As filed with the Securities and Exchange Commission on June 26, 1997.
Registration No. 333-22227.
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UNITED STATES SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE ACT OF 1933
APPLIED INTELLIGENCE GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Oklahoma 73-1247666
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
13800 Benson Road
__________ Edmond, Oklahoma_____________ _____73013_____
(Address of principal executive offices) (Zip Code)
Applied Intelligence Group, Inc. Employee Stock Purchase Plan
(Full Title of the Plan)
Mr. Robert L. Barcum
President and Chief Executive Officer
Applied Intelligence Group, Inc.
13800 Benson Road
Edmond, Oklahoma 73013
(Name and Address of Agent For Service)
(405) 936-2300
(Telephone Number, Including Area Code, of Agent For Service)
Copies To:
Mr. Michael E. Dunn, Esq.
Dunn Swan & Cunningham
2800 Oklahoma Tower, 210 Park Avenue
Oklahoma City, Oklahoma 73102-5604
(405) 235-8318
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE(1)
Title of Amount to be Proposed Proposed Amount of
Securities to Registered Maximum Maximum Registration
be Registered Offering Aggregate Fee (2)
Price Per Offering
Share (1) Price (1)
<S> <C> <C> <C> <C>
Common Stock
($.001 per
share par 100,000 $2.667 $266,700 $81
value) shares
<FN>
(1) Estimated solely for the purpose of determining the
registration fee.
(2) Calculated pursuant to rule 457(h)(1) on the basis of 85%
of the reported closing price of shares of the Common Stock on
the Nasdaq SmallCap Market on June 17, 1997.
</FN>
</TABLE>
Exhibit Index Appears on Page _6_.
PART II
This Registration Statement relates to 100,000 shares of
Common Stock, $.001 par value per share (the "Common Stock"), of
Applied Intelligence Group, Inc. (the "Company" or the
"Registrant"), being registered for use under the Applied
Intelligence Group, Inc. Employee Stock Purchase Plan, adopted
April 1, 1997. The Common Stock registered hereunder may be
issued under the Plan upon exercise of options granted to
employees under and pursuant to the Plan.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Securities
and Exchange Commission (the "Commission") are incorporated in
this Registration Statement by reference:
(a) the Prospectus, dated November 20, 1996, of the
Registrant filed with the Central Regional Officer of the
Commission pursuant to Rule 424(b) and in conjunction with the
Company's Registration Statement on Form SB-2 (No. 333-5038-D),
as declared effective by the Commission on November 20, 1996;
(b) the Certificate of Incorporation contained as Exhibit
3.1 to the Company's Registration Statement on Form SB-2 (No. 333-
5038-D), as filed with the Central Regional Office of the
Commission and as declared effective by the Commission on
November 20, 1996;
(c) the Bylaws contained as Exhibit 3.2 to the Company's
Registration Statement on Form SB-2 (No. 333-5038-D), as filed
with the Central Regional Office of the Commission and as
declared effective by the Commission on November 20, 1996;
(d) the description of the Company's Common Stock contained
in the Company's Registration Statement on Form 8-A as filed with
the Commission on November 14, 1996 under Section 12 of the
Securities Exchange Act of 1934, including any amendment or
description filed for the purpose of updating such description;
and
(e) All documents and reports subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-
effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of
filing such documents. Specifically incorporated by reference is Form
10-KSB for the year ending December 31, 1996 and Form 10-QSB for the
quarter ending March 31, 1997.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable. (Class of securities to be offered is
registered under Section 12 of the Securities Exchange Act of
1934.)
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1031 of the Oklahoma General Corporation Act permits and
(and Registrant's Certificate of Incorporation and Bylaws, which
are incorporated by reference herein) authorizes indemnification
of directors and officers of the Registrant and officers and
directors of another corporation, partnership, joint venture,
trust or other enterprise who serve at the request of Registrant,
against expenses, including attorneys fees, judgments, fines and
amount paid in settlement actually and reasonably incurred by
such person in connection with any action, suit or proceeding in
which such person is a party by reason of such person being or
having been a director or officer of Registrant or at the request
of Registrant, if he conducted himself in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of Registrant, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful. Registrant may not indemnify an officer or a director
with respect to any claim, issue or matter as to which such
officer or director shall have been adjudged to be liable to
Registrant, unless and only to the extent that the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the
court shall deem proper. To the extent that an officer or
director is successful on the merits or otherwise in defense on
the merits or otherwise in defense of any action, suit or
proceeding with respect to which such person is entitled to
indemnification, or in defense of any claim, issue or matter
therein, such person is entitled to be indemnified against
expenses, including attorneys fees, actually and reasonable
incurred by him in connection therewith.
