exhibit 4.1 MARKETING SERVICES GROUP, INC. (FORMERLY, ALL-COMM MEDIA CORPORATION AND BRISTOL HOLDINGS, INC.) 1991 STOCK OPTION PLAN 1. Purpose. The purpose of this Plan is to advance the interests of the Company by providing an additional incentive to attract and retain qualified and competent employees upon whose efforts and judgment the success of the Company is largely dependent, through the encouragement of stock ownership in the Company by such employees. 2. Definitions. As used herein, the following terms shall have the meaning indicated: (a) "Board" shall mean the Board of Directors of the Company. (b) "Committee" shall mean any committee of three (3) or more persons appointed by the Board, each of whom may be a 'disinterested person' within the meaning of former Rule 16b-3(d)(3) promulgated by the Staff of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, as such Rule was in effect prior to May 1, 1991. In the event the Board of Directors has not appointed such a Committee, the term "Committee" shall refer to the full Board of Directors. (c) "Company" shall mean Marketing Services Group, Inc. (formerly All-Comm Media Corporation and Bristol Holdings, Inc.), a Nevada corporation. (d) "Director" shall mean a member of the Board, or a member of the Board of Directors of any subsidiary of the Company, or any other company in which the Company holds a substantial ownership interest. (e) "Disability" or "Disabled" shall mean the inability to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which has lasted, or can be expected to last, for a period of not less than 12 months. (f) "Employee" shall mean (1) an employee, including an officer of the Company, any subsidiary of the Company, or any other company in which the Company holds a substantial ownership interest, or (2) any person providing consulting or similar services to the Company, any subsidiary of the Company, or any other company in which the company holds a substantial ownership interest. (g) "Fair Market Value" of a Share on any date of reference shall mean (1) if the Shares are listed or admitted for trading on any United States national securities exchange, or are traded through the National Market System of the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), the last reported sale price of the Shares on the last business day prior to the date in question, or if no such sale is made on such day, the average of the bid and asked prices for such day, as reported in any newspaper of general circulation, (2) if the Shares are not so listed, admitted to trading or traded, the average of the last bid and asked quotations for Shares as reported by NASDAQ (or, if not so reported by NASDAQ, as reported by the National Quotation Bureau, Inc.) on the last business day prior to the date in question, or (3) if the Shares are not so listed, admitted to trading or traded and bid and asked prices are not so reported, an amount, not less than book value, determined in such reasonable manner as may be prescribed by the Committee. (h) "Option" (when capitalized) shall mean any option granted under this Plan. (i) "Option Agreement" shall mean an agreement executed by the Company and an Employee evidencing an Option granted pursuant to the Plan. 1 8 (j) "Optionee" shall mean a person to whom a stock option is granted under this Plan or any person who succeeds to the rights of such person under this Plan by reason of the death of such person. (k) "Plan" shall mean this Marketing Services Group, Inc. (formerly, All-Comm Media Corporation and Bristol Holdings, Inc.) 1991 Stock Option Plan. (l) "Share(s)" shall mean a share or shares of the common stock, par value $0.01 per share, of the Company. 3. Shares and Options. (a) The Company may grant from time to time Options to purchase an aggregate of up to two hundred and fifty thousand (250,000) Shares (adjusted for the one-for-four reverse stock split on August 22, 1995) from Shares held in the Company's treasury or from authorized and unissued Shares, plus an additional 600,000 Shares authorized by the Board of Directors on November 3, 1995, 600,000 authorized on September 26, 1996 and 1,700,000 authorized on May 27, 1997, pursuant to paragraph 3(c) herein, as an amendment to the Plan. In no event shall any Option granted hereunder be deemed to be an "incentive stock option" as defined in Section 422 of the Internal Revenue Code of 1986, as amended from time to time. (b) All Options granted pursuant to the Plan shall be treated as "outstanding" until they are exercised in full, terminate or expire, or until they are cancelled. If any Option shall terminate, expire or be cancelled as to any Shares, new Options may thereafter be granted covering such Shares. (c) Except as set forth in Section 13 hereof, the aggregate number of shares with respect to which Options may be granted shall be subject to change only by means of an amendment of the Plan duly adopted by the Board. 4. Administration of the Plan. (a) The Plan shall be administered by the Committee. Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board and any vacancy occurring in the membership of the Committee shall be filled by appointment by the Board. (b) Subject to the provisions of the Plan, the Committee shall have the authority, in its sole and absolute discretion, to: (i) construe and interpret the provisions of the Plan or of any Option or Option Agreement, adopt, amend and rescind all rules, regulations and procedures and otherwise make any determinations which it deems necessary or advisable for the administration of the Plan, such interpretations, rule making and determinations to be final, conclusive and binding on all persons having any interest therein; (ii) determine who shall be granted Options; (iii) determine the number of Shares with respect to which Options shall be granted and the exercise price per share of any Options granted; and (iv) subject to the terms of the Plan, specify the terms and conditions of any Options granted, including, without limitation, (A) prescribing the date or dates on which an Option becomes exercisable, (B) providing that an Option accrues or becomes exercisable in installments over a period of years or upon the attainment of stated goals, or both, and (C) relating an Option to the continued employment of the Optionee for a stated period of time, provided that such terms and conditions are not more favorable to an Optionee than those expressly permitted herein. (c) 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 written approval of a majority of the members of the Committee. 2 9 5. Eligibility For Grant Of Options. (a) All Employees and Directors shall be eligible to receive Options under the Plan. Any person who files with the Committee, in a form satisfactory to the Committee, a written waiver of eligibility to receive any Option under this Plan shall not be eligible to receive any Option under this Plan for the duration of such waiver. (b) Notwithstanding subsection 5(a), the Committee may grant Options to a person not then in the employ of the Company, in order to induce such person to become employed by the Company, provided that the grant of Options to such person shall be conditioned upon such person becoming an Employee at, or prior to, the time of the execution of an Option Agreement evidencing such Options, and in no event shall any such person have any rights with respect to Options granted pursuant to the Plan prior to becoming an Employee. 