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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 20, 1998
Exigent International, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-5753 59-3379927
(State of incorporation) (Commission File Number) (IRS Employer
Identification Number)
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1225 Evans Road
Melbourne, Florida 32904-2314
(407) 952-7550
(Address, zip code and telephone number of principal executive offices)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 4. Changes in Registrant's Certifying Accountant.
On March 18, 1998, the Board of Directors of Exigent International, Inc.
("Exigent") adopted resolutions changing Exigent's certifying accountant to
Ernst & Young LLP. The engagement letter was executed on March 20, 1998. The
change will be effective after the audit for the fiscal year ended January 31,
1998. The certifying accountant for the previous years and the 1998 fiscal year,
Hoyman, Dobson & Company, P.A., will continue to provide various accounting
services to Exigent and its subsidiaries. The change was made because the new
certifying accountant has greater national name recognition.
The principal accountant's report on the financial statements for the
previous two years has not contained an adverse opinion or disclaimer of opinion
nor were such reports qualified or modified as to uncertainty, audit scope or
accounting principles. Exigent has not had any disagreements with its principle
accountants on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure during its two most recent
fiscal years or since then. During its two most recent fiscal years or since
then, Exigent has not been advised by its principal accountant: (i) that the
internal controls necessary for Exigent to develop reliable financial
information do not exist; (ii) that information has come to the accountant's
attention that has led the accountant to no longer be able to rely on
management's representations or that have made the accountant unwilling to be
associated with the financial statements prepared by management; (iii) of the
need to expand significantly the scope of its audit, or that information has
come to the accountant's attention that if further investigated may materially
impact the fairness or reliability of either a previously issued audit report or
the underlying financial statements, or the financial statements covering a
period subsequent to the date of the most recent financial statements covered by
an audit report or cause the accountant to be unwilling to rely on management's
representations or be associated with Exigent's financial statements; or (iv)
that information has come to the accountant's attention that the accountant has
concluded materially impacts the fairness or reliability of either a previously
issued audit report or the underlying financial statements, or the financial
statements issued or to be issued covering the fiscal periods subsequent to the
date of the most recent financial statements covered by an audit report.
Item 5. Other Events.
Exigent has adopted an incentive stock option plan for nonemployee
independent directors of Exigent. The plan entitles independent directors who
are granted options to purchase up to 120,000 Common Shares of Exigent at not
less than the fair market value of the underlying Common Shares on the date of
grant. An independent director who is granted options under the plan is entitled
to receive options to purchase 40,000 Common Shares which options will become
exercisable at a rate of 2,500 shares per quarter provided that the holder
continues to serve on the Exigent Board of Directors and attends at least 75% of
the Board of Directors meeting held during the twelve months preceding the
vesting date. Each option has a term of ten years. The options are
nontransferable. A copy of the plan is attached as an exhibit to this report.
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Contemporaneously herewith, Exigent is filing Form S-8 to register the 120,000
Common Shares underlying the options.
Item 7. Financial Statements and Exhibits.
(c) The following documents are furnished as exhibits to this report:
Exhibit Page
Number Description of Documents Number
- ------- ------------------------ ------
4 Independent Director Stock Option Plan (5NQ) 4
16 Letter re Change in Certifying Accountant 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Exigent International, Inc.
Date: March 30, 1998 By: /s/Don F. Riordan, Jr.
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Title: Treasurer
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EXHIBIT 4
INDEPENDENT DIRECTOR STOCK OPTION PLAN (5NQ)
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1. PURPOSE.
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This Independent Director Stock Option Plan (5NQ) (the "Plan") is intended
to further the established policy of EXIGENT INTERNATIONAL, INC. (the
"Corporation") of encouraging ownership of its Common Stock by independent
directors of the Corporation and of providing inducements to obtain and
retain the services of qualified persons to serve as members of the Board
of Directors and to demonstrate the Corporation's appreciation for their
service upon the Board of Directors.
2. DEFINITIONS.
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(a) "Option" shall mean any option granted hereunder, which option is not
intended to qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.
