As filed with the Securities and Exchange Commission on July 24, 1998
Registration No. 333-__________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BASE TEN SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
NEW JERSEY 22-1804206
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
ONE ELECTRONICS DRIVE
TRENTON, NEW JERSEY 08619
(Address, including Zip Code, of Principal Executive Offices)
1998 STOCK OPTION AND STOCK AWARD PLAN
(Full Title of the Plan)
THOMAS E. GARDNER
PRESIDENT, CHAIRMAN OF THE BOARD,
and CHIEF EXECUTIVE OFFICER
BASE TEN SYSTEMS, INC.
ONE ELECTRONICS DRIVE
TRENTON, NEW JERSEY 08619
(609) 586-7010
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
----------------------
With a copy to:
WARREN J. CASEY, ESQ.
PITNEY, HARDIN, KIPP & SZUCH
P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962
(973) 966-6300
CALCULATION OF REGISTRATION FEE
<TABLE>
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- ----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered(1) Per Share(2) Offering Price Fee
- ----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $1.00 1,720,000(3) $3.09375 $5,321,250 $1,569.77
Par Value
Total Registration Fee
$1,569.77
- ----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, this
Registration Statement also covers an indeterminate number of shares of
Class A Common Stock that may be issuable pursuant to anti-dilution
provisions contained in the 1998 Stock Option and Stock Award Plan (the
"Plan").
(2) Estimated solely for the purpose of calculating the registration fee. Such
estimate has been computed in accordance with Rule 457(c) and Rule 457(h)(1)
based on the average high and low prices of the Registrant's Class A Common
Stock as reported on the NASDAQ National Market on July 22, 1998.
(3) Includes 720,000 shares of Class A Common Stock that may be issued pursuant
to an annual increase in the number of shares that may be offered under the
Plan, estimated at 80,000 shares for each of the remaining nine years of the
Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. Plan Information
Not filed with this Registration Statement.
ITEM 2. Registrant Information and Employee Plan Annual Information
Not filed with this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
The following documents filed by Base Ten Systems, Inc. ("Base Ten" or
the "Registrant") with the Securities and Exchange Commission (the "Commission")
are incorporated by reference in this Registration Statement:
1. Annual Report on Form 10-K for the year ended October, 31,
1997 filed on February 11, 1998.
2. Amendment to Annual Report on Form 10-K/A for the year ended
October 31, 1997 filed on February 27, 1998.
3. The Description of the Registrant's Capital Stock contained in
the Current Report on Form 8-K, filed on April 23, 1998.
4. Form 8-K, filed on November 12, 1997, reporting the sale of
all the assets, subject to certain liabilities, of the
Registrant's Government Technology Division.
5. Form 8-K, filed on December 18, 1997, reporting the sale of
the first installment of the sale of $19 million of
Convertible Preferred Shares.
6. Form 8-K, filed on January 9, 1998, reporting the completion
of the sale of the Government Technology Division and the
second and final installment of the sale of $19 million of
Convertible Preferred Shares.
7. Form 8-K, filed on February 2, 1998, reporting the
Registrant's change in fiscal year.
8. Form 8-K, filed on March 6, 1998, reporting the Registrant's
execution of a Definitive Purchase Agreement with Consilium,
Inc. under which the Registrant purchased the assets of
Consilium's Health Care and Process business unit for a cash
consideration of $1.5 million and the assumption of certain
maintenance and warranty obligations.
9. Form 8-K, filed on March 9, 1998, reporting the dismissal of
Deloitte & Touche LLP as the principal accountant to audit the
Registrant's financial statements.
10. Form 8-K, filed on March 16, 1998, reporting the appointment
of Price Waterhouse LLP as the principal accountant to audit
the Registrant's financial statements.
11. Quarterly Report on Form 10-Q for the transition period from
November 1, 1997 to December 31, 1997, filed on March 16,
1998.
12. Amendment No. 1 to Form 8-K, filed on May 5, 1998, amending
the Form 8-K filed on March 6, 1998.
13. Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, filed on May 15, 1998.
14. Amendment No. 2 to Form 8-K, filed on May 11, 1998, amending
the Form 8-K filed on March 6, 1998.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, 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, hereby are incorporated herein by reference and shall be deemed a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not applicable.
ITEM 6. Indemnification of Directors and Officers.