The circumstances under which indemnification is granted
with an action brought on behalf of Registrant are generally the
same as those set forth above; however, expenses incurred by an
officer or a director in defending a civil or criminal action,
suit or proceeding may be paid by the Company in advance of final
disposition upon receipt of an undertaking by or on behalf of
such officer or director to repay such amount it is ultimately
determined that such officer or director is not entitled to
indemnification by Registrant.
These provisions may be sufficiently broad to indemnify such
persons for liabilities under the Securities Act of 1933, as
amended (the "1933 Act"), in which case such provision is against
public policy as expressed in the 1933 Act and is therefore
unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.3 Applied Intelligence Group, Inc. Employee Stock Purchase
Plan, adopted April 1, 1997
5.1 Opinion of Dunn Swan & Cunningham
23.3 Consent of Independent Accountants
23.4 Consent of Dunn Swan & Cunningham
24.1 Power of Attorney
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 1933 Act;
(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;
(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 2 (a) (1) (i) and 2 (a) (1)
(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") that are incorporated by reference herein.
(2) That, for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered herein, 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 1933 Act, each
filing of the undersigned Company's annual report pursuant to
Section 13 (a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the new 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 1933 Act my 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 1933 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 Securities Act and will be governed by the final
adjudication of such issue.
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 Edmond, Oklahoma, on this 26th day of June, 1997.
APPLIED INTELLIGENCE GROUP, INC.
BY:/S/ ROBERT L. BARCUM
Robert L. Barcum
President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities indicated.
SIGNATURES TITLE DATE
/S/ ROBERT L. BARCUM Chairman of the June 26, 1997
Robert L. Barcum Board of Directors
/S/ ROBERT N. BAKER Vice President and June 26, 1997
Robert N. Baker Director
/S/ RUSSELL L REINHARDT Vice President and June 26, 1997
Russell L. Reinhardt Director
/S/ DAVID B. NORTH Vice President June 26, 1997
David B. North
/S/ JOHN M. DUCK Vice President and June 26, 1997
John M. Duck Chief Financial
Officer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
4.3 Applied Intelligence Group, Inc. Stock Purchase
Plan
5.1 Opinion of Dunn Swan & Cunningham
23.3 Consent of Independent Accountants
23.4 Consent of Dunn Swan & Cunningham
24.1 Power of Attorney
<PAGE>
Exhibit 4.3
APPLIED INTELLIGENCE GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
Effective Date: April 1, 1997
<PAGE>
APPLIED INTELLIGENCE GROUP, INC. EMPLOYEE STOCK PURCHASE PLAN
Table of Contents
ARTICLE I 1
I.1 Name of Plan 1
I.2 Purpose 1
ARTICLE II 1
II.1 Definitions 1
II.2 Construction 4
ARTICLE III 4
III.1 Stock Purchase Accounts 4
III.2 Participant's Contributions 4
III.3 Continued Participation; Voluntary Withdrawal from Plan 4
III.4 Withdrawal by Terminating Participant 5
III.5 Reparticipation 5
III.6 Interest Accrual 5
ARTICLE IV 5
IV.1 Exercise 5
IV.2 Amount of Shares of Stock 5
IV.3 Distribution 6
IV.4 Fractional Shares 6
IV.5 Issuance of Shares 6
ARTICLE V 6
V.1 Maximum Number of Shares Available to Participants 6
V.2 Maximum Authorized Shares 6
V.3 Termination of Offering for the Second and Subsequent
Purchase Periods 6
ARTICLE VI 7
VI.1 Appointment of Committee 7
VI.2 Committee Powers and Duties 7
VI.3 Committee to Make Rules and Interpret Plan 7
ARTICLE VII 7
ARTICLE VIII 7
VIII.1 Stock Adjustments 7
VIII.2 Effect of Certain Transactions 8
VIII.3 Stockholder Approval 8
ARTICLE IX 8
IX.1 Notices 8
IX.2 Application of the Funds 8
IX.3 Repurchase of Stock 8
IX.4 Alternate Contribution Methods 8
IX.5 Nonassignability 8
IX.6 Government Regulation 9
IX.7 Effective Date of Plan 9
IX.8 Termination of Plan 9
IX.9 No Obligations to Exercise Stock Option 9
IX.10 Right to Continued Employment 9
IX.11 Reliance on Reports 9
IX.12 Applicable Law 9
IX.13 Construction 9
<PAGE>
ARTICLE I
NAME AND PURPOSE OF PLAN
I.1 Name of Plan. This Plan shall be known as: Applied
Intelligence Group, Inc. Employee Stock Purchase Plan.
I.2 Purpose. The Applied Intelligence Group, Inc.
Employee Stock Purchase Plan, by offering Employees the opportunity
to purchase the Company's Stock through payroll deductions, is
intended to encourage participation in the ownership and economic
progress of the Company. Employees may only be granted Stock
Options to purchase Stock. Except as otherwise provided in the
Plan, by reason of their employment relationship with the Company
and/or the Employer, all Employees of all Employers will be
eligible to participate in the Plan.
