H.T.E., INC. QUALIFIED EICP FORM S-8
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST __, 1997
REGISTRATION NO. 333-22637
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------
H.T.E., INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-2133858
- ---------------------------------- ---------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
1000 BUSINESS CENTER DRIVE
LAKE MARY, FLORIDA 32746
----------------------------------------------------
(Address of Principal Executive Offices)
H.T.E., INC. 1997 EXECUTIVE INCENTIVE COMPENSATION PLAN
----------------------------------------
(Full title of the Plans)
-----------------------
DENNIS J. HARWARD
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
H.T.E., INC.
1000 BUSINESS CENTER DRIVE
LAKE MARY, FLORIDA 32746
--------------------------------------------------
(Name and address of agent for service)
(407) 304-3235
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy to:
Randolph H. Fields, Esq.
Greenberg Traurig Hoffman
Lipoff Rosen & Quentel, P.A.
111 North Orange Avenue, Suite 2050
Orlando, Florida 32801
(407) 420-1000
-------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================ ===================== ===================== ====================== =====================
Proposed maximum Proposed
Title of securities Amount to be offering price maximum aggregate Amount of
to be registered registered per share (1) offering price (1) registration fee
- ---------------------------- --------------------- --------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
Common stock, 954,000
$.01 par value........ shares $13.31 $12,697,740 $3,847.42
============================ ===================== ===================== ====================== =====================
<FN>
(1) Estimated solely for the purpose of calculating the registration fee which
was computed in accordance with Rule 457(h) on the basis of the average of the
high and low sale price of the Common Stock as of the close of business on
August 18, 1997.
</FN>
</TABLE>
<PAGE>
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents or portions thereof as indicated:
(a) the Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended June 30, 1997; and
(b) the description of the Registrant's Common Stock filed as a
part of the Registrant's Registration Statement, as amended,
on Form S-1 under the Securities Act of 1933 (Registration No.
333-22637).
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided in such statute. The Registrant's Amended and Restated Articles of
Incorporation provide that the Registrant may indemnify its executive officers
and directors to the fullest extent permitted by law either now or hereafter.
The Registrant has also entered into an agreement with each of its directors and
certain of its officers wherein it has agreed to indemnify each of them to the
fullest extent permitted by law.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Florida law. In addition, each
director will continue to be subject to liability for (a) violations of the
criminal law, unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful; (b)
deriving an improper personal benefit from a transaction; (c) voting for or
assenting to an unlawful distribution; and (d) willful misconduct or a conscious
disregard for the best interests of the Registrant in a proceeding by or in the
right of the Registrant to procure a judgment in its favor or in a proceeding by
or in the right of a shareholder. The statute does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act") may be permitted to directors, officers
or controlling persons of Registrant, pursuant to the foregoing provisions or
otherwise, Registrant has been advised that, in the opinion of the Securities
and Exchange Commission (the "Commission"), such indemnification is against
public policy as expressed in the 1933 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 Registrant in the successful defense of any
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, 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 1933 Act
and will be governed by the final adjudication of such issue.
II-1
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS
EXHIBIT DESCRIPTION
NUMBER -----------
------
4.1 1997 Executive Incentive Compensation Plan
5.1 Opinion of Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel, P.A.
23.1 Consent of Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel, P.A. (contained in
its opinion filed as Exhibit 5.1 hereto).
23.2 Consent of Arthur Andersen L.L.P.
24.1 Power of Attorney is included in the
Signatures section of this Registration
Statement.
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 arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(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 which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(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-2
<PAGE>
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 Lake Mary, State of Florida on August __, 1997.
H.T.E.
By:/s/ Dennis J. Harward
------------------------------------
Dennis J. Harward
Chairman of the Board, President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Dennis J. Harward his true and
lawful attorney-in-fact, each acting alone, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments, including any post-effective
amendments, to this Registration Statement, and to file the same, with exhibits
thereto, and other documents to be filed in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Dennis J. Harward Chairman of the Board, President, Chief August __, 1997
- ---------------------------------------- Executive Officer and Director
Dennis J. Harward (principal executive officer)
/s/ Jack L. Harward Executive Vice President and Director August __, 1997
- ----------------------------------------
Jack L. Harward
/s/ L. A. Gornto, Jr. Executive Vice President and Chief August __, 1997
- ---------------------------------------- Financial Officer (principal financial
L. A. Gornto, Jr. officer)
/s/ Susan D. Falotico Vice President, Controller, Chief August __, 1997
- ---------------------------------------- Accounting Officer (chief accounting
Susan D. Falotico officer)
/s/ Bernard B. Markey Director August __, 1997
- ----------------------------------------
Bernard B. Markey
/s/ Peter R. Roberts Director August __, 1997
- ----------------------------------------
Peter R. Roberts
</TABLE>
<PAGE>
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT DESCRIPTION NUMBERED
NUMBER ----------- PAGE
------ ----
4.1 1997 Executive Incentive Compensation Plan
5.1 Opinion of Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel, P.A.
23.2 Consent of Arthur Andersen L.L.P.
OFFERING MEMORANDUM
FOR
H.T.E., INC.