Article 9 of the Registrant's Restated Certificate of Incorporation, as
amended, provides as follows:
Any present or future Director or Officer of the Corporation, and any
present or future director or officer of any other corporation serving
as such at the request of the Corporation, or the legal representative
of any such Director or Officer, shall be indemnified by the
Corporation against reasonable costs, expenses (exclusive of any amount
paid to the Corporation in settlement) and counsel fees paid or
incurred in connection with any action, suit or proceeding to which any
such Director or Officer or his legal representative may be made a
party by reason of his being or having been such Director or Officer;
provided that, (1) said action, suit or proceeding shall be prosecuted
against such Director or Officer or against his legal representative to
final determination, and it shall not be finally adjudged in said
action, suit or proceeding that he had been derelict in the performance
of his duties as such Director or Officer, or (2) said action, suit or
proceeding shall be settled or otherwise terminated as against such
Director or Officer or his legal representative without a final
determination on the merits and it shall be determined by a majority of
the members of the Board of Directors who are not parties to said
action, suit or proceeding, or by a person or persons specially
appointed by the Board of Directors to determine the same that said
Director or Officer has not in any substantial way been derelict in the
performance o his duties as charged in such action, suit or proceeding.
The foregoing right of indemnification shall not be exclusive of other
rights to which such Director or Officer or legal representative may be
entitled by law, and shall inure to the benefit of the heirs, executors
or administrators of such Director or Officer.
Article 10 of the Registrant's Restated Certificate of Incorporation,
as amended, provides as follows:
No director or officer of the corporation shall be personally liable to
the corporation or its shareholders for damages for breach of any duty
owed to the corporation or its shareholders, except for liability for
any breach of duty based upon an act or omission (a) in breach of such
director's or officer's duty of loyalty to the corporation or its
shareholders, (b) not in good faith or involving a knowing violation of
law, or (c) resulting in receipt by such director or officer of an
improper personal benefit. As used in this Article, an act or omission
in breach of a director's or officer's duty of loyalty means an act or
omission which such director or officer knows or believes to be
contrary to the best interests of the corporation or its shareholders
in connection with a matter in which such director or officer has a
material conflict of interest.
The provisions of this Article shall be effective as and to the fullest
extent that, in whole or in part, they shall be authorized or permitted
by the laws of the State of New Jersey. No repeal or modification of
the provisions of this Article nor, to the fullest extent permitted by
law, any modification of law shall adversely affect any right or
protection of a director or officer of the corporation which exists at
the time of such repeal or modification.
Article X of the Registrant's By-Laws, as amended, entitled
"Indemnification: Insurance," provides as follow:
Section 1. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
contemplated action, suit or proceeding, whether civil, criminal,
administrative or investigative (including an action by or in the right
of the Corporation) by reason of the fact that he is or was a director
or officer of the Corporation against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement to the maximum
extent permitted by law, and shall advance expenses incurred by such
person in any such action to the maximum extent permitted by law in
accordance with the procedures provided by applicable law.
Section 2. To the extent, according to standards and in such manner as
the Board of Directors may direct pursuant to and in accordance with
applicable law in the particular case, the Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including an
action by or in the right of the Corporation) by reason of the fact
that he is or was an employee or agent of the Corporation, or is or was
serving at the request of the Corporation, as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expense (including attorneys' fees),
judgments, fines and amounts paid in settlement.
Section 3. The indemnification provided by this Article X shall not be
deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any agreement, vote of
stockholder or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
Section 4. The Corporation, acting by its Board of Directors, shall
have power to purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such
liability under the provisions of this Article X. Nothing in this
Section 4 shall obligate the Corporation to indemnify any person to any
extent other than as provided in Sections 1, 2, 3 and 4 of this Article
X.
Statutory authority for indemnification of and insurance for Base Ten's
directors and officers is contained in the New Jersey Business Corporation
Act ("the Act"), in particular, Section 14A:3-5 of the Act, the material
provisions of which may be summarized as follows:
Directors and officers may be indemnified in non-derivative proceedings
against settlement, judgments, fines and penalties and against
reasonable expenses (including counsel fees) where the person acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and also, in a
criminal proceeding, he must have had no reasonable cause to believe
that his conduct was unlawful. In derivative proceedings such persons
may be indemnified against reasonable expenses (including counsel fees)
were the person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, but not against settlements, judgments, fines or penalties
except that, without a court determination as to entitlement to
indemnity, no indemnity may be provided to a person who has been
adjudged liable to the corporation In all cases, the Act provides that
indemnification may only be made by the corporation (unless order by a
court) only as authorized in a specific case upon a determination that
indemnification is proper in the circumstances because the person has
met the applicable standard of conduct required of the person, requires
a person to be indemnified for reasonable expenses (including counsel
fees) to the extent he has been successful in any proceeding and
permits a corporation to advance expenses upon an undertaking for
repayment if it shall be ultimately determined that the director or
officer is not entitled to indemnification. The indemnification and
advancement of expenses provided by or granted pursuant to the Act is
not exclusive of other rights of indemnification to which a corporate
agent may be entitled under a certificate of incorporation, by-law,
agreement, vote of shareholders or otherwise. However, no
indemnification may be made to or on behalf of a director or officer if
a final adjudication adverse to the director or officer establishes
that the director's or officer's acts or omissions were in breach of
his duty of loyalty to the corporation or its shareholders, were not in
good faith or involved a knowing violation of law, or resulted in
receipt by the director or officer an improper personal benefit. A
corporation may purchase and maintain insurance on behalf of any
directors and officers against expenses incurred in any proceeding and
liabilities asserted against them by reason of being or having been a
director or officer, whether or not the corporation would have the
power to indemnify the directors or officers against such expenses and
liabilities under the statute.
