<PAGE> 1
As filed with the Securities and Exchange Commission on August 28, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________________
DBT ONLINE , INC.
(Exact name of issuer as specified in its charter)
Pennsylvania 85-0439411
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation organization)
5550 W. Flamingo Road, Suite B-5
Las Vegas, Nevada 89103
(Address of principal executive offices)
PATLEX CORPORATION AMENDED AND RESTATED STOCK OPTION PLAN
1991 STOCK OPTION PLAN OF AUTOFINANCE GROUP, INC.("AFG")
1989 STOCK OPTION AND PERFORMANCE AWARD PLAN OF AFG
(Full title of the plans)
J. Henry Muetterties
Vice President, Secretary and General Counsel
DBT Online, Inc.
5550 W. Flamingo Road, Suite B-5
Las Vegas, Nevada 89103
(Name and address of agent for service)
(702) 257-1112
(Telephone number, including area code, of agent for service)
_______________________
Copy to:
STEPHEN M. GOODMAN
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
(215) 963-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price aggregate offering registration fee
per share(3) price(3)
<S> <C> <C> <C> <C>
Common Stock, 900,000(1) $40.75 $37,973,010 $13,094.14
par value $.10 per share 31,853(2)
</TABLE>
(1) Represents shares that may be offered or sold pursuant to the Patlex
Corporation Amended and Restated Stock Option Plan.
(2) Represents shares issuable upon exercise of options granted pursuant
to the 1989 Stock Option and Performance Award Plan of AutoFinance
Group, Inc. ("AFG") and 1991 Stock Option Plan of AFG, which, upon
exercise, entitle the holder thereof to receive one share of DBT
Online Common Stock for every eight shares of AFG Common Stock
issuable upon exercise of such options
(3) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely for
the purpose of calculating the registration fee based on the bid price
for Patlex Common Stock in the when-issued trading market.
(4) Calculated pursuant to Section 6(b) as follows: 1/29 of one percent of
the maximum aggregate offering price.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, as filed by DBT Online, Inc. (the "Company")
with the Securities and Exchange Commission, are incorporated by reference in
this Registration Statement and made a part hereof:
(a) The Company's Registration Statement on Form
S-4, filed pursuant to the Securities Act of 1933, as amended,
which Registration Statement became effective July 22, 1996.
(b) The Company's Registration Statement on Form
S-4, filed pursuant to Rule 429 under the Securities Act of 1933,
as amended, which Registration Statement became effective August
16, 1996.
(c) All other reports filed 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 last fiscal period
covered by the Registration Statement referred to in (a) above.
(d) The description of the Common Stock of the
Company contained in the Registration Statements referred to in (a)
and (b) above, including any amendment or report filed for the
purpose of updating such description.
All reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be part hereof from the date of filing of such documents. Any statement
contained in any document, all or a portion of which is incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained or
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Experts
The financial statements of Patlex Corporation at June 30,
1995 and 1994 and for each of the two years in the period ended June 30, 1995
and the balance sheet of Patlex Holdings, Inc. at April 11, 1996 appearing in
the Registration Statements of Patlex Holdings, Inc. described in paragraphs
(a) and (b) above, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein and
incorporated herein by reference. Such financial statements are, and audited
financial statements to be included in subsequently filed documents and
incorporated by reference will be, incorporated herein in reliance upon the
reports of Ernst & Young LLP pertaining to such financial statements (to the
extent covered by consents filed with the Securities and Exchange Commission)
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of Database Technologies, Inc. as
of December 31, 1995 and for the year then ended, incorporated in this
Registration Statement by reference to the Registration Statements described in
paragraphs (a) and (b) above, have been audited by Deloitte & Touche LLP,
independent certified public accountants, as stated in their report which is
incorporated herein by reference and have been so incorporated herein by
reference in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
The financial statements of Database Technologies, Inc. as
of and for the year ended December 31, 1994, incorporated in this Registration
Statement by reference to the Registration Statements described in parargraphs
(a) and (b) above, have been audited by Ahearn, Jasco + Company, P.A.,
independent certified public accountants, as stated in their report appearing
in the Registration Statements described in paragraphs (a) and (b) above and
incorporated herein by reference and have been so included in reliance upon
the authority of said firm as experts in accounting and auditing.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
II-1
<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1741 of the Pennsylvania Business Corporation Law
of 1988 provides the Company the power to indemnify any officer or director
acting in his capacity as a representative of the Company who was or is a party
or is threatened to be made a party to any action or proceeding against
expenses, judgments, penalties, fines and amounts paid in settlement in
connection with such action or proceeding whether the action was instituted by
a third party or arose by or in the right of the Company. Generally, the only
limitation on the ability of the Company to indemnify its officers and
directors is if the act violates a criminal statute or if the act or failure to
act is finally determined by a court to have constituted willful misconduct or
recklessness.