1997 EXECUTIVE INCENTIVE COMPENSATION PLAN
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
AUGUST 19, 1997
<PAGE>
H.T.E., INC.
1997 EXECUTIVE INCENTIVE COMPENSATION PLAN
TABLE OF CONTENTS
PAGE
----
INTRODUCTION..............................................................1
OUTSTANDING AWARDS UNDER THE PLAN.........................................1
PURPOSE...................................................................2
TYPES OF AWARDS...........................................................2
NUMBER OF SHARES SUBJECT TO THE PLAN......................................2
ADMINISTRATION............................................................3
ELIGIBILITY...............................................................4
TERM, AMENDMENT AND TERMINATION OF THE PLAN...............................4
TERMS AND CONDITIONS OF AWARDS............................................5
Stock Options and SARs............................................5
Restricted and Deferred Stock.....................................5
Dividend Equivalents..............................................6
Bonus Stock and Awards in Lieu of Cash Obligations................6
Other Stock-Based Awards..........................................6
Performance Awards, Including Annual Incentive Awards.............6
Other Terms of Awards.............................................7
Acceleration of Vesting; Change in Control........................8
RESTRICTIONS ON RESALE....................................................8
FEDERAL INCOME TAX EFFECTS...............................................10
Nonqualified Stock Options.......................................10
Incentive Stock Options..........................................11
Performance-Based Compensation...................................12
Importance of Consulting Tax Adviser.............................12
ADDITIONAL INFORMATION...................................................13
Incorporation of Documents by Reference..........................13
Documents Available to Participants..............................13
(i)
<PAGE>
H.T.E., INC.
1997 EXECUTIVE INCENTIVE COMPENSATION PLAN
INTRODUCTION
This Offering Memorandum (this "Memorandum") relates to 954,000 shares
(as such number may be adjusted from time to time, see "Number of Shares Subject
to the Plan" below) of the Common Stock, $.01 par value per share (the "Common
Stock"), of H.T.E., Inc., a Florida corporation (the "Company"), that may be
subject to the granting of stock options, stock appreciation rights ("SARs"),
restricted stock, deferred stock, other stock-related awards and performance or
annual incentive awards that may be settled in cash, stock or other property
(collectively, "Awards") under the Company's 1997 Executive Incentive
Compensation Plan (the "Plan").
The Plan became effective on January 29, 1997. Unless earlier
terminated by the Board of Directors of the Company (the "Board"), the Plan will
terminate at such time as no shares of Common Stock remain available for
issuance under the Plan and the Company has no further rights or obligations
with respect to outstanding Awards under the Plan. See "Term, Amendment and
Termination of the Plans" below.
The Plan is not qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code" or "Internal Revenue Code"), and it is
exempt from the provisions of the Employee Retirement Income Security Act of
1974, as amended. See "Federal Income Tax Effects" below.
The statements in this Memorandum concerning the terms and provisions
of the Plan are summaries only and do not purport to be complete. All such
statements are qualified in their entirety by reference to the full text of the
Plan, which is attached hereto as Exhibit A. A copy of the Plan will be provided
by the Company upon request. See "Additional Information" below.
OUTSTANDING AWARDS UNDER THE PLANOUTSTANDING AWARDS UNDER THE PLAN
As of the date hereof, ________ Awards have been granted under Plan.
Certain information with respect to Awards granted will be set forth in the
Company's reports and other documents incorporated by reference herein and
required or available upon request to be delivered to Plan participants,
including, without limitation, the executive compensation disclosures in the
Company's proxy statements and the notes to the Company's financial statements
included in such filings. See "Additional Information" below. As used herein,
the term "participant" means a person who has been granted an Award under the
Plan which remains outstanding.
<PAGE>
PURPOSE
The purpose of the Plan is to assist the Company and its subsidiaries
in attracting, motivating, retaining and rewarding high-quality executives and
other employees, officers, directors and independent contractors, enabling such
persons to acquire or increase a proprietary interest in the Company in order to
strengthen the mutuality of interests between such persons and the Company's
shareholders, and providing such persons with annual and long term performance
incentives to expend their maximum efforts in the creation of shareholder value.
The Plan is also intended to qualify certain compensation awarded under the Plan
for tax deductibility under Section 162(m) of the Code to the extent deemed
appropriate by the Committee (as defined below, see "Administration"), or any
successor committee of the Board.
TYPES OF AWARDS
The Plan complies with Rule 16b-3, a rule promulgated by the Securities
and Exchange Commission (the "SEC") that provides certain exemptions from the
"short-swing profit" recovery provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), with respect to certain
transactions involving officers and directors under the Plan. The Plan also (i)
complies with certain exclusions from the limitations of Section 162(m) of the
Internal Revenue Code, which are further described below, and (ii) is eligible
under the "plan lender" exemption from the margin requirements of Regulation G
promulgated under the Exchange Act.
NUMBER OF SHARES SUBJECT TO THE PLAN
The total number of shares of Common Stock that may be subject to the
granting of Awards under the Plan at any time during its term shall be equal to
954,000 shares, plus the number of shares with respect to Awards previously
granted under the Plan that terminate without being exercised, expire, are
forfeited or canceled, and the number of shares of Stock that are surrendered in
payment of any Awards or any tax withholding with regard thereto. Shares of
Common Stock issued under the Plan may be either authorized and unissued shares
or treasury shares.
