As filed with the Securities and Exchange Commission on October 14, 1997.
Registration No. 333-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------------
THINK NEW IDEAS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4578104
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
45 W. 36TH STREET - 12TH FLOOR
NEW YORK, NEW YORK 10018
(212) 629-6800
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
THINK NEW IDEAS, INC. AMENDED AND RESTATED 1997 STOCK OPTION PLAN
(Full Title of Plan)
------------------------------
SCOTT A. MEDNICK, CHIEF EXECUTIVE OFFICER
THINK NEW IDEAS, INC.
8000 SUNSET BOULEVARD
PENTHOUSE EAST
LOS ANGELES, CA 90046
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
------------------------------
Copies to:
Victoria A. Baylin, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
Washington, DC 20036
(202) 778-9000
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: |X|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
Proposed Maximum Proposed Maximum Amount Of
Amount To Aggregate Price Per Aggregate Offering Registration
Title Of Securities To Be Registered Be Share (1) Price (2) Fee (1)
Registered(1)
<S> <C> <C> <C> <C>
Options ----- ----- ----- -----
Common Stock, $.0001 par value (2) 2,000,000 $11.47 $22,940,000 $6,952
======================================================================================================================
</TABLE>
(1) Represents the maximum number of shares of Common Stock which may be issued
pursuant to exercise of options granted under the THINK New Ideas, Inc.
Amended and Restated 1997 Stock Option Plan.
(2) Calculated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended, based upon the average of the bid and asked prices for the
Common Stock on October 13, 1997.
(3) Represents the same shares of Common Stock described in the line above,
which may be resold by the holder upon exercise of options issued under the
above-referenced stock option plan.
(4) Pursuant to Rule 457(h), no additional fee is payable since the shares of
Common Stock, which may be offered for resale, are the same shares being
registered hereby upon their initial issuance pursuant to the
above-referenced stock option plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
This Registration Statement (the "Registration Statement") relates to
the issuance by THINK New Ideas, Inc. (the "Company") of up to 2,000,000 shares
of its common stock, par value $.0001 per share (the "Common Stock") upon
exercise of options granted under the Company's Amended and Restated 1997 Stock
Option Plan (the "Plan").
The purpose of the Plan is to induce officers, directors, employees and
consultants of the Company (or any subsidiary of the Company) who are in a
position to contribute materially to the Company's prosperity to remain with the
Company, to offer such persons incentives and rewards in recognition of their
contributions to the Company and to encourage such persons to continue to
promote the best interests of the Company.
The Plan provides for the grant to employees of options intended to
qualify as incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended, and options which do not so qualify to persons
including those who are not employees.
The Plan is currently administered by the board of directors (the
"Board") of the Company, but may be administered pursuant to the terms of the
Plan, by a committee of the Board, provided that such committee has at least two
members, each of whom is not an employee.
The exercise price, period of exercise and number of shares subject to
options granted under the Plan is within the discretion of the administrator of
the Plan, subject to certain requirements as to the pricing and exercise period
of certain qualified and non-qualified options granted to stockholders based on
the percentage of their ownership of the Company's common stock.
The Plan was authorized by the Board of Directors in February 1997 and
will be submitted for approval of the stockholders of the Company at the
Company's next annual meeting of stockholders, which is currently scheduled for
December 11, 1997.
The foregoing information relating to the Plan is intended to provide a
summary thereof and does not purport to be a complete description of the Plan.
Such summary should be read in conjunction with the Plan which has been filed as
Exhibit 4 hereto and is incorporated herein by reference in its entirety.
Document(s) containing more specific information regarding the Plan as required
by this Item 1 will be sent or given to participants in the Plan as specified by
Rule 428(b) promulgated under the Securities Act of 1933, as amended, and are
not a part of this Registration Statement.
<PAGE>
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The participants in the Plan have been provided with copies of the Plan
and the documents incorporated herein by reference in Part II: Item 3 hereof.
Such participants have been advised by the Company in writing that such
documents will continue to be available, without charge, to the participants
upon written request to the Company at its principal offices at 45 W. 36th
Street, New York, New York 10018 (Phone: 212-629-6800).
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, including any amendments thereto, which have
been or shall be filed by the Company with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference and shall be
deemed to be a part hereof from the date of filing such documents.
(a) The Company's annual report on Form 10-KSB for the year ended
June 30,1997 (File No. 000-21775); and
(b) All reports filed by the Company pursuant to Sections 13(a) or
15(d) of the Exchange Act of 1934 (the "Exchange Act")
subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment which
indicates that all of the securities offered hereby have been
sold or which deregisters all securities then remaining
unsold.