Each of the officers and directors of Base Ten is insured against
certain liabilities which he might incur in his capacity as an officer
or director of Base Ten or its subsidiaries pursuant to a Directors and
Officers Insurance and Company Reimbursement Policy issued by National
Union Fire Insurance Company of Pittsburgh, PA, Zurich Insurance
Company of Philadelphia, PA and Genesis Insurance Company of Stamford,
CT. The general effect of the policy is that if any claims are made
against officers or directors of Base Ten or its subsidiaries or any of
them for a Wrongful Act (as defined in the policy) while acting in
their individual or collective capacities as directors or officers, to
the extent Base Ten or its subsidiary has property indemnified such
officers and directors, the insurer will, subject to the retention
amount, reimburse Base Ten or its subsidiary for 100% of any Loss (as
defined in the policy). In addition, to the extent that Base Ten or its
subsidiary has not indemnified an officer or director, the insurer
will, subject to the retention amount, pay on behalf of such officer or
director 100% of the Loss. Defense Costs (as defined in the Policy) are
part of Loss and are subject to the limits of the policy.
The retention amount under the policy is $250,000. The retention amount
is first applied to Base Ten or its subsidiary. The retention amount is
not applicable to officers or directors if Base Ten or its subsidiary
is not permitted or required to indemnify the officers or directors.
If, however, Base Ten or its subsidiary is permitted or required to
indemnify the officers or directors, then the retention amount does
apply to them.
Under the policy, the term "Wrongful Act" means any actual or alleged
error, or misstatement, or misleading statement, or act, or omission,
or neglect or breach of duty by the directors or officers in their
capacities as such, individually or collectively, or any matter claimed
against them solely by reason of their being directors or officers of
Base Ten or its subsidiaries, except that certain claims are excluded
by the terms and conditions of the policy. The term "Loss" means
damages, judgments, settlements and Defense Costs. The term "Defense
Costs" means reasonable and necessary fees, costs and expenses
consented to by the insurer resulting solely from the investigation,
adjustment, defense and appeal of any claim against any director or
officer, but excluding salaries of officers or employees of Base Ten or
its subsidiaries.
7ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
4(b) 1998 Stock Option and Stock Award Plan.
5 Opinion of Pitney, Hardin, Kipp & Szuch, as to the legality of
the securities being registered.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Pitney, Hardin, Kipp & Szuch (included in Exhibit 5
hereto).
24 Power of Attorney (included on signature page hereto).
ITEM 9. Undertakings.
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement 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.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) 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.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all 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 Trenton, State of New Jersey, on this 24th day
of July, 1998.
<TABLE>
<CAPTION>
BASE TEN SYSTEMS, INC.
<S> <C> <C>
THOMAS E. GARDNER WILLIAM F. HACKETT WILLIAM F. HACKETT
By:__________________ By:_____________________ By:___________________
Thomas E. Gardner William F. Hackett William F. Hackett
Chief Executive Officer Chief Financial Officer (Principal Accounting Officer
(Principal Executive Officer) and Principal Financial Officer)
</TABLE>
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Thomas E. Gardner and William F.
Hackett, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution for him and in his name, place and stead in any
and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments), and to file the same with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said 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 connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming what said attorneys-in-fact and agents or their
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
THOMAS E. GARDNER
__________________________ July 24, 1998
Thomas E. Gardner Chief Executive Officer, Chairman of
the Board, President, and Director
(Principal Executive Officer)
ALEXANDER M. ADELSON
__________________________ July 24, 1998
Alexander M. Adelson Director
DAVID C. BATTEN
__________________________ July 24, 1998
David C. Batten Director
__________________________ July __, 1998
Alan S. Poole Director
WILLIAM SWORD
__________________________ July 24, 1998
William Sword Director
__________________________ July __, 1998
Carl W. Schafer Director
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
4(b) 1998 Stock Option and Stock Award Plan.
5 Opinion of Pitney, Hardin, Kipp & Szuch.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Pitney, Hardin, Kipp & Szuch (included in Exhibit 5
hereto).
