<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN ARTISTS FILM CORPORATION
(Exact name of registrant as specified in its charter)
Missouri 43-1717111
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1245 Fowler Street, N.W.
Atlanta, GA 30318
American Artists Film Corporation 1996 Stock Option Plan, as Amended
(Full Title of the Plan)
Eric Van Atta, 1245 Fowler Street, N.W., Atlanta, GA 30318
(Name and address of agent for service)
Copies of Communications to:
Eric Van Atta
1245 Fowler Street, N.W.
Atlanta, GA 30318
(404) 874-7373
CALCULATION OF REGISTRATION FEE
1996 Stock Option Plan, as amended
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount To Be Offering Price Aggregate Amount of
To Be Registered Registered (1) Per Share (2) Offering Registration
Price (2) Fee (2)
<S> <C> <C> <C> <C>
Common Stock,
$0.001 per share 1) 98,189(A) 1) $1.45 1) $142,374 1) $43.14
2) 39,569(A) 2) $2.56 2) $101,297 2) $30.70
3) 31,241(A) 3) $3.00 3) $93,723 3) $28.40
4) 146,052(B) 4) $3.75 4) $547,695 4) $165.97
5) 2,500,000(B) 5) $2.00 5)$5,000,000 5) $1,515.15
</TABLE>
(A) Class B common stock
(B) Class A common stock
<PAGE>
(1) [This Registration Statement also covers such indeterminable additional
number of shares as may be issuable under the Plan by reason of adjustments in
the number of shares covered thereby as described in the Registration
Statement.]
(2) Pursuant to Rule 457(h), the proposed Maximum Offering Price per share
and the proposed Maximum Aggregate Offering Price for 2,500,000 of the shares
are estimated solely for purposes of calculating the registration fee and is
based upon the closing price of the Company's Common Stock of $2.00 per share on
the electronic bulletin board on June 23, 1998.
Pursuant to Rule 416(a) of the General Rules and Regulations under the
Securities Act of 1933, this Registration Statement shall cover such additional
securities as may be offered or issued to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Company's Annual Report on Form 10-KSB for the year ended July 31, 1997,
which has been filed by the Company with the Commission as well as the Company
Quarterly Reports on Form 10-QSB for the quarters ended October 31, 1997,
January 31, 1998, and April 30, 1998, are incorporated herein by reference.
All other reports filed by the Company pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
since the end of the fiscal year covered by the foregoing Annual Report on Form
10-KSB are incorporated herein by reference. All other reports or documents
filed by the Company pursuant to the requirements of 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 termination of the offering of the securities
offered hereby shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such reports or documents.
Any statements contained in a document incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any
subsequently filed document which also is incorporated herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
The description of the Company's Class A and Class B Common Stock, the
class of securities offered pursuant to this Registration Statement, is
contained in the Company's Registration Statement, on Form S-4 (File No.
333-4159), filed on May 21, 1996, and is incorporated herein by reference.
Item 4. Description of Securities
The class of securities to be offered is registered under Section 12 of the
Exchange Act.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
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The Company's Restated Certificate of Incorporation provides that the Company
shall have the power, without further action by the shareholders of the Company,
to give any further indemnity in addition to the indemnity authorized or
contemplated under the Bylaws of this Company to any person who is or was a
director, officer, employee, or agent, or to any person who is or was serving at
the request of the Company as a director, officer, employee, or agent of another
company, partnership, joint venture, trust, or other enterprise or to enter into
agreements with any of such persons providing such rights of indemnification as
the Company may deem appropriate; provided that no such indemnity shall
indemnify any person from or on account of such person's conduct which was
finally adjudged to have been knowingly fraudulent, deliberately dishonest or
willful misconduct.
