AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY , 2000
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REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ICTS INTERNATIONAL N.V.
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(Exact name of registrant as specified in its charter)
THE NETHERLANDS 000000000
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
BIESBOSCH 225
1181 JC AMSTELVEEN
THE NETHERLANDS
31-20-347-1077
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
ICTS INTERNATIONAL N.V.
1999 EQUITY INCENTIVE PLAN
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(Full title of the plan)
LIOR ZOUKER, CHIEF EXECUTIVE OFFICER
BIESBOSCH 225
1181 JC AMSTELVEEN
THE NETHERLANDS
31-20-347-1077
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
David W. Sass, Esq.
McLaughlin & Stern, LLP
260 Madison Avenue, 18th Floor
New York, New York 10016
Telephone: (212) 448-1100 Facsimile: (212) 448-0066
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CALCULATION OF REGISTRATION FEE
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Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered(1) offering price per unit(2) aggregate offering price(2) registration fee
Common Stock 600,000 shares $5.75 $3,450,000 $910.80
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(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan(s) described herein. (2)
Estimated, in accordance with 17 CFR 230.457 (c), solely for the purpose of
calculating the registration fee. The Proposed Maximum Offering Price per Share
is based on the average of the high and low prices reported by the NASDAQ
National Market
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System as of May 4, 2000 which is within five (5) business days prior to the
date of this registration statement.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan information.*
Item 2. Registrant information and employee plan annual information.*
* The information required by Items 1 and 2 of Form S-8 is not filed as a part
of this registration statement in accordance with the Note to Part I of Form S-8
and Rule 428 (b)(1) under the Securities Act of 1933, as amended ("Securities
Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference in this Registration
Statement the following documents:
(a) The Registrant's latest annual report on Form 20-F, filed pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), containing audited financial statements for the
Registrant's latest fiscal year.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual report
referred to in (a) above, including Form 6-K.
All documents subsequently filed by the Registrant and the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered hereby have been sold or which deregisters
all securities remaining unsold, shall be deemed to be incorporated by reference
in this Registration Statement and to be part hereof from the date of filing of
such documents.
(c) The class of securities to be offered pursuant to the Company's
1999 Equity Incentive Plan is the Registrant's Common Stock, par value 1.0 Dutch
guilder per share, registered under Form 8-A of Section 12 of the Exchange Act.
Item 4. Description of Securities. Not applicable.
Item 5. Interests of Named Experts and Counsel.
The Registrant has retained McLaughlin & Stern, LLP as its legal counsel and
Kesselman & Kesselman. as its Certified Public Accountants.
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Item 6. Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation and Articles of Association
provide in Article 23 that the Registrant shall, to the fullest extent permitted
by law, indemnify and advance expenses to each of its currently acting and
former members of the Supervisory and Management Board, officers, employees and
agents, whenever any such person is made a party, or threatened to be made a
party, in any action, suit or proceeding by reason of his or her service with
the Registrant. The Registrant is also authorized, to the fullest extent
permitted by law, to produce liability insurance on behalf of its now acting and
former members of the Supervisory and Management Board, officers, employees and
agents.
Item 7. Exemption from Registration Claimed. Not applicable.
Item 8. Exhibits.
4.1 Certificate of Incorporation of Registrant
4.2 By-laws of Registrant
4.3 Form of Common Stock Certificate
4.4 1999 Equity Incentive Plan
5.1 Opinion of McLaughlin & Stern, LLP.
23.1 Consent of Kesselman & Kesselman, independent certified
public accountants
23.2 Consent of McLaughlin & Stern, LLP. (included in Exhibit 5.1)
24.1 Power of Attorney (contained on page 5 herein)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if 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 the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining 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.
(3) To remove from registration by means of a post effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under
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the Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities and Exchange Act of 1934 that
is incorporated by reference in this 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or 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 that a claim for indemnification
against such liabilities (other than the payment 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 Common Stock
being registered, the Registrant will, unless in the opinion of 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.
(4) 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 and Exchange Act of 1934 and 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 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.
(5) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities and Exchange Act
of 1934; and where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent of given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Lior
Zouker his true and lawful attorney-in-fact and agent, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement or any related registration statement
filed pursuant to Rule 462(b) under the Securities Act, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
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 New York, State of New York, on May 9, 2000
I.C.T.S. INTERNATIONAL N.V.