The Bylaws of the Company provide a right to
indemnification to the full extent permitted by law, for expenses (including
attorney's fees), damages, punitive damages, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by any director or
officer whether or not the indemnified liability arises or arose from any
threatened, pending or completed proceeding by or in the right of the Company
(a derivative action) by reason of the fact that such director or officer is or
was serving as a director, officer or employee of the Company or, at the
request of the Company, as a director, officer, partner, fiduciary or trustee
of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, unless the act or failure to act giving rise to the
claim for indemnification is finally determined by a court to have constituted
willful misconduct or recklessness. The Bylaws of the Company provide for the
advancement of expenses to an indemnified party upon receipt of an undertaking
by the party to repay those amounts if it is finally determined that the
indemnified party is not entitled to indemnification.
The Bylaws of the Company authorize the Company to take
steps to ensure that all persons entitled to indemnification are properly
indemnified, including, if the Board so determines, purchasing and maintaining
insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following is a list of exhibits filed as part of this
Registration Statement.
<TABLE>
<CAPTION>
Exhibit Location or
Number Exhibit Page Number
- ------ ------- -----------
<S> <C> <C> <C>
5.1 - Opinion of Morgan, Lewis & Bockius LLP E-1
23.1 - Consent of Ernst & Young LLP E-3
23.2 - Consent of Deloitte & Touche LLP E-4
23.3 - Consent of Ahearn, Jasco + Company, P.A. E-5
23.4 - Consent of Morgan, Lewis & Bockius LLP E-1
(included as part of Exhibit 5.1)
99.1 - Patlex Corporation Amended and Restated Stock Option Plan E-7
</TABLE>
II-2
<PAGE> 4
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 of 1933;
(ii) To reflect in the prospectus any facts or
events which, individually or together, represent a fundamental
change in the information set forth in the registration statement;
and
(iii) To include any additional or changed
material information on 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 (a)(1)(i) and (a)(1)(ii)
of this section 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 Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) 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.
(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 the
purpose of determining any liability under the Securities Act of 1933, each
filing of the Company'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 a plan's annual report pursuant to Section 15(d) of the Securities
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 of 1933 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 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.
II-3
<PAGE> 5
SIGNATURES AND POWER OF ATTORNEY
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 Las Cruces, New Mexico, on the 26th day of August, 1996.
DBT ONLINE, INC.