The Plan limits to 954,000 the number of shares which may be issued
pursuant to incentive stock options. In addition, the Plan imposes individual
limitations on the amount of certain Awards in part to comply with Code Section
162(m). Under these limitations, in any fiscal year during any part of which the
Plan is in effect, any one participant may not be granted options, SARs,
restricted shares of Common Stock, deferred shares of Common Stock, shares as a
bonus or in lieu of other Company obligations, and other stock-based Awards
relating to more than 132,500 shares of Stock, subject to adjustment in certain
circumstances. The maximum amount that may be paid out as a final annual
incentive Award or other cash Award in any fiscal year to any one participant is
$1,000,000, and the maximum amount that may be earned as a final performance
Award or other cash Award in respect of a performance period by any one
participant is $2,000,000.
2
<PAGE>
The Committee is authorized to adjust the limitations described in the
preceding paragraph and is authorized to adjust outstanding Awards (including
adjustments to exercise prices of options and other affected terms of Awards) in
the event that a dividend or other distribution (whether in cash, shares of
Common Stock or other property), recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, share
exchange or other similar corporate transaction or event affects the Common
Stock so that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of participants. The Committee is also authorized to
adjust performance conditions and other terms of Awards in response to these
kinds of events or in response to changes in applicable laws, regulations or
accounting principles.
ADMINISTRATION
The Plan is required to be administered by a committee (the
"Committee") designated by the Board consisting of not less than two directors,
each member of which must be a "non-employee director" within the meaning of
Rule 16b-3 under the Exchange Act and an "outside director" for purposes of
Section 162(m) of the Code. The Compensation Committee of the Board has been
appointed as the Committee for the Plan. Subject to the terms of the Plan, the
Committee is authorized to select eligible persons to become participants, grant
Awards, determine the type, number and other terms and conditions of, and all
other matters relating to, Awards, prescribe Award agreements (which need not be
identical for each participant) and rules and regulations for the administration
of the Plan, construe and interpret the Plan and Award agreements and correct
defects, supply omissions or reconcile inconsistencies therein and to make all
other decisions and determinations as the Committee may deem necessary or
advisable for the administration of the Plan. Any action of the Committee shall
be final, conclusive and binding on all persons, including the Company, its
subsidiaries, participants, beneficiaries of participants, transferees
thereunder or other persons claiming rights from or through a participant, and
stockholders. The Committee may appoint agents to assist in administering the
Plan and may delegate to officers or managers of the Company, or any subsidiary
or committee thereof, the authority to perform certain functions, subject to
such terms as the Committee may determine. See "Eligibility" and "Terms and
Conditions of Awards" below. Any member of the Committee may be removed at any
time, with or without cause, by resolution of the Board, and any vacancy
occurring in the membership of the Committee may be filled by appointment by the
Board. In exercising its discretion under the Plan or pursuant to any Award, the
Committee shall not be required to follow past practices, act in a manner
consistent with past practices, or treat any eligible person in a manner
consistent with treatment of other eligible persons.
The Board of Directors is divided into three classes, Class I, Class II
and Class III with the directors of each class elected for a staggered term of
three years and to serve until their successor is duly elected and qualified or
until their earlier resignation, death or removal from office. The Company's
directors do not currently receive any cash compensation for service on the
Board of Directors but may be reimbursed for certain expenses in connection with
attendance at Board of Directors meetings or other meetings on the Company's
behalf. In addition, non-
3
<PAGE>
employee directors receive automatic formula grants of stock options and
restricted stock as described below. Directors receive no additional
compensation for their services in administering of the Plans. See "Eligibility"
and "Terms and Conditions of Awards" below. Additional information about the
Plan and its administrators may be obtained by writing L.A. Gornto, Jr., the
Company's Executive Vice President, Chief Financial Officer and General Counsel
at the Company, or by calling (407) 304-3020.
ELIGIBILITY
The persons eligible to receive Awards under the Plan are the officers,
directors, employees and independent contractors of the Company and its
subsidiaries. No independent contractor will be eligible to receive any Awards
other than stock options. An employee on leave of absence may be considered as
still in the employ of the Company or a subsidiary for purposes of eligibility
for participation in the Plan. As of August 18, 1997, approximately [_______]
persons were eligible to participate in the Plan.
TERM, AMENDMENT AND TERMINATION OF THE PLAN
The Plan became effective on January 29, 1997. The Board may amend,
alter, suspend, discontinue or terminate the Plan or the Committee's authority
to grant Awards without further shareholder approval or participant approval,
except that shareholder approval must be obtained for any amendment or
alteration that is required by law or regulation or under the rules of any stock
exchange or quotation system on which shares of Common Stock are then listed or
quoted; provided, that, without the consent of an affected participant, no such
Board action may materially and adversely affect the rights of such participant
under any previously granted and outstanding Award. Thus, shareholder approval
may not necessarily be required for every amendment to the Plan which might
increase the cost of the Plan or alter the eligibility of persons to receive
Awards. Shareholder approval will not be deemed to be required under laws or
regulations, such as those relating to incentive stock options, that condition
favorable treatment of participants on such approval, although the Board may, in
its discretion, seek shareholder approval in any circumstance in which it deems
such approval advisable. Unless earlier terminated by the Board, the Plan will
terminate at such time as no shares of Common Stock remain available for
issuance under the Plan and the Company has no further rights or obligations
with respect to outstanding Awards under the Plan.