By: /s/ Lior Zouker
Name: Lior Zouker
Title: Chief Executive Officer
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SIGNATURE TITLE DATE
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/s/ Lior Zouker Chief Executive Officer, May 9, 2000
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Member of Management Board
/s/ Ezra Harel Member of Supervisory Board May 9, 2000
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/s/Amos Lapidot Member of Supervisory Board May 9, 2000
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/s/ Boaz Harel Member of Supervisory Board May 9, 2000
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/s/ Gerald Gitner Member of Supervisory Board May 9, 2000
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/s/ Michael Barnea Member of Supervisory Board May 9, 2000
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/s/ Savinoam Avivi Member of Supervisory Board May 9, 2000
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/s/ Menachem Atzmon Member of Supervisory Board May 9, 2000
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/s/ Chaime Orlev Chief Financial Officer, Vice President May 9, 2000
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of Finance and Treasurer
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Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on May 9 , 2000.
1999 Equity Incentive Plan
By: /s/ Lior Zouker
Name: Lior Zouker
Title : Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 Certificate of Incorporation of Registrant*
4.2 By-laws of Registrant*
4.3 Form of Common Stock Certificate*
4.4 1999 Equity Incentive Plan (filed herewith)
5.1 Opinion of McLaughlin & Stern, LLP. (filed herewith)
23.1 Consent of Kesselman & Kesselman, independent certified
public accountants (filed herewith)
23.2 Consent of McLaughlin & Stern, LLP. (included in Exhibit 5.1)
24.1 Power of Attorney (contained on page 5 herein)
* Incorporated by reference to the Registrant's Registration Statement on Form
20-F, registration number 0-28542.
EXHIBIT 4.4
ICTS INTERNATIONAL N.V.
1999 EQUITY INCENTIVE PLAN
As Adopted by the Supervisory Board
1. Purpose. The purpose of the plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of ICTS INTERNATIONAL N.V., a
Netherlands company (the "Company"), its Parent, Subsidiaries and Affiliates, by
offering them an opportunity to participate in the Company's future performance
through awards of Options, Restricted Stock and Stock Bonuses. Capitalized terms
not defined in the text are defined in Section 23.
2. Shares Subject to the Plan.
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2.1 Number of Shares Available. Subject to Sections 2.2 and
18, the total number of Shares reserved and available for grant and issuance
pursuant to the Plan shall be six hundred thousand (600,000) Shares. Subject to
Sections 2.2 and 18, Shares shall again be available for grant and issuance in
connection with future Awards under the Plan that:
(a) are subject to issuance upon exercise of an Option but cease to be subject
to such Option for any reason other than exercise of such Option; (b) are
subject to an Award granted hereunder but are forfeited; or (c) are subject to
an Award that otherwise terminates without Shares being issued.
2.2 Adjustment of Shares. In the event that the number of
outstanding Shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision or similar change in the capital
structure of the Company without consideration, then (a) the number of Shares
reserved for issuance under the Plan; (b) the Exercise Prices of and number of
Shares subject to outstanding Options; and (c) the number of Shares subject to
other outstanding Awards shall be proportionately adjusted, subject to any
required action by the Board or the shareholders of the Company and compliance
with applicable securities laws.
3. Eligibility.
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3.1 General. ISO's (as defined in Section 5 below) may be
granted only to employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the Company. All other
Awards may be granted to employees, officers, consultants and advisors of the
Company or any Parent, Subsidiary or Affiliate of the Company, provided such
consultants and advisors render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction. A person may be
granted more than one Award under the Plan.
3.2 Restrictions. No Awards may be granted to persons who are
established, settled or ordinarily reside in The Netherlands, other than in
compliance with the securities laws of The Netherlands.
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4. Administration.
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4.1 Board Discretion. Any determination made by the Board
with respect to any Award shall be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of the Plan
or Award, at any later time, and such determination shall be final and binding
on the Company and all persons having an interest in any Award under the Plan.