By: /s/ Frank Borman
--------------------------------
FRANK BORMAN
Chairman of the Board of Directors
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Hank E. Asher and Frank Borman and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents 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
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Frank Borman Chairman of the Board of August 26, 1996
- ------------------------------- Directors (principal
Frank Borman executive officer)
/s/ Richard Laitinen Chief Financial Officer and August 26 , 1996
- ------------------------------- Treasurer (principal
Richard Laitinen financial officer and
principal accounting officer)
/s/ Hank E. Asher Director August 26, 1996
- -------------------------------
Hank E. Asher
Director August 26, 1996
- -------------------------------
Charles A. Asher
/s/ Gary E. Erlbaum Director August 26, 1996
- -------------------------------
Gary E. Erlbaum
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
Director August 26, 1996
- -------------------------------
Jack Hight
/s/ Kenneth G. Langone Director August 26, 1996
- -------------------------------
Kenneth G. Langone
Director August 26, 1996
- -------------------------------
Sari Zalcberg
</TABLE>
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Numbered Page
- ------ ------- -------------
<S> <C> <C> <C>
5.1 - Opinion of Morgan, Lewis & Bockius LLP E-1
23.1 - Consent of Ernst & Young LLP E-3
23.2 - Consent of Deloitte & Touche LLP E-4
23.3 - Consent of Ahearn, Jasco + Company, P.A. E-5
23.4 - Consent of Morgan, Lewis & Bockius LLP E-1
(included as part of Exhibit 5.1)
99.1 - Patlex Corporation Amended and Restated Stock Option Plan E-7
</TABLE>
<PAGE> 1
EXHIBIT 5.1
Morgan, Lewis & Bockius LLP
COUNSELORS AT LAW
August 28, 1996
DBT Online, Inc.
5550 W. Flamingo Road
Suite B-5
Las Vegas, Nevada 89103
Re: Registration Statement on Form S-8 Relating to the Company's
Amended and Restated Stock Option Plan and Shares of the Company's
Common Stock Issuable Pursuant to the Exercise of Options Issued
under the 1989 Stock Option and Performance Award Plan of
AutoFinance Group, Inc. ("AFG") and 1991 Stock Option Plan of AFG
------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to DBT Online, Inc., a Pennsylvania corporation (the
"Company"), in connection with the preparation of a registration statement on
Form S-8 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating
to the offering of up to 931,853 shares of the Company's Common Stock, par
value $.10 per share (the "Common Stock"), 900,000 shares of which may be
issued in connection with the exercise of options originally granted or to be
granted under the Patlex Corporation Amended and Restated Stock Option Plan
(the "Plan Options"); and 31,853 shares of which may be issued in connection
with the exercise of options (the "AFG Plan Options") originally granted
pursuant to the 1989 Stock Option and Performance Award Plan of AFG and 1991
Stock Option Plan of AFG (the "AFG Plans") that are converted into, inter alia,
the right to receive Common Stock in accordance with the terms of the Agreement
of Merger dated as of March 20, 1995 by and among KeyCorp, Key Auto Inc. and
AFG (the "Merger Agreement"). The Company assumed the Plan from Patlex
Corporation, a Pennsylvania corporation of which the Company was previously a
wholly-owned subsidiary ("Patlex"), in connection with the reorganization of
the Company into a holding company structure, pursuant to which Patlex became a
wholly-owned subsidiary of the Company.
We have examined such records, documents, statutes and decisions as we have
deemed relevant in rendering this opinion. In our examination we have assumed
the genuineness of documents
<PAGE> 2
DBT Online, Inc.
August 28, 1996
Page 2
submitted to us as originals and the conformity with the original of all
documents submitted to us as copies thereof.
In our opinion, the shares of the Company's Common Stock that may be issued (i)
upon exercise of the Plan Options, when issued in accordance with the terms of
such options and the Plan, and (ii) in connection with the exercise of the AFG
Options, when issued in accordance with the terms of such options, the
respective AFG Plans and the Merger Agreement, will, in each case, be validly
issued, fully paid and nonassessable shares of the Common Stock of the Company.
The opinion set forth above is limited to the General Corporation Law of the
Commonwealth of Pennsylvania.