TERMS AND CONDITIONS OF AWARDS
The Plan provides for the issuance of various Awards. The following is
a summary of certain principal features of the Awards and is qualified in its
entirety by reference to the full text of the Plan, which is attached to this
Memorandum as Exhibit A. Participants are urged to read the complete text of the
Plan.
4
<PAGE>
STOCK OPTIONS AND SARS. The Committee is authorized to grant stock
options, including both incentive stock options ("ISOs"), which can result in
potentially favorable tax treatment to the participant, and non-qualified stock
options, and SARs entitling the participant to receive the amount by which the
fair market value of a share of Common Stock on the date of exercise (or defined
"change in control price" following a change in control) exceeds the grant price
of the SAR. The exercise price per share subject to an option and the grant
price of an SAR are determined by the Committee, but must not be less than the
fair market value of a share of Common Stock on the date of grant, except to the
extent of in-the-money awards or cash obligations surrendered by the participant
at the time of grant. For purposes of the Plan, the term "fair market value"
means the fair market value of Common Stock, Awards or other property as
determined by the Committee or under procedures established by the Committee.
Unless otherwise determined by the Committee, the fair market value of Common
Stock as of any given date shall be the closing sales price per share of Common
Stock as reported on a consolidated basis on the principal stock exchange or
market on which Common Stock is traded on the date as of which such value is
being determined or, if there is no sale on that date, then on the last previous
day on which a sale was reported. The maximum term of each option or SAR, the
times at which each option or SAR will be exercisable, and provisions requiring
forfeiture of unexercised options or SARs at or following termination of
employment generally are fixed by the Committee, except that no option or SAR
may have a term exceeding ten years. Options may be exercised by payment of the
exercise price in cash, shares, outstanding Awards or other property having a
fair market value equal to the exercise price, as the Committee may determine
from time to time. Methods of exercise and settlement and other terms of the
SARs are determined by the Committee. SARs granted under the Plan may include
"limited SARs" exercisable for a stated period of time following a change in
control of the Company, as discussed below.
RESTRICTED AND DEFERRED STOCK. The Committee is authorized to grant
restricted stock and deferred stock. Restricted stock is a grant of shares of
Common Stock which may not be sold or disposed of, and which may be forfeited in
the event of certain terminations of employment, prior to the end of a
restricted period specified by the Committee. A participant granted restricted
stock generally has all of the rights of a shareholder of the Company, unless
otherwise determined by the Committee. An Award of deferred stock confers upon a
participant the right to receive shares of Common Stock at the end of a
specified deferral period, subject to possible forfeiture of the Award in the
event of certain terminations of employment prior to the end of a specified
restricted period. Prior to settlement, an Award of deferred stock carries no
voting or dividend rights or other rights associated with share ownership,
although dividend equivalents may be granted, as discussed below.
DIVIDEND EQUIVALENTS. The Committee is authorized to grant dividend
equivalents conferring on participants the right to receive, currently or on a
deferred basis, cash, shares of Common Stock, other Awards or other property
equal in value to dividends paid on a specific number of shares of Common Stock
or other periodic payments. Dividend equivalents may be granted alone or in
connection with another Award, may be paid currently or on a deferred basis
5
<PAGE>
and, if deferred, may be deemed to have been reinvested in additional shares of
Common Stock, Awards or otherwise as specified by the Committee.
BONUS STOCK AND AWARDS IN LIEU OF CASH OBLIGATIONS. The Committee is
authorized to grant shares of Common Stock as a bonus free of restrictions, or
to grant shares of Common Stock or other Awards in lieu of Company obligations
to pay cash under the Plan or other plans or compensatory arrangements, subject
to such terms as the Committee may specify.
OTHER STOCK-BASED AWARDS. The Committee is authorized to grant Awards
that are denominated or payable in, valued by reference to, or otherwise based
on or related to shares of Common Stock. Such Awards might include convertible
or exchangeable debt securities, other rights convertible or exchangeable into
shares of Common Stock, purchase rights for shares of Common Stock, Awards with
value and payment contingent upon performance of the Company or any other
factors designated by the Committee, and Awards valued by reference to the book
value of shares of Common Stock or the value of securities of or the performance
of specified subsidiaries or business units. The Committee determines the terms
and conditions of such Awards.