4.2 Committee Authority. The Plan shall be administered by the
Committee, subject to and at the direction of the Board. Subject to the general
purposes, terms and conditions of the Board, the Committee shall have full power
to implement and carry out the Plan. The Committee may delegate to one or more
officers of the Company the authority to make recommendations to grant an Award
under the Plan to Participants who are not Insiders of the Company. The
Committee shall have the authority to:
(a) construe and interpret the Plan, any Award Agreement and any other agreement
or document executed pursuant to the Plan;
(b) recommend to the Board amendments to the rules and regulations relating to
the Plan;
(c) recommend to the Board persons to receive Awards;
(d) recommend to the Board the form and terms of Awards;
(e) recommend to the Board the number of Shares or other consideration subject
to Awards;
(f) recommend to the Board whethe Awards will be granted singly, in combination,
in tandem with, in replacement of, or as alternatives to, other Awards under the
Plan or any other incentive or compensation plan of the Company or any Parent,
Subsidiary or Affiliate of the Company;
(g) recommend to the Board the granting of certain waivers of Plan or Award
conditions;
(h) recommend to the Board conditions concerning the vesting, exercisability and
payment of Awards;
(i) recommend to the Board such matters so as to correct any defect, supply any
omission, or reconcile any inconsistency in the Plan, any Award or any Award
Agreement;
(J) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the administration
of the Plan.
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4.3 Exchange Act Requirements. If the Company is subject to the Exchange Act,
the Company will take appropriate steps to comply with the disinterested
director requirements of Section 1 6(b) of the Exchange Act, including but not
limited to, the appointment by the Board of a Committee consisting of not less
than two persons (who are members of the Board), each of whom is a Disinterested
Person.
4.4 Address of Committee. The Committee's address to which any correspondence or
notifications may be sent or given is:
ICTS International N.V.
Biesbosch 225,
11 81 JC Amstelveen
The Netherlands
Attention:
Chief Financial Officer
5. Options. The Board, upon recommendation of the Committee, may grant Options
to eligible persons and, upon recommendation of the Board, shall determine
whether such Options shall be Incentive Stock Options within the meaning of the
Code ("ISO'S") or Nonqualified Stock Options ("NQSO's), the number of Shares
subject to the Option, the Exercise Price of the Option, the period during which
the Option may be exercised, and all other terms and conditions of the Option,
subject to the following:
5.1 Form of Option Grant. Each Option granted under the Plan shall be evidenced
by an Award Agreement which shall expressly identify the Option as an ISO or
NQSO ("Stock Option Agreement"), and be in such form and contain such provisions
(which need not be the same for each Participant) as the Board, upon
recommendation of the Committee, shall from time to time approve, and which
shall comply with and be subject to the terms and conditions of the Plan.
5.2 Date of Grant. The date of grant of an Option shall be the
date on which the Board, upon recommendation of the Committee, makes the
determination to grant such Option, unless otherwise specified by the Board,
upon recommendation of the Committee. The Stock Option Agreement and a copy of
the Plan will be delivered to the Participant within a reasonable time after the
granting of the Option.
5.3 Exercise Period. Options shall be exercisable within the
times or upon the events determined by Board, upon recommendation of the
Committee, as set forth in the Stock Option Agreement; provided, however, that
no Option shall be exercisable after the expiration of ten (10) years from the
date the Option is granted, and provided further that no Option granted to a
person who directly or by attribution owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary of the Company ("Ten Percent Shareholder") shall be exercisable
after the expiration of five (5) years from the date the Option is granted. The
Board, upon recommendation of the Committee, also may provide for the exercise
of Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number or percentage as the Board, upon recommendation of
the Committee, determines.
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5.4 Exercise Price. The Exercise Price shall be determined by
the Board, upon recommendation of the Committee, when the Option is granted and
may be not less than eighty-five percent (85%) of the Fair Market Value of the
Shares on the date of grant; provided that (i) the Exercise Price of an ISO
shall be not less than one hundred percent (100%) of the Fair Market Value of
the Shares on the date of grant; (ii) the Exercise Price of any Option granted
to a Ten Percent Shareholder shall not be less than one hundred ten percent
(110%) of the Fair Market Value of the Shares on the date of grant; and (iii)
the Exercise Price of any option granted that the Board intends to qualify under
Section 1 62(m) of the Code, shall not be less than one hundred percent (100%)
of the fair market value of the shares on the date of grant. Payment for the
Shares purchased may be made in accordance with Section 8 of the Plan.
5.5 Method of Exercise. Options may be exercised only by
delivery to the Company of a written stock option exercise agreement (the
"Exercise Agreement") in a form approved by the Committee (which need not be the
same for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares, if any, and such representations and
agreements regarding Participant's investment intent and access to information
and other matters, if any, as may be required or desirable by the Company to
comply with applicable securities laws, together with payment in full of the
Exercise Price for the number of Shares being purchased.