ITEM 4. DESCRIPTION OF SECURITIES.
The Certificate of Incorporation of the Company authorizes the issuance
of up to 50,000,000 shares of Common Stock, $.0001 par value per share. Each
share of Common Stock entitles the holder thereof to one vote on each matter
submitted to the stockholders of the Company. The holders of Common Stock are
entitled to receive ratable dividends, if any, as may be declared by the Board
of Directors out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of Company, the holders of Common Stock
are entitled to share ratably in all of the assets of the Company available for
distribution. The Common Stock has no preemptive, subscription or conversion
rights, or redemption or sinking fund provisions applicable thereto. All
outstanding shares of Common Stock are fully paid and non-assessable. The
Company has not paid any dividends on its Common Stock to date.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Certificate of Incorporation of the Company limits the personal
liability of directors to the fullest extent permitted by Section 102(b)(7) of
the Delaware General Corporation Law. Section 145 of the Delaware General
Corporation Law provides that a corporation's certificate of incorporation may
limit the personal liability of its directors for monetary damages for breach of
their fiduciary duties as directors except for liability: (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) arising under Section 174 of the Delaware
General Corporation Law; or (iv) for any transaction from which the director
derived an improper personal benefit.
The effect of the foregoing is to require the Company to indemnify the
officers and directors of the Company for any claim arising against such persons
in their official capacities if such person acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT MAY
BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT
TO THE FOREGOING PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT IN THE OPINION
OF THE SECURITIES AND EXCHANGE COMMISSION, SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT AND IS THEREFORE UNENFORCEABLE.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4 THINK New Ideas, Inc. Amended and Restated 1997 Stock Option
Plan
5(a) Opinion of Counsel regarding legality.
23(a) Consent of BDO Seidman, LLP
23(b) Consent of Counsel included in Exhibit 5(a).
<PAGE>
ITEM 9. UNDERTAKINGS
The Company hereby undertakes:
A. Rule 415 Offering.
------------------
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this Registration Statement to include any
additional or changed information with respect to the plan of distribution;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. Subsequent Exchange Act Documents Incorporated by Reference:
------------------------------------------------------------
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act, and each filing
of the Plan's annual report pursuant to Section 15(d) of the Exchange Act 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. Indemnification.
----------------
(1) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the 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 Company of expenses incurred or paid by a director,
officer, or controlling person of the Company 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
Company 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on October 10,
1997.
THINK NEW IDEAS, INC.
By: Scott A. Mednick
----------------
Scott A. Mednick, Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of the Company, hereby
severally constitute and appoint Scott A. Mednick our true and lawful
attorney-in-fact and agent, with full power to him to sign any and all
amendments (including post effective amendments) to this Registration Statement
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite or necessary to be done in and about the
premises, as fully to all interest and purposes as we might or could do in
person, ratifying and conforming all that said attorney-in-fact and agent or any
of them, or his substitute or substitutes, may unlawfully 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 by the following persons in the
capacities indicated as of October 14, 1997.
/s/ Scott A. Mednick Chief Executive Officer, Chairman
- ---------------------------------- of the Board and Director
Scott A. Mednick
/s/ Ronald Bloom President and Director
- ----------------------------------
Ronald Bloom
/s/ Melvin Epstein Chief Financial Officer and Secretary
- ----------------------------------
Melvin Epstein
/s/ Adam Curry Chief Technology Officer and
- ----------------------------------
Adam Curry Director
/s/ Larry Kopald Chief Creative Officer and Director
- ----------------------------------
Larry Kopald
/s/ Barry Wagner Director
- ----------------------------------
Barry Wagner
/s/ Richard Char Director
- ----------------------------------
Richard Char
/s/ Marc Canter Director
- ----------------------------------
Marc Canter
===============================================================================
THINK NEW IDEAS, INC.
AMENDED AND RESTATED
1997 STOCK OPTION PLAN
=============================================================================
<PAGE>
THINK NEW IDEAS, INC.
AMENDED AND RESTATED
1997 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
Section 1.1. THINK New Ideas, Inc., a Delaware corporation (the
"Company"), hereby establishes a stock option plan to be named the THINK New
Ideas, Inc. Amended and Restated 1997 Stock Option Plan (the "Plan").
Section 1.2. The purpose of this Plan is to induce persons who are
officers, directors, employees and consultants of the Company (or any of its
subsidiaries) who are in a position to contribute materially to the Company's
prosperity to remain with the Company, to offer said persons incentives and
rewards in recognition of their contributions to the Company's progress, and to
encourage said persons to continue to promote the best interests of the Company.