PERFORMANCE AWARDS, INCLUDING ANNUAL INCENTIVE AWARDS. The right of a
participant to exercise or receive a grant or settlement of an Award, and the
timing thereof, may be subject to such performance conditions (including
subjective individual goals) as may be specified by the Committee. In addition,
the Plan authorizes specific annual incentive Awards, which represent a
conditional right to receive cash, shares of Common Stock or other Awards upon
achievement of certain preestablished performance goals and subjective
individual goals during a specified fiscal year. Performance Awards and annual
incentive Awards granted to persons whom the Committee expects will, for the
year in which a deduction arises, be "covered employees" (as defined below)
will, if and to the extent intended by the Committee, be subject to provisions
that should qualify such Awards as "performance-based compensation" not subject
to the limitation on tax deductibility by the Company under Code Section 162(m).
For purposes of Section 162(m), the term "covered employee" means the Company's
chief executive officer and each other person whose compensation is required to
be disclosed in the Company's filings with the SEC by reason of that person
being among the four highest compensated officers of the Company as of the end
of a taxable year.
Subject to the requirements of the Plan, the Committee will determine
performance Award and annual incentive Award terms, including the required
levels of performance with respect to specified business criteria, the
corresponding amounts payable upon achievement of such levels of performance,
termination and forfeiture provisions and the form of settlement. In granting
annual incentive or performance Awards, the Committee may establish unfunded
award "pools," the amounts of which will be based upon the achievement of a
performance goal or goals based on one or more of certain business criteria
described in the Plan (including, for example, total shareholder return, net
income, pretax earnings, EBITDA, earnings per share, growth in earnings per
share, and return on investment). During the first 90 days of a fiscal year
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or performance period, the Committee will determine who will potentially receive
annual incentive or performance Awards for that fiscal year or performance
period, either out of the pool or otherwise.
After the end of each fiscal year or performance period, the Committee
will determine (i) the amount of any pools and the maximum amount of potential
annual incentive or performance Awards payable to each participant in the pools
and (ii) the amount of any other potential annual incentive or performance
Awards payable to participants in the Plan. The Committee may, in its
discretion, determine that the amount payable as a final annual incentive or
performance Award will be reduced from the amount of any potential Award.
OTHER TERMS OF AWARDS. Awards may be settled in the form of cash,
shares of Common Stock, other Awards or other property, in the discretion of the
Committee. The Committee may require or permit participants to defer the
settlement of all or part of an Award in accordance with such terms and
conditions as the Committee may establish, including payment or crediting of
interest or dividend equivalents on deferred amounts, and the crediting of
earnings, gains and losses based on deemed investment of deferred amounts in
specified investment vehicles. The Committee is authorized to place cash, shares
of Common Stock or other property in trusts or make other arrangements to
provide for payment of the Company's obligations under the Plan. The Committee
may condition any payment relating to an Award on the withholding of taxes and
may provide that a portion of any shares of Common Stock or other property to be
distributed will be withheld (or previously acquired shares of Common Stock or
other property be surrendered by the participant) to satisfy withholding and
other tax obligations. Awards granted under the Plan generally may not be
pledged or otherwise encumbered and are not transferable except by will or by
the laws of descent and distribution, or to a designated beneficiary upon the
participant's death, except that the Committee may, in its discretion, permit
transfers for estate planning or other purposes subject to any applicable
restrictions under Rule 16b-3.
Awards under the Plan are generally granted without a requirement that
the participant pay consideration in the form of cash or property for the grant
(as distinguished from the exercise), except to the extent required by law. The
Committee may, however, grant Awards in exchange for other Awards under the
Plan, awards under other Company plans, or other rights to payment from the
Company, and may grant Awards in addition to and in tandem with such other
Awards, rights or other awards.
In addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to the restrictions on
amendment described under "Term, Amendment and Termination of the Plan" above)
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms requiring a
forfeiture of Awards in the event of termination of employment by the
participant and terms permitting a participant to make elections relating to his
Award. The Committee shall retain full power and discretion to accelerate, waive
or modify, at any time, any term or condition of an Award that is not mandatory
under the Plan. Except in cases in which the Committee is
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authorized to require other forms of consideration under the Plan, or to the
extent other forms of consideration must be paid to satisfy the requirements of
Florida law, no consideration other than services may be required for the grant
(but not the exercise) of any Award.
ACCELERATION OF VESTING; CHANGE IN CONTROL. The Committee may, in its
discretion, accelerate the exercisability, the lapsing of restrictions or the
expiration of deferral or vesting periods of any Award, and such accelerated
exercisability, lapse, expiration and, if so provided in the Award agreement,
vesting shall occur automatically in the case of a "change in control" of the
Company, as defined in the Plan (including the cash settlement of SARs and
"limited SARs" which may be exercisable in the event of a change in control). In
addition, the Committee may provide in an Award agreement that the performance
goals relating to any performance based Award will be deemed to have been met
upon the occurrence of any "change in control." Upon the occurrence of a change
in control, if so provided in the Award agreement, stock options and limited
SARs (and other SARs which so provide) may be cashed out based on a defined
"change in control price," which will be the higher of (i) the cash and fair
market value of property that is the highest price per share paid (including
extraordinary dividends) in any reorganization, merger, consolidation,
liquidation, dissolution or sale of substantially all assets of the Company, or
(ii) the highest fair market value per share (generally based on market prices)
at any time during the 60 days before and 60 days after a change in control. For
purposes of the Plan, the term "change in control" generally means (a) any of
the transactions referenced in clause (i) of the previous sentence, (b) an
acquisition by any person, entity or group of 30% or more of the outstanding
Common Stock or 30% or more of the combined voting power of the Company's
outstanding voting securities, or (c) a change in the composition of the Board
such that the persons constituting the current Board, and subsequent directors
approved by the current Board (or approved by such subsequent directors), cease
to constitute at least a majority of the Board.