5.6 Termination. Notwithstanding the exercise periods set forth in the Stock
Option Agreement, exercise of an Option shall always be subject to the
following:
(a) If the Participant is Terminated for any reason except death or Disability,
then Participant may exercise such Participant's Options only to the extent that
such Options would have been exercisable upon the Termination Date no later than
three (3) months after the Termination Date (or such shorter time period as may
be specified in the Stock Option Agreement), but in any event, no later than the
expiration date of the Options.
(b) If the Participant is terminated because of death or Disability (or the
Participant dies within three (3) months of such termination), then
Participant's Options may be exercised only to the extent that such Options
would have been exercisable by Participant on the Termination Date and must be
exercised by Participant (or Participant's legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date (or such
shorter time period as may be specified in the Stock Option Agreement), but in
any event no later than the expiration date of the Options; provided, however,
that in the event of termination due to Disability other than as defined in
Section 22(e)(3) of the Code, any ISO that remains exercisable after ninety (90)
days after the date of termination shall be deemed a NQSO.
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5.7 Limitations on Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of an
Option, provided that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.
5.8 Limitations on ISO's. The aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which ISO'S are
exercisable for the first time by a Participant during any calendar year (under
the Plan or under any other incentive stock option plan of the Company or any
Affiliate, Parent or Subsidiary of the Company) shall not exceed One Hundred
Thousand Dollars ($100,000). If the Fair Market Value of Shares on the date of
grant with respect to which ISO's are exercisable for the first time by a
Participant during any calendar year exceeds One Hundred Thousand Dollars ($
1OO,OOO),the Options for the first One Hundred Thousand Dollars ($100,000) worth
of Shares to become exercisable in such calendar year shall be ISO's and the
Options for the amount in excess of One Hundred Thousand Dollars ($100,000) that
become exercisable in that calendar year shall be NQSO's. In the event that the
Code or the regulations promulgated thereunder are amended after the Effective
Date of the Plan to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to SO's, such different limit shall be
automatically incorporated herein and shall apply to any Options granted after
the effective date of such amendment.
5.9 Modification. Extension or Renewal. The Board, upon
recommendation of the Committee, may modify, extend or renew outstanding Options
and authorize the grant of new Options in substitution therefor, provided that
any such action may not without the written consent of Participant, impair any
of Participant's rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price
may not be reduced below the minimum Exercise price that would be permitted
under Section 5.4 of the Plan for Options granted on the date the action is
taken to reduce the Exercise Price.
5.10 No Disqualification. Notwithstanding any other provision
in the Plan, no term of the Plan relating to ISO's shall be interpreted, amended
or altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. Restricted Stock. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to restrictions.
The Board, upon recommendation of the Committee, shall determine to whom an
offer will be made, the number of Shares the person may purchase, the price to
be paid (the "Purchase Price"), the restrictions to which the Shares shall be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:
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6.1 Form of Restricted Stock Award. All purchases under a
Restricted Stock Award made pursuant to the Plan shall be evidenced by an Award
Agreement ("Restricted Stock Purchase Agreement") that shall be in such form
(which need not be the same for each Participant) as the Board, upon
recommendation of the Committee, shall from time to time approve, and shall
comply with and be subject to the terms and conditions of the Plan. The offer of
Restricted Stock shall be accepted by the Participant's execution and delivery
of the Restricted Stock Purchase Agreement and full payment for the shares to
the Company within thirty (30) days from the date the Restricted Stock Purchase
Agreement is delivered to the person. If such person does not execute and
deliver the Restricted Stock Purchase Agreement along with full payment for the
Shares to the Company within thirty (30) days, then the offer shall terminate,
unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold
pursuant to a Restricted Stock Award shall be determined by the Board, upon
recommendation of the Committee, and shall be at least eighty-five percent (85%)
of the Fair Market Value of the Shares on the date the Restricted Stock Award is
granted, except in the case of a sale to a Ten Percent Shareholder, in which
case the Purchase Price shall be one hundred percent (100%) of the Fair Market
Value. Payment of the Purchase Price may be made in accordance with Section 8 of
the Plan.
6.3 Restrictions. Restricted Stock Awards shall be subject to
such restrictions as the Board, upon recommendation of the Committee, may
impose. The Board, upon recommendation of the Committee, may provide for the
lapse of such restrictions in installments and may accelerate or waive such
restrictions, in whole or in part, based on length of service, performance or
such other factors or criteria as the Board, upon recommendation of the
Committee, may determine. Restricted Stock Awards which the Board intends to
qualify under Code section 162(m) shall be subject to a performance-based goal.