This Plan provides for the grant of options to purchase shares of common stock
of the Company, par value $.0001 per share (the "Common Stock") which qualify as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), to persons who are employees, as
well as options which do not so qualify ("Non-Qualified Options") to be issued
to persons, including those who are not employees. Incentive Options and
Non-Qualified Options may be collectively referred to hereinafter as the
"Options" as the context may require. Persons granted Options hereunder may be
referred to hereinafter as the "Optionees."
Section 1.3. All Options granted on or after the date that this Plan
has been approved and adopted by the Company's board of directors (the "Board of
Directors") shall be governed by the terms and conditions of this Plan unless
the terms of any such Option specifically indicate that it is not to be so
governed.
Section 1.4. Any Option granted hereunder which is intended to qualify
as an Incentive Option which, for any reason whatsoever, fails to so qualify,
shall be deemed to be a Non-Qualified Option granted hereunder.
ARTICLE II
ADMINISTRATION
Section 2.1. All determinations hereunder concerning the selection of
persons eligible to receive awards under this Plan and determinations with
respect to the timing, pricing and amount of an award hereunder (other than
pursuant to a non-discretionary formula hereinafter set forth, shall be made by
an administrator (the "Administrator"). The Administrator shall be either: (a)
the Board of Directors, or (b) in the discretion of the Board of Directors, a
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<PAGE>
committee of not less than two members of the Board of Directors (the
"Committee"), each of whom is a "Non-Employee" Director as such term is defined
in Rule 16b-3 (as such rule may be amended from time to time, "Rule 16b-3")
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In
the event this Plan is administered by the Committee, the Committee shall select
one of its members to serve as the chairman thereof and shall hold its meetings
at such times and places as it may determine. In such case, a majority of the
total number of members of the Committee shall be necessary to constitute a
quorum; and (i) the affirmative act of a majority of the members present at any
meeting at which a quorum is present, or (ii) the approval in writing by a
majority of the members of the Committee, shall be necessary to constitute
action by the Committee.
Section 2.2. The provisions hereof relating to Incentive Options are
intended to comply in every respect with Section 422 of the Code ("Section 422")
and the regulations promulgated thereunder. In the event that any future statute
or regulation shall modify Section 422, this Plan shall be deemed to incorporate
by reference such modification. Any agreement relating to the grant of any
Incentive Option hereunder, which Option is outstanding and unexercised at the
time that any modifying statute or regulation becomes effective, shall also be
deemed to incorporate by reference such modification and no notice of such
modification need be given to the Optionee. Any agreement relating to an
Incentive Option granted hereunder shall provide that the Optionee hold the
stock received upon exercise of such Incentive Option for a minimum of two years
from the date of grant of the Incentive Option and one year from the date of
exercise of such Incentive Option, absent the written approval, consent or
waiver of the Administrator.
Section 2.3. If any provision of this Plan is determined to disqualify
the shares of Common Stock purchasable upon exercise of an Incentive Option
granted hereunder from the special tax treatment provided by Section 422, such
provision shall be deemed to incorporate by reference the modification required
to qualify such shares of Common Stock for said tax treatment.
Section 2.4. The Company shall grant Options hereunder in accordance
with determinations made by the Administrator pursuant to the provisions hereof.
All Options granted pursuant hereto shall be clearly identified as Incentive
Options or Non-Qualified Options. The Administrator may from time to time adopt
(and thereafter amend or rescind) such rules and regulations for carrying out
this Plan and take such action in the administration of this Plan, not
inconsistent with the provisions hereof, as it shall deem proper. The Board of
Directors or, subject to the supervision of the Board of Directors, the
Committee, as the Administrator, shall have plenary discretion, subject to the
express provisions of this Plan, to determine which officers, directors,
employees and consultants shall be granted Options, the number of shares subject
to each Option, the time or times when an Option may be exercised (whether in
whole or in installments), the terms and provisions of the respective agreements
relating to the grant of Options (which need not be identical), including such
terms and provisions which may be amended from time to time as shall be
required, in the judgment of the Administrator, to conform to any change in any
law or regulation applicable hereto, and to make all other determinations deemed
necessary or advisable for the administration of this Plan. The interpretation
3
<PAGE>
and construction of any provision of this Plan by the Administrator (unless
otherwise determined by the Board of Directors) shall be final, conclusive and
binding upon all persons.
Section 2.5. No member of the Administrator shall be liable for any
action or determination made in good faith with respect to administration of
this Plan or the Options granted hereunder. Members of the Board of Directors
and/or the Committee, as the Administrator, shall be indemnified by the Company,
pursuant to the Company's bylaws, for any expenses, judgments or other costs
incurred as a result of a lawsuit filed against such member claiming any rights
or remedies arising out of such member's participation in the administration of
this Plan.