ARTICLE II
DEFINITIONS
II.1 Definitions. Where the following capitalized words
and phrases appear in either a singular or plural form in this
instrument, they shall have the respective meanings set forth below
unless a different context is clearly expressed herein.
(a) Account and Account Balance:
(i) The word "Account" shall mean the
record established and maintained to record the
interest in the Plan of each Participant in
accordance with Article III.
(ii) The words "Account Balance" shall
mean the credited balance standing in a
Participant's Account from time to time.
(b) Board: The word "Board" shall mean the Board
of Directors of the Company.
(c) Code: The word "Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.
(d) Committee: The word "Committee" shall mean the
Compensation Committee of the Board referred to in
Article VI.
(e) Company: The word "Company" shall mean Applied
Intelligence Group, Inc., an Oklahoma corporation.
(f) Employee: The word "Employee" shall mean any
person employed by the Employer on the basis of an
employer-employee relationship who receives remuneration
for personal services rendered to the Employer.
(g) Employer: The word "Employer" shall mean the
Company and any Subsidiary of the Company.
(h) Exercise Date: The words "Exercise Date" shall
mean the last day of each calendar quarter during which
the Plan is in existence, being June 30, 1997, September
30, 1997, December 31, 1997, March 31, 1998, June 30,
1998, September 30, 1998, December 31, 1998, March 31,
1999, June 30, 1999, September 30, 1999, December 31,
1999, March 31, 2000, June 30, 2000, September 30, 2000,
December 31, 2000, March 31, 2001, June 30, 2001,
September 30, 2001, December 31, 2001, and March 31,
2002.
(i) Fair Market Value: The words "Fair Market
Value" shall mean (A) during such time as the Stock is
listed upon the New York Stock Exchange or other
exchanges or the NASDAQ/National Market System, the
closing price of the Stock on such stock exchange or
exchanges or the NASDAQ/ National Market System on the
day for which such value is to be determined, or if no
sale of the Stock shall have been made on any such stock
exchange or the NASDAQ/National Market System that day,
on the next preceding day on which there was a sale of
such Stock or (B) during any such time as the Stock is
not listed upon an established stock exchange or the
NASDAQ/National Market System, the mean between dealer
"bid" and "ask" prices of the Stock in the
over-the-counter market on the day for which such value
is to be determined, as reported by the National
Association of Securities Dealers, Inc.
(j) Granting Date: The words "Granting Date" shall
mean the beginning of each applicable Purchase Period,
being April 1, 1997, July 1, 1997, October 1, 1997,
January 1, 1998, April 1, 1998, July 1, 1998, October 1,
1998, January 1, 1999, April 1, 1999, July 1, 1999,
October 1, 1999, January 1, 2000, April 1, 2000, July 1,
2000, October 1, 2000, January 1, 2001, April 1, 2001,
July 1, 2001, October 1, 2001, and January 1, 2002.
(k) Option Agreement: The words "Option Agreement"
shall mean an agreement to be executed by the Participant
and the Company, which shall comply with the terms of the
Plan and shall be in such form as the Committee agrees
upon from time to time.
(l) Option Price: The words "Option Price" shall
mean the price which shall be paid by the Participant
from his Account for any Stock purchased on an applicable
Exercise Date pursuant to any Stock Option granted to
such Participant; provided, such option price shall be
the lesser of:
(i) 85% of the per share Fair Market Value
on the Granting Date of the Purchase Period
applicable to such Participant: or
(ii) 85% of the per share Fair Market
Value on the Exercise Date of the Purchase Period
applicable to such Participant.
Provided, in no event shall the Option Price per share be
less than the par value of the Stock.
(m) Participant: The word "Participant" shall mean
an Employee (i) who executes with the Company an Option
Agreement on or prior to a Granting Date, (ii) who on
such Granting Date has been continuously employed by the
Employer for at least six months, and (iii) whose
customary employment is more than 20 hours per week and
more than five months in any calendar year. Provided,
for purposes of calculating the foregoing six month
service requirement for an Employee, all employment
service with the Company and its Subsidiaries will be
recognized. The word "Participant" shall also include
the legal representative of a deceased Participant, and a
Participant who, within one month prior to the end of the
applicable Purchase Period for which he is a Participant,
terminates his employment with the Employer on account of
(i) retirement on or after age 55, (ii) retirement
because of disability, (iii) lay off by the Employer, or
(iv) an authorized leave of absence granted by the
Employer. "Disability" for purposes of this Subsection
(m) shall mean a physical or mental condition which, in
the judgment of the Committee, totally and permanently
prevents a Participant from engaging in any substantial
gainful employment with the Employer. A determination
that disability exists shall be based upon independent
medical evidence satisfactory to the Committee. In the
event that any Employer ceases to be a Subsidiary of the
Company, the Employees of such Employer will be deemed to
have terminated employment as of such date.