24 Power of Attorney (included on signature page hereto).
BASE TEN SYSTEMS, INC.
1998 STOCK OPTION AND STOCK AWARD PLAN
1. Purpose
The purpose of this Base Ten Systems, Inc. 1998 Stock Option
and Stock Award Plan (the "Plan") is to encourage and enable selected officers
and other key employees of Base Ten Systems Inc. (the "Company") and its
subsidiaries to acquire a proprietary interest in the Company through the
ownership of Class A Common Stock ("Common Stock") of the Company. Such
ownership will provide such employees with a more direct stake in the future
welfare of the Company and encourage them to remain with the Company and its
subsidiaries. It is also expected that the Plan will encourage qualified persons
to seek and accept employment with the Company and its subsidiaries. Pursuant to
the Plan, such employees will be offered the opportunity to acquire such Common
Stock through the grant of options, the award of restricted stock under the
Plan, bonuses payable in stock, or a combination thereof.
As used herein, the term "subsidiary" shall mean any present
or future corporation which is or would be a "subsidiary corporation" of the
Company as the term is defined in Section 424(f) of the Internal Revenue Code of
1986, as amended (the "Code").
2. Administration of the Plan
The Plan shall be administered by the Board of Directors of
the Company or a Compensation Committee as appointed from time to time by the
Board of Directors of the Company ("Board"), which Compensation Committee shall
consist solely of not less than two (2) members of the Board qualifying as
"non-employee directors" under Rule 16b-3 of the Securities Exchange Act of
1934, as it may be amended from time to time (the "Exchange Act"); none of the
members of the Compensation Committee shall be eligible to be granted options or
awarded restricted stock under the Plan or receive bonuses payable in stock. No
member of the Board of Directors shall be appointed to the Compensation
Committee who has been granted an option, awarded restricted stock or received a
bonus payment in stock under the Plan within one year prior to appointment. As
used hereinafter the term "Committee" shall mean (i) the Board of Directors of
the Company at all times that a Compensation Committee is not in existence or
(ii) the Compensation Committee at all times that a Compensation Committee is in
existence.
In administering the Plan, the Committee may adopt rules and
regulations for carrying out the Plan. The interpretation and decision with
regard to any question arising under the Plan made by the Committee shall be
final and conclusive on all employees of the Company and its subsidiaries
participating or eligible to participate in the Plan. The Committee may consult
with counsel, who may be of counsel to the Company, and the Committee shall not
incur any liability for any action taken in good faith in reliance upon the
advice of counsel.
The Committee shall determine the employees to whom, and the
time or times at which, grants or awards shall be made and the number of shares
to be included in the grants or awards.
Each option granted pursuant to the Plan shall be evidenced by
an Option Agreement (the "Agreement"). The Agreement shall not be a precondition
to the granting of options; however, no person shall have any rights under any
option granted under the Plan unless and until the optionee to whom such option
shall have been granted shall have executed and delivered to the Company an
Agreement. The Committee shall prescribe the form of the Agreement. A fully
executed original of the Agreement shall be provided to both the Company and the
optionee.
3. Shares of Stock Subject to the Plan
The total number of shares that may be optioned or awarded
under the Plan is 1,000,000 shares of Common Stock plus an additional amount of
shares on May 1 each year, from May 1, 1999 to May 1, 2007, inclusive, equal to
one percent (1%) of the number of shares of Common Stock outstanding on the
immediately preceding April 30 (the "Additional Annual Increment"), of which (i)
150,000 shares plus shares equal to twenty percent (20%) of each Additional
Annual Increment may be awarded as restricted stock and (ii) no more than
500,000 shares may be awarded as Incentive Stock Options, as defined in Section
422 of the Code, except that, notwithstanding any of the foregoing limitations
set forth in this Paragraph 3, said numbers of shares shall be adjusted as
provided in Paragraph 12. Any shares subject to an option which for any reason
expires or is terminated unexercised and any restricted stock which is forfeited
may again be optioned or awarded under the Plan; provided, however, that
forfeited shares shall not be available for further awards if the employee has
realized any benefits of ownership from such shares. Shares subject to the Plan
may be either authorized and unissued shares or issued shares acquired by the
Company or its subsidiaries.
No employee shall receive, over the term of the Plan, awards
in the form of options (whether incentive stock options or options other than
incentive stock options) or restricted stock, or both, covering more than
500,000 shares of Common Stock.
4. Eligibility
Key employees, including officers, of the Company and its
subsidiaries (but excluding members of the Committee), are eligible to be
granted options and awarded restricted stock under the Plan and to have their
bonuses payable in stock. The employees who shall receive awards or options
under the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible, and the Committee shall determine, in its
sole discretion, the number of shares to be covered by the award or awards and
by the options or options granted to each such employee selected.