ARTICLE III
TOTAL NUMBER OF SHARES TO BE OPTIONED
Section 3.1. There shall be reserved for issuance or transfer upon
exercise of the Options granted from time to time hereunder an aggregate of
2,000,000 shares of Common Stock (subject to adjustment as provided in Article
VIII hereof). The shares of Common Stock issued upon exercise of any Option
granted hereunder may be shares of Common Stock previously issued and reacquired
by the Company at any time or authorized but unissued shares of Common Stock, as
the Board of Directors from time to time may determine.
Section 3.2. In the event that any Options outstanding under this Plan
for any reason expire or are terminated without having been exercised in full,
the unpurchased shares of Common Stock subject to such Option and any such
surrendered shares of Common Stock may again be available for transfer
hereunder.
Section 3.3. No Options shall be granted pursuant hereto to any
Optionee after the tenth anniversary of the earlier of: (a) the date that this
Plan is adopted by the Board of Directors, or (b) the date that this Plan is
approved by the stockholders of the Company.
ARTICLE IV
ELIGIBILITY
Section 4.1. Non-Qualified Options may be granted hereunder to
officers, directors, employees and consultants of the Company (or any of its
subsidiaries) selected by the Administrator, and Incentive Options may be
granted hereunder only to employees (including officers and directors who are
employees) of the Company (or any of its subsidiaries) selected by the
Administrator. For purposes of determining who is an employee with respect to
eligibility for Incentive Options, the provisions of Section 422 of the Code
shall govern. The Administrator may determine (in its sole discretion) that any
person who would otherwise be eligible to be granted Options shall, nonetheless,
be ineligible to receive any award under this Plan.
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<PAGE>
Section 4.2. The Administrator shall (in its discretion) determine the
persons to be granted Options, the time or times at which Options shall be
granted, the number of shares of Common Stock subject to each Option, the terms
of a vesting or forfeiture schedule, if any, the type of Option issued, the
period during which such Options may be exercised, the manner in which Options
may be exercised and all other terms and conditions of the Options; provided,
however, no Option shall be granted which has terms or conditions inconsistent
with those stated in Articles V and VI hereof. Relevant factors in making such
determinations may include the value of the services rendered by the respective
Optionee, his or her present and potential contributions to the Company, and
such other factors which are deemed relevant by the Administrator in
accomplishing the purpose of this Plan.
ARTICLE V
TERMS AND CONDITIONS OF OPTIONS
Section 5.1. Each Option granted under this Plan shall be evidenced by
a stock option certificate and agreement (the "Option Agreement") in a form
consistent with this Plan, provided that the following terms and conditions
shall apply:
(a) The price at which each share of Common Stock covered by
an Option may be purchased shall be set forth in the Option Agreement and shall
be determined by the Administrator, provided that the option price for any
Incentive Option shall not be less than the "fair market value" of the shares of
Common Stock at the time of grant determined. Notwithstanding the foregoing, if
an Incentive Option to purchase shares of Common Stock is granted hereunder to
an Optionee who, on the date of the grant, directly or indirectly owns more than
ten percent (10%) of the voting power of all classes of capital stock of the
Company (or its parent or subsidiary), not including the shares of Common Stock
obtainable upon exercise of the Option, the minimum exercise price of such
Option shall be not less than one hundred ten percent (110%) of the "fair market
value" of the shares of Common Stock on the date of grant determined in
accordance with Section 5.1(b) below.
(b) The "fair market value" shall be determined by the
Administrator, which determination shall be binding upon the Company and its
officers, directors, employees and consultants. The determination of the "fair
market value" shall be based upon the following: (i) if the Common Stock is not
listed and traded upon a recognized securities exchange and there is no report
of stock prices with respect to the Common Stock published by a recognized stock
quotation service, on the basis of the recent purchases and sales of the Common
Stock in arms-length transactions; (ii) if the Common Stock is not then listed
and traded upon a recognized securities exchange or quoted on the NASDAQ
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<PAGE>
National Market System, and there are reports of stock prices by a recognized
quotation service, upon the basis of the last reported sale or transaction price
of the Common Stock on the date of grant as reported by a recognized quotation
service, or, if there is no last reported sale or transaction price on that day,
then upon the basis of the mean of the last reported closing bid and closing
asked prices for the Common Stock on that day or on the date nearest preceding
that day; or (iii) if the Common Stock shall then be listed and traded upon a
recognized securities exchange or quoted on the NASDAQ National Market System,
upon the basis of the last reported sale or transaction price at which shares of
Common Stock were traded on such recognized securities exchange on the date of
grant or, if the Common Stock was not traded on such date, upon the basis of the
last reported sale or transaction price on the date nearest preceding that date.