(n) Plan: The word "Plan" shall mean this Applied
Intelligence Group, Inc. Employee Stock Purchase Plan,
and any amendments thereto.
(o) Purchase Period: The words "Purchase Period"
shall mean any calendar quarter of each year during which
the Plan is in existence, as follows:
(i) "First Purchase Period"--April 1, 1997
through June 30, 1997.
(ii) "Second Purchase Period"--July 1,
1997 through September 30, 1997.
(iii) "Third Purchase Period"--October 1,
1997 through December 31, 1997.
(iv) "Fourth Purchase Period"--January 1,
1998 through March 31, 1998.
(v) "Fifth Purchase Period"--April 1, 1998
through June 30, 1998.
(vi) "Sixth Purchase Period"--July 1, 1998
through September 30, 1998.
(vii) "Seventh Purchase Period"--October
1, 1998 through December 31, 1998.
(viii) "Eighth Purchase Period"--January
1, 1999 through March 31, 1999.
(ix) "Ninth Purchase Period"--April 1,
1999 through June 30, 1999.
(x) "Tenth Purchase Period"--July 1, 1999
through September 30, 1999.
(xi) "Eleventh Purchase Period"--October
1, 1999 through December 31, 1999.
(xii) "Twelfth Purchase Period"--January
1, 2000 through March 31, 2000.
(xiii) "Thirteenth Purchase Period"--April
1, 2000 through June 30, 2000.
(xiv) "Fourteenth Purchase Period"--July
1, 2000 through September 30, 2000.
(xv) "Fifteenth Purchase Period"--October
1, 2000 through December 31, 2000.
(xvi) "Sixteenth Purchase Period"--January
1, 2001 through March 31, 2001.
(xvii) "Seventeenth Purchase Period"--
April 1, 2001 through June 30, 2001.
(xviii) "Eighteenth Purchase Period"--July
1, 2001 through September 30, 2001.
(xix) "Nineteenth Purchase Period"--
October 1, 2001 through December 31, 2001.
(xx) "Twentieth Purchase Period"--January
1, 2002 through March 31, 2002.
(p) Stock: The word "Stock" shall mean the common
stock of the Company, par value $.001 per share,
authorized for issuance pursuant to the terms of the
Plan, subject to Article VIII of the Plan.
(q) Stock Option: The words "Stock Option" shall
mean the right of a Participant on an applicable Exercise
Date to purchase the number of whole shares of Stock as
provided in Article IV.
(r) Subsidiary: The word "Subsidiary" shall mean
any present or future subsidiary corporation of the
Company as defined in Section 424 of the Code.
(s) Terminating Participant: The words
"Terminating Participant" shall mean a Participant who
terminates his employment for reasons other than those
set forth in Subsection 2.1(m).
II.2 Construction. The masculine gender, where appearing
in the Plan, shall be deemed to include the feminine gender, unless
the context clearly indicates to the contrary. Any word appearing
herein in the plural shall include the singular, where appropriate,
and likewise the singular shall include the plural, unless the
context clearly indicates to the contrary.
ARTICLE III
FUNDING AND EARLY WITHDRAWAL OF ACCOUNTS
III.1 Stock Purchase Accounts. As of the applicable
Granting Date, there shall be established and maintained under the
Plan in the name of each Participant (who is a Participant with
respect to the Purchase Period pertaining to such Granting Date) an
Account which shall be debited and credited in accordance with the
following Sections of this Article III.
III.2 Participant's Contributions. By becoming a
Participant, authorization shall be deemed to be automatically
given by the Participant for his periodic contributions which shall
be credited to his Account. Prior to the applicable Granting Date,
the Participant shall elect in his Option Agreement filed with the
Committee the dollar amount of equal periodic contributions which
shall be withheld by the Employer by payroll deduction from the
Participant's compensation on each payroll payment date. Such
dollar amount shall not exceed $20 per payroll payment date
("Contribution Rate"); provided, an election, once made with
respect to any Purchase Period cannot be changed after commencement
of the Purchase Period; and provided further, a Participant may
elect to change his Contribution Rate for succeeding Purchase
Periods by notifying the Committee within 10 days of any succeeding
Granting Date. If a Participant receives a "hardship withdrawal"
from a cash or deferred arrangement established by the Employer
under Section 401(k) of the Code, he shall be prohibited from
making contributions to his Account under this Plan for a period of
12 months after receipt of such hardship distribution. If a
Participant's number of payroll payment dates thereafter shall be
changed, appropriate adjustment shall be made so that equal
periodic contributions shall be made.