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/S/ MORGAN, LEWIS & BOCKIUS LLP
- --------------------------------------
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and the
incorporation by reference in the Registration Statement on Form S-8 pertaining
to the Patlex Corporation Amended and Restated Stock Option Plan, 1991 Stock
Option Plan of AutoFinance Group, Inc. ("AFG") and 1989 Stock Option and
Performance Award Plan of AFG and to the incorporation by reference, of our
reports dated August 9, 1995 and April 11, 1996 on Patlex Corporation and
Patlex Holdings, Inc., respectively, with respect to the financial statments of
Patlex Corporation and Patlex Holdings, Inc. included in Amendment No. 4 to the
Registration Statement (Form S-4 No. 333-2000) filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
August 28, 1996
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
DBT Online, Inc. on Form S-8 of our report dated January 19, 1996 (February 7,
1996, as to Note 11), relating to the financial statements of Database
Technologies, Inc. as of and for the year ended December 31, 1995, appearing in
the Registration Statement on Form S-4 of Patlex Holdings, Inc.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELLOITTE & TOUCHE LLP
Fort Lauderdale, Florida
August 29, 1996
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
DBT Online, Inc. on Form S-8 of our report dated January 20, 1995 relating to
the financial statements of Database Technologies, Inc. as of and for the year
ended December 31, 1994, appearing in the Registration Statement on Form S-4 of
Patlex Holdings, Inc.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ AHEARN, JASCO + COMPANY, P.A.
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants
Pompano Beach, Florida
August 29, 1996
<PAGE> 1
EXHIBIT 99.1
AMENDED AND RESTATED STOCK OPTION PLAN
The purpose of the Stock Option Plan (the "Plan") is to provide designated
officers, directors and employees of Patlex Corporation and its subsidiaries
(hereinafter collectively referred to as the "Company") and consultants,
independent contractors and principals of organizations involved with the
Company on significant projects ("Key Advisors") with the opportunity to receive
grants of nonqualified stock options or, in the case of officers or other
employees of the Company, incentive stock options or a combination of each. The
Company believes that the Plan will cause the participants to contribute
materially to the growth of the Company, thereby benefitting the Company's
shareholders and will align the economic interests of the participants with
those of the shareholders.
1. ADMINISTRATION
The Plan shall be administered and interpreted by a committee (the
"Committee") which shall consist of two or more persons appointed by the board
of directors of the Company (the "Board"), all of whom shall be "disinterested
persons" as defined under Rule 16b-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and "outside directors" as defined under Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The
Committee shall have the sole discretion and authority to (i) determine the
individuals to whom options shall be granted under the Plan, (ii) determine the
type, size, exercise price and other terms and conditions of the options to be
granted to each such individual, (iii) determine the time when the options will
be granted and the duration of the exercise period, including the criteria for
exercisability and the acceleration of exercisability and (iv) deal with any
other matters arising under the Plan. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interests in the Plan or in any awards granted hereunder.
2. STOCK OPTIONS
Incentives under the Plan shall consist of incentive stock options and
nonqualified stock options (hereinafter collectively referred to as "Stock
Options"). All Stock Options shall be subject to the terms and conditions set
forth herein and to those other terms and conditions consistent with the Plan as
the Committee deems appropriate and as are specified in writing by the Committee
to the recipient in an instrument evidencing the grant of the Stock Option (the
"Grant Letter"). The Committee shall approve the form and provisions of each
Grant Letter. Grants of Stock Options under the plan need not be uniform as
among the officers, directors, employees or Key Advisors.
3. SHARES SUBJECT TO THE PLAN
(a) Subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company (the "Company Stock") that may be issued
or transferred under the Plan is 900,000 shares. Notwithstanding anything in the
Plan to the contrary, the maximum aggregate number of shares of the Company
Stock shall be subject to Stock Options granted under the Plan to any one
individual during any calendar year shall be 375,000 shares. The shares may be
authorized by unissued shares of Company Stock or reacquired shares of Company
Stock, including shares purchased by the Company on the open market for purposes
of the Plan. If and to the extent options granted under the Plan terminate,
expire, or are cancelled, forfeited, exchanged or surrendered without having
been exercised, the shares subject to such Stock Option shall again be available
for purposes of the Plan.