Restrictions on such stock shall lapse based on one (1) or more of the following
performance goals: stock price, market share, sales increases, earning per
share, return on equity, cost reductions, or any other similar performance
measure established by the Board, upon recommendation of the Committee. Such
performance measures shall be established by the Board, upon recommendation of
the Committee, in writing, no later than the earlier of (a) ninety (90) days
after the commencement of the performance period with respect to which the
Restricted Stock award is made; and (b) the date as of which twenty-five percent
(25%) of such performance period has elapsed.
7. Stock Bonuses.
7.1 Awards of Stock Bonuses. A Stock Bonus is an award of
Shares (which may consist of Restricted Stock) for services rendered to the
Company or any Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may
be awarded for past services already rendered to the Company, or any Parent,
Subsidiary or Affiliate of the Company pursuant to an Award Agreement (the
"Stock Bonus Agreement") that shall be in such form (which need not be the same
for each Participant) as the Board, upon recommendation of the Committee, shall
from time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan subject to Section 7.2 herein. A Stock Bonus may be
awarded upon satisfaction of such performance goals as are set
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out in advance in Participant's individual Award Agreement (the "Performance
Stock Bonus Agreement") that shall be in such form (which need not be the same
for each Participant) as the Board, upon recommendation of the Committee, shall
from time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. Stock Bonuses may vary from Participant to Participant
and between groups of Participants, and may be based upon such other criteria as
the Board, upon recommendation of the Committee, may determine; provided,
however, that performance-based bonuses shall be restricted to individuals
earning at least Sixty Thousand Dollars ($60,000) per year and of adequate
sophistication and sufficiently empowered to achieve the performance goals.
7.2 Code Section 162(m). A Stock Bonus that the Board intends
to qualify for the performance-based exception under Code section 162(m) shall
only be awarded based upon the attainment of one (1) or more of the following
performance goals: stock price, market share, sales increases, earning per
share, return on equity, cost reductions, or any other similar performance
measure established by the Board, upon recommendation of the Committee. Such
performance measures shall be established by the Board, upon recommendation of
the Committee, in writing, no later than the earlier of (a) ninety (90) days
after the commencement of the performance period with respect to which the Stock
Bonus award is made; and (b) the date as of which twenty-five percent (25%) of
such performance period has elapsed.
7.3 Terms of Stock Bonuses. The Board, upon recommendation of
the Committee, shall determine the number of Shares to be awarded to the
Participant and whether such Shares shall be Restricted Stock. If the Stock
Bonus is being earned upon the satisfaction of performance goals pursuant to a
Performance Stock Bonus Agreement, then the Board, upon recommendation of the
Committee, shall determine: (a) the nature, length and starting date of any
period during which performance is to be measured (the "Performance Period") for
each Stock Bonus; (b) the performance goals and criteria to be used to measure
the performance, if any; (c) the number of Shares that may be awarded to the
Participant; and (d) the extent to which such Stock Bonuses have been earned.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Stock Bonuses that are subject to different Performance Periods
and different performance goals and other criteria. The number of Shares may be
fixed or may vary in accordance with such performance goals and criteria as may
be determined by the Board, upon recommendation of the Committee. The Board,
upon recommendation of the Committee, may adjust the performance goals
applicable to the Stock Bonuses to take into account changes in law and
accounting or tax rules and to make such adjustments as the Board, upon
recommendation of the Committee, deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.
7.4 Form of Payment. The earned portion of a Stock Bonus may
be paid currently or on a deferred basis with such interest or dividend
equivalent, if any, as the Board, upon recommendation of the Committee, may
determine. Payment may be made in the form of cash, Shares, including Restricted
Stock, or a combination thereof, either in a lump sum payment or in
installments, all as the Board, upon recommendation of the Committee, shall
determine.
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7.5 Termination During Performance Period. If a Participant
is Terminated during a Performance Period for any reason, then such Participant
shall be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Stock Bonus only to the extent earned as of the date of Termination in
accordance with the Performance Stock Bonus Agreement, unless the Board, upon
recommendation of the Committee, shall determine otherwise.