III.3 Continued Participation; Voluntary Withdrawal
from Plan. Once a Participant elects to participate in the Plan,
he shall thereafter remain as a Participant until expiration or
termination of the Plan, unless he otherwise withdraws from, or
otherwise becomes ineligible to participate in the Plan. A legal
representative of a deceased Participant and a Participant who
terminates employment for any reasons specified in Subsection
2.1(m) within one month prior to the end of the applicable Purchase
Period will continue to be a Participant in the Plan until the next
succeeding Exercise Date unless such Participant or his
representative (in the event of the Participant's death) elects to
withdraw from the Plan pursuant to this Section 3.3. A Participant
may withdraw from the Plan at any time by filing a written notice
with the Committee of withdrawal prior to the next applicable
Exercise Date. Upon a Participant's withdrawal, his entire Account
Balance, if any, on the date of withdrawal shall be refunded to
him.
III.4 Withdrawal by Terminating Participant. A
Terminating Participant shall be deemed to have made an election to
withdraw from the Plan on the date his employment terminates. Upon
such withdrawal, his entire Account Balance, if any, on the date of
withdrawal, shall be refunded to him.
III.5 Reparticipation. A Participant who withdraws
under Section 3.3 within any Purchase Period shall not be eligible
to reenter the Plan with respect to the same Purchase Period;
provided, a Participant who withdraws from the Plan under Section
3.3 prior to the end of any Purchase Period shall not be precluded
from becoming a Participant with respect to any succeeding Purchase
Period if he has satisfied the eligibility requirements of the
Plan.
III.6 Interest Accrual. With respect to the refund
or distribution of an Account Balance under either of Sections 3.3
or 3.4, no interest shall be paid or payable. If the Plan is
terminated under either of Sections 8.2 or 9.8, the refund of an
Account Balance shall be with interest at a per annum rate of 5%
and shall be computed upon the average balance in such
Participant's Account for the period of time following the Granting
Date applicable to such Participant and ending on the day of the
withdrawal or distribution.
ARTICLE IV
EXERCISE OF STOCK OPTION
IV.1 Exercise. If a Participant has not made an earlier
election to withdraw pursuant to either of Sections 3.3 or 3.4, he
shall be deemed to have elected to exercise his Stock Option as of
each Exercise Date with respect to the applicable Purchase Period.
IV.2 Amount of Shares of Stock.
(a) Subject to the Subsection (b) following, the
whole number of shares of Stock to which a Participant
shall be entitled ("Total Stock Entitlement") upon the
applicable Exercise Date shall be determined under the
following formula:
Account Balance = Total Stock Entitlement
Option Price
Provided, the Account Balance for purposes of this
Section 4.2 shall be determined without crediting any
interest thereon.
(b) The Total Stock Entitlement computed for each
Participant shall be reduced to the extent that any of
the following Subsections shall apply:
(i) No Participant shall be entitled to
participate in the Plan to a greater extent than
that permitted under Section 423(b)(3) of the Code.
Thus, no Employee may be granted a Stock Option if
such Employee, immediately after the Stock Option is
granted, owns stock possessing five percent or more
of the total combined voting power or value of all
classes of stock of the Company or of its parent or
any Subsidiary (if applicable). For purposes of
this Subsection, the rules of Section 424(d) of the
Code shall apply in determining the stock ownership
of an individual, and stock which the Employee may
purchase under all outstanding stock options shall
be treated as stock owned by the Employee.
(ii) No Participant shall be entitled to
participate in the Plan to a greater extent than
that permitted under Section 423(b)(8) of the Code.
Thus, no Employee may be granted a Stock Option
which permits his rights to purchase stock under all
such "employee stock ownership plans" of the Company
and its parent or any Subsidiary (if applicable)
intended to qualify under Section 423 of the Code to
accrue at a rate which exceeds $25,000 of fair
market value of such stock (determined at the time
such Stock Option is granted) for each calendar year
in which such Stock Option is outstanding at any
time. For purposes of this Subsection, (1) the
right to purchase stock under an option accrues when
the option (or any portion thereof) first becomes
exercisable during the calendar year; (2) the right
to purchase stock under an option accrues at the
rate provided in the option, but in no case may such
rate exceed $25,000 of fair market value of such
stock (determined at the time such stock option is
granted) for any one calendar year; and (3) a right
to purchase stock which has accrued under one option
granted pursuant to any such plan may not be carried
over to any other such stock option.
IV.3 Distribution. A Participant's Total Stock
Entitlement as determined under Section 4.2 shall be distributed to
him pursuant to Section 4.5 together with any cash which is not
applied toward the purchase of whole shares of Stock. No interest
shall be payable upon such refunded Account Balance.
IV.4 Fractional Shares. Fractional shares will not be
issued under the Plan and any accumulated payroll deductions which
would have been used to purchase fractional shares will be returned
to the Participant promptly following the termination of all
Purchase Periods, without interest.
IV.5 Issuance of Shares. The shares of Stock purchased
by a Participant on the applicable Exercise Date shall for all
purposes, be deemed to have been issued and sold at the close of
business on such Exercise Date. Prior to that time, none of the
rights or privileges of a stockholder of the Company shall exist
with respect to such shares.