(b) "Optionee" shall mean any director of the Corporation who is not (i)
an employee of or consultant to the Corporation; (ii) an officer of
the Corporation; or (iii) an affiliate of the Corporation by reason of
direct or indirect beneficial ownership of 10% or more of any class of
capital stock of the Corporation. The payment to a director of fees
for serving as a director, shall not, in and of itself, disqualify any
director as an Optionee.
3. ADMINISTRATION OF THE PLAN.
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(a) The Plan shall be administered by the Compensation Committee as and if
appointed by the Board of Directors of the Corporation (the
"Committee") from time to time. Notwithstanding the foregoing, to the
extent required by Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), for exemption
from Section 16(b) of the Exchange Act, each grant of an Option, and
the terms of each disposition of a security to the Corporation, shall
be approved by the Board of Directors of the Corporation or, if
composed solely of two or more Non-Employee Directors within the
meaning of Rule 16b-3 at the time of the approval, the Committee.
Hereinafter, all references to the Committee shall mean the Board of
Directors if no Committee has been appointed. Any action of the
Committee may be taken by a written instrument signed by the
Committee. Subject to the provisions of the Plan, and subject to the
ratification of the grant or authorization of each Option or award by
the Board of Directors (if so required by applicable state law), the
Committee shall have full and final authority in its discretion to
take any action with respect to the Plan including, without
limitation, the following: (i) to
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determine the Optionees to whom, and the time or times at which,
Options shall be granted, the term of such Options, and the number of
shares to be covered by each Option, and if at any time the vesting of
any Options shall be accelerated; (ii) to prescribe the form or forms
of the agreements (which need not be identical) evidencing any Options
granted under the Plan; (iii) to establish, amend and rescind rules
and regulations for administration of the Plan; (iv) to construe and
interpret the Plan, the rules and regulations, and the agreements
evidencing Options granted under the Plan; and (v) to make all other
determinations deemed necessary or advisable for administering the
Plan.
(b) The interpretation and construction by the Committee of any provisions
of the Plan or of any Option or right granted under the Plan shall be
final unless otherwise determined by the Board of Directors. No member
of the Board of Directors or Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any
Option or right granted under it. The Corporation shall indemnify and
hold harmless each current and former director of the Corporation
against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with
or resulting from any claim, action, suit or proceeding to which such
person may be a party or in which such person may be involved by
reason of any action taken or failure to act under the Plan (excluding
intentional wrongdoing) and against and from any and all amounts paid
by such person in settlement thereof, with the Corporation's approval,
or paid by such person in satisfaction of any judgment in any such
action, suit or proceeding in which such person is involved; provided
that such person gives the Corporation prompt notice of the claim,
action suite or proceeding and an opportunity, at its own expense, to
handle and defend the same. This right of indemnification shall not
exclude any other indemnification rights to which such persons may be
entitled under the Corporation's Certificate of Incorporation or
Bylaws, as a matter of law or otherwise, or any power of the
Corporation may have to indemnify or hold them harmless.
(c) The Committee, if appointed, shall consist of at least two persons.
The Committee may select one of its members as its chairman, and shall
hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing
by the Committee, shall be valid acts of the Committee. From time to
time, the Board of Directors may increase the size of the Committee
and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill
vacancies however caused, or remove all members of the Committee and
thereafter directly administer the Plan.
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4. EFFECTIVE DATE OF THE PLAN.
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The Effective date of the Plan is September 30, 1997. Options may be
granted under the Plan on and after the effective date, but not after
September 30, 2007.
5. OPTIONS; SHARES OF STOCK SUBJECT TO THE PLAN.
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Options granted hereunder are not options intended to qualify as an
incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). One Hundred Twenty Thousand
(120,000) Common Shares of the Corporation (hereinafter called "Common
Stock") may be issued pursuant to the exercise of Options granted hereunder
(subject to adjustment as provided in Section 13 below), and the
Corporation has reserved sufficient authorized shares to provide for the
exercise of such Options. Any shares subject to an Option which, for any
reason, expires or is terminated unexercised as to such shares may again be
subjected to an option granted under the Plan.
6. AMOUNT OF OPTIONS AND ELIGIBILITY.
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(a) Options may be granted only to Optionees.