8. Payment For Share Purchases.
8.1 Payment. Payment for Shares purchased pursuant to the
Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Board and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by transfer of Shares that either (1) have been owned by Participant for
more than six (6) months and have been paid for within the meaning of SEC Rule
144; or (2) were obtained by Participant in the public market;
(c) by waiver of compensation due or accrued to Participant for services
rendered;
(d) by tender of property;
(e) with respect only to purchase upon exercise of an Option, and provided that
a public market for the Company's stock exists:
(f) through a "same day sale" commitment from Participant and a broker-dealer
that is a member of the National Association of Securities Dealers (an "NASD
Dealer") whereby the Participant irrevocably elects to exercise the Option and
to sell a portion of the Shares so purchased to pay for the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or
(g) through a "margin" commitment from Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise the Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; or
(h) by any combination of the foregoing.
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9. Stock Appreciation Rights
All options granted pursuant to the Plan shall include a stock
appreciation right. Such stock appreciation right shall be subject to the
following express terms and conditions and to such other terms and conditions as
the Committee may deem appropriate:
(1) The stock appreciation right shall be exercisable to the
extent, and only to the extent, the option is exercisable.
(2) The stock appreciation right shall entitle the optionee
to surrender to the Company unexercised the option in which it is included, or
any portion thereof, and to receive from the Company in exchange therefor that
number of shares which is equal to the following:
(i) from the fair market value, at the time of exercise of the stock
appreciation right, of one share of Common Stock, SUBTRACT the purchase price
specified in such option; then
(ii) MULTIPLY the result obtained in subparagraph (i) by the number of shares
called for by the option, or portion thereof, which is so surrendered; then
(iii) DIVIDE the product obtained in subparagraph (ii) by the fair market value,
at the time of exercise of the stock appreciation right, of one share of Common
Stock.
10. Withholding Taxes.
10.1 Withholding Generally. Whenever Shares are to be issued
in satisfaction of Awards granted under the Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under the Plan, payments
in satisfaction of Awards are to be made in cash, such payment shall be net of
an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
10.2 Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Board may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date"). All elections by a Participant to have Shares withheld for
this purpose shall be made in writing in a form acceptable to the Board and
shall be subject to the following restrictions:
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(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, then except as provided below, the election shall be irrevocable
as to the particular Shares as to which the election is made;
(c) all elections shall be subjec to the consent or disapproval of the Board;
(d) if the Participant is an Insider and if the Company is subject to Section 1
6(b) of the Exchange Act: (1) the election may not be made within six (6) months
of the date of grant of the Award, except as otherwise permitted by SEC Rule 1
6b- 3(e) under the Exchange Act, and (2) either (A) the election to use stock
withholding must be irrevocably made at least six (6) months prior to the Tax
Date (although such election may be revoked at any time at least six (6) months
prior to the Tax Date) or (B) the exercise of the Option or election to use
stock withholding must be made in the ten (10) day period beginning on the third
day following the release of the Company's quarterly or annual summary statement
of sales or earnings; and
(e) in the event that the Tax Dat is deferred until six (6) months after the
delivery of Shares under Section 83(b) of the Code, the Participant shall
receive the full number of Shares with respect to which the exercise occurs, but
such Participant shall be unconditionally obligated to tender back to the
Company the proper number of Shares on the Tax Date.
11. Privileges of Stock Ownership.
11.1 Voting and Dividends. No Participant shall have any of
the rights of a shareholder with respect to any Shares until the Shares are
issued to the Participant. After Shares are issued to the Participant, the
Participant shall be a shareholder and have all the rights of a shareholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company shall be subject to the same
restrictions as the Restricted Stock.
11.2 Financial Statements. The Company shall provide
financial statements to each Participant prior to such Participant's purchase of
Shares under the Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company shall not be
required to provide such
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financial statements to Participants whose services in connection with the
Company assure them access to equivalent information.
12. Transferability. Awards granted under the Plan, and any interest
therein, shall not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution or as consistent with the specific
Plan and Award Agreement provisions relating thereto. During the lifetime of the
Participant an Award shall be exercisable only by the Participant, and any
elections with respect to an Award, may be made only by the Participant.
13. Restrictions on Shares. At the discretion of the Board, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right of first
refusal to purchase all Shares that a Participant (or a subsequent transferee)
may propose to transfer to a third party.
14. Certificates. All certificates for Shares or other securities
delivered under the Plan shall be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed.
15. Escrow; Pledge of Shares. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates.
16. Exchange and Buy out of Awards. The Board, upon recommendation of
the Committee, may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The Company
may at any time buy from a Participant an Award previously granted with payment
in cash, Shares (including Restricted Stock) or other consideration, based on
such terms and conditions as the Company and the Participant shall agree.