ARTICLE V
MAXIMUM SHARES OF STOCK AVAILABLE
V.1 Maximum Number of Shares Available to Participants.
If on the Exercise Date of any Purchase Period the Total Stock
Entitlement for all Participants, determined under Section 4.2
hereof exceeds the number of shares of Stock available for issuance
under the Plan, there shall be a proportionate reduction for the
ensuing applicable Purchase Period of each Participant's Total
Stock Entitlement in order to eliminate such excess.
Notwithstanding any provision herein to the contrary, the maximum
number of shares a Participant will be allowed to purchase during
any Purchase Period is 50 shares of Stock.
V.2 Maximum Authorized Shares. Subject to adjustment
under Article VIII, the maximum number of shares of Stock which may
be issued under the Plan shall not in the aggregate exceed 100,000
shares of Stock whether it be authorized but unissued shares of
Stock or treasury shares of Stock.
V.3 Termination of Offering for the Second and
Subsequent Purchase Periods. If in the opinion of the Committee,
there is insufficient Stock available for Stock Options at any
Granting Date after the October 1, 1997 Granting Date, the
Committee may terminate the offering contemplated for any or all
succeeding Purchase Periods.
ARTICLE VI
ADMINISTRATION
VI.1 Appointment of Committee. The Plan shall be
administered by the Committee appointed by the Board and consisting
of not less than two members from the Board. The members of the
Committee shall serve at the pleasure of the Board. Any member may
serve concurrently as a member of any other administrative
committee of any other plan of the Company or its affiliates
entitling participants therein to acquire stock, stock options or
deferred compensation rights including stock appreciation rights.
VI.2 Committee Powers and Duties. The Committee shall
have all the powers and authorities which are reasonably
appropriate and necessary to discharge its duties under the Plan.
VI.3 Committee to Make Rules and Interpret Plan. The
Committee, in its sole discretion, shall have the authority,
subject to the provisions of the Plan, to establish, adopt, or
revise rules and regulations with respect to the administration of
the Plan and to make all such determinations relating to the Plan
as it may deem necessary or advisable for the administration of the
Plan. The Committee's interpretation of the Plan and all decisions
and determinations by the Committee with respect to the Plan shall
be final, binding, and conclusive on all parties unless otherwise
determined by the Board.
ARTICLE VII
AMENDMENT OF THE PLAN
The Board may at any time, or from time to time, amend
the Plan in any respect consistent with Sections 421 and 423 of the
Code, except that, without approval of the stockholders, no
amendment shall (i) increase the maximum number of shares reserved
under the Plan other than as provided in Article VIII, or (ii) make
the Plan available to any person who is not a Participant.
ARTICLE VIII
RECAPITALIZATION AND EFFECT OF CERTAIN TRANSACTIONS
VIII.1 Stock Adjustments. In the event that the shares
of Stock, as presently constituted, shall be changed into or
exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation (whether
by reason of merger, consolidation, recapitalization,
reclassification, stock split, combination of shares or otherwise),
or if the number of such shares of Stock shall be increased through
the payment of a stock dividend, then there shall be substituted
for or added to each share available under and subject to the Plan
as provided in Section 5.2 hereof, and each share theretofore
appropriated or thereafter subject or which may become subject to
Stock Options under the Plan, the number and kind of shares of
stock or other securities into which each outstanding share of
Stock shall be so changed or for which each such share shall be
exchanged or to which each such share shall be entitled, as the
case may be, on a fair and equivalent basis in accordance with the
applicable provisions of Section 424 of the Code; provided, in no
such event will such adjustment result in a modification of any
Stock Option as defined in Section 424(h) of the Code. In the
event there shall be any other change in the number or kind of the
outstanding shares of Stock, or any stock or other securities into
which the Stock shall have been changed or for which it shall have
been exchanged, then, if the Committee shall, in its sole
discretion, determine that such change equitably requires an
adjustment in the shares available under and subject to the Plan,
or in any Stock Option theretofore granted or which may be granted
under the Plan, such adjustments shall be made in accordance with
such determination, except that no adjustment of the number of
shares of Stock available under the Plan or to which any Stock
Option relates that would otherwise be required shall be made
unless and until such adjustment either by itself or with other
adjustments not previously made would require an increase or
decrease of at least 1% in the number of shares of Stock available
under the Plan or to which a Stock Option relates immediately prior
to the making of such adjustment (the "Minimum Adjustment"). Any
adjustment representing a change of less than such minimum amount
shall be carried forward and made as soon as such adjustment
together with other adjustments required by this Section 8.1 and
not previously made would result in a Minimum Adjustment.
Notwithstanding the foregoing, any adjustment required by this
Section 8.1 which otherwise would not result in a Minimum
Adjustment shall be made with respect to shares of Stock relating
to any Stock Option immediately prior to exercise of such Stock
Option.