(b) Subject to Section 6(c) and Section 8 below, each Optionee who is
granted Options under the Plan shall receive Options to purchase Forty
Thousand (40,000) shares of Common Stock, which Options shall vest and
become exercisable by the Optionee on a quarterly basis following
grant of the options at the rate of 2,500 shares per quarter for the
16 quarters following the grant date, provided at each quarterly
vesting date the Optionee continues to serve on the Board of
Directors. Subject to Section 6(c) below, Optionees will be eligible
to receive a grant of Options to purchase such 40,000 shares of Common
Stock upon their initial election to the Board of Directors.
(c) With respect to eligible Optionees serving on the Board of Directors
upon the adoption of the Plan by the Board of Directors: if such
Optionee holds no options to purchase shares of Common Stock granted
under other stock option plans of the Corporation, such Optionee will
be eligible to receive under the Plan an initial grant of Options to
purchase 40,000 shares of Common Stock, which Options shall vest and
become exercisable over a 48-month period, taking into account the
service on the Board of Directors by such Optionee prior to the
adoption of the Plan, as follows: on the date ("Section 6 (c) Initial
Vesting Date") 31 days following the grant of such Options, Options
for the purchase of an amount of shares of Common Stock equal to 2,500
multiplied by the number of quarters such Optionee shall have then
served on the Board of Directors shall vest and become
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exercisable. Thereafter, subject to Section 8 below, the balance of
the remaining unvested Options shall vest and become exercisable at
the rate of 2,500 shares of Common Stock per quarter for the quarters
following the Section 6 (c) Initial Vesting Date, provided the
Optionee continues to serve on the Board of Directors;
(d) Notwithstanding the foregoing or any other provision of this Plan (i)
in the event of a proposed sale of the Corporation through a sale of
its stock by stockholders or a sale of all or substantially all of its
assets, subject to the closing of such sale and, effective upon the
closing or any record date established for stockholder participation
in such sale and prior to any distribution of assets to stockholders
or any dissolution or liquidation of the Corporation, any and all
unvested Options held by Optionees shall thereupon vest and become
exercisable; and (ii) if following a merger or similar transaction
resulting in a change in control, other than a sale of the
Corporation, any Optionee then serving on the Board of Directors is
removed from the Board of Directors or not nominated to serve on the
Board of Directors or, if nominated, is not reelected to the Board of
Directors, then any and all unvested Options held by such an Optionee
shall thereupon vest and become exercisable.
7. OPTION PRICE.
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The purchase price of the Common Stock covered by each Option shall be one
hundred percent (100%) of the fair market value of the Common Stock at the
time the Option is granted. The fair market value shall be (i) if the
Common Stock is listed on a national exchange, the simple average of the
high and the low prices in trading of the Common Stock as reported by
sources deemed reliable by the Committee, on such exchange on the date on
which the Option is granted (or if there shall be no trading on such date,
then on the first previous date on which there shall have been trading);
(ii) if the Common Stock is not listed on a national exchange but is traded
in the over-the-counter market, the average of the high and low prices on
the date on which the Option is granted (or if there shall be no trading on
such date, then on the first previous date on which there shall have been
trading); or (iii) if the Common Stock is neither listed on a national
exchange or traded in the over-the-counter market, as determined in good
faith by the Committee in accordance with the applicable provisions of
Section 20.2031-2 of the Federal Estate Tax Regulations, or in any other
manner consistent with the Code and accompanying regulations.
8. OPTION PERIOD AND LIMITATIONS ON THE RIGHT TO EXERCISE OPTIONS.
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(a) The term of each Option shall be for a term of ten (10) years, and
shall be subject to earlier termination as hereinafter provided.
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(b) Options granted to an Optionee pursuant to Section 6 shall become
exercisable in such amounts and on such dates as set forth in Section
6, provided the Optionee served as a director throughout the period
from the date of the grant of such Options through such respective
dates of vesting and provided such Optionee shall have attended at
least seventy-five percent (75%) of the Board of Directors meetings
held during the 12 months preceding each such respective vesting date.