5. Duration of the Plan
The Plan shall terminate upon the earlier of the following
dates or events to occur:
(a) upon the adoption of a resolution of the Board
terminating the Plan; or
(b) ten years from the date of adoption of the Plan by the
Board; or
(c) the date all shares of Common Stock subject to the
Plan shall have been purchased according to the Plan's
provisions.
No such termination of the Plan shall affect the rights of any
participant hereunder and all options previously granted and restricted stock
and stock bonus awarded hereunder shall continue in force and in operation after
the termination of the Plan, except as they may be otherwise terminated in
accordance with the terms of the Plan.
6. Terms and Conditions of Stock Options
All options granted under this Plan shall be either Incentive
Stock Options as defined in Section 422 of the Code or options other than
Incentive Stock Options. Each such option shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms and conditions not inconsistent therewith as the Committee
shall determine.
(a) The option price per share shall be determined by the
Committee. However, the option price shall not be less than 100% of the fair
market value at the time the option is granted. The fair market value shall be
the closing price of the Common Stock as reported on NASDAQ for the day on which
the option is granted. In the event that the method for determining the fair
market value of the shares provided for in this Paragraph 6(a) shall not for any
reason be practicable, then the fair market value per share shall be determined
by such other reasonable method as the Committee shall, in its discretion,
select and apply at the time of grant of the option concerned.
(b) Each option shall be exercisable during and over such
period ending not later than ten years from the date it was granted, as may be
determined by the Committee and stated in the option.
(c) No option shall be exercisable prior to the expiration of
the period specified by the Committee at the time of grant (the "vesting
period"), which period shall not be less than six (6) months, except as provided
in Paragraphs 6(j), 9 and 12 of the Plan.
(d) Each option shall state whether it will or will not be
treated as an Incentive Stock Option.
(e) Each option may be exercised by giving written notice to
the Company specifying the number of shares to be purchased, which shall be
accompanied by payment in full including applicable taxes, if any. Payment shall
be (i) in cash, or (ii) in shares of Common Stock of the Company already owned
by the optionee (the value of such stock shall be its fair market value on the
date of exercise as determined under Paragraph 6(a), or (iii) by a combination
of cash and shares of Common Stock of the Company. No option shall be exercised
for less than the lesser of 50 shares or the full number of shares for which the
option is then exercisable. No optionee shall have any rights to dividends or
other rights of a shareholder with respect to shares subject to his option until
he has given written notice of exercise of his option and paid in full for such
shares. Tax withholding obligations may be met by the withholding of Common
Stock otherwise deliverable to the optionee pursuant to procedures approved by
the Committee. In no event shall Common Stock be delivered to any optionee until
he has paid to the Company in cash the amount of tax required to be withheld by
the Company or has elected to have his tax withholding obligations met by the
withholding of Common Stock in accordance with the procedures approved by the
Committee, except that in the case of later tax dates under Section 83 of the
Code, the Company may deliver Common Stock prior to the optionee's satisfaction
of tax withholding obligations if the optionee makes arrangements satisfactory
to the Company that such obligations will be met on the applicable tax date.
(f) Notwithstanding the foregoing Paragraph 6(e) of the Plan,
each option granted hereunder may provide, or be amended to provide, the right
either (i) to exercise such option in whole or in part without any payment of
the option price, or (ii) to request the Committee to permit, in its sole
discretion, such exercise without any payment of the option price. If an option
is exercised without a payment of the option price, the optionee shall be
entitled to receive that number of whole shares as is determined by dividing (a)
an amount equal to the fair market value per share on the date of exercise as
determined under Paragraph 6(a) into (b) an amount equal to the excess of the
total fair market value of the shares on such date as so determined with respect
to which the option is being exercised over the total cash purchase price of
such shares as set forth in the option. Fractional shares will be rounded to the
next lowest number and the optionee will receive cash in lieu thereof. At the
sole discretion of the Committee, or as specified in the option, the settlement
of all or part of an optionee's rights under this Paragraph 6(f) may be made in
cash in an amount equal to the fair market value of the shares otherwise payable
hereunder. The number of shares with respect to which any option is exercised
under this Paragraph 6(f) shall reduce the number of shares thereafter available
for exercise under the option, and such shares thereafter may not again be
optioned under the Plan.
(g) Each option may provide, or be amended to provide, that
the optionee may exercise the option without payment of the option price by
delivery to the Company of an exercise notice and irrevocable instructions to
deliver shares of Common Stock directly to the brokerage firm named therein in
exchange for payment of the option price and withholding taxes by such brokerage
firm to the Company.