6. Grant Of Options. (a) Subject to the terms of the Plan, the Committee may from time to time grant Options with respect to the Shares covered by the Plan. In granting Options, the Committee shall take into consideration the contribution the person has made, or may make, to the success of the Company and such other factors as the Committee shall determine. The Committee shall also have the authority to consult with, and receive recommendations from, officers and other personnel of the Company with regard to these matters. (b) Each Option granted pursuant to the Plan shall be evidenced by an Option Agreement in such form as the Committee shall from time to time approve, which agreement may contain any terms and conditions deemed necessary or desirable by the Committee, provided such terms and conditions are not inconsistent with this Plan or any applicable law. (c) The Options granted under this Plan shall be in addition to regular salaries, pension, life insurance or other benefits related to employment with the Company. Neither the Plan, any Option granted under the Plan nor any Option Agreement shall confer upon any person any right to continuance of employment by the Company. 7. Option Price. The Committee Shall Determine The Exercise Price Of all Options granted pursuant to the Plan in its sole discretion. The exercise price need not be equal to the Fair Market Value per Share on the date such Option is granted. 8. Exercise Of Options. (a) An Option shall be deemed exercised when (i) the Company has received written notice of such exercise accordance with the terms of the Option, (ii) full payment of the aggregate exercise price of the Shares as to which the Option is exercised has been made, and (iii) arrangements which are satisfactory to the Committee in its sole discretion have been made for the Optionee's payment to the Company of the amount which is necessary for the Company to withhold in accordance with applicable federal or state tax withholding requirements. (b) Unless further limited by the Committee in any Option, the exercise price of any shares purchased shall be paid in cash, by certified or cashier's check, by money order, with Shares (provided that at the time of exercise the Committee, in its sole discretion, does not prohibit the exercise of Options through the delivery of already-owned Shares) or by a combination of the above; provided, however, that the Committee, in its sole discretion, may accept a personal check in full or partial payment of any Shares. If the exercise price is paid in whole or in part with Shares, the value of Shares surrendered shall be their Fair Market Value. The Company, in its sole discretion, may lend money to an Optionee, 3 10 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. 9. Exercisability Of Options. Any Option Shall Become Exercisable In such amounts, at such intervals and upon such terms and conditions as the Committee shall provide in the Option Agreement executed with respect to such Option, except as otherwise provided in this Section 9. (a) The expiration date of an Option shall be determined by the Committee at the time of grant, but in no event shall an Option be exercisable after the expiration of ten (10) years from the date of grant of the Option. (b) Unless otherwise provided in any Option Agreement, each outstanding Option shall become immediately and fully exercisable (i) if there occurs any transaction (which shall include a series of transactions occurring within 60 days or occurring pursuant to a plan), which has the result that shareholders of the Company immediately before such transaction cease to own at least 51% of the voting stock of the Company or of any entity which results from the participation of the Company in a reorganization, consolidation, merger, liquidation or any form of corporate transaction; (ii) if the shareholders of the Company shall approve a plan of merger, consolidation, reorganization, liquidation or dissolution in which the Company does not survive (unless the approved merger, consolidation, reorganization, liquidation or dissolution is subsequently abandoned); or (iii) if the shareholders of the Company shall approve a plan for the sale, lease, exchange or other disposition of all or substantially all the property and assets of the Company (unless such plan is subsequently abandoned). (c) The Committee may, in its sole discretion, accelerate the date on which any Option may be exercised and may accelerate the vesting of any Shares subject to any Option or previously acquired by the exercise of any Option. (d) The Committee, in its sole discretion, by giving written notice ("cancellation notice") to all Optionees may cancel, effective upon the date of the consummation of any corporate transaction described in Subsections 9(b)(ii) and (iii) hereof, any Option which remains unexercised on such date. Such cancellation notice shall be given a reasonable period of time prior to the proposed date of such cancellation and may be given either before or after shareholder approval of such corporate transaction. 10. Termination Of Employment. (a) Unless otherwise determined by the Committee at the time of grant, an Optionee who ceases to be an Employee or Director for any reason (including layoff) other than death, Disability or termination by the Company for cause, may exercise not later than three (3) months after the date of such termination of employment (but not later than the originally prescribed expiration date) any Option granted to such Optionee, but only to the extent that the right to exercise any such Option has accrued on such date. (b) An Optionee whose employment is terminated by the Company for "cause", or who is found to have engaged in conduct which would constitute "cause", shall forthwith upon such termination or determination cease to have any right to exercise any Option. For purposes of this Section 10, "cause" shall be deemed to include (but shall not be limited to) employment in any capacity with a competitor of the Company, commission of a felony, dishonesty with respect to the Company, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information or conduct substantially prejudicial to the business of the Company. The determination of the Committee as to the existence of cause shall be conclusive on the Optionee and the Company. 4 11 11. Disability. (a) Unless otherwise determined by the Committee at the time of grant, an Optionee who ceases to be an Employee or Director by reason of a Disability may exercise not later than one (1) year after the date that the Optionee became Disabled (but not later than the originally prescribed expiration date) any Option granted to such Optionee, but only to the extent that the right to exercise any Option has accrued on the date such Optionee becomes Disabled (notwithstanding that the Optionee might have been able to exercise any such Option as to some or all of the Shares covered thereby on a later date if the Optionee had not become Disabled). (b) The Committee shall make the determination both of whether a Disability has occurred and the date thereof. If requested, the Optionee shall be examined by a physician selected or approved by the Committee, the cost of which examination shall be paid for by the Company. 12. Death. In The Event That An Optionee Ceases To Be An Employee Or Director by reason of such Optionee's death, such Optionee's survivors may exercise not later than one (1) year after the date of death of such Optionee (but not later than the originally prescribed expiration date) any Option granted to such Optionee, but only to the extent that the right to exercise and such Option has accrued on the date of the Optionee's death (notwithstanding that the decedent might have been able to exercise any such Option as to some or all of the Shares covered thereby on a later date if the Optionee were alive and had continued to be an Employee or Director). 