Pursuant to the Company's bylaws, as amended, the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of this Company) by reason of the fact that (i) such person is or was a
director, officer, employee, or agent of this Company, or (ii) is or was serving
at the request of this Company as a director, officer, employee, partner,
trustee, or agent of another company, partnership, joint venture, trust, or
other enterprise, or (iii) is or was, at the request of the Company, a guarantor
of any debts of the Company, against expenses (including attorneys' fees),
judgment, fines, taxes, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit, or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of this Company, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe such
conduct was unlawful. The Company shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of this Company to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee, or agent of this Company, or is or was serving at
the request of this Company as a director, officer, employee, partner, trustee,
or agent of another company, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees) and amounts paid in
settlement actually and reasonably incurred by such person in connection with
the defense or settlement of such action or suit, if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of this Company and except that no indemnification shall be
made in respect of any claim, issue, or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of such person's duty to this Company unless and only to the extent that the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person if fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Any
indemnification thereunder (unless ordered by a court) shall be made by this
Company only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, partner, trustee, or agent
is proper in the circumstances because he has met the applicable standard of
conduct. Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit, or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the shareholders. Expenses
incurred in defending any actual or threatened civil or criminal action, suit,
or proceeding may also be paid by the Company in advance of the final
disposition of such action, suit, or proceeding as authorized by the Board of
Directors.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Reference is made to the Exhibit Index.
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Item 9. Undertakings
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(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,
represents a fundamental change in the information set forth in the
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; provided, however, that paragraphs (1)(i) and (1) (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 by the registrant pursuant to Section 13 or Section 15 (d) of
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 of 1933, 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.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) 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.
(3) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
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, the registrant 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 Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Atlanta, State of Georgia, on the 26th day of June,
1998.
AMERICAN ARTISTS FILM CORPORATION
By /s/ Steven D. Brown
------------------------------------------
Steven D. Brown, Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven Brown and Eric Van Atta, and each of them,
his or her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory authority, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing required and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on June 26, 1998, by the following persons in
the capacities indicated.
/s/ Rex Hauck Director and Co-President June 26, 1998
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Rex Hauck
/s/ Vivian W. Jones Director and Co-President June 26, 1998
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Vivian W. Jones
/s/ Robert A. Martinez Vice President/Finance, Chief June 26, 1998
- -------------------------- Financial Officer and Treasurer
Robert A. Martinez
/s/ John W. Boyd Director June 26, 1998
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John W. Boyd
/s/ Malcolm C. Davenport, V Director June 26, 1998
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Malcolm C. Davenport, V
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<PAGE>
/s/ Dan W. Holloway Director June 26, 1998
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Dan W. Holloway
/s/ Norman J. Hoskin Director June 26, 1998
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Norman J. Hoskin
/s/ Ben E. Noble Director June 26, 1998
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Ben E. Noble
/s/ Glen C. Warren Director June 26, 1998
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Glen C. Warren
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EXHIBIT INDEX
The following exhibits are filed as a part of the Registration Statement:
Exhibit 4 American Artists Film Corporation 1996 Stock Option
Plan, as amended
Exhibit 5 Opinion Sims Moss Kline & Davis LLP
Exhibit 23.1 Consent of BDO Seidman, LLP
Exhibit 23.2 Consent of Sims Moss Kline & Davis LLP-included
in Exhibit 5
Exhibit 24 Power of Attorney - included on the signature page hereof
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EXHIBIT 4
AMERICAN ARTISTS FILM CORPORATION
1996 STOCK OPTION PLAN, AS AMENDED
ON JUNE 25, 1998
ARTICLE I
Purpose, Scope and Administration of the Plan
I.1 Purpose. The purpose of this 1996 Stock Option Plan is to promote the
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long-term success of American Artists Film Corporation ("AAF"), and its
subsidiaries and to encourage growth in shareholder value by providing financial
incentives to selected members of its Board of Directors, employees, consultants
and advisers who are in positions to make significant contributions toward that
success.
I.2 Definitions. Unless the context clearly indicates otherwise, for
-----------
purposes of this Plan:
(a) "Board of Directors" means the Board of Directors of AAF.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Stock Option Committee of the Board of
Directors, which shall be composed of two or more members appointed from time
to time by the Board of Directors from among its members.
(d) "Common Stock" means the Class A or Class B Common Stock of AAF,
$0.001 par value per share, or such other class of shares or other securities
to which the provisions of the Plan may be applicable by reason of the
operation of Section 4.1 hereof.
(e) "Company" means AAF and any subsidiary of AAF, including subsidiaries
of AAF which become such after adoption of this Plan.