(b) If there is any change in the number or kind of shares of Company Stock
outstanding by reason of a stock dividend, a recapitalization, stock split, or
combination or exchange of shares, or merger, reorganization
<PAGE> 2
or consolidation in which the Company is the surviving corporation,
reclassification or change in par value or by reason of any other extraordinary
or unusual events affecting the outstanding Company Stock as a class without the
Company's receipt of consideration, or if the value of outstanding shares of
Company Stock is substantially reduced due to the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Stock Options, the maximum number of shares of Company Stock
that may be subject to Stock Options granted to any one individual in any
calendar year, the number of shares covered by outstanding Stock Options, and
the price per share or the applicable market value of such Stock Options and the
other terms and conditions of the Stock Options, as the Committee may deem
necessary or desirable, shall be proportionately adjusted by the Committee to
reflect any increase or decrease in the number or kind of issued shares of
Company Stock to preclude the enlargement or dilution of rights and benefits
under such Stock Options; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated. The adjustments determined
by the Committee shall be final, binding and conclusive.
4. ELIGIBILITY FOR PARTICIPATION
Officers, directors and employees of the Company and Key Advisors
designated by the Committee (without participation by any Committee member in
his designation) shall be eligible to participate in the Plan (hereinafter
referred to individually as the "Participant" and collectively as the
"Participants"). The Committee shall select the individuals to receive Stock
Options (the "Optionees") from among the Participants and determine the number
of shares of Company Stock subject to a particular Stock Option in such manner
as the Committee determines, provided, however, that no Committee member shall
participate in any matter specifically pertaining to him. Nothing contained in
this Plan shall be construed to (i) limit the right of the Committee to grant
Stock Options under the Plan in connection with the acquisition, by purchase,
lease, merger, consolidation or otherwise, of the business or assets of any
corporation, firm or association, including options granted to employees thereof
who become employees of the Company, or for other proper corporate purposes or
(ii) limit the right of the Company to grant stock options or make other awards
outside of this Plan.
5. STOCK OPTION TERMS
(a) Number of Shares. The Committee, in its sole discretion, shall
determine the number of shares of Company Stock that shall be subject to each
Stock Option grant.
(b) Type of Option. The Committee, in its sole discretion, may grant
options that are intended to qualify as "incentive stock options" within the
meaning of section 422 of the Code ("Incentive Stock Options") or stock options
which are not intended to so qualify ("Nonqualified Stock Options") or any
combination of Incentive Stock Options and Nonqualified Stock Options, all in
accordance with the terms and conditions set forth herein.
(c) Purchase Price. The purchase price of Company Stock subject to a Stock
Option shall be determined by the Committee, and may be equal to, greater than
or less than the Fair Market Value (as defined below) of a share of such Stock
on the date such Stock Option is granted; provided, however, that the purchase
price of Company Stock subject to an Incentive Stock Option shall be equal to or
greater than the Fair Market Value of a share of such Stock on the date such
Stock Option is granted and the purchase rice of Company Stock subject to a
Nonqualified Stock Option shall not be less than 85% of the Fair Market Value
(as defined below) of a share of Company Stock on the date such Stock Option is
granted. During such time that the Company Stock is not listed upon an
established stock exchange or traded in the over-the-counter-market, the "Fair
Market Value" of Company Stock shall be determined by the Committee at least
annually after taking into account such factors as it shall deem appropriate. If
the Company Stock is listed upon an established stock exchange or other
recognized market source, as determined by the Committee, "Fair Market Value" on
any date of reference shall be the closing price of a share of Company Stock on
the principal exchange or other recognized market source, as determined by the
Committee on such date, or if there is no sale on such date, then the closing
price of a share of Company Stock on the last previous day on which a sale is
reported.
<PAGE> 3
(d) Option Term. The Committee shall determine the term of each Stock
Option. The term of any Stock Option shall not exceed ten years from the date of
grant.
(e) Exercisability of Options. Stock Options shall become exercisable in
accordance with the terms and conditions determined by the Committee, in its
sole discretion and specified in the Grant Letter. The Committee, in its sole
discretion, may accelerate the exercisability of any or all outstanding Stock
Options at any time for any reason.