13. Adjustment Of Shares. (a) In the event that the outstanding Shares of the Company are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of any reorganization, merger, consolidation, recapitalization, reclassification, change in par value, stock split-up, combination of shares or dividend payable in capital stock, or the like; (i) appropriate adjustment shall be made in the maximum number and kind of shares with respect to which Options may be granted under the Plan, so that the same percentage of the Company's issued and outstanding capital stock shall continue to be subject to the grant of Options under the Plan; and (ii) appropriate adjustment to prevent dilution or enlargement of the rights granted to or available for Optionees shall be made in the number and kind of shares and in the exercise price per Share with respect to outstanding Options. (b) Except as otherwise expressly provided herein, the issuance by the Company of its capital stock of any class, or securities convertible into shares of capital stock of any class, either in connection with direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Options then subject to outstanding Options granted under the Plan or the exercise prices of such Options. (c) Without limiting the generality of the foregoing, the existence of outstanding Options granted under the Plan shall not affect in any manner the right or power of the Company to make, authorize or consummate (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business; (ii) any merger or consolidation of the Company; (iii) any issuance by the Company of debt securities, or preferred or preference stock which would rank above the Shares subject to outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the assets or business of the Company; or (vi) any other corporate act or proceeding, whether of a similar character or otherwise. 5 12 14. Transferability And Assignability Of Options. An Option Shall Not Be Transferable By The Optionee otherwise than by will or the laws of descent and distribution. So long as an Optionee lives, only such Optionee or his guardian or legal representative shall have the right to exercise the Option. An Option shall not be assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge or hypothecation, or the levy of any attachment or similar process, shall render the Option subject thereto null and void. 15. Issuance Of Shares. As A Condition Of Any Sale Or Issuance Of Shares Upon Exercise Of Any Option, the Committee may require such agreements or undertakings, if any, as the Committee may deem necessary or advisable to assure compliance with any federal or state securities law or regulation including, but not limited to, the following: (a) a representation and warranty by the Optionee to the Company, at the time any Option is exercised, that he is acquiring the Shares to be issued to him for investment and not with a view to, or for sale in connection with, the distribution of any such Shares; and (b) a representation, warranty or agreement to be bound by any legends that are, in the opinion of the Committee, necessary or appropriate to comply with the provisions of any law or regulation deemed by the Committee to be applicable to the issuance of the Shares and are endorsed upon the Share certificates. 16. Rights As A Shareholder. No Optionee To Whom An Option Has Been Granted Shall Have Any Rights As A shareholder with respect to any Shares covered by such Option except as to such Shares as shall have been issued to and registered in the Company's share register in the name of such Optionee upon the due exercise of the Option. 17. Interpretation. (a) If any provision of the Plan should be held invalid for any reason, such holding shall not affect the remaining provisions hereof, but instead the Plan shall be construed and enforced as if such provision had never been included in the Plan. (b) This Plan shall be governed by, and construed and interpreted in accordance with, the laws of the State of Nevada. 18. Amendment Of The Plan Or Options. The Board May From Time To Time Amend The Plan Or Any Option; provided, however, that except to the extent provided in Section 9, no amendment of the Plan or any Option issued hereunder shall substantially impair any Option previously granted to any Optionee without the consent of such Optionee. 19. Termination Of The Plan. The Plan Shall Terminate On The Tenth Anniversary Of Its Adoption By The Board. The Plan may be terminated at an earlier date provided, however, that any such earlier termination shall not affect any Options granted or Option Agreements executed prior to the effective date of such termination. 20. Effective Date. This Plan Shall Become Effective As Of The Date Of Its Adoption By The Board. 13 SUMMARY PLAN DESCRIPTION MARKETING SERVICES, GROUP, INC. (FORMERLY ALL-COMM MEDIA CORPORATION, FORMERLY SPORTS-TECH, INC., AND FORMERLY BRISTOL HOLDINGS, INC.) 1991 STOCK OPTION PLAN No person has been authorized to give any information or to make any representation in connection with this offering, other than those contained in this Summary. If given or made, such representations must not be relied upon as having been authorized by Marketing Services Group, Inc.. This Summary shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This Summary is qualified in its entirety by reference to the provisions of the Marketing Services Group, Inc. (formerly, Bristol Holdings, Inc.) 1991 Stock Option Plan, a copy of which is attached hereto and made a part hereof as Exhibit A. The date of this Summary is June 30, 1997. ---------------------------------- INTRODUCTION This Summary relates to shares of Common Stock, par value $.01 per share (the "Common Stock") of Marketing Services Group, Inc., a Nevada corporation, which was formerly known as All-Comm Media Corporation, Sports-Tech, Inc. and Bristol Holdings, Inc. (the "Company"), which are issuable in connection with awards of stock options ("Options") granted or to be granted by the Company pursuant to the Bristol Holdings, Inc. 1991 Stock Option Plan (the "Plan"). THIS SUMMARY INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS, AND OTHER DOCUMENTS DISTRIBUTED TO SHAREHOLDERS, ARE AVAILABLE UPON REQUEST FROM MARKETING SERVICES GROUP, INC., 400 CORPORATE POINTE, SUITE 780, CULVER CITY, CALIFORNIA 90230 (TELEPHONE: 310/342-2800) ISSUER AND PARTICIPATING EMPLOYERS Shares of Common Stock are offered hereby to eligible employees, directors and consultants of the Company, any subsidiary of the Company and any other companies in which the Company holds a substantial ownership interest. 7 14 ADDITIONAL INFORMATION ABOUT THE COMPANY The principal executive offices of the Company are located at: 400 Corporate Pointe, Suite 780 Culver City, California 90230-7615 Telephone: 310/342-2800 PLAN DESCRIPTION The following is a summary of the material provisions of the Plan. The Plan provides for the grant of nonqualified stock options ("Nonqualified Options") and does not provide for the issuance of "incentive stock options", as defined in Section 422 of the Code ("Incentive Options"). Nonqualified Options are Options which are not entitled to special tax treatment afforded Incentive Options under Section 422 of the Code. General The primary purpose of the Plan is to attract and retain capable executives and employees by offering such persons a greater personal interest in the Company's business through stock ownership. The Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Company had reserved 250,000 shares of Common Stock for issuance under the Plan. The Plan was amended by the Board of Directors on November 3, 1995, September 26, 1996 and May 27, 1997 to increase by 600,000, 600,000 and 1,700,000, respectively, the number of shares authorized for issuance under option grants. Administration The Plan is administered by a committee, appointed by the Board of Directors (the "Committee"). The Committee determines, among other things, the persons to be granted Options, the number of shares subject to each option, and the exercise price of the Options granted. The Committee may interpret the Plan and may prescribe, amend and rescind its rules and regulations. The current members of the Committee are all of the current directors of the Company. All current Committee members are members of the Board of Directors and shareholders of the Company and are entitled to receive Options under the Plan as described under "Eligibility" below. Eligibility Officers, directors, employees and consultants to the Company, its subsidiaries and other companies in which the Company owns an substantial ownership interest ("Eligible Employees"), are eligible to be granted options under the Plan. However, because participation is solely at the discretion of the Committee, no Eligible Employee has a right to be selected for participation in the Plan. Option Price The Committee will determine the term and exercise price of each Option and the manner in which it may be exercised. The Committee is authorized under the Plan to grant Options with an exercise price less than the fair market value of the shares covered by the Option on the date of grant. Under the Plan, there is no maximum or minimum number of shares that may be covered by Options granted to a single person. 