(f) "Fair Market Value" of a share of Common Stock on a specified date
means: (i) if the Common Stock is then traded on a national securities
exchange, the closing price on such date of a share of the Common Stock as
traded on the largest securities exchange on which it is then traded; or (ii)
if the Common Stock is not then traded on a national securities exchange, the
mean between the closing composite inter-dealer "bid" and "ask" prices for
Common Stock, as quoted on the NASDAQ National Market System (A) on such date,
or (B) if no "bid" and "ask" prices are quoted on such date, then on the next
preceding date on which such prices were quoted; or (iii) if the Common Stock
is not then traded on a national securities exchange or quoted on the NASDAQ
National Market System, the value determined in good faith by the Committee.
(g) "Grant Date," as used with respect to a particular Option or Stock
Appreciation Right, means the date as of which the Option or Stock
Appreciation Right is granted by the Committee pursuant to the Plan.
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<PAGE>
(h) "Grantee" means the person to whom an Option or Stock Appreciation
Right is granted by the Committee pursuant to the Plan.
(i) "Incentive Stock Option" means an Option, or any portion thereof,
granted to an employee of the Company which qualifies as an Incentive Stock
Option as described in Section 422 of the Code, unless the Committee expressly
designates the Option, or such portion thereof, as a Nonqualified Stock
Option.
(j) "Nonqualified Stock Option" means any option granted under this Plan,
other than an Incentive Stock Option.
(k) "Option" means an Option granted by the Committee pursuant to Article
II to purchase shares of Common Stock, which shall be designated at the time
of grant as either an Incentive Stock Option or a Nonqualified Stock Option,
as provided in Section 2.1 hereof.
(l) "Option Agreement" means the agreement between AAF and a Grantee under
which the Grantee is granted an Option or an Option and Stock Appreciation
Rights pursuant to the Plan.
(m) "Option Period" means, with respect to any Option or Stock
Appreciation Right granted hereunder, the period beginning on the Grant Date
and ending at such time not later than the tenth anniversary of the Grant Date
as the Committee in its sole discretion shall determine and during which the
Option or Stock Appreciation Right may be exercised.
(n) "Plan" means the 1996 American Artists Film Corporation Stock Option
Plan as set forth herein and as amended from time to time.
(o) "Stock Appreciation Right" means a right granted pursuant to Article
III hereof by the Committee, in conjunction with an Option, to receive payment
equal to any increase in the Fair Market Value of a share of Common Stock from
the Grant Date to the date of exercise of such right, in lieu of exercise of
the Option for such share.
(p) "Total and Permanent Disability," as applied to a Grantee of an
Incentive Stock Option, means that the Grantee (i) has established to the
satisfaction of the Committee that the Grantee is unable to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months
(all within the meaning of Section 105(d)(4) of the Code), and (ii) has
satisfied any requirement imposed by the Committee in regard to evidencing
such disability.
I.3 Aggregate Limitation.
--------------------
(a) The maximum number of shares of Common Stock with respect to which
Options and Stock Appreciation Rights may be granted shall not exceed a total
of 5,000,000 shares in the aggregate, subject to possible adjustment in
accordance with Section 4.1.
(b) Any shares of Common Stock to be delivered by AAF upon the exercise of
Options or Stock Appreciation Rights shall, at the discretion of the Board of
Directors, be issued from AAF's authorized but unissued shares of Common Stock
or transferred from any available Common Stock held in treasury.
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(c) The Committee may grant new Options and Stock Appreciation Rights
hereunder with respect to any shares for which an Option or Stock Appreciation
Right expires or otherwise terminates prior to being exercised.
I.4 Administration of the Plan.
--------------------------
(a) The Plan shall be administered by the Committee, which shall have the
authority:
(i) To determine the members of the Board of Directors and the
employees, consultants and advisers of the Company to whom, and the times
at which, Options and Stock Appreciation Rights shall be granted, and the
number of shares of Common Stock to be subject to each such Option and
Stock Appreciation Right, taking into consideration the nature of the
services rendered by the particular Grantee, the Grantee's potential
contribution to the long-term success of the Company and such other
factors as the Committee in its discretion may deem relevant;
(ii) To interpret and construe the provisions of the Plan and to
establish rules and regulations relating to it;
(iii) To prescribe the terms and conditions of the Option Agreements
for the grant of Options and Stock Appreciation Rights (which need not be
identical for all Grantees) in accordance and consistent with the
requirements of the Plan; and
(iv) To make all other determinations necessary or advisable to
administer the Plan in a proper and effective manner.