(f) Manner of Exercise. An Optionee may exercise a Stock Option which has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Committee with accompanying payment of the purchase price in accordance with
Subsection (f) below. Such notice may instruct the Company to deliver shares of
Company Stock due upon the exercise of the Stock Option to any registered broker
or dealer designated by the Committee ("Designated Broker") in lieu of delivery
to the Optionee. Such instructions must designate the account into which the
shares are to be deposited. The Optionee may tender a notice of exercise, which
has been properly executed by the Optionee, and the aforementioned delivery
instructions to any Designated Broker.
(g) Termination of Employment or Services.
(1) Except as provided in (2) or (3) below, in the event the Optionee
ceases to be an employee or director of the Company or Key Advisor, any
Stock Option which is otherwise exercisable by the Optionee shall
automatically terminate ninety days (or such other time as may be specified
in the Grant Letter) after the date on which the Optionee ceases to be an
employee or director of the Company or a Key Advisor, but in no event later
than the date of expiration of the term of such Stock Option.
(2) In the event the Optionee ceases to be an employee or director of
the Company or Key Advisor on account of a termination for cause (as
determined in the sole judgement of the Board or its delegate), any Stock
Option held by the Optionee shall automatically terminate as of the date
the Optionee ceases to be an employee or director of the Company or a Key
Advisor (except as the Committee may otherwise provide in the Grant
Letter), but in no event later than the date of expiration of the term of
such Stock Option.
(3) In the event of the death of the Optionee or in the event the
Optionee ceases to be an employee or director of the Company or Key Advisor
on account of the Optionee having become disabled, within the meaning of
Section 22(e) of the Code, any Stock Option which was otherwise exercisable
by the Optionee on the date of death or such disability may be exercised by
the Optionee's personal representative or the Optionee, as the case may be,
at any time prior to the expiration of one year (or such other time as may
be specified in the Grant Letter) from the date of death or the date such
Optionee ceases to be an employee or director of the Company or a Key
Advisor, on account of such disability, but in no event later than the date
of expiration of the term of the Stock Option.
(h) Satisfaction of Purchase Price. The Optionee shall pay the purchase
price specified in the Grant Letter in (i) cash, (ii) with the approval of the
Committee, by delivering shares of Company Stock already owned by the Optionee
for the period necessary to avoid a charge to the Company's earnings for
financial reporting purposes and having a Fair Market Value on the date of
exercise equal to the purchase price, or (iii) through any combination of (i)
cash and (ii) shares. The Optionee shall pay the purchase price and the amount
of any federal, state or local withholding tax due, if any, at the time of
exercise. Shares of Company Stock shall not be issued or transferred upon
exercise of a Stock Option until the purchase price is fully paid and any
required withholding is made.
(i) Limits on Incentive Stock Options. Each Incentive Stock Option shall
provide that, to the extent that the aggregate Fair Market Value of the Company
Stock (on the date of the grant with respect to which Incentive Stock Options
are exercisable for the first time by an Optionee during any calendar year under
the Plan or any other stock option plan of the Company exceeds $100,000, then
such Stock Option as to the excess shall be treated as a Nonqualified Stock
Option. An Incentive Stock Options shall not be granted to any Participant who
is not an employee of the Company or any "subsidiary" (within the meaning of
Section 424(f) of the Code). An Incentive Stock Option shall not be granted to
any employee who, at the time of
<PAGE> 4
grant, owns stock possessing more than 10 percent of the total combined voting
power of all classes of stock of the Company or any "parent" or "subsidiary" of
the Company within the meaning of Section 424(f) of the Code, unless the
purchase price per share is not less than 110% of the Fair Market Value of
Company Stock on the date of grant and the term of the Option is not more than
five years from the date of grant.