(h) If an optionee's employment by the Company or a subsidiary
terminates by reason of his retirement under a retirement plan of the Company or
a subsidiary, his option may thereafter be exercised whenever the vesting period
has elapsed until the expiration of the stated period of the option; provided,
however, that if the optionee dies after such termination of employment, any
unexercised option may thereafter be immediately exercised in full by the legal
representative of his estate or by the legatee of the optionee under his last
will until the expiration of the stated period of the option; provided, further,
that any right granted to such an optionee pursuant to Paragraph 6(f) of the
Plan, shall terminate on the date of such termination of employment.
(i) If an optionee's employment by the Company or a subsidiary
terminates by reason of permanent disability, as determined by the Committee,
his option may thereafter be exercised whenever the vesting period has elapsed
until the expiration of the stated period of the option; provided, however, that
if the optionee dies after such termination of employment, any unexercised
option may thereafter be immediately exercised in full by the legal
representative of his estate or by the legatee of the optionee under his last
will until the expiration of the stated period of the option; provided, further,
that any right granted to such an optionee pursuant to Paragraph 6(f) of the
Plan, shall terminate on the date of such termination of employment.
(j) If an optionee's employment by the Company or a subsidiary
terminates by reason of his death, his option may thereafter be immediately
exercised in full by the legal representative of his estate or by the legatee of
the optionee under his last will until the expiration of the stated period of
the option; provided, however, that any right granted to such an optionee
pursuant to Paragraph 6(f) of the Plan, shall terminate on the date of his
death.
(k) Unless otherwise determined by the Committee, if an
optionee's employment terminates for any reason other than death, retirement or
permanent disability, his option shall thereupon terminate.
(l) The option by its terms shall be personal and shall not be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution. During the lifetime of an optionee, the option shall be
exercisable only by him.
(m) Notwithstanding any intent to grant Incentive Stock
Options, an option granted will not be considered an Incentive Stock Option to
the extent that it together with any earlier Incentive Stock Options permits the
exercise for the first time in any calendar year of more than $100,000 in value
of Common Stock (determined at the time of grant).
(n) In the event any option is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased optionee, the
Company shall be under no obligation to issue Common Stock thereunder unless and
until the Company is satisfied that the person or persons exercising the option
are the duly appointed legal representative of the deceased optionee's estate or
the proper legatees or distributees thereof.
(o) No Incentive Stock Option shall be granted to an employee
who owns immediately before the grant of such option, directly or indirectly,
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company. This restriction does not apply if, at the time such
Incentive Stock Option is granted, the option price is at least 110% of the fair
market value of one share of Common Stock, as determined in Paragraph 6(a), on
the date of grant and the Incentive Stock Option by its terms is not exercisable
after the expiration of five years from the date of grant.
7. Terms and Conditions of Restricted Stock Awards
All awards of restricted stock under the Plan shall be subject
to all the applicable provisions of the Plan, including the following terms and
conditions, and to such other terms and conditions not inconsistent therewith,
as the Committee shall determine.
(a) Awards of restricted stock may be in addition to or in
lieu of option grants.
(b) During a period set by the Committee at the time of each
award of restricted stock (the "restriction period"), the recipient shall not be
permitted to sell, transfer, pledge, or assign the shares of restricted stock.
(c) Shares of restricted stock shall become free of all
restrictions if the recipient dies or his employment terminates by reason of
permanent disability, as determined by the Committee, during the restriction
period and, to the extent set by the Committee at the time of the award or
later, if the recipient retires under a retirement plan of the Company or a
subsidiary during such period. The Committee may require medical evidence of
permanent disability, including medical examinations by physician(s) selected by
it. If the Committee determines that any such recipient is not permanently
disabled or that a retiree's restricted stock is not to become free of
restrictions, the restricted stock held by either such recipient, as the case
may be, shall be forfeited and revert to the Company.
(d) Shares of restricted stock shall be forfeited and revert
to the Company upon the recipient's termination of employment during the
restriction period for any reason other than death, permanent disability or
retirement under a retirement plan of the Company or a subsidiary except to the
extent the Committee, in its sole discretion, finds that such forfeiture might
not be in the best interest of the Company and, therefore, affirmatively waives
in writing all or part of the application of this provision to the restricted
stock held by such recipient.
(e) Stock certificates for restricted stock shall be
registered in the name of the recipient but shall be appropriately legended and
returned to the Company by the recipient, together with a stock power, endorsed
in blank by the recipient. The recipient shall be entitled to vote shares of
restricted stock and shall be entitled to all dividends paid thereon, except
that dividends paid in Common Stock or other property shall also be subject to
the same restrictions.