The Administrator shall also consider such other factors relating to the "fair
market value" of the Common Stock as it shall deem appropriate.
(c) For the purpose of determining whether an Optionee owns
more than ten percent (10%) of the voting power of all classes of stock of the
Company, an Optionee shall be considered to own those shares of stock which are
owned directly or indirectly through brothers and sisters (including
half-blooded siblings), spouse, ancestors and lineal descendants; and
proportionately as a shareholder of a corporation, a partner of a partnership,
and/or a beneficiary of a trust or an estate that owns shares of capital stock
of the Company.
(d) Notwithstanding any other provision hereof, in accordance
with the provisions of Section 422(d) of the Code, to the extent that the
aggregate "fair market value" (determined at the time the Option is granted) of
the shares of Common Stock with respect to which Incentive Options (without
reference to this provision) are exercisable for the first time by any
individual in any calendar year under any and all stock option plans of the
Company (and its subsidiary corporations and its parent, if any) exceeds
$100,000, such Options shall be treated as Non-Qualified Options.
(e) An Optionee may, in the Administrator's discretion, be
granted more than one Incentive Option or Non-Qualified Option during the
duration of this Plan, and may be issued a combination of Non-Qualified Options
and Incentive Options; provided, however, that non-employees are not eligible to
receive Incentive Options.
(f) The duration of any Option shall be within the sole
discretion of the Administrator; provided, however, that any Incentive Option
granted to a ten percent (10%) or less stockholder or any Non-Qualified Option
shall, by its terms, be exercised within ten years after the date the Option is
granted and any Incentive Option granted to a greater than ten percent (10%)
stockholder shall, by its terms, be exercised within five years after the date
the Option is granted.
(g) An Option shall not be transferable by the Optionee other
than by will, or by the laws of descent and distribution. An Option may be
exercised during the Optionee's lifetime only by the Optionee.
(h) At least six (6) months shall elapse from the date on
which an Option is granted to an officer, director, or beneficial owner of more
than ten percent (10%) of the outstanding shares of Common Stock of the Company
under this Plan by the Administrator to the date on which any share of Common
Stock underlying such Option is sold, unless the Administrator otherwise
consents in writing.
6
<PAGE>
ARTICLE VI
EMPLOYMENT OR SERVICE OF OPTIONEE
Section 6.1. If the employment or service of an Optionee is terminated
for cause, the option rights of such Optionee, both accrued and future, under
any then outstanding Non- Qualified or Incentive Option shall terminate
immediately, subject to the provisions of any employment agreement between the
Company (or any subsidiary) and an Optionee which, by its terms, provides
otherwise. In the event that an employee who is an Optionee hereunder has
entered into an employment agreement with the Company (or a subsidiary), "cause"
shall have the meaning attributed thereto in such employment agreement;
otherwise, "cause" shall mean incompetence in the performance of duties,
disloyalty, dishonesty, theft, embezzlement, unauthorized disclosure of patents,
processes or trade secrets of the Company, individually or as an employee,
partner, associate, officer or director of any organization. The determination
of the existence and the proof of "cause" shall be made by the Administrator
and, subject to the review of any determination made by the Administrator, such
determination shall be binding on the Optionee and the Company.
Section 6.2. Subject to the provisions of any employment agreement
between the Company (or a subsidiary) and an Optionee, if the employment or
service of an Optionee is terminated by either the Optionee or the Company for
any reason other than cause, death, or for disability (as defined in Section
22(e)(3) of the Code or pursuant to the terms of such an employment agreement),
the option rights of such Optionee under any then outstanding Non-Qualified or
Incentive Option shall, subject to the provisions of Section 5.1(h) hereof, be
exercisable by such Optionee at any time prior to the expiration of the Option
or within three months after the date of such termination, whichever period of
time is shorter, but only to the extent of the accrued right to exercise an
Option at the date of such termination.