(b) All decisions and determinations of the Committee in the
administration of the Plan and on other matters concerning the Plan or any
Option or Stock Appreciation Right shall be final, conclusive and binding on
all persons, including (but not by way of limitation) the Company, the
shareholders and directors of AAF, and any persons having any interest in any
Options or Stock Appreciation Rights. The Committee shall be entitled to rely
in reaching its decisions on the advice of counsel (who may be counsel to the
Company).
(c) The Committee members shall comprise persons who have not in the year
prior to their appointment participated in the Plan or in any other
discretionary plan for acquiring stock, stock options or stock appreciation
rights of the Company, and the members shall not be eligible to participate in
any such plans within one year after leaving the Committee.
I.5 Eligibility for Awards. The Committee shall in accordance with Articles
----------------------
II and III designate from time to time the members of the Board of Directors and
the employees, consultants and advisers of the Company who are to be granted
Options and Stock Appreciation Rights. In no event may a member of the
Committee or a person who is not an employee of the Company be granted an
Incentive Stock Option under the Plan.
I.6 Effective Date and Duration of Plan. The Plan shall become effective
-----------------------------------
June 1, 1996; provided, that any grant of Options or Stock Appreciation Rights
under the Plan prior to approval of the Plan by the shareholders of AAF is
subject to such shareholder approval within 12 months of adoption of the Plan by
the Board of Directors. Unless previously terminated by the Board of Directors,
the Plan (but not any Options or Stock Appreciation Rights then outstanding)
shall terminate on the tenth anniversary of its adoption by the Board of
Directors.
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ARTICLE II
Stock Options
II.1 Grant of Options.
----------------
(a) The Committee may from time to time, subject to the provisions of the
Plan, grant Options to members of the Board of Directors and to employees,
consultants and advisers of the Company under appropriate Option Agreements to
purchase shares of Common Stock up to the aggregate number of shares of Common
Stock set forth in Section 1.3(a).
(b) The Committee may designate any Option (or portion thereof) as an
option to purchase either Class A Common Stock or Class B Common Stock. Any
portion of an Option which the Committee does not designate as an option to
purchase Class B Common Stock shall be an option to purchase Class A Common
Stock.
(c) The Committee may designate as an Incentive Stock Option any Option
(or portion thereof) granted to an employee or the Company which satisfies the
requirements of Section 2.3 hereof. Any portion of an Option that is not
designated as an Incentive Stock Option (or otherwise does not qualify as an
Incentive Stock Option) shall be a Nonqualified Stock Option. A Nonqualified
Stock Option must satisfy the requirements of Section 2.2 hereof, but shall
not be subject to the requirements of Section 2.3.
II.2 Option Requirements.
-------------------
(a) An Option shall be evidenced by an Option Agreement specifying the
number and class of shares of Common Stock that may be purchased upon its
exercise and containing such other terms and conditions consistent with the
Plan as the Committee may determine to be applicable to that Option.
(b) No Option shall be granted under the Plan on or after the tenth
anniversary of the date upon which the Plan was adopted by the Board of
Directors.
(c) An Option shall expire by its terms at the expiration of the Option
Period and shall not be exercisable thereafter.
(d) The Committee may provide in the Option Agreement for the expiration
or termination of the Option prior to the expiration of the Option Period,
upon the occurrence of any event specified by the Committee.
(e) The option price per share of Common Stock shall not be less than the
Fair Market Value of a share of Common Stock on the Grant Date.
(f) An Option shall not be transferable other than by will or the laws of
descent and distribution. During the Grantee's lifetime an Option shall be
exercisable only by the Grantee or, if the Grantee is disabled and the Option
remains exercisable, by his or her duly appointed guardian or other legal
representative. Upon the Grantee's death, but only to the extent that the
Option is otherwise exercisable hereunder, an Option may be exercised by the
Grantee's legal representative or by a person who receives the right to
exercise the Option under the Grantee's will or by the applicable laws of
descent and distribution.
