HIRSCH INTERNATIONAL CORP - DEF 14A - 20010530 - EXECUTIVE_COMPENSATION
Executive Compensation
The following table sets forth the compensation earned during the three
fiscal years ended January 31, 2001, 2000, and 1999 by the Company's Chief
Executive Officer and by the four most highly paid Company's Executive Officers
whose total compensation for such periods exceeded $100,000 (the "Named
Executives"):
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation Awards
----------------------------------------- --------------------------
Other All
Name and Annual Other
Principal Position Fiscal Year Salary Bonus Compensation Options Compensation
------------------ ----------- ------ ----- ------------ ------- ------------
Henry Arnberg 2001 $100,000 - $ 3,460 - $500
Chairman of the Board of 2000 $246,749 - $ 3,460 - -
Directors and Chief 1999 $393,625 - $ 17,359 - -
Executive Officer
Ronald Krasnitz 2001 $295,337 - $ 2,362 - $400
Executive Vice President, 2000 $295,337 - $ 2,462 18,000 -
Chief Operating Officer, 1999 $300,000 - $ 4,863 - -
Secretary and Director
Tas Tsonis 2001 $350,664 $211,945 $ 9,600 - -
Vice President, Chief 2000 $337,417 $161,239 $ 9,600 18,050 -
Executive Officer of 1999 $337,417 $430,958 $ 9,600 - -
Pulse Microsystems Ltd.
and Director
Brian Goldberg 2001 $350,664 $211,945 $ 9,600 - -
Vice President, President of 2000 $337,417 $161,239 $ 9,600 18,050 -
Pulse Microsystems Ltd. and 1999 $337,417 $430,958 $ 9,600 - -
Director
Kristof Janowski 2001 $359,200 - $ 7,200 - $1,500
Vice President, National 2000 $511,465 - $ 5,800 18,000 -
Sales 1999 $849,295 - - - -
Stock Options
There were no stock options granted to the named executives during the
fiscal year ended January 31, 2001.
Option Exercises and Holdings
The following table sets forth information concerning the exercise of stock
options by the Named Executives during the Company's fiscal year ended January
31, 2001, the number of options owned by the Named Executives and the value of
any in-the-money unexercised stock options as of January 31, 2001.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options at
At Fiscal Year End (#) Fiscal Year End ($)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) $ Unexercisable Unexercisable (1)
---- --------------- -------------- ------------- -----------------
Henry Arnberg 0 $0 75,000/-0- $ 0/0
Kristof Janowski 0 $0 31,834/12,000 $ 0/0
Ronald Krasnitz 0 $0 184,125/12,000 $ 0/0
Tas Tsonis 0 $0 51,640/12,035 $ 0/0
Brian Goldberg 0 $0 51,640/12,035 $ 0/0
(1) Represents the closing price of the Company's common stock listed on the
NASDAQ National Market on January 31, 2001 minus the respective exercise
prices.
Stock Option Plans
The Company maintains two stock option plans pursuant to which options to
purchase an aggregate of 1,284,375 shares of Class A Common Stock may be
granted.
1993 Stock Option Plan. The 1993 Stock Option Plan was adopted by the Board
of Directors in December 1993 and was approved by the stockholders of the
Company in July 1994 (the "1993 Plan"). The 1993 Plan, as amended, has 1,050,000
shares of Class A Common Stock reserved for issuance upon exercise of options
designated as either (i) incentive stock options ("ISOs") under the Internal
Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified options.
ISOs may be granted under the 1993 Plan to employees and officers of the
Company. Non-qualified options may be granted to consultants, directors (whether
or not they are employees), employees or officers of the Company.
The purpose of the 1993 Plan is to encourage stock ownership by certain
directors, officers and employees of the Company and certain other persons
instrumental to the success of the Company and to give them a greater personal
interest in the success of the Company. The 1993 Plan is administered by the
Stock Option Committee. The Committee, within the limitations of the 1993 Plan,
determines the persons to whom options will be granted, the number of shares to
be covered by each option, whether the options granted are intended to be ISOs,
the duration and rate of exercise of each option, the option purchase price per
share and the manner of exercise, the time, manner and form of payment upon
exercise of an option, and whether restrictions such as repurchase rights in the
Company are to be imposed on shares subject to options. Options granted under
the 1993 Plan may not be granted at a price less than the fair market value of
the Class A Common Stock on the date of grant (or 110% of fair market value in
the case of persons holding 10% or more of the voting stock of the Company). The
aggregate fair market value of shares for which ISOs granted to any person are
exercisable for the first time by such person during any calendar year (under
all stock option plans of the Company and any related corporation) may not
exceed $100,000. The 1993 Plan will terminate in December 2003; however, options
granted under the 1993 Plan will expire not more than five years from the date
of grant. Options granted under the 1993 Plan are not transferable during an
optionee's lifetime but are transferable at death by will or by the laws of
descent and distribution.
1994 Non-Employee Director Stock Option Plan. The 1994 Non-Employee
Director Stock Option Plan (the "Directors Plan") was adopted by the Board of
Directors in September 1994 and was approved by the stockholders of the Company
in June 1995. The Directors Plan has 234,375 shares of Class A Common Stock
reserved for issuance. Pursuant to the terms of the Directors Plan, each
independent unaffiliated Director shall automatically be granted, subject to
availability, without any further action by the Board of Directors or the Stock
Option Committee: (i) a non-qualified option to purchase 7,500 shares of Class A
Common Stock upon their election to the Board of Directors; and (ii) a
non-qualified option to purchase 2,500 shares of Class A Common Stock on the
date of each annual meeting of stockholders following their election to the
Board of Directors. The exercise price of each option is the fair market value
of the Company's Class A Common Stock on the date of grant. Each option expires
five years from the date of grant and vests in three annual installments of 33
1/3% each on the first, second and third anniversary of the date of grant.
Options granted under the Directors Plan are generally not transferable during
an optionee's lifetime but are transferable at death by will or by the laws of
descent and distribution. In the event an optionee ceases to be a member of the
Board of Directors (other than by reason of death or disability), then the
non-vested portion of the option immediately terminates and becomes void and any
vested but unexercised portion of the option may be exercised for a period of
180 days from the date the optionee ceased to be a member of the Board of
Directors. In the event of death or permanent disability of an optionee, all
options accelerate and become immediately exercisable until the scheduled
expiration date of the option.
Voluntary Stock Option Cancellation Program. The price of Hirsch's Class A
common stock has been depressed for some time. As compared to the exercise price
on most incentive stock options, the market price of our stock is and has been
for some time significantly lower than the exercise price of most incentive
stock options issued to employees of the Company. To restore the incentive value
for which the stock option plan was established, the Board of Directors has
approved a limited stock option voluntary cancellation program (the "Program").
The Program affords the opportunity for employees, officers and directors
holding options to turn them into the Company for cancellation. At that time, no
new options will be issued to employees who turn their options in for
cancellation. Approximately six (6) months following the termination of the
Program, the Company intends to evaluate the option holdings by its employees as
a whole and decide whether new options to its employees who have turned in their
current options at the then fair market value of the Company's Class A common
stock are warranted (or 110% of fair market value in the case of persons holding
10% or more of the voting stock of the Company).
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