(f) Restricted stock shall become free of the foregoing
restrictions upon expiration of the applicable restriction period and the
Company shall deliver Common Stock certificates evidencing such stock.
(g) Recipients of restricted stock shall be required to pay
taxes to the Company upon the expiration of restriction periods or such earlier
dates as elected pursuant to Section 83 of the Code; provided, however, tax
withholding obligations may be met by the withholding of Common Stock otherwise
deliverable to the recipient pursuant to procedures approved by the Committee.
In no event shall Common Stock be delivered to any awardee until he has paid to
the Company in cash the amount of tax required to be withheld by the Company or
has elected to have his withholding obligations met by the withholding of Common
Stock in accordance with the procedures approved by the Committee.
8. Bonuses Payable in Stock
In lieu of cash bonuses otherwise payable under the Company's
compensation practices to employees eligible to participate in the Plan, the
Committee, in its sole discretion, may determine that such bonuses shall be
payable in stock or partly in stock and partly in cash. Such bonuses shall be in
consideration of services previously performed and shall consist of shares of
Common Stock free of any restrictions imposed by the Plan. The number of shares
of Common Stock payable in lieu of an amount of each bonus otherwise payable
shall be determined by dividing such amount by the fair market value of one
share of Common Stock on the date the bonus is payable, with the fair market
value determined in accordance with Paragraph 6(a). The Company shall withhold
from any such bonus an amount of cash sufficient to meet its tax withholding
obligations.
9. Limited Rights
Any option granted under the Plan may, at the discretion of
the Committee, contain provisions for limited rights, as described herein. A
limited right shall be exercisable upon the occurrence of an event specified in
the option as an exercise event, and shall expire thirty (30) days after the
occurrence of such event. Exercise events may include, at the discretion of the
Committee and as specified in the option, consummation of a tender or exchange
offer for at least 20% of the Company's Common Stock outstanding at the
commencement of such offer or a proxy contest the result of which is the
replacement of a majority of the members of the Company's Board of Directors, or
consummation of a merger or reorganization of the Company in which the Company
does not survive or in which the shareholders of the Company receive stock or
securities of another corporation or cash, or a liquidation or dissolution of
the Company or other similar events. Limited rights shall permit optionees to
receive in cash either (i) the highest market price per share for each share
covered by an option, without regard to the date on which the option otherwise
would be exercisable, which the Company's Common Stock traded on NASDAQ for the
sixty days immediately preceding the exercise event or (ii) if provided by the
Committee in its discretion at the time of grant, the highest market price per
share for each share covered by the option which the Company's Common Stock
traded on NASDAQ on the date of exercise, less the option price per share
specified in the option. In the event the exercise event is consummation of a
tender or exchange offer, the value per share set by the tenderor or offeror
shall be substituted for the highest market price per share provided in clause
(i) in the preceding sentence. Limited rights shall not extend the exercise
period of any option and, to the extent exercised, shall reduce the shares of
Common Stock available under the Plan and the shares of Common Stock covered by
the options to which the limited rights relate.
10. Transfer, Leave of Absence, Etc.
For the purpose of the Plan: (a) a transfer of an employee
from the Company to a subsidiary, or vice versa, or from one subsidiary to
another, and (b) a leave of absence, duly authorized in writing by the Company,
shall not be deemed a termination of employment.
11. Rights of Employees
(a) No person shall have any rights or claims under the Plan
except in accordance with the provisions of the Plan.
(b) Nothing contained in the Plan shall be deemed to give any
employee the right to be retained in the service of the Company or its
subsidiaries.
12. Changes in Capital
Upon changes in the Common Stock by a stock dividend,
extraordinary dividend payable in cash or property, stock split, reverse split,
subdivision, recapitalization, merger, consolidation (whether or not the Company
is a surviving corporation), combination or exchange of shares, separation,
reorganization or liquidation, the number and class of shares available under
the Plan as to which stock options and restricted stock may be awarded, the
number and class of shares under each option or award and the option price per
share shall be correspondingly adjusted by the Committee, such adjustments to be
made in the case of outstanding options without change in the total price
applicable to such options; provided, however, no such adjustments shall be made
in the case of stock dividends aggregating in any fiscal year of the Company not
more than 5% of the Common Stock issued and outstanding at the beginning of such
year or in the case of one or more splits, subdivisions or combinations of the
Common Stock during any fiscal year of the Company resulting in an increase or
decrease of not more than 5% of the Common Stock issued and outstanding at the
beginning of such year.