(g) Except as otherwise provided in the Option Agreement, an Option, to
the extent that it has not previously been exercised, shall terminate prior to
the expiration of its Option Period upon the first
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to occur of: (i) the expiration of two years after the death of the Grantee,
or (ii) if the Option is an Incentive Stock Option, the expiration of one year
after the Grantee ceases to be an employee of the Company due to disability,
or (iii) if the Option is an Incentive Stock Option, the expiration of three
months after the Grantee ceases to be an employee of the Company for any
reason other than death or disability.
(h) A person electing to exercise an Option shall give written notice of
election to AAF in such form as the Committee may require, accompanied by
payment of the full purchase price of the shares of Common Stock for which the
election is made. Payment of the purchase price shall be made in cash or in
such other form as the Committee may specify, which may include shares of
Common Stock valued at their Fair Market Value on the date of exercise of the
Option.
(i) The exercise of any number of Stock Appreciation Rights granted under
an Option Agreement shall result in a simultaneous corresponding reduction in
the number of shares of Common Stock then available for purchase upon exercise
of the related Option.
II.3 Incentive Stock Option Requirements.
-----------------------------------
(a) An Option granted to an employee of the Company and designated by the
Committee as an Incentive Stock Option is intended to qualify as an "incentive
stock option" within the meaning of Section 422 of the Code and shall satisfy,
in addition to the conditions of Section 2.2 above, the conditions set forth
in this Section 2.3.
(b) An Incentive Stock Option shall not be granted to an individual who on
the Grant Date owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of AAF, unless the option price
per share of Common Stock will not be less than 110% of the Fair Market Value
thereof on the Grant Date and the Option Period does not extend beyond five
years from the Grant Date.
ARTICLE III
Stock Appreciation Rights
III.1 Grant of Rights.
---------------
(a) In conjunction with any Option granted hereunder, the Committee may in
its discretion grant a Stock Appreciation Right with respect to each share of
Common Stock that may be purchased upon exercise of the Option.
(b) Upon exercise of a Stock Appreciation Right, the Company shall pay to
the party authorized to exercise the Stock Appreciation Right the amount by
which (i) the lesser of (A) the Fair Market Value of a share of Common Stock
on the date of exercise or (B) 200% of the Fair Market Value of a share of
Common Stock on the Grant Date, exceeds (ii) the Fair Market Value of a share
of Common Stock on the Grant Date. A Stock Appreciation Right may not be
exercised unless the Fair Market Value of a share of Common Stock on the date
of exercise exceeds the Fair Market Value of a share of Common Stock on the
Grant Date.
(c) Payment upon exercise of a Stock Appreciation Right may be made, in
the sole discretion of the Committee, (i) in cash, (ii) by delivery of shares
of Common Stock valued at Fair Market Value on the date of exercise, or (iii)
partly in cash and partly by delivery of shares of Common Stock.
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III.2 Requirements for Stock Appreciation Rights.
------------------------------------------
(a) Stock Appreciation Rights shall be granted under and evidenced by the
Option Agreement under which the related Option is granted, which shall have
such terms and conditions consistent with the Plan as the Committee may
determine, and shall be exercisable in accordance with such terms and
conditions.
(b) Stock Appreciation Rights granted in relation to an Option (i) shall
be exercisable only to the extent and at the times the Option is exercisable,
(ii) shall expire or otherwise terminate simultaneously with the expiration or
termination of the related Option, (iii) shall be transferable only when the
related Option is transferable and subject to the same conditions, (iv) shall
be exercised by the Grantee giving written notice of such exercise to the
Company in such form as the Committee may require, and (v) shall be reduced
upon each exercise of the related Option by the number of Stock Appreciation
Rights which corresponds to the number of shares of Common Stock purchased
pursuant to such exercise.
ARTICLE IV
General Provisions
IV.1 Adjustment Provisions.