RESTRICTIONS ON RESALE
Shares of Common Stock available for Awards may be resold only in
compliance with the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state securities laws.
Persons not deemed to be "affiliates" of the Company within the meaning
of the Securities Act and applicable regulations promulgated thereunder by the
Commission may resell shares of Common Stock acquired pursuant to the Plan
without limitation under the Securities Act as to either the quantity sold or
the period during which such stock was held, provided such shares are so
acquired while a registration statement under the Securities Act covering the
issuance of such shares is in effect.
Under the Securities Act, persons who are "affiliates" of the Company
may resell shares of Common Stock purchased under the Plan only (i) in
accordance with the provisions of Rule 144 promulgated by the Commission under
the Securities Act (exclusive of the one year holding period if such shares are
acquired under the Plan while a registration statement covering the issuance of
such shares is in effect) or some other exemption from registration under the
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Securities Act, or (ii) pursuant to an applicable, current and effective
registration statement in accordance with the Securities Act, including Form S-1
or Form S-3, but not including a registration statement on Form S-8. As defined
in Rule 405 promulgated by the Commission under the Securities Act, an
"affiliate" of the Company is a person that directly, or indirectly through one
or more intermediaries, controls or is controlled by, or is under common control
with, the Company. The determination of whether a person is an "affiliate" of
the Company is primarily a factual one based upon whether he possesses, directly
or indirectly, individually or in concert with others, the power to direct or
cause the direction of the management or policies of the Company, whether
through the ownership of voting stock, by executive position, by membership on
the Board, by contract or otherwise. Each participant should consult his legal
counsel to determine whether he is an "affiliate" of the Company and therefore
whether the attendant restrictions on resale under the Securities Act apply to
sales of Common Stock acquired pursuant to the Plan.
Section 16(b) of the Exchange Act provides, among other things, that
any person who is a beneficial owner of more than 10 percent of an equity
security of a company registered under the Exchange Act or an officer or
director of that company, will be liable to the company for any profit realized
from any purchase and sale (or any sale and purchase) of any equity security of
such company within a period of less than six months, irrespective of the
intention on the part of such person entering into the transaction. Persons to
whom Section 16(b) may apply should consult with the Company's general counsel
prior to the acquisition or disposition of any shares of Common Stock (including
shares acquired in connection with the exercise of stock options or other Awards
granted pursuant to the Plan).
Section 16(b) liability does not attach unless both a purchase and a
sale of a security have occurred. In that regard, because the Plan complies with
the requirements of Rule 16b-3 promulgated under the Exchange Act, none of the
following events will be deemed to be a "purchase" of shares: (i) provided that
at least six months have elapsed between the grant of the Award and the
disposition of the Common Stock received pursuant thereto, the acquisition of
Awards granted under the Plan; (ii) the vesting of rights under stock options;
and (iii) the use of already owned Common Stock as payment for the exercise of
stock options. An acquisition of Common Stock pursuant to the exercise of a
stock option will generally not be considered a "purchase" of Common Stock for
purposes of Section 16(b); provided, however, that if the acquisition of Common
Stock is pursuant to the exercise of an out-of-the-money stock option, such
acquisition will be treated as a nonexempt acquisition of securities unless the
exercise is necessary to comport with the sequential exercise provisions of the
Internal Revenue Code.
FEDERAL INCOME TAX EFFECTS
The Plan is not qualified under the provisions of Section 401(a) of the
Code, nor is it subject to any of the provisions of the Employee Retirement
Income Security Act of 1974, as amended. The following is a brief description of
the Federal income tax consequences generally arising with respect to Awards of
options under the Plan.
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NONQUALIFIED STOCK OPTIONS. Under the Code, a participant generally is
not subject to tax upon the grant of a stock option. On exercise of a
non-qualified stock option granted under the Plan, a participant (other than an
officer or director of the Company pursuant to Section 83(b) of the Code as
described below) will recognize ordinary income equal to the excess, if any, of
the fair market value on the date of exercise of the shares of Common Stock
acquired on exercise of the option over the exercise price. That income will be
subject to the withholding of Federal income tax. The participant's tax basis in
those shares will be equal to their fair market value on the date of exercise of
the option, and his holding period for those shares will begin on that date.
An officer or director of the Company or any other person to whom the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act
apply (a "Reporting Person") generally will not recognize ordinary income until
the earlier of the expiration of the six month period after the exercise of an
option and the first day on which a sale at a profit of shares acquired on
exercise of an option would not subject the Reporting Person to suit under
Section 16(b) of the Exchange Act. The amount of ordinary income will equal the
excess, if any, of the fair market value of the shares on the date the income is
recognized over the exercise price of the option. A Reporting Person, however,
is entitled to elect under Section 83(b) of the Code to recognize ordinary
income on the date of exercise of the option, in which case the amount of income
will be equal to the excess, if any, of the fair market value of the shares on
that date over the exercise price of the option. A Section 83(b) election must
be made within 30 days after exercising an option.