8 15 Duration And Exercise Of Options Any Options will be exercisable in such amounts, at such intervals and upon such terms and conditions as the Committee provides. Options granted under the Plan are exercisable until the earlier of (i) a date set by the Committee at the time of grant, or (ii) ten years from their respective dates of grant. Unless otherwise provided in any option agreement, each outstanding Option will become immediately exercisable if there occurs any transaction or series of transactions which results in the shareholders of the Company immediately before such transaction(s) owning less than 51% of the voting stock of the Company or any successor company, or if the shareholders shall approve a plan of merger, consolidate, reorganization, liquidation or dissolution in which the Company does not survive, or a plan for the sale, lease, exchange or other disposition of all or substantially all of the property or assets of the Company. The Committee, in its sole discretion, by giving written notice to all Optionees, may cancel, effective upon the date of the consummation of any such transaction, any Option that remains unexercised on the effective date of such transaction. Such cancellation notice shall be given a reasonable period of time prior to the proposed date of such cancellation and may be given either before or after shareholder approval of such transaction. In addition, the Committee may, for any reason, accelerate the date on which any Option may be exercised and may accelerate the vesting of any shares subject to any Option or previously acquired by the exercise of any Option. In no event may any Option granted under the Plan be exercised subsequent to the expiration date of the Option. Termination Of Employment Unless otherwise determined by the Committee at the time of grant, an Optionee who ceased to be an eligible participant in the Plan by reason of any event (including layoff) other than death, disability or termination by the Company for cause, may exercise within three(3) months after the date of such event (but not later than the originally prescribed expiration date) any Option granted to such Optionee, but only to the extent that the right to exercise any such Option has accrued as of the date of such event. An Optionee whose employment is terminated by the Company for "cause", or who is found to have engaged in conduct which would constitute cause, shall forthwith upon such termination or determination cease to have any right to exercise any Option. The determination of the Committee as to the existence of cause shall be conclusive on the Optionee and the Company. Unless otherwise determined by the Committee at the time of grant, if an Optionee ceases to be an employee by reason of disability or such Optionee's death, the Optionee, or such Optionee's survivors, may exercise within a period of one (1) year after the date that the Optionee became disabled or died (but not later than the originally prescribed expiration date) any option granted to such Optionee, but only to the extent that the right to exercise any such option has accrued on the date such Optionee became disabled or died. The Committee shall make the determination both as to whether a disability has occurred and the date thereof. Nontransferability No award of Options, or any right or interest therein, may be assigned or transferred except by will or the laws of descent and distribution. During the lifetime of an option holder, Options are exercisable only by the Option Holder or his guardian or legal representative. 9 16 Adjustments Relating To Shares The number and price of shares of Common Stock subject to Options will be adjusted for certain stock splits or consolidations, or for other capital adjustments or payment of stock dividends affecting the Company's capital structure. Any adjustment shall be conclusively determined by the Committee. No Shareholder Rights date a certificate is issued to him for such shares. Payment For Shares Unless further limited by the Committee in any Option, payment for shares to be acquired through Options may be paid in cash, by certified cashier's check, by money order, surrender of Common Stock, or a combination of the foregoing. Termination And Amendment No Options may be granted under the Plan after the tenth anniversary of its adoption. Subject to certain limitations, the Plan may be terminated or amended at any time or from time to time by the Board. No Additional Employment Rights The adoption of the Plan does not confer upon any employee of the Company any right to continued employment with the Company, nor does it interfere in any way with the right of the Company to terminate the employment of any employee at any time. Option Agreements Options granted under the Plan are evidenced by written agreements incorporating the provisions of the Plan. Option agreements may set forth additional terms and conditions not inconsistent with the provisions of the Plan. Withholding Of Taxes No later than the date as of which an amount first may be included in the gross income of an Optionee for federal income tax purposes with respect to the exercise of an Option, Optionee will be required to pay the Company, or make arrangements satisfactory to the Committee, regarding the payment of any federal, state or local taxes of any kind required by law or the Company to be withheld with respect to such amount. Procedures and permissible methods for satisfying withholding obligations may be set forth in Option Agreements between the Company and an Optionee, and/or in tax withholding procedures adopted by the Committee. The obligations of the Company under the Plan are conditional on an Optionee's compliance with withholding requirements. The Company, to the extent permitted by law, will have the right to deduct any such taxes from any payment otherwise due to the Optionee. Additional Information Additional information about the Plan, the Board and the Committee may be obtained from: MARKETING SERVICES GROUP, INC. 400 Corporate Pointe, Suite 780 Culver City, California 90230-7615 (310) 342-2800 10 17 RESALE OF SHARES ACQUIRED PURSUANT TO THE PLAN Officers and directors of the Company or owners of 10% or more of the Common Stock of the Company or those otherwise deemed, under applicable rules and regulations of the Commission, to be in a position to control the Company may re-offer or resell shares acquired pursuant to the Plan only in connection with a separate registration statement which has been declared effective under the Securities Act, an amendment to the Registration Statement, or pursuant to an available exemption under the Securities Act, including the exemption provided by Rule 144, or any successor provisions thereunder (hereinafter referred to as "Rule 144"), subject to certain limitations set forth in Rule 144 but without regard to the two-year