---------------------
(a) In the event of:
(i) any stock dividend payable in respect of Common Stock; or
(ii) any recapitalization, reclassification, split-up or consolidation
of or other change in the Common Stock; or
(iii) any exchange of the outstanding shares of Common Stock in
connection with a merger, consolidation or other reorganization of or
involving AAF or a sale by AAF of all or a portion of its assets, for a
different number or class of shares of stock or other securities of AAF or
for shares of the stock or other securities of any other corporation;
then the Committee shall, in such manner as it may determine in its sole
discretion, appropriately adjust the number and class of shares or other
securities which shall be subject to Options and Stock Appreciation Rights and
the purchase price per share which must be paid thereafter upon exercise of any
option and which will be used to determine the amount which any Grantee would
receive upon exercise thereafter of Stock Appreciation Rights. Any such
adjustments made by the Committee shall be final, conclusive and binding upon
all persons, including (but not by way of limitation) the Company, the
shareholders and directors of AAF, and any persons having any interest in any
Options or Stock Appreciation Rights which may be granted under the Plan.
(b) Except as provided above in subparagraph (a) of this paragraph 4.1,
issuance by AAF of shares of stock of any class or securities convertible into
shares of stock of any class shall not affect the Options or Stock
Appreciation Rights.
IV.2 Additional Conditions. Any shares of Common Stock issued or transferred
---------------------
under any provision of the Plan may be issued or transferred subject to such
conditions, in addition to those specifically provided in the Plan, as the
Committee or AAF may impose.
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<PAGE>
IV.3 No Rights as Shareholder or to Employment. No Grantee or any other
-----------------------------------------
person authorized to purchase Common Stock upon exercise of an Option shall have
any interest in or shareholder rights with respect to any shares of the Common
Stock which are subject to any Option or Stock Appreciation Right until
certificates evidencing the shares have been issued and delivered to the Grantee
or any such person upon the exercise of the Option. Furthermore, an Option
shall not confer upon any Grantee any rights to employment or any other
relationship with the Company, including without limitation any right to
continue in the employ of the Company, nor affect the right of the Company to
terminate the employment or other relationship of the Grantee with the Company
at any time with or without cause.
IV.4 Legal Restrictions. If in the opinion of legal counsel for AAF the
------------------
issuance or sale of any shares of Common Stock pursuant to the exercise of an
Option would not be lawful for any reason, including (but not by way of
limitation) the inability or failure of AAF to obtain from any governmental
authority or regulatory body the authority deemed necessary by such counsel for
such issuance or sale, AAF shall not be obligated to issue or sell any Common
Stock pursuant to the exercise of an Option to a Grantee or any other authorized
person unless a registration statement that complies with the provisions of the
Securities Act of 1933, as amended (the "Act") in respect of such shares is in
effect at the time thereof, or other appropriate action has been taken under and
pursuant to the terms and provisions of the Act, or AAF receives evidence
satisfactory to its legal counsel that the issuance and sale of the shares, in
the absence of an effective registration statement or other appropriate action,
would not constitute a violation of the Act or any applicable state securities
law. AAF shall in no event be obligated to register any such shares, to comply
with any exemption from registration requirements or to take any other action
which may be required in order to permit, or to remedy or remove any prohibition
or limitation on, the issuance or sale of such shares to any Grantee or other
authorized person.
IV.5 Rights Unaffected. The existence of the Options and Stock Appreciation
-----------------
Rights shall not affect: the right or power of AAF and its shareholders to make
adjustments, recapitalizations, reorganizations or other changes in the AAF's
capital structure or its business; any issuance of bonds, debentures, preferred
or prior preference stocks affecting the Common Stock or the rights thereof; the
dissolution or liquidation of AAF, or sale or transfer of any part of its assets
or business; or any other corporate act, whether of a similar character or
otherwise.
IV.6 Withholding Taxes. As a condition to exercise of an Option or Stock
-----------------
Appreciation Right, AAF may in its sole discretion withhold or require the
Grantee to pay or reimburse AAF for any taxes which AAF determines are required
to be withheld in connection with the grant or any exercise of an Option or
Stock Appreciation Right.