Otherwise, a participant's disposition of shares of Common Stock
acquired upon the exercise of an option generally will result in short-term or
long-term capital gain or loss measured by the difference between the sale price
and the participant's tax basis in such shares of Common Stock (the tax basis
generally being the exercise price plus any amount previously recognized as
ordinary income in connection with the exercise of the option).
If a participant pays for shares of Common Stock on exercise of an
option by delivering shares of the Company's Common Stock, the participant will
not recognize gain or loss on the shares delivered, even if their fair market
value at the time of exercise differs from the participant's tax basis in them.
The participant, however, otherwise will be taxed on the exercise of the option
in the manner described above as if he had paid the exercise price in cash. If a
separate identifiable stock certificate is issued for that number of shares
equal to the number of shares delivered on exercise of the option, the
participant's tax basis in the shares represented by that certificate will be
equal to his tax basis in the shares delivered, and his holding period for those
shares will include his holding period for the shares delivered. The
participant's tax basis and holding period for the additional shares received on
exercise of the option will be the same as if the participant had exercised the
option solely in exchange for cash.
The Company will be entitled to a deduction for Federal income tax
purposes equal to the amount of ordinary income taxable to the participant,
provided that amount constitutes an ordinary and necessary business expense for
the Company and is reasonable in amount, and either the participant includes
that amount in income or the Company timely satisfies its
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reporting requirements with respect to that amount. The Company generally is not
entitled to a tax deduction relating to amounts that represent a capital gain to
a participant.
INCENTIVE STOCK OPTIONS. The Plan provides for the grant of stock
options that qualify as "incentive stock options" as defined in Section 422 of
the Code. Under the Code, a participant generally is not subject to tax upon the
grant or exercise of an ISO (except that the alternative minimum tax may apply).
In addition, if the participant holds a share received on exercise of an ISO for
at least two years from the date the option was granted and at least one year
from the date the option was exercised (the "Required Holding Period"), the
difference, if any, between the amount realized on a sale or other taxable
disposition of that share and the holder's tax basis in that share will be
long-term capital gain or loss (the tax basis generally being the exercise price
plus any amount previously recognized as ordinary income in connection with the
exercise of the option).
If, however, a participant disposes of a share acquired on exercise of
an ISO before the end of the Required Holding Period (a "Disqualifying
Disposition"), the participant generally will recognize ordinary income in the
year of the Disqualifying Disposition equal to the excess, if any, of the fair
market value of the share on the date the ISO was exercised over the exercise
price. If, however, the Disqualifying Disposition is a sale or exchange on which
a loss, if realized, would be recognized for Federal income tax purposes, and if
the sales proceeds are less than the fair market value of the share on the date
of exercise of the option, the amount of ordinary income recognized by the
participant will not exceed the gain, if any, realized on the sale. If the
amount realized on a Disqualifying Disposition exceeds the fair market value of
the share on the date of exercise of the option, that excess will be short-term
or long-term capital gain, depending on whether the holding period for the share
exceeds one year.
A participant who exercises an ISO by delivering shares of Common Stock
acquired previously pursuant to the exercise of an ISO before the expiration of
the Required Holding Period for those shares is treated as making a
Disqualifying Disposition of those shares. This rule prevents "pyramiding" the
exercise of an ISO (that is, exercising an ISO for one share and using that
share, and others so acquired, to exercise successive ISOs) without the
imposition of current income tax.
For purposes of the alternative minimum tax, the amount by which the
fair market value of a share of Common Stock acquired on exercise of an ISO
exceeds the exercise price of that option generally will be an adjustment
included in the participant's alternative minimum taxable income for the year in
which the option is exercised. If, however, there is a Disqualifying Disposition
of the share in the year in which the option is exercised, there will be no
adjustment with respect to that share. If there is a Disqualifying Disposition
in a later year, no income with respect to the Disqualifying Disposition is
included in the participant's alternative minimum taxable income for that year.
In computing alternative minimum taxable income, the tax basis of a share
acquired on exercise of an ISO is increased by the amount of the adjustment
taken into account with respect to that share for alternative minimum tax
purposes in the year the option is exercised.
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The Company generally will be entitled to a tax deduction equal to the
amount recognized as ordinary income by the participant in connection with an
option. The Company generally is not entitled to a tax deduction relating to
amounts that represent a capital gain to a participant. Accordingly, the Company
is not allowed an income tax deduction with respect to the grant or exercise of
an ISO or the disposition of a share acquired on exercise of an ISO after the
Required Holding Period. However, if there is a Disqualifying Disposition of a
share, the Company is allowed a deduction in an amount equal to the ordinary
income includible in income by the participant, provided that amount constitutes
an ordinary and necessary business expense for the Company and is reasonable in
amount, and either the employee includes that amount in income or the Company
timely satisfies its reporting requirements with respect to that amount.