17. Securities Law and Other Regulatory Compliance. An Award shall not
be effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed, as they are in effect on the date of grant of the
Award and also on the date of exercise or other Issuance. Notwithstanding any
other provision in the Plan, the Company shall have no obligation to issue or
deliver certificates for Shares under the Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) completion of any registration or
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other qualification of such shares under any state or federal law or ruling of
any governmental body that the Company determines to be necessary or advisable.
The Company shall be under no obligation to register the Shares with the SEC or
to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company shall have no liability for any inability or failure to
do so.
18. No Obligation to Employ. Nothing in the Plan or any Award granted
under the Plan shall confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent, Subsidiary or Affiliate of the Company or limit in any
way the right of the Company or any Parent, Subsidiary or Affiliate of the
Company to terminate Participant's employment or other relationship at any time,
with or without cause.
19. Corporate Transactions.
19.1 Assumption or Replacement of Awards by Successor. In the
event of (a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the company and the Awards granted under the Plan are assumed or replaced by the
successor corporation, which assumption shall be binding on all Participants);
(b) a dissolution or liquidation of the Company; (c) the sale of substantially
all of the assets of the Company; or (d) any other transaction which qualifies
as a "corporate transaction" under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Awards may, to the
extent permitted by applicable law, be replaced by the successor corporation (if
any), which replacement shall be binding on all Participants. In the
alternative, the successor corporation may substitute equivalent Awards or
provide substantially similar consideration to Participants as was provided to
shareholders (after taking into account the existing provisions of the Awards).
The successor corporation may also issue, in place of outstanding Shares of the
Company held by the Participant, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Participant.
In the event such successor corporation (if any) refuses to
substitute Options, as provided above, pursuant to a transaction described in
this Subsection 1 8.1, such Options shall expire on such transaction at such
time and on such conditions as the Board shall determine.
19.2 Other Treatment of Awards. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 18, in
the event of the occurrence of any transaction described in Section 18.1, any
outstanding Awards shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."
19.3 Assumption of Awards by the Company. The Company, from time to time, also
may grant Awards identical to awards granted by another company,
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whether in connection with an acquisition of such other company or otherwise, by
granting an Award under the Plan in replacement of such other company's award.
Such replacement shall be permissible if the holder of the replaced award would
have been eligible to be granted an Award under the Plan if the other company
had applied the rules of the Plan to such grant. In the event the Company grants
Awards identical to an award granted by another company, the terms and
conditions of such award shall remain unchanged (except that the exercise price
and the number and nature of Shares issuable upon exercise of any such option
will be adjusted approximately pursuant to Section 424(a) of the Code).
20. Adoption and Shareholder Approval. The Plan shall become effective
on the date that it is adopted by the Board (the "Effective Date"). The Plan
shall be approved by the shareholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve months
before or after the Effective Date. Upon the Effective Date, the Board may grant
Awards pursuant to the Plan; provided, however, that: (a) no Option may be
exercised prior to initial shareholder approval of the Plan; (b) no Option
granted pursuant to an increase in the number of Shares approved by the Board
shall be exercised prior to the time such increase has been approved by the
shareholders of the Company; and (c) in the event that shareholder approval is
not obtained within the time period provided herein, all Awards granted
hereunder shall be canceled, any Shares issued pursuant to any Award shall be
canceled and any purchase of Shares hereunder shall be rescinded. After the
Company becomes subject to Section 16(b) of the Exchange Act, the Company will
comply with the requirements of Rule 16b-3 (or its successor), as amended, with
respect to shareholder approval.
21. Term of Plan. The Plan will terminate ten (10) years from the Effective Date
or, if earlier, the date of shareholder approval of the Plan.
22. Amendment or Termination of Plan. The Board may at any time
terminate or amend the Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to the Plan; provided, however, that the Board shall not, without the approval
of the shareholders of the Company, amend the Plan in any manner that requires
such shareholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act
or Rule 16b-3 (or its successor), as amended, thereunder.
23. Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board, the submission of the Plan to the shareholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
24. Definitions. As used in the Plan, the following terms shall have the
following meanings:
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"Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
"Award" means any award under the Plan, including any Option,
Restricted Stock or Stock Bonus.
"Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the Participant setting forth
the terms and conditions of the Award.