IV.7 Choice of Law. The validity, interpretation and administration of the
-------------
Plan and of any rules, regulations, determinations or decisions made thereunder,
and the rights of any and all persons having or claiming to have any interest
therein or thereunder, shall be determined exclusively in accordance with the
laws of the State of Missouri. Without limiting the generality of the
foregoing, the period within which any action in connection with the Plan must
be commenced shall be governed by the laws of the State of Missouri, without
regard to the place where the act or omission complained of took place, the
residence of any party to such action or the place where the action may be
brought or maintained.
IV.8 Amendment, Suspension and Termination of Plan. The Plan may from time
---------------------------------------------
to time be terminated, suspended or amended by the Board of Directors in such
respects as it may deem advisable, including any such amendment effected (i) so
that the Incentive Stock Options granted hereunder shall be "incentive stock
options" as such term is defined in Section 422 of the Code, or (ii) to conform
to any change in any law or regulation governing the Plan, or the Options or
Stock Appreciation Rights granted hereunder, including (but not by way of
limitation) amendments to comply with the reporting and liability provisions of
Section 16 of the Securities Exchange Act of 1934; provided, however, that no
such amendment shall change the following
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<PAGE>
unless approved by the shareholders of AAF within twelve months following the
date such amendment is adopted:
(a) The maximum aggregate number of shares for which Options may be
granted under the Plan, except as required under any adjustment pursuant to
Section 4.1 hereof;
(b) The Option exercise price, with the exception of any change in such
price required as a result of any adjustment pursuant to Section 4.1 hereof,
and with the further exception of changes in determining Fair Market Value of
shares of Common Stock to conform with any then applicable provision of the
Code or regulations promulgated thereunder;
(c) The maximum period during which Options or Stock Appreciation Rights
may be exercised;
(d) The maximum amount which may be paid upon exercise of a Stock
Appreciation Right;
(e) The termination date of the Plan, in any manner which would extend
such date; or
(f) The requirements as to eligibility for participation in the Plan in
any material respect.
IV.9 Headings. The headings in this Plan are for convenience only and are
--------
not to be used in interpreting the meaning or effect of any provisions hereof.
AS APPROVED BY THE BOARD OF DIRECTORS OF AAF ON JUNE 25, 1998.
AMERICAN ARTISTS FILM CORPORATION
By: /s/ J. Eric Van Atta
----------------------------------------
Secretary
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EXHIBIT 5
June 26, 1998
American Artists Film Corporation
1245 Fowler Street, N.W.
Atlanta, GA 30318
Re: Registration Statement on Form S-8 Relating to the American Artists Film
Corporation 1996 Stock Option Plan, as amended
Gentlemen:
With respect to the Registration Statement on Form S-8 (the "Registration
Statement"), filed by American Artists Film Corporation, a Missouri corporation
(the "Company"), with the Securities and Exchange Commission for the purpose of
registering under the Securities Act of 1933, as amended, 2,646,052 shares of
the Company's Class A common stock and 168,999 shares of the Company's Class B
common stock, each with a par value $0.001 per share, for issuance pursuant to
the Company's 1996 Stock Option Plan, as amended (the "Plan"), we have examined
such documents and questions of law we consider necessary or appropriate for the
purpose of giving this opinion. On the basis of such evaluation, we advise you
that in our opinion the 2,815,051 shares covered by the Registration Statement,
upon the exercise of stock options, at the prices described in the Registration
Statement, but not less than the par value thereof, and upon delivery of such
shares and payment therefor in accordance with the terms stated in the Plan and
the Registration Statement, will be duly and legally authorized, issued and
outstanding and will be fully paid and nonassessable.
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 within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or under the rules and regulations of
the Securities and Exchange Commission relating thereto.
Sincerely,
SIMS MOSS KLINE & DAVIS LLP
By: /s/ Raymond L. Moss
--------------------------------------------
Raymond L. Moss
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EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AMERICAN ARTISTS FILM CORPORATION
Atlanta, GA
We hereby consent to the incorporation by reference in this Registration
Statement of our report dated November 5, 1997, relating to the consolidated
Financial Statements of American Artists Film Corporation and subsidiaries
appearing in the Company's Annual Report on Form 10-KSB for the year ended July
31, 1997, and to the reference to us as experts included in this Registration
Statement.
/s/ BDO Seidman, LLP
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BDO Seidman, LLP
Atlanta, GA
June 26, 1998
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