PERFORMANCE-BASED COMPENSATION. The Omnibus Budget Reconciliation Act
of 1993 added Section 162(m) to the Code, which generally disallows a public
company's tax deduction for compensation to covered employees in excess of $1
million in any tax year beginning on or after January 1, 1994. Compensation that
qualifies as "performance-based compensation" is excluded from the $1 million
deductibility cap, and therefore remains fully deductible by the company that
pays it. As discussed above, the Company intends that options and certain other
Awards granted to employees whom the Committee expects to be covered employees
at the time a deduction arises in connection with such Awards, qualify as such
"performance-based compensation," so that such Awards will not be subject to the
Section 162(m) deductibility cap of $1 million. Future changes in Section 162(m)
or the regulations thereunder may adversely affect the ability of the Company to
ensure that options or other Awards under the Plan will qualify as
"performance-based compensation" that is fully deductible by the Company under
Section 162(m).
IMPORTANCE OF CONSULTING TAX ADVISER. The information set forth above
is a summary only and does not purport to be complete. In addition, the
information is based upon current Federal income tax rules and therefore is
subject to change when those rules change. Moreover, because the tax
consequences to any participant may depend on his particular situation, each
participant should consult his tax adviser as to the Federal, state, local and
other tax consequences of the grant of an Award, the exercise of a stock option
or the disposition of Common Stock acquired on exercise of a stock option or
otherwise acquired pursuant to an Award.
ADDITIONAL INFORMATION
INCORPORATION OF DOCUMENTS BY REFERENCE. The Company hereby
incorporates by reference into this Memorandum the following documents:
(i) the registration statement on Form S-1 (Registration
No. 333-22637) filed with the Securities and Exchange Commission, effective June
10, 1997;
(ii) the Company's quarterly report on Form 10-Q for the
fiscal quarter ended June 30, 1997; and
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(iii) all reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act.
In addition, all 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 which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of filing of such documents.
DOCUMENTS AVAILABLE TO PARTICIPANTS. Participants in the Plan may
obtain from the Company without charge, upon written or oral request, a copy of
any and all of the documents incorporated by reference herein as described above
(not including exhibits thereto unless such exhibits are specifically
incorporated by reference into such documents), and a copy of any other
documents required by Rule 428(b)(2) promulgated under the Securities Act to be
delivered herewith to each employee to whom this Memorandum is sent or given.
Such requests should be sent in writing to H.T.E., Inc., 1000 Business Center
Drive, Lake Mary, Florida 32746, Attention: L.A. Gornto, Jr. In addition, the
Company will deliver or cause to be delivered to all employees participating in
the Plan who do not otherwise receive such material, copies of all reports,
proxy statements, and other communications distributed to its security holders
generally.
13
Exhibit 5.1
August __, 1997
H.T.E., Inc.
1000 Business Center Drive
Lake Mary, Florida 32746
RE: H.T.E., INC. REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
On the date hereof, H.T.E., Inc. a Florida corporation (the "Company"),
sent for filing with the Securities and Exchange Commission a registration
statement on Form S-8 (the "Registration Statement"), under the Securities Act
of 1933, as amended (the "Act"). The Registration Statement relates to the
offering and sale by the Company of up to 954,000 shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), pursuant to the Company's
1997 Executive Incentive Compensation Plan (the "Plan"). We have acted as
special counsel to the Company in connection with the preparation and filing of
the Registration Statement.
In connection therewith, we have examined and relied upon the original
or a copy, certified to our satisfaction, of (i) the articles of incorporation
and bylaws of the Company, each as amended to date; (ii) records of corporate
proceedings of the Company authorizing the Plan, any amendments thereto, and the
preparation of the Registration Statement and related matters; (iii) the
Registration Statement and exhibits thereto; and (iv) such other documents and
instruments as we have deemed necessary for the expression of the opinions
herein contained. In making the foregoing examinations, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, and the conformity to original documents of all documents
submitted to us as certified or photostatic copies. As to various questions of
fact material to this opinion, we have relied, to the extent we deem reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by the
Company, without independently checking or verifying the accuracy of such
documents, records and instruments.
Based upon the foregoing examination, we are of the opinion that the
Company presently has available at least 954,000 authorized and unissued shares
of Common Stock from which the 954,000 shares of Common Stock proposed to be
sold pursuant to the Plan may be issued, and, assuming that the Company
maintains an adequate number of authorized and unissued shares of
<PAGE>
H.T.E., Inc.
August __, 1997
Page 2
Common Stock available for issuance pursuant to purchases made under the Plan
and the consideration for shares of Common Stock issued pursuant to the Plan is
actually received by the Company as provided in the Plan, the shares of Common
Stock issued pursuant to purchases made under and in accordance with the terms
of the Plan will be duly and validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we come
within the category of persons whose consent is required by Section 7 of the Act
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Sincerely,
GREENBERG TRAURIG HOFFMAN
LIPOFF ROSEN & QUENTEL, P.A.
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 28, 1997, included in H.T.E., Inc.'s Form S-1 (File No. 333-22637) and
to all references to our Firm included in this registration statement.
Orlando, Florida,
August 21, 1997 /S/ Arthur Andersen LLP