"Board" means the Supervisory Board of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee appointed by the Board to
administer the Plan. "Company" means ICTS International N.V.,
a Netherlands company organized under the laws of the
Netherlands, or any successor company. "Disability" means a
disability, whether temporary or permanent, partial or total,
as determined by the Committee.
"Disinterested Person" means a director who has not, during
the period that person is a member of the Committee and for one (1) year prior
to service as a member of the Committee, been granted or awarded equity
securities pursuant to the Plan or any other plan of the Company or any Parent,
Subsidiary or Affiliate of the Company, except in accordance with the
requirements set forth in Rule 16b-3(c)(2)(i) (and any successor regulation
thereto) as promulgated by the SEC under Section 16(b) of the Exchange Act, as
such rule is amended from time to time and as interpreted by the SEC.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Price" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the Option.
"Fair Market Value" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National Market, its last
reported sale price on the Nasdaq National Market or, if no such reported sale
takes place on such date, the average of the closing bid and asked prices;
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(b) if such Common Stock is publicly traded and is then listed on a national
securities exchange, the last reported sale price or, if no such reported sale
takes place on such date, the average of the closing bid and asked prices on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading;
(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq
National Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on such date, as
reported by The Wall Street Journal, for the over-the-counter market; or
(d) if none of the foregoing is applicable, by the Board of Directors of the
Company in good faith.
"Insider" means an officer or director of the Company or any
other person whose transactions in the Company's Common Stock are subject to
Section 16 of the Exchange Act.
"Option" means an award of an option to purchase Shares
pursuant to Section 5.
"Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if at the time of the
granting of an Award under the Plan, each of such corporations other than the
Company owns stock possessing fifty percent (50%), or more, of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
"Participant" means a person who receives an Award under the
Plan.
"Plan" means this ICTS International N.V. 1999 Equity
Incentive Plan, as amended from time to time.
"Restricted Stock Award" means an award of Shares pursuant to
Section 6.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Shares" means shares of the Company's Common Stock reserved
for issuance under the Plan, as adjusted pursuant to Sections 2 and 15, and any
successor security.
"Stock Bonus" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 7.
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"Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of granting of the Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%), or
more, of the total combined voting power of all classes of stock in one of the
other corporations in such claim.
"Termination" or "Terminated" means, for purposes of the Plan
with respect to a Participant, that the Participant has ceased to provide
services as an employee, director, consultant or advisor, to the Company or a
Parent, Subsidiary or Affiliate of the Company, except in the case of sick
leave, military leave, or any other leave of absence approved by the Committee,
provided, that such leave is for a period of not more than ninety (90) days, or
reinstatement upon the expiration of such leave is guaranteed by contract or
statute. The Committee shall have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the "Termination Date").
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EXHIBIT 5.1
McLaughlin & Stern, LLP
260 Madison Avenue, 18th Floor
New York, New York 10016
May 9, 2000
We are rendering this opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") filed by I.C.T.S.
INTERNATIONAL N.V. (the "Company') with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended, on or about the
date hereof. The Registration relates to the registration of 600,000 shares
("Shares") of Common Stock, par value 1.0 Dutch guilder per share issuable upon
exercise of stock options ("Options") to be granted pursuant to the Company's
1999 Equity Incentive Plan.
We hereby advise you that we have examined originals or copies
certified to our satisfaction of the Certificate of Incorporation and amendments
thereto and the By-Laws and amendments thereto of the Company, minutes of the
meetings of the Board of Directors and Shareholders and such other documents and
instruments, and we have made such examination of law as we have deemed
appropriate as the basis for the opinions hereinafter expressed.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing and in good
standing under the laws of The Netherlands.
2. Based upon the foregoing, we are of the opinion that when
issued and paid for in accordance with the terms of the Options, the Shares
pursuant to the 1999 Equity Incentive Plan will be duly authorize, validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as a part of the
Registration Statement and to the use of our name therein and in the related
prospectus.
Very truly yours,
/s/McLaughlin & Stern, LLP
Consent of Kesselman & Kesselman, Independent Auditors
We consent to the incorporation of our report (and all references to ur firm)
with respect to the consolidated financial statements of ICTS International N.V.
for each of the fiscal years ended December 31, 199, 1998 and 1997, in its
Annual Report (Form 20-F) for the fiscal year ended December 31, 1999, filed
with the Securities and Exchange Commission and with NASDAQ.
Kesselman & Kesselman
Certified Public Accountants
March 15, 2000
Ramat Gan, Israel