6. TRANSFERABILITY OF STOCK OPTIONS
Only the Optionee or his or her authorized legal representative may
exercise rights under a Stock Option. Rights under an Incentive Stock Option may
not be transferred other than by will or by the laws of descent and
distribution. Rights under a Nonqualified Stock Option may not be transferred
except (i) by will or by the laws of decent and distribution, (ii) to the
Optionee's spouse or a lineal descendant or to one or more trusts for the
benefit of such family members or to partnerships in which such family members
are the only partners provided that the Optionee receives no consideration for
such transfer and the Grant Letter relating to such Stock Options continues to
be subject to the same terms and conditions that were applicable to such Stock
Option immediately prior to such transfer, and (iii) if permitted by Rule 16b-3
of the Exchange Act and if permitted in any specific case by the Committee, in
its sole discretion, pursuant to a qualified domestic relations order as defined
under the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended or the regulations thereunder. When an Optionee dies, the
personal representative or other person entitled to succeed to the rights of the
Optionee ("Successor Optionee") may exercise such rights. A Successor Optionee
must furnish proof satisfactory to the Company of his or her right to receive
the Stock Option under the Optionee's will or under the applicable laws of
descent and distribution.
7. CHANGE OF CONTROL OF THE COMPANY
As used herein, a "Change of Control" shall be deemed to have occurred if:
a. Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 40% or more of the voting power of the then outstanding securities
of the Company;
b. The stockholders of the Company approve an agreement providing for (i)
the merger or consolidation of the Company with another corporation where the
stockholders of the Company, immediately prior to the merger or consolidation,
would not beneficially own, immediately after the merger or consolidation shares
entitling such stockholders to 50% or more of all votes (without consideration
of the rights of any class of stock to elect directors by a separate class vote)
to which all stockholders of the surviving corporation would be entitled in the
election of directors or where the members of the Board, immediately prior to
the merger or consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the Board of the surviving corporation
or (ii) the sale or other disposition of all or substantially all the assets of
the Company, or a liquidation, dissolution or statutory exchange of the Company;
c. Any person has commenced, or announced an intention to commence, a
tender offer or exchange offer for 40% or more of the voting power of the then
outstanding securities of the Company; or
d. During any period of two consecutive calendar years there is a change of
25% or more in the composition of the Board in office at the beginning of the
period except for changes approved by at least two-thirds of the directors then
in office who were directors at the beginning of the period.
8. CONSEQUENCES OF A CHANGE OF CONTROL
(a) Upon a Change of Control (i) the Company shall provide each Grantee
with outstanding Grants written notice of such Change of Control and (ii) all
outstanding Stock Options shall automatically accelerate and become fully
exercisable.
(b) In addition, upon a Change of Control described in Section 7(b)(i)
where the Company is not the surviving corporation (or survives only as a
subsidiary of another corporation), all outstanding Stock Options shall be
assumed or replaced with comparable options or rights by the surviving
corporation.
<PAGE> 5
(c) Notwithstanding the foregoing, in the event of a Change of Control, the
Committee may (i) require that Optionees surrender their outstanding Stock
Options in exchange for a payment by the Company, in cash or Company Stock as
determined by the Committee, in an amount equal to the amount by which the then
Fair Market Value of the shares of Company Stock subject to the Optionee's
outstanding Stock Options exceeds the option purchase price of the Stock Options
and (ii) terminate any or all outstanding Stock Options at such time as the
Committee deems appropriate. Such surrender shall take place as of the date of
the Change of Control or such other date as the Committee may specify, and, in
the case of a Stock Option held by a Optionee who is subject to Section 16(b) of
the Exchange Act, any such surrender or payment shall be made on such date as
the Committee shall determine consistent with Rule 16b-3 under the Exchange Act.
The Committee shall not have the right to take the actions described in this
Subsection (c) if such right would make the applicable Change of Control
ineligible for pooling of interest accounting treatment under APB No. 16 or make
such Change of Control ineligible for desired tax treatment with respect to such
Change of Control and, but for this provision, the Change of Control would
otherwise qualify for and the Company intends to use such treatment.
9. AMENDMENT AND TERMINATION OF THE PLAN
(a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that any amendment that increases the aggregate (or
individual limit for any single Optionee) number of shares of Company Stock that
may be issued or transferred under the Plan (other than by operation of Section
3(b), or modifies the requirements as to eligibility for participation in the
Plan, shall be subject to approval by the shareholders of the Company and
provided, further, that the Board shall not amend the Plan without shareholder
approval if such approval is required by Rule 16b-3 of the Exchange Act or
Section 162(m) of the Code.