Section 6.3. Subject to the provisions of any employment agreement
between the Company (or a subsidiary) and an Optionee, in the case of an
Optionee who becomes disabled (as defined by Section 22(e)(3) of the Code or
pursuant to the terms of such an employment agreement), the option rights of
such Optionee under any then outstanding Non-Qualified or Incentive Option
shall, subject to the provisions of Section 5.1(h) hereof, be exercisable by
such Optionee at any time prior to the expiration of the Option or within one
year after the date of termination of employment or service due to disability,
whichever period of time is shorter, but only to the extent of the accrued right
to exercise an Option at the date of such termination
Section 6.4. In the event of the death of an Optionee, the option
rights of such Optionee under any then outstanding Non-Qualified or Incentive
Option shall be exercisable by the person or persons to whom these rights pass
by will or by the laws of descent and distribution, at any time prior to the
expiration of the Option or within three years after the date of death,
whichever period of time is shorter, but only to the extent of the accrued right
to exercise an Option at the date of death. If a person or estate acquires the
right to exercise a Non-Qualified or Incentive Option by bequest or inheritance,
the Administrator may require reasonable evidence as to the ownership of such
Option, and may require such consents and releases of taxing authorities as the
Administrator may deem advisable.
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Section 6.5. The Administrator may also provide that an employee must
be continuously employed by the Company for such period of time as the
Administrator, in its discretion, deems advisable before the right to exercise
any portion of an Option granted to such employee will accrue, and may also set
such other targets, restrictions or other terms relating to the employment of
the Optionee which targets, restrictions, or terms must be fulfilled or complied
with, as the case may be, prior to the exercise of any portion of an Option
granted to any employee.
Section 6.6. Options granted hereunder shall not be affected by any
change of duties or position, so long as the Optionee continues in the service
of the Company.
Section 6.7. Nothing contained in this Plan or in any Option granted
pursuant hereto shall confer upon any Optionee any right with respect to
continuance of employment or service by the Company nor interfere in any way
with the right of the Company to terminate the Optionee's employment or service
or change the Optionee's compensation at any time.
ARTICLE VII
PURCHASE OF SHARES
Section 7.1. Except as provided in this Article VII, an Option shall be
exercised by tender to the Company of the full exercise price of the shares of
Common Stock with respect to which an Option is exercised and written notice of
the exercise. The right to purchase shares of Common Stock shall be cumulative
so that, once the right to purchase any shares of Common Stock has accrued, such
shares or any part thereof may be purchased at any time thereafter until the
expiration or termination of the Option. A partial exercise of an Option shall
not affect the right of the Optionee to subsequently exercise his or her Option
from time to time, in accordance with this Plan, as to the remaining number of
shares of Common Stock subject to the Option. The purchase price payable upon
exercise of an Option shall be in United States dollars and shall be payable in
cash or by certified bank check. Notwithstanding the foregoing, in lieu of cash,
an Optionee may, with the approval of the Administrator, exercise his or her
Option by tendering to the Company shares of Common Stock owned by him or her
having an aggregate fair market value at least equal to the aggregate purchase
price. The "fair market value" of any shares of Common Stock so surrendered
shall be determined by the Administrator in accordance with Section 5.1(b)
hereof.
Section 7.2. Except as provided in Article VI above, an Option may not
be exercised unless the holder thereof is an officer, director, employee, or
consultant of the Company at the time of exercise.
Section 7.3. No Optionee, or Optionee's executor, administrator,
legatee, or distributee or other permitted transferee, shall be deemed to be a
holder of any shares of Common Stock subject to an Option for any purpose
whatsoever unless and until such Option has been exercised and a stock
certificate or certificates for the shares of Common Stock purchased by the
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Optionee are issued to the Optionee in accordance with the terms of this Plan.
No adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date that any such stock certificate is issued,
except as provided in Article VIII hereof.
Section 7.4. If: (i) the listing, registration or qualification of the
Options issued hereunder or of any securities issuable upon exercise of such
Options (the "Subject Securities") upon any securities exchange or quotation
system or under federal or state law is necessary as a condition of or in
connection with the issuance or exercise of the Options; or (ii) the consent or
approval of any governmental regulatory body is necessary as a condition of or
in connection with the issuance or exercise of the Options, the Company shall
not be obligated to deliver the certificates representing the Subject Securities
or to accept or to recognize an Option exercise unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained. The Company will take reasonable action to so list, register, or
qualify the Options and the Subject Securities, or effect or obtain such consent
or approval, so as to allow for issuance and/or exercise.
Section 7.5. An Optionee may be required to represent to the Company as
a condition of his or her exercise of Options issued under this Plan that: (i)
the Subject Securities acquired upon exercise of his or her Option are being
acquired by him or her for investment purposes only and not with a view to
distribution or resale, unless counsel for the Company is then of the view that
such a representation is not necessary and is not required under the Securities
Act of 1933, as amended (the "Securities Act"), or any other applicable statute,
law, regulation or rule; and (ii) that the Optionee shall make no exercise or
disposition of an Option or of the Subject Securities in contravention of the
Securities Act, the Exchange Act of 1934, or the rules and regulations
thereunder. Optionees may also be required to provide (as a condition precedent
to exercise of an Option) such documentation as may be reasonably requested by
the Company to assure compliance with applicable law and the terms and
conditions of this Plan and the subject Option.