holding period provided for under Rule 144. The Company has no obligation to file or have declared effective any registration statement in connection with the resale of any securities acquired pursuant to the Plan. Employees of the Company who acquire shares of Common Stock pursuant to the Plan should consult with the Company to ascertain whether or not their position within the Company requires compliance with the resale restrictions described above. FEDERAL INCOME TAX CONSEQUENCES AND OTHER INFORMATION The following is a brief discussion of the Federal income tax consequences of transactions under the Plan, based on the Internal Revenue Code of 1986 (the "Code"). The Plan is not qualified under Section 401(a) of the Code. This discussion is not intended to be exhaustive and does not describe state or local tax consequences. None of the Company, the Board, the Committee or any member of any of the foregoing has any liability or responsibility to pay, or reimburse any optionee for the payment of, any tax arising out of, or on account of, the issuance of an Option or Options under the Plan to any Optionee, an Optionee's exercise of any Option issued under the Plan or an Optionee's sale, transfer or other disposition of any shares acquired pursuant to the exercise of an Option issued under the Plan. Because there is no "readily ascertainable fair market value" for the Options on the date of grant, as defined in Treasury Regulations, an Optionee will not realize any income, nor will the company be entitled to any deduction, in the year of grant. An Optionee will generally realize ordinary income at the time the shares are transferred to him pursuant to his exercise of any Option or, if later, the time the shares transferred to him are substantially vested. Accordingly, the Optionee will generally realize ordinary income when the shares of Common Stock subject to the Option are transferred to him. The amount of income recognized by the Optionee is the difference between the exercise price and the fair market value of the Common Stock at the time of exercise. The Optionee's basis in the shares received upon exercise of an Option is the fair market value of the shares at the time of the taxable event. The Company will be entitled to a deduction for federal income tax purposes at the same time and in the same amount as the Optionee is considered to realize ordinary income under the rules described above provided that it satisfied its income tax withholding obligation. When an Optionee disposes of shares acquired upon exercise of an Option, any amount received in excess of the Optionee's basis in the shares (as described above) will be treated as long-term or short-term capital gain. If the amount received is less than the Optionee's basis, the loss will be treated as long-term or short-term capital loss, which may be aggregated with other capital losses and, subject to certain limitations, may be used to reduce the amount of the Optionee's ordinary income subject to taxation. Long-term capital gain or loss would arise from the sale of Common Stock held for more than one year from the date it is acquired pursuant to the exercise of an Option. Short-term capital gain or loss 11 18 would arise from the disposition of Common Stock so held for one year or less. The Company receives no further deduction as a result of the realization by an Optionee of any capital gain or loss as described in this paragraph. Special Rules Applicable To Corporate Insiders For exercises of Nonqualified Options occurring on or after May 1, 1991, as a result of new rules under Section 16(b) of the Exchange Act, "insiders" (such as directors, certain officers and principal shareholders), as with non-insiders, will generally be taxed immediately upon the exercise of an Option grant to the date of exercise, and the general tax rules discussed above will apply to insiders as well as non-insiders. Special Rules Applicable To Nonresident Aliens In general, Optionees who are nonresident aliens for income tax purposes and whose services are performed outside the United States will not be subject to federal income tax upon the grant, vesting, or exercise of Options under the Plan. However, if a proportion of the nonresident alien's Optionee's compensation income earned during the vesting or deferral period applicable to an Option was subject to federal income tax (e.g., because the Optionee rendered services both within and without the United States during that period and there was no applicable treaty exemption), then that proportion of the Optionee's income from exercise of the Option would be subject to federal income tax (in accordance with the rules discussed above). THE DISCUSSION ABOVE IS INTENDED ONLY AS A SUMMARY AND DOES NOT PURPORT TO BE A COMPLETE DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT TO RECIPIENTS OF OPTIONS UNDER THE PLAN. AMONG OTHER ITEMS, SUCH DISCUSSION DOES NOT ADDRESS TAX CONSEQUENCES UNDER THE LAWS OF ANY STATE, LOCALITY OR FOREIGN JURISDICTION, OR ANY TAX TREATIES OR CONVENTIONS BETWEEN THE UNITED STATES AND FOREIGN JURISDICTIONS. SUCH DISCUSSION IS BASED UPON CURRENT LAW AND INTERPRETATION AUTHORITIES WHICH ARE SUBJECT TO CHANGE AT ANY TIME. IT IS STRONGLY URGED THAT INDIVIDUALS CONSULT WITH THEIR TAX ADVISORS CONCERNING THE TAX CONSEQUENCES OF RECEIPT AND EXERCISE OF OPTIONS AND RELATED TRANSACTIONS WITH RESPECT TO THEIR PERSONAL TAX CIRCUMSTANCES. 12 EX-4.2 3 EXHIBIT 4.2 1 Exhibit 4.2 EMPLOYMENT AGREEMENT THIS AGREEMENT (this "Agreement") is being made as of the 27th day of May, 1997 among All-Comm Media Corporation, a Nevada corporation (the "Company"), Metro Services Group, Inc., a New York corporation ("Metro"), each having an office at 333 Seventh Avenue, New York, New York 10001, and J. Jeremy Barbera ("Employee"), an individual residing at 24 West 70th Street, New York, New York 10023. W I T N E S S E T H: WHEREAS, Metro is a party to an employment agreement dated as of October 1, 1996 with Employee (the "Employment Agreement"). WHEREAS, Employee has taken on additional responsibility for the Company and the Company, Metro and Employee desire to amend and restate the Employment Agreement, upon the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual premises and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows: 1. Nature Of Employment; Term Of Employment. The Company Hereby employs Employee and Employee agrees to serve the Company as its Chairman, President and Chief Executive Officer, and Metro hereby employs Employee and Employee agrees to serve Metro as its Chief Executive Officer, upon the terms and conditions contained herein, for a term commencing as of the date hereof and continuing until May 31, 2000 (the "Employment Term"); provided, that this Agreement (including this Section 1) shall automatically be renewed for one (1) additional three (3) year period upon terms no less favorable than the terms existing in the third year of the Employment Term, unless the Company or Employee gives written notice to the other party of its intention not to renew this Agreement with sixty (60) days prior to the expiration of the Employment Term. 2. Duties And Powers As Employee. During The Employment Term, Employee Agrees To Devote All Of His Full Working Time, Energy, And Efforts To The Business Of The Company And Metro. In Performance Of His Duties, Employee Shall Be Subject To The Reasonable Direction Of The Board Of Directors Of The Company And Metro. Employee Shall Be Available To Travel As The Needs Of The Business Reasonably Require. Employee Agrees That The Company Or Metro May Obtain A Life Insurance Policy On The Life Of Employee Naming The Company Or Metro As The Beneficiary Thereof. 