(b) Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date unless terminated earlier
by the Board or unless extended by the Board with the approval of the
shareholders.
(c) Termination and Amendment of Outstanding Stock Options. A termination
or amendment of the Plan that occurs after a Stock Option is granted shall not
materially impair the rights of an Optionee unless the Optionee consents or
unless the Committee acts under Section 17(b) hereof. The termination of the
Plan shall not impair the power and authority of the Committee with respect to
an outstanding Stock Option. Whether or not the Plan has terminated, an
outstanding Stock Option may be terminated or amended under Section 17(b) hereof
or may be amended by agreement of the Company and the Optionee consistent with
the Plan.
10. FUNDING OF THE PLAN
This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Stock Options under this Plan.
11. RIGHTS OF OPTIONEES
Nothing in this Plan shall entitle any Optionee or other person to any
claim or right to be granted a Stock Option under this Plan. Neither this Plan
nor any action taken hereunder shall be construed as giving any Optionee any
rights to be retained by or in the employ of the Company or any other employment
rights.
12. WITHHOLDING OF TAXES
The Optionee or other person receiving such shares in connection with the
exercise of any Stock Option hereunder shall be required to pay to the Company
the amount of any federal, state or local taxes which the Company is required to
withhold with respect to the exercise of such Stock Options. The Company further
shall have the right to deduct from other wages paid to the employee by the
Company the amount of any withholding due with respect to such Stock Options.
<PAGE> 6
13. AGREEMENTS WITH OPTIONEES
Each Stock Option made under this Plan shall be evidenced by a Grant Letter
containing such terms and conditions as the Committee shall approve.
14. REQUIREMENTS FOR ISSUANCE OF SHARES
No Company Stock shall be issued or transferred upon exercise of any Stock
Option hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Stock Option granted to any Optionee hereunder on such Optionee's
undertaking in writing to comply with such restrictions on his subsequent
disposition of such shares of Company Stock as the Committee shall deem
necessary or advisable as a result of any applicable law, regulation or official
interpretation thereof, and certificates representing such shares may be
legended to reflect any such restrictions.
15. HEADINGS
Section headings are for reference only. In the event of a conflict between
a title and the content of a Section, the content of the Section shall control.
16. EFFECTIVE DATE OF THE PLAN
Subject to the approval of the Company's shareholders, this Plan shall be
effective as of September 8, 1995.
17. MISCELLANEOUS
(a) Substitute Stock Options. The Committee may grant a Stock Option to an
employee of another corporation who becomes a Participant by reason of a
corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or any of its subsidiaries
in substitution for a stock option granted by such corporation ("Substituted
Stock Options"). The terms and conditions of the substitute Stock Option may
vary from the terms and conditions required by the Plan and from those of the
Substituted Stock Options. The Committee shall prescribe the provisions of the
substitute Stock Options.
(b) Compliance with Law. The Plan, the exercise of Stock Options and the
obligations of the Company to issue or transfer shares of Company Stock under
Stock Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to a person
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The Committee
may revoke any Stock Option if it is contrary to law or modify a Stock Option to
bring it into compliance with any valid and mandatory government regulation. The
Committee may also adopt rules regarding the withholding of taxes on payments to
Optionees. The Committee may, in its sole discretion, agree to limit its
authority under this Section.
(c) Ownership of Stock. Except as otherwise provided by the Committee, an
Optionee or Successor Optionee shall have no rights as a shareholder with
respect to any shares of Company Stock covered by a Stock Option until the
shares are issued or transferred to the Optionee or Successor Optionee on the
stock transfer records of the Company.
(d) Governing Law. The validity, construction, interpretation and effect
of the Plan and Grant Letters issued under the Plan shall be governed
exclusively by and determined in accordance with the laws of the Commonwealth of
Pennsylvania.