Section 7.6. An Option may be exercised by tender to the Administrator
of a written notice of exercise together with advice of the delivery of an order
to a broker to sell part or all of the shares of Common Stock subject to such
exercise notice and an irrevocable order to such broker to deliver to the
Company (or its transfer agent) sufficient proceeds from the sale of such shares
to pay the exercise price and any withholding taxes. All documentation and
procedures to be followed in connection with such a "cashless exercise" shall be
approved in advance by the Administrator.
ARTICLE VIII
CHANGE IN NUMBER OF OUTSTANDING SHARES OF
STOCK, ADJUSTMENTS, REORGANIZATIONS, ETC.
Section 8.1. In the event that the outstanding shares of Common Stock
of the Company are hereafter increased or decreased or changed into or exchanged
for a different number of shares or kind of shares or other securities of the
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Company or of another corporation by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, combination of
shares, or a dividend payable in capital stock, appropriate adjustment shall be
made by the Administrator in the number and kind of shares for the purchase of
which Options may be granted under this Plan, including the maximum number that
may be granted to any one person. In addition, the Administrator shall make
appropriate adjustments in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised, shall be exercisable, to the end
that the Optionee's proportionate interest shall be maintained as before the
occurrence to the unexercised portion of the Option and with a corresponding
adjustment in the option price per share. Any such adjustment made by the
Administrator shall be conclusive.
Section 8.2. The grant of an Option hereunder shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
Section 8.3. Upon the dissolution or liquidation of the Company, or
upon a reorganization, merger or consolidation of the Company as a result of
which the outstanding securities of the class then subject to Options hereunder
are changed into or exchanged for cash or property or securities not of the
Company's issue, or upon a sale of substantially all the property of the Company
to an association, person, party, corporation, partnership, or control group as
that term is construed for purposes of the Exchange Act, this Plan shall
terminate, and all Options theretofore granted hereunder shall terminate, unless
provision be made in writing in connection with such transaction for the
continuance of this Plan and/or for the assumption of Options theretofore
granted, or the substitution for such Options of options covering the stock of a
successor employer corporation, or a parent or a subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices, in which
event this Plan and options theretofore granted shall continue in the manner and
under the terms so provided. If this Plan and unexercised Options shall
terminate pursuant to the foregoing sentence, all persons owning any unexercised
portions of Options then outstanding shall have the right, at such time prior to
the consummation of the transaction causing such termination as the Company
shall designate, to exercise the unexercised portions of their Options,
including the portions thereof which would, but for this Section 8.3 not yet be
exercisable.
ARTICLE IX
DURATION, AMENDMENT AND TERMINATION
Section 9.1. The Board of Directors may at any time terminate this Plan
or make such amendments hereto as it shall deem advisable and in the best
interests of the Company, without action on the part of the stockholders of the
Company unless such approval is required pursuant to Section 422 of the Code or
the regulations thereunder; provided, however, that no such termination or
amendment shall, without the consent of the individual to whom any Option shall
theretofore have been granted, affect or impair the rights of such individual
under such Option. Pursuant to ss. 422(b) of the Code, no Incentive Option may
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be granted pursuant to this Plan after ten years from the date this Plan is
adopted or the date this Plan is approved by the stockholders of the Company,
whichever is earlier.
ARTICLE X
RESTRICTIONS
Section 10.1. Any Options and shares of Common Stock issued pursuant
hereto shall be subject to such restrictions on transfer and limitations as
shall, in the opinion of the Administrator, be necessary or advisable to assure
compliance with the laws, rules and regulations of the United States government
or any state or jurisdiction thereof. In addition, the Administrator may in any
Option Agreement impose such other restrictions upon the disposition or exercise
of an Option or upon the sale or other disposition of the shares of Common Stock
deliverable upon exercise thereof as the Administrator may, in its sole
discretion, determine. By accepting the grant of an Option or SAR pursuant
hereto, each Optionee shall agree to any such restrictions.
Section 10.2. Any certificate evidencing shares of Common Stock issued
pursuant to exercise of an Option shall bear such legends and statements as the
Administrator, the Board of Directors or counsel to the Company shall deem
advisable to assure compliance with the laws, rules and regulations of the
United States government or any state or jurisdiction thereof. No certificate
evidencing shares of Common Stock shall be delivered pursuant to exercise of the
Options granted under this Plan until the Company has obtained such consents or
approvals from such regulatory bodies of the United States government or any
state or jurisdiction thereof as the Administrator, the Board of Directors or
counsel to the Company deems necessary or advisable.