3. Compensation. (a) As compensation for his services hereunder, the Company shall pay Employee, a salary (a "Base Salary"), payable in equal semi-monthly installments, at the annual rate of $250,000 for the first year of the Employment Term; $300,000 for the second year of the Employment Term and $350,000 for the third year of the 1 2 Employment Term. Additionally, Employee shall participate in all present or future employee benefit and plans of the Company and Metro, provided that he meets the eligibility requirements therefor. (b) Employee shall be eligible to receive raises and bonuses each year of the Employment Term if and as determined by the Compensation Committee of the Board of Directors of the Company. Such bonuses, if any, shall be based upon the achievement of earnings and other targeted criteria. Employee shall receive non-qualified stock options (the "Options") to acquire up to 1,000,000 shares common stock of the Company, of which 333,334 (the "First Level") shall be exercisable at $2.63 per share, 333,333 (the "Second Level") of which shall be exercisable at $3.00 per share and 333,333 (the "Third Level", together with the First Level and the Second Level, the "Three Levels") of which shall be exercisable at $3.50 per share (each, an "Applicable Exercise Price"). One third of the Options in each of the Three Levels shall vest as of the date hereof, one third on the first anniversary of the date hereof, and the final third of which shall vest on the second anniversary of the date hereof. Exhibit A attached hereto sets forth the additional terms and conditions under which such options can be exercised; such terms are hereby incorporated by reference in their entirety. 4. Expenses; Vacations. Employee Shall Be Entitled To Reimbursement For Reasonable Travel And Other Out-of-pocket Expenses Reasonably Incurred In The Performance Of His Duties Hereunder, Upon Submission And Approval Of Written Statements And Bills In Accordance With The Then Regular Procedures Of The Company. Employee Shall Be Entitled To Thirty (30) Days Paid Vacation Time In Accordance With Then Regular Procedures Of Metro Governing Executives As Determined From Time To Time By The Company's Board Of Directors And Communicated, In Writing To Employee. 5. Representations And Warranties Of Employee. Employee Represents And Warrants To The Company And Metro That (A) Employee Is Under No Contractual Or Other Restriction Or Obligation Which Is Inconsistent With The Execution Of This Agreement, The Performance Of His Duties Hereunder, Or The Other Rights Of The Company And Metro Hereunder; And (B) Employee Knows Of No Physical Or Mental Disability That Would Hinder His Performance Of Duties Under This Agreement. 6. Non-competition. (a) Employee agrees that during the Employment Term he will not engage in, or otherwise directly or indirectly be employed by, or act as a consultant, or be a director, officer, employee, owner, agent, member or partner of, any other business or organization that is or shall then be competing with the Company or any of its subsidiaries, except that in each case the provisions of this Section 6 will not be deemed breached merely because Employee owns not more than five percent (5.0%) of the outstanding common stock of a corporation, if, at the time of its acquisition by Employee, such stock is listed on a national securities exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter market by a member of a national securities exchange. The Company understands that Employee is a Vice President, a director and a shareholder of Pegasus Internet, Inc. ("Pegasus") and Metro is a customer of Pegasus. The Company acknowledges that Employee may engage in such activities to the extent they do not compete with the business of the Company or any of its subsidiaries and that such engagement will not violate this Agreement. 2 3 (b) If this Agreement is terminated, Employee, for a period of three (3) years from the date of termination, shall not, directly or indirectly, solicit or encourage any person who was a customer of the Company or any of its subsidiaries during the three years prior to the date of such termination to cease doing business with the Company or any of its subsidiaries or to do business with any other enterprise that is engaged in the same or similar business to that of the Company or any of its subsidiaries. 7. Inventions; Patents; Copyrights. Any Interest In Patents, Patent Applications, Inventions, Copyrights, Developments, And Processes ("Such Inventions") Which Employee Now Or Hereafter During The Period He Is Employed By The Company And Metro Under This Agreement May, Directly Or Indirectly, Own Or Develop Relating To The Fields In Which The Company Or Metro May Then Be Engaged Shall Belong To The Company Or Metro, As The Case May Be; And Forthwith Upon Request Of The Company, Employee Shall Execute All Such Assignments And Other Documents And Take All Such Other Action As The Company May Reasonably Request In Order To Vest In The Company Or Metro, As The Case May Be, All Of His Right, Title, And Interest In And To Such Inventions, Free And Clear Of All Liens, Charges, And Encumbrances. 8. Confidential Information. All Confidential Information Which Employee May Now Possess, May Obtain During The Employment Term, Or May Create Prior To The End Of The Period He Is Employed By The Company And Metro Under This Agreement, Relating To The Business Of The Company, Metro Or Of Any Customer Or Supplier Of The Company Or Metro Shall Not Be Published, Disclosed, Or Made Accessible By Him To Any Other Person, Firm, Or Corporation During The Employment Term Or Any Time Thereafter Without The Prior Written Consent Of The Company. Employee Shall Return All Tangible Evidence Of Such Confidential Information To The Company Prior To Or At The Termination Of His Employment. 9. Termination. (a) Notwithstanding anything herein contained, if on or after the date hereof and prior to the end of the Employment Term, Employee is terminated "For Cause" (as defined below) then the Company and Metro shall have the right to give notice of termination of Employee's services hereunder as of a date to be specified in such notice, and this Agreement shall terminate on the date so specified. Termination "For Cause" shall mean Employee shall (i) be convicted of a felony crime, (ii) commit any act or omit to take any action in bad faith and to the detriment of the Company or any of its subsidiaries, (iii) commit an act of moral turpitude to the detriment of the Company, (iv) commit an act of fraud against the Company or any of its subsidiaries, or (v) materially breach any term of this Agreement and fail to correct such breach within ten (10) days after written notice thereof; provided that in the case of a termination pursuant to (ii), (iii) or (iv) such determination must be made by the Board of Directors of the Company after a meeting at which Employee was given an opportunity to explain such actions. In the event this Agreement is terminated "For Cause" pursuant to Section 9(a), then Employee shall be entitled to receive only his salary at the rate provided in Section 3 to the date on which termination shall take effect plus any compensation which is accrued but unpaid on the date of termination. 