Any Options which do not vest because the Optionee has not attended
the Board of Directors meetings as required in the foregoing sentence
are forfeited; provided, however, that the Options may be reinstated
by the Committee if special circumstances are present and, if required
under Rule 16b-3, the reinstatement is approved by the Board of
Directors of the Corporation. The foregoing rights of exercise are
cumulative and, while the Optionee continues to serve as a director,
may be exercised throughout the term of the Option as specified above
in subsection (a). An Option may be exercised upon satisfaction of
such other or additional conditions as the Committee may specify. No
fractional shares will be issued.
(c) An Option may be exercised by giving written notice of at least 30
days to the Committee at such place as the Committee shall direct.
Such notice shall specify the aggregate number of shares to be
purchased pursuant to an Option and shall be accompanied by payment of
such purchase price either (i) in United States dollars in cash or by
check, (ii) in the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value as of the date of
the exercise equal to the cash exercise price of the Option, (iii) in
the discretion of the Committee, through delivery of the Optionee's
personal recourse negotiable promissory note bearing interest payable
not less frequently than annually at no less than 100% of the lowest
applicable federal rate, as defined in Section 1274(d) of the Code, or
(iv) in the discretion of the Committee, over a three (3) year period,
by any combination of (i), (ii) and (iii) above. The shares will be
issued as soon as practical after exercise of an Option in accordance
with this paragraph. Notwithstanding the foregoing, the issuance of
shares may be delayed in the discretion of the Committee for such time
period as is necessary to enable the Corporation to comply with any
federal and state securities laws applicable to the exercise of the
Options granted to any Optionee.
(d) Except as provided in Section 12 hereof, no Option may be exercised at
any time unless the holder thereof is then an Optionee. The holder of
an Option shall not have any of the rights of a stockholder with
respect to the shares covered by his or her Option until such shares
shall be issued to him upon the due exercise of the Option. Nothing in
the Plan or in any Option granted pursuant to the Plan shall confer
upon any Optionee any right to
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continue in the service of the Corporation. Subject to the provisions
of Section 6(d), in the event of the proposed dissolution or
liquidation of the Corporation, each Option will terminate immediately
prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by
the Committee.
9. OPTIONEEE'S INTENTION TO SERVE.
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Each Optionee receiving an Option shall, as one of the terms of the Option
agreement, acknowledge his or her present intention to devote such time,
energy and skill to the service of the Corporation and the promotion of its
interests as are commensurate with his or her position as a director of the
Corporation. If an Optionee who has received an Option shall at any time
thereafter not be a member of the Board of Directors of the Corporation,
the Option shall terminate immediately, subject only to exercise as
provided in Section 12.
10. NON-TRANSFERABILITY OF OPTIONS.
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An Option granted under the Plan shall not be transferable otherwise than
by will or the laws of descent and distribution.
11. WITHHOLDING.
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The Committee shall require any recipient of shares pursuant to the
exercise of an Option, or on the surrender of any Option, to pay to the
Corporation in cash the amount of any tax or other amount required by any
governmental authority to be withheld and paid over by the Corporation to
such authority for the account of such recipient. Notwithstanding the
foregoing, the recipient may satisfy such obligation in whole or in part,
and any other local, state or federal income tax obligations resulting from
the exercise of an Option, or the surrender of any Option, by electing (the
"Election") to deliver to the Corporation shares owned by the Optionee at
the time of exercise or surrender, or to have the Corporation withhold from
the shares to which the recipient is entitled. The number of shares to be
delivered or withheld shall have a fair market value as of the date that
the amount of tax is to be withheld is determined (the "Tax Date") as
nearly as equal as possible to (but not exceeding) the amount of such
obligations being satisfied. The following rules shall apply with respect
to Elections:
(a) Each Election must be made in writing to the Committee prior to the
Tax Date. The Committee may reject any Election, or may suspend or
terminate the right to make an Election. An Election, once made by the
recipient and accepted by the Committee, shall be irrevocable.
(b) The fair market value of the shares to be delivered or withheld shall
be determined pursuant to Section 7.
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12. TERMINATION OF STATUS AS OPTIONEE.