No fractional shares of Stock or units of other
securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in
each case by rounding downward to the nearest whole share. Any
adjustments under this Section 8.1 shall be made according to the
sole discretion of the Company, and its decision shall be binding
and conclusive.
VIII.2 Effect of Certain Transactions. Subject to any
required action by the stockholders, if the Company shall be the
surviving or resulting corporation in any merger or consolidation,
any Stock Option hereunder shall pertain to and apply to the shares
of stock of the Company, but a dissolution or liquidation of the
Company or merger or consolidation in which the Company is not the
surviving or the resulting corporation shall cause the Plan and any
Stock Option hereunder to terminate upon the effective date of such
dissolution, liquidation, merger or consolidation, and the Account
Balance of each Participant shall be refunded to him. Provided,
that for the purpose of this Section 8.2, if any merger,
consolidation or combination occurs in which the Company is not the
surviving corporation and is the result of a mere change in the
identity, form or place of organization of the Company accomplished
in accordance with Section 368(a)(1)(F) of the Code, then, such
event shall not cause a termination.
VIII.3 Stockholder Approval. The Plan shall be
approved by the holders of a majority of the outstanding shares of
Stock, present, or represented, and entitled to vote at a meeting
called for such purposes, which approval must occur within the
period ending twelve (12) months after the date the Plan is adopted
by the Board. In the event stockholder approval is not obtained
within such twelve-month period, the Plan and all such Stock
Options and such Stock shall be void.
ARTICLE IX
MISCELLANEOUS
IX.1 Notices. Any notice which a Participant files
pursuant to the Plan shall be on the form prescribed by the
Committee and shall be effective when received by the Committee.
IX.2 Application of the Funds. All funds received by the
Company under the Plan may be used for any corporate purpose.
IX.3 Repurchase of Stock. The Company shall not be
required to repurchase from any Participant shares of Stock which
he acquired under the Plan.
IX.4 Alternate Contribution Methods. If authorized
payroll deductions of a Participant's periodic contributions under
Section 3.2 are not permitted by reason of the provisions of any
law applicable to an Employer, the Committee shall adopt an
appropriate alternative method under which affected Participants
may make payment for shares of Stock purchased hereunder which
would otherwise have been made pursuant to Section 3.2.
IX.5 Nonassignability. Stock Options are exercisable
only by the Participant during his lifetime, or by his estate or
the person who acquires the right to exercise such Stock Option
upon his death by bequest or inheritance, and are not transferable
by him other than by will or the laws of descent and distribution.
No Stock Option shall be subject in any manner to alienation,
anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and
distribution. Any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of, or to subject to execution, attachment or
similar process, any Stock Option contrary to the provisions
hereof, shall be void and ineffective, shall give no right to any
purported transferee, and may, at the sole discretion of the
Committee, result in forfeiture of the Stock Option involved in
such attempt.
IX.6 Government Regulation. The Company's obligation to
sell and deliver the Stock under the Plan is at all times subject
to any and all approvals, rules and regulations of any governmental
authority required in connection with the authorization, issuance,
sale or delivery of such Stock.
IX.7 Effective Date of Plan. The Plan shall become
effective on April 1, 1997, if within twelve months after that date
the Plan has been approved by the holders of a majority of the
common stock of the Company present, or represented, and entitled
to vote at a meeting called for such purposes.
IX.8 Termination of Plan. The Plan shall continue in
effect through March 31, 2002, unless terminated pursuant to
Section 8.2 or by the Board, which shall have the right to
terminate the Plan at any time. Upon the termination of the Plan
pursuant to this Section 9.8 or Section 8.2, the Account Balance of
each Participant shall be refunded to the Participant.
IX.9 No Obligations to Exercise Stock Option. The
granting of a Stock Option shall impose no obligation upon the
Participant to exercise his Stock Option.
IX.10 Right to Continued Employment. Participation
in the Plan shall not give any Participant any right to remain in
the employ of the Employer. The Employer reserves the right to
terminate any Participant at any time.
IX.11 Reliance on Reports. Each member of the
Committee and each member of the Board shall be fully justified in
relying or acting in good faith upon any report made by the
independent public accountants of the Company and upon any other
information furnished in connection with the Plan by any person or
persons other than himself. In no event shall any person who is or
shall have been a member of the Committee or of the Board be liable
for any determination made or other action taken or any omission to
act in reliance upon any such report or information or for any
action taken, including the furnishing of information, or failure
to act, if in good faith.
IX.12 Applicable Law. This Plan shall be governed by
and interpreted in accordance with the laws of the State of
Oklahoma.
IX.13 Construction. It is intended that this Plan
shall qualify in accordance with Sections 421 and 423 of the Code,
and the provisions of this Plan shall be interpreted and applied in
a manner consistent with such intent.
Pursuant to the terms of the Plan and the applicable provisions of
the Code, all Participants in the Plan will have the same rights
and privileges and all such Participants will be treated in an
equal, uniform and nondiscriminatory manner.