3 4 (b) In the event that Employee shall be physically or mentally incapacitated or disabled or otherwise unable fully to discharge his duties hereunder for a period of six (6) months, then this Agreement shall terminate upon ninety (90) days' written notice to Employee, and no further compensation (other than accrued but unpaid salary or bonus through the date of termination) shall be payable to Employee, except as may otherwise be provided under any disability insurance policy. (c) In the event that Employee shall die, then this Agreement shall terminate on the date of Employee's death, and no further compensation (other than accrued but unpaid salary or bonus through the date of death) shall be payable to Employee, except as may otherwise be provided under any insurance policy or similar instrument. (d) In the event this Agreement is terminated without Cause, Employee shall receive severance pay consisting of a single lump sum distribution (with no present value adjustment) equal to the Base Salary as provided in Section 3 for a period of one (1) year, notwithstanding that such one-year period might extend beyond the Employment Term. 10. Merger, Etc. In The Event Of A Future Disposition Of The Properties And Business Of The Company Or Metro, Substantially As An Entirety, By Merger, Consolidation, Sale Of Assets, Sale Of Stock, Or Otherwise, Then The Company Or Metro, As The Case May Be, May Elect To Assign This Agreement And All Of Its Rights And Obligations Hereunder To The Acquiring Or Surviving Corporation. In The Event The Company Or Metro, As The Case May Be, Does Not Assign This Agreement Or That This Agreement Is Not So Assumed Then Employee Shall Have The Right To Terminate This Agreement By Written Notice Given Within Six (6) Months Of The Date Of Such Acquisition. Upon Such Termination, Employee Shall Receive Severance Pay Consisting Of A Single Lump Sum Distribution (With No Present Value Adjustment) Equal To The Base Salary As Provided In Section 3 For A Period Of Three (3) Years, Notwithstanding That Such Three-year Period Might Extend Beyond The Employment Term. 11. Survival. The Covenants, Agreements, Representations, And Warranties Contained In Or Made Pursuant To This Agreement Shall Survive Employee's Termination Of Employment, Irrespective Of Any Investigation Made By Or On Behalf Of Any Party. 12. Modification. This Agreement Sets Forth The Entire Understanding Of The Parties With Respect To The Subject Matter Hereof, Supersedes All Existing Agreements Between Them Concerning Such Subject Matter, And May Be Modified Only By A Written Instrument Duly Executed By Each Party. 13. Notices. Any Notice Or Other Communication Required Or Permitted To Be Given Hereunder Shall Be In Writing And Shall Be Mailed By Certified Mail, Return Receipt Requested, Or Delivered Against Receipt to the party to whom it is to be given at the address of such party set forth in the preamble to this Agreement (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 13). In the case of a notice to the Company or Metro, a copy of such notice (which copy shall not constitute notice) shall be delivered to Camhy Karlinsky & Stein LLP, 1740 Broadway, 16th Floor, New York, New York 10019, Attn. Alan I. Annex, Esq. In the case of a notice to Employee, a copy of such notice (which copy shall not constitute notice) shall be delivered to Saviano 4 5 Tobias & Weinberger P.C., 3 New York Plaza, New York, New York 10004, Attention: David G. Tobias, Esq. Notice to the estate of Employee shall be sufficient if addressed to Employee as provided in this Section 13. Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing a party's address which shall be deemed given at the time of receipt thereof. 14. Waiver. Any Waiver By Either Party Of A Breach Of Any Provision Of This Agreement Shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing and signed by the party against whose waiver is asserted. 15. Binding Effect. Subject To The Terms And Conditions Described In Section 10, Above, Employee's rights and obligations under this Agreement shall not be transferable by assignment or otherwise, such rights shall not be subject to encumbrance or the claims of Employee's creditors, and any attempt to do any of the foregoing shall be void. The provisions of this Agreement shall be binding upon and inure to the benefit of Employee and his heirs and personal representatives, and shall be binding upon and inure to the benefit of the Company and Metro and their successors and those who are its assigns under Section 10. 16. Headings. The Headings In This Agreement Are Solely For The Convenience Of Reference And shall be given no effect in the construction or interpretation of this Agreement. 17. Counterparts; Governing Law. This Agreement May Be Executed In Any Number Of Counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. It shall be governed by, and construed in accordance with, the laws of the State of New York, without given effect to the rules governing the conflicts of laws. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the County and State of New York, and of any federal court located in the County and State of New York, in connection with any action or proceeding arising out of or relating to, or a breach of, this Agreement. Each of the parties hereto agrees that such court may award reasonable legal fees and expenses to the prevailing party. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above. ALL-COMM MEDIA CORPORATION By: /s/ Alan I. Annex ------------------------------- Secretary METRO SERVICES GROUP, INC. By: /s/ J. Jeremy Barbera ------------------------------- /s/ J. Jeremy Barbera ------------------------------- J. Jeremy Barbera 5 6 EXHIBIT A 1. Term. The Options shall terminate on or before the earlier of (i) one hundred and eighty (180) days after the termination of Employee's relationship to the Company as an employee of, or consultant to, the Company or any of its subsidiaries or affiliates, (ii) one hundred and eighty (180) days after Employee's death, or (iii) ten (10) years from the date of the Agreement of which this Exhibit A is a part, (the "Agreement") and any shares not vested on or before the earlier of occurrence of one of these events may not thereafter be vested. For the purpose of making determinations as to termination event number (i) preceding, decisions by the Company's Board of Directors as to when such relationships have been terminated shall be binding on the Employee, provided that notice of such termination has been provided to all parties by way of notice of resignation given by the Employee or by notice of termination given by the Company to the Employee. 2. Exercise. (a) The options may be exercised in whole or in part, by delivery of written notice to the Secretary of the Company by the Employee indicating the number of shares of common stock of the Company as to which the option is exercised. Such notice shall be accompanied by payment of the exercise price (the "Exercise Price") which shall be an amount equal to the result obtained by multiplying (i) the Applicable Exercise Price (as defined in the Agreement), times (ii) the total number of shares of common stock of the Company being purchased by the Employee pursuant to the exercise of all or any portion of the options. The Exercise Price shall be paid in United States Dollars, in cash, certified or cashier's check or by money order, with shares of common stock of the Company or by a combination of the above. Shares of common stock of the Company utilized in full or partial payment of the Exercise Price shall be valued at their fair market value, based on the closing price of the common stock of the Company, on the date of exercise. (b) Each outstanding Option shall become immediately and fully exercisable (i) if there occurs any transaction (which shall include a series of transactions occurring within 60 days or occurring pursuant to a plan), which has the result that shareholders of the Company immediately before such transaction cease to own at least 51% of the voting stock of the Company or of any entity which results from the participation of the Company in a reorganization, consolidation, merger, liquidation or any form of corporate transaction; (ii) if the shareholders of the Company shall approve a plan of merger, consolidation, reorganization, liquidation or dissolution in which the Company does not survive (unless the approved merger, consolidation, reorganization, liquidation or dissolution is subsequently abandoned); or (iii) if the shareholders of the Company shall approve a plan for the sale, lease, exchange or other disposition of all or substantially all the property and assets of the Company (unless such plan is subsequently abandoned). (c) The Company may, in its sole discretion, accelerate the date on which any Option may be exercised and may accelerate the vesting of any shares subject to any option or previously acquired by the exercise of any Option. 