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In the event of termination for any reason (including but not limited to
resignation, removal, or expiration of term as a director without re-
election, acceptance of employment with the Corporation, or death) of an
Optionee's status, after an Option has been granted to him or her, as an
independent director of the Corporation ("Termination of Status"), an
Option may be exercised, to the extent that the Optionee was entitled to do
so on the date of Termination of Status, at any time within three (3)
months after such termination, but in no event after the expiration of the
term of the Option. If Termination of Status is caused by the Optionee's
death, such Option may be exercised to the extent that the Optionee was
entitled to do so at the date of his death, by his executor or
administrator or other person at the time entitled by law to the Optionee's
rights under the Option.
13. ADJUSTMENTS UPON CHANGE IN CAPITALIZATION.
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The number of Common Shares available under the Plan in the aggregate, the
number of Common Shares covered by each Option and the price per share
thereof in each Option shall be adjusted for any increase or decrease in
the number of issued shares of all classes of the common stock of the
Corporation by reason of merger, consolidation, other reorganization,
recapitalization, reclassification, combination of shares, stock split-up
or dividend paid in stock of the Corporation. If the Corporation shall be a
party to any merger or consolidation, any Option shall pertain to and apply
to the securities to which a holder, immediately prior to such merger or
consolidation, of the number of shares of Common Stock then subject to the
Option would have been entitled upon such merger or consolidation; but a
dissolution or liquidation of the Corporation shall cause the Option to
terminate as provided for in Section 8. Except as expressly provided
herein, no issuance by the Corporation of shares of stock of any class, or
securities convertible into any shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Options. No adjustment shall be made
for dividends paid in cash or property other than securities of the
Corporation.
14. TERMINATION AND AMENDMENT OF THE PLAN.
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(a) Unless the Plan shall theretofore have been terminated as hereinafter
in this paragraph provided, no Option shall be granted hereunder after
ten years from the adoption of the Plan. The Board of Directors of the
Corporation may at any time prior to that date terminate the Plan or
make such modification or amendment of the Plan as it shall deem
advisable; provided, however, that no amendment may be made which
will, except as provided in Section 13 hereof, increase the maximum
number of shares for which Options may be granted under the Plan,
either in the aggregate or to
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any individual, or change the manner of determining the minimum Option
prices or extend the period during which an Option may be granted or
amend the requirements as to the class of persons eligible to receive
Options. No termination, modification, or amendment of the Plan may
adversely affect the rights of an Optionee under an Option previously
granted to such Optionee without the consent of such Optionee.
(b) Notwithstanding subsection (a) above, the provisions set forth in
Section 5 with respect to the number of Options to be granted to
Optionees and in Section 6 with respect to the purchase price of such
Options shall not be amended more than once every six months.
15. GOVERNMENT REGULATIONS.
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The Plan and the granting and exercise of Options thereunder, and the
obligation of the Corporation to sell and deliver shares under such Options
shall be subject to all applicable laws, rules and regulations.
16. REPURCHASE AND RESTRICTIONS ON TRANSFER.
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Shares issued pursuant to Options granted under the Plan shall be subject
to such repurchase provisions and such restriction on sale or transfer as
shall be determined by the Committee, in connection with the grant of such
Options. Such provisions may include provisions obligating or permitting
the Corporation to purchase such shares for some period of time after
termination of service and providing for rights of first refusal in favor
of the Corporation.
17. APPLICABLE LAW.
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Except as otherwise provided herein, the Plan shall be construed and
enforced in accordance with the laws of the State of Delaware.
18. MISCELLANEOUS.
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(a) Applications of Funds. Proceeds from the sale of stock pursuant to
the Plan shall be used for general corporate purposes.
(b) Governmental Regulation. The Corporation's obligations to sell and
deliver Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization,
issuance or sale of such shares.
19. TERM OF THE PLAN. The Plan is effective as of the 30th day of September,
1997. The Plan was approved by the Board of Directors of the Corporation
on the 30th day of September, 1997.
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Exhibit 16
[Letterhead of Hoyman, Dobson & Company, P.A.]
March 27, 1998
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
Gentlemen:
We were previously certifying accountants for Exigent International, Inc.
(Exigent). We have read item 4 of Form 8-K dated March 20, 1998 and are in
agreement with the statements contained therein.
Very truly yours,
/s/ Hoyman, Dobson & Company, P.A.
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Hoyman, Dobson & Company, P.A.