ARTICLE XI
FINANCIAL ASSISTANCE
Section 11.1 The Company is vested with the authority hereunder to
assist any employee to whom an Option is granted hereunder (including any
officer or director of the Company or any of its subsidiaries who is also an
employee) in the payment of the purchase price payable upon exercise of such
Option, by lending the amount of such purchase price to such employee on such
terms and at such rates of interest and upon such security (or unsecured) as
shall have been authorized by or under authority of the Board of Directors. Any
such assistance shall comply with the requirements of Regulation G promulgated
by the Board of the Federal Reserve System, as amended from time to time, and
any other applicable law, rule or regulation.
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ARTICLE XII
APPLICATION OF FUNDS
Section 12.1. The proceeds received by the Company from the issuance
and sale of Common Stock upon exercise of Options granted pursuant to this Plan
are to be added to the general funds of the Company and used for its corporate
purposes as determined by the Board of Directors.
ARTICLE XIII
EFFECTIVENESS OF PLAN
Section 13.1 This Plan shall become effective upon adoption by the
Board of Directors, and Options may be issued hereunder from and after that date
subject to the provisions of Section 3.3 above. This Plan must be approved by
the Company's stockholders in accordance with the applicable provisions
(relating to the issuance of stock or options) of the Company's governing
documents and state law or, if no such approval is prescribed therein, by the
affirmative vote of the holders of a majority of the votes cast at a duly held
stockholders meeting at which a quorum representing a majority of all the
Company's outstanding voting stock is present and voting (in person or by proxy)
or, without regard to any required time period for approval, by any other method
permitted by Section 422 of the Code and the regulations thereunder. If such
stockholder approval is not obtained within one year of the adoption of this
Plan by the Board of Directors or within such other time period required under
Section 422 of the Code and the regulations thereunder, this Plan shall remain
in force, provided however, that all Options issued and issuable hereunder shall
automatically be deemed to be Non-Qualified Options.
IN WITNESS WHEREOF, pursuant to the approval of this Plan by the Board
of Directors, this Plan is executed and adopted the 30th day of September, 1997.
THINK NEW IDEAS, INC.
[CORPORATE SEAL]
By: /s/ Scott A. Mednick
------------------------
Scott A. Mednick, Chief Executive Officer
ATTEST:
By: /s/ Melvin Epstein
------------------
Melvin Epstein
KIRKPATRICK & LOCKHART
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20018
(202) 778-9000
October 14, 1997
Board of Directors
THINK New Ideas, Inc.
45 West 36th Street, 12th Floor
New York, New York 10018
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
We have acted as counsel to THINK New Ideas, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing by the Company of
a registration statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended, relating to the issuance by the Company of
up to 2,000,000 shares of Common Stock, $.0001 par value per share, issuable
upon exercise of options granted pursuant to the Company's Amended and Restated
1997 Stock Option Plan (the "Plan").
We have examined the Registration Statement, the Plan, the Certificate of
Incorporation, as amended, the By-Laws of the Company, as amended, the minutes
of the various meetings and consents of the Board of Directors of the Company,
originals or copies of such records of the Company, agreements, certificates of
public officials, certificates of officers and representatives of the Company
and others, and such other documents, certificates, records, authorizations,
proceedings, statutes and judicial decisions as we have deemed necessary to form
the basis of the opinion expressed below. In such examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to originals of all documents submitted to
us as copies thereof. As to various questions of fact material to such opinion,
we have relied upon statements and certificates of officers and representatives
of the Company and others. We are not herein passing upon and do not assume
responsibility for the accuracy, completeness or fairness of the statements or
other provisions contained in any of the foregoing materials.
Based upon the foregoing, we are of the opinion that the shares of
Common Stock issuable upon exercise of the options granted pursuant to the Plan,
which securities are the subject of the Registration Statement, have been duly
authorized and when such securities are issued and paid for in accordance with
the terms of the Plan (and each such option) will be duly authorized, validly
issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
/s/ Victoria A. Baylin
By: ______________________________
Victoria A. Baylin, Of Counsel
Exhibit 23(a)
Consent of Independent Certified Public Accountants
THINK New Ideas, Inc.
New York, New York
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this registration statement on Form S-8 of our report
dated September 19, 1997 relating to the consolidated financial statements of
THINK New Ideas, Inc. appearing in the Company's Annual Report on Form 10-KSB
for the year ended June 30, 1997.
/s/ BDO Seidman, LLP
BDO Seidman, LLP
New York, New York
October 9, 1997