6 7 (d) The Company, in its sole discretion, by giving written notice ("cancellation notice") to Employee may cancel, effective upon the date of the consummation of any corporate transaction described in (b)(ii) and (iii) above, any option which remains unexercised on such date. Such cancellation notice shall be given a reasonable period of time prior to the proposed date of such cancellation and may be given either before or after shareholder approval of such corporate transaction. 3. Delivery Of Certificates. (a) As soon as practicable following the exercise of all or a portion of the Option by the Employee, the Company shall deliver or cause to be delivered to the Employee a certificate or certificates representing the shares of common stock of the Company acquired pursuant to such exercise. (b) Prior to issuance of any certificate representing shares of common stock of the Company as to which the options have been exercised, Employee shall pay to Company in a form satisfactory to the Company, the amount, if any, which the Company reasonably determines to be necessary to withhold in accordance with applicable income tax withholding requirements. (c) Employee shall have the rights of a shareholder only with respect to those shares of common stock covered by the Option which have been registered in the Employee's name in the share register of the Company upon the due exercise of the options. 4. No Transfer Or Assignment. The Options granted hereby may not be transferred in any manner other than by will or the laws of descent and distribution; may be exercised during the Employee's lifetime only by the Employee or his guardian or legal representative; and may not be assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) or subject to execution, attachment or similar process. 5. Adjustment Of Shares. (a) In the event that the outstanding shares of the Company are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of any reorganization, merger, consolidation, recapitalization, reclassification, change in par value, stock split-up, combination of shares or dividend payable in capital stock, or the like; (i) appropriate adjustment shall be made in the maximum number and kind of shares with respect to which the Options were granted, so that the same percentage of the Company's issued and outstanding capital stock shall continue to be subject to the grant of the Options, and (ii) appropriate adjustment to prevent dilution or enlargement of the rights granted to or available for Employee shall be made in the number and kind of shares and in the exercise price per share with respect to outstanding Options. (b) Without limiting the generality of the foregoing, the existence of outstanding Options granted under the Agreement shall not affect in any manner the right or power of the Company to make, authorize or consummate (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business; (ii) any merger or consolidation of the Company; (iii) any issuance by the Company of debt securities, or preferred or preference stock which would rank above the shares subject to outstanding options; (iv) the dissolution or liquidation of 7 8 the Company; (v) any sale, transfer or assignment of all or any part of the assets or business of the Company; or (vi) any other corporate act or proceeding, whether of a similar character or otherwise. 8 EX-5.1 4 EXHIBIT 5.1 1 Exhibits 5.1 and 23.1 July 2, 1997 Board of Directors Marketing Services Group, Inc. 400 Corporate Pointe, Suite 780 Culver City, CA 90230-7615 Re: Marketing Services Group, Inc. Registration Statement On Form S-8 Ladies and Gentlemen: We have acted as special counsel to Marketing Services Group, Inc., a Nevada corporation (the "Company"), in connection with the preparation of a registration statement on Form S-8, file number 333-_____ (the "Registration Statement"), filed by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), relating to the registration and issuance by the Company of 3,991,562 shares (the "Shares") of common stock, par value $0.01 per share (the "Common Stock"), of the Company, including 2,991,562 shares authorized for issuance under the 1991 stock option plan, and 1,000,000 shares authorized for issuance under an executive employment agreement (as defined in the Registration Statement; the "Stock Plan" and the "Executive Employment Agreement", respectively). This opinion is being furnished to you in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act. In connection with the opinions hereinafter given, we have examined copies of the following documents: (i) the Registration Statement, (ii) the Stock Plan, (iii) the Executive Employment Agreement, (iv) the Articles of Incorporation of the Company, as currently in effect, (v) the By-laws of the Company, as currently in effect, (vi) a specimen certificate representing the Shares and (vii) copies of certain resolutions adopted by the Board of Directors of the Company relating to, among other things, the Stock Plan, the Executive Employment Agreement and related matters. We have also examined originals or copies certified or otherwise identified to our satisfaction of such other corporate records and certificates of public officials as we have deemed necessary or advisable for the purposes of this opinion. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to originals of all copies of all documents submitted to us. We have relied upon the certificates of all public officials and corporate officers with respect to the accuracy of all matters contained therein, including, but not limited to, the officer's certificate attached hereto as Exhibit A. 1 2 Based upon and subject to the foregoing, and assuming (i) the conformity of the certificates representing the Shares to the form of specimen thereof examined by us, (ii) the due execution and delivery of such certificates, and (iii) the receipt of the consideration for the Shares designated in the Stock Plan and in the Executive Employment Agreement, as the cas emay be, we are of the opinion that the Shares have been duly authorized by requisite corporate action by the Company and, when issued, delivered and paid for in accordance with the terms and conditions of the Stock Plan and the Executive Employment Agreement, respectively, will be validly issued, fully paid and non-assessable. Nothing herein shall be deemed an opinion as to the laws of any jurisdiction other than the State of Nevada. This opinion is intended solely for the use of the Company in connection with the registration of the Shares. It may not be relied upon by any other person or for any other purpose, or reproduced without the written consent of this firm; provided, however, we hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of person whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ Lionel Sawyer & Collins -------------------------------------- Lionel Sawyer & Collins 2 EX-23.2 5 EXHIBIT 23.2 1 Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference into the Registration Statement on Form S-8 of our report dated September 19, 1996, except for Note 19 as to which the date is December 17, 1996, on our audits of the consolidated financial statements and financial statement schedule of All-Comm Media Corporation and subsidiaries as of June 30, 1996, and 1995, and for each of the three years in the period ended June 30, 1996, which reports are included in All-Comm Media Corporation's Annual Report on Form 10-K/A-2. /s/ Coopers & Lybrand L.L.P. ------------------------------------- COOPERS & LYBRAND L.L.P. Los Angeles, California July 2, 1997 -----END PRIVACY-ENHANCED MESSAGE-----