<PAGE>
EXHIBIT 5.1
DUNN SWAN & CUNNINGHAM
Attorneys and Counsellors At Law
2800 Oklahoma Tower
210 Park Avenue
(405)235-8318
Facsimile (405)235-9605
June 26, 1997
Board of Directors
Applied Intelligence Group, Inc.
13800 Benson Road
Edmond, Oklahoma 73013-6417
Gentlemen:
We have acted as counsel to Applied Intelligence Group, Inc.,
an Oklahoma corporation (the "Company"), in conjunction with the
offering of an aggregate of 100,000 shares of Common Stock, $.001
par value per share, of the Company (the "Shares") to be issued
upon exercise of stock options granted under the Applied
Intelligence Group, Inc. 1997 Employee Stock Purchase Plan (the
"Plan").
The offering of the Securities is more fully described in that
certain Registration Statement on Form S-8 (No. 333-22227), filed
by the Company with the United States Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of
1933, as amended (the "Act").
For purposes of this opinion, we have made such investigations
as we deem necessary or appropriate and have reviewed and
considered among other certificates, documents and materials the
following:
(a) The Certificate of Transcript, dated November 25, 1996,
issued by the Secretary of State of the State of Oklahoma
certifying that the copy of Certificate of Incorporation
of the Company attached thereto is a full, true and
correct copy;
(b) The Certificate of Good Standing, dated November 25,
1996, issued by the Secretary of State of the State of
Oklahoma certifying that the Company is duly organized
and existing under and by virtue of the Law of the State
of Oklahoma and is in good standing according to the
records of its office;
(c) A copy of the Bylaws, as amended and restated, of the
Company as certified by the Secretary of the Company;
(d) A copy of the resolutions adopted by the Board of
Directors of the Company on February 18, 1997 and
February 24, 1997, as certified by the Secretary of the
Company;
(e) The manually signed Registration Statement;
(f) Form of certificate of the Common Stock of the Company;
and
(g) The Certificate of Officers and Directors of Applied
Intelligence Group, Inc. dated February 19, 1997.
In conducting our examination we have assumed the genuineness
of all signatures and the authenticity of all documents submitted
to us as originals and the conformity with the originals of all
documents submitted to us as certified copies. Based upon our
examination and consideration of the foregoing and upon our
examination and consideration of such other documents,
certificates, records, matters and things as we have deemed
necessary for the purposes hereof, we are of the opinion as of the
date hereof that:
1.The Company is duly organized and existing under
the laws of the State of Oklahoma;
2.All of the issued and outstanding shares of the
Common Stock of the Company have been legally issued, are
fully paid and are not liable to further call or
assessment;
3.The 100,000 shares of Common Stock to be issued
upon exercise of stock options granted pursuant to the
Plan, upon issuance and delivery against payment therefor
in accordance with the terms and conditions of the stock
options, will be legally issued, fully paid and not
liable for further call or assessment;
In arriving at the foregoing opinion, we have relied, among
other things, upon the examination of the corporate records of the
Company and certificates of officers and directors of the Company
and of public officials. We hereby consent to the use of this
opinion in the Registration Statement and all amendments thereto.
Very truly yours,
DUNN SWAN & CUNNINGHAM
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Shareholders
Applied Intelligence Group, Inc.
We consent to the incorporation by reference in the registration
statement of Applied Intelligence Group, Inc. on Form S-8 (File No.
333-22227) of our report dated March 7, 1997, on our audits of the
financial statements of Applied Intelligence Group, Inc. as of
December 31, 1996 and 1995, and for each of the three years in the period
ended December 31, 1996, which report is included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1996.
COOPERS & LYBRAND L.L.P.
Oklahoma City, Oklahoma
June 26, 1997
<PAGE>
Exhibit 23.4
CONSENT OF DUNN SWAN & CUNNINGHAM
Board of Directors and Shareholders
Applied Intelligence Group, Inc.
Dunn Swan & Cunningham, A Professional Corporation, hereby
consents to the use of its name in connection with the opinion of
counsel provided and included as an exhibit to this Registration
Statement.
/s/DUNN SWAN &CUNNINGHAM
Oklahoma City, Oklahoma
June 26, 1997
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of Robert L.
Barcum, Russell L. Reinhardt, and David B. North constitutes and
appoints Robert N. Baker and John M. Duck, and each of them, his
true and lawful attorney-in-fact and agent, with all power of
substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to
this Registration Statement, including post-effective amendments
thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith with the United States Securities
and Exchange Commission, granting unto same attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/s/ROBERT L. BARCUM
Dated June 26, 1997 ________________________
Robert L. Barcum
/s/RUSSELL L. REINHARDT
_______________________
Russell L. Reinhardt
/s/DAVID B. NORTH
________________________
David B. North
<PAGE>