In the event of a "Change of Control of the Company" (as
hereinafter defined) (i) all restrictions on restricted stock previously awarded
to recipients under the Plan shall lapse and (ii) all stock options and stock
appreciation rights which are outstanding shall become immediately exercisable
in full without regard to any limitations of time or amount otherwise contained
in the Plan, the options or the rights. Further, in the event of a Change in
Control of the Company, the Committee may determine that the options shall be
adjusted and make such adjustments by substituting for Common Stock subject to
options, stock or other securities of any successor corporation to the Company
that may be issuable by another corporation that is a party to such Change in
Control of the Company if such stock or other securities are publicly traded or,
if such stock or other securities are not publicly traded, by substituting stock
or other securities of a parent or affiliate of such corporation if the stock or
other securities of such parent or affiliate are publicly traded, in which event
the aggregate option price shall remain the same and the amount of shares or
other securities subject to options shall be the amount of shares or other
securities which could have been purchased on the day of the Change in Control
of the Company with the proceeds which would have been received by the optionee
if the option had been exercised in full prior to such Change in Control of the
Company and the optionee had exchanged all of such shares in the Change in
Control transaction. No optionee shall have any right to prevent the
consummation of any of the foregoing acts affecting the number of shares
available to the optionee.
For purposes of the foregoing, a "Change in Control of the
Company" shall be deemed to have occurred upon the occurrence of one of the
following events:
(a) "any person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Company,
any employee benefit plan sponsored by the Company,
any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportion as their ownership of stock of the
Company), is or becomes (other than pursuant to a
transaction which is deemed to be a "Non-Qualifying
Transaction" under Subsection 12(c)) the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined
voting power of the Company's then outstanding
securities eligible to vote for the election of the
Board of Directors of the Company (the "Company Voting
Securities"); or
(b) individuals who, on January 31, 1998, constitute the
Board of Directors of the Company (the "Incumbent
Directors") cease for any reason to constitute at
least a majority of the Board of Directors of the
Company, provided that any person becoming a director
subsequent to January 31, 1998, whose election or
nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors then on
the Board of Directors of the Company (either by a
specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee
for director, without written objection to such
nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or
nominated as a director of the Company as a result of
an actual or threatened election contest with respect
to directors (including without limitation in order to
settle any such contest) or any other actual or
threatened solicitation of proxies by or on behalf of
any person other than the Board of Directors of the
Company shall be an Incumbent Director; or
(c) the stockholders of the Company approve a merger,
consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or
any of its subsidiaries that requires such approval,
whether for such transaction or the issuance of
securities in the transaction (a "Business
Combination"), unless immediately following such
Business Combination: (i) more than 50% of the total
voting power of (x) the corporation resulting from
such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate
parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving
Corporation (the "Parent Corporation"), will be
represented by Company Voting Securities that were
outstanding immediately prior to such Business
Combination (or, if applicable, shares into which such
Company Voting Securities were converted pursuant to
such Business Combination), (ii) no person (other than
any employee benefit plan sponsored or maintained by
the Surviving Corporation or the Parent Corporation)
will be or becomes the beneficial owner, directly or
indirectly, of 25 % or more of the total voting power
of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) and
(iii) at least a majority of the members of the board
of directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation)
following the consummation of the Business Combination
were Incumbent Directors at the time of the approval
of the Board of Directors of the Company of the
execution of the initial agreement providing for such
Business Combination (any Business Combination which
satisfies all of the criteria specified in (i), (ii)
and (iii) above shall be deemed to be a
"Non-Qualifying Transaction"); or
(d) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or
an agreement for the sale or disposition by the
Company of all or substantially all of the Company's
assets.
Anything contained herein to the contrary notwithstanding, a
Change in Control of the Company shall be deemed not to have occurred with
respect to any optionee who participates as an investor in the acquiring entity
(which shall include the Parent Corporation) in any such Change in Control
transaction unless such acquiring entity is a publicly-traded corporation and
the optionee's interest in such acquiring entity immediately prior to the
acquisition constitutes less than one percent (1 %) of both (1) the combined
voting power of such entity's outstanding securities and (2) the aggregate fair
market value of such entity's outstanding equity securities. For this purpose
the optionee's interest in any equity securities shall include any such interest
of which such optionee is a beneficial owner.
13. Use of Proceeds
Proceeds from the sale of shares pursuant to options granted
under this Plan shall constitute general funds of the Company.
14. Amendments
The Board of Directors may amend, alter or discontinue the
Plan, including without limitation any amendment considered to be advisable by
reason of changes to the United States Internal Revenue Code, but no amendment,
alteration or discontinuation shall be made which would impair the rights of any
holder of an award of restricted stock or option or stock bonus theretofore
granted, without his consent, or which, without the approval of the
shareholders, would:
(a) except as is provided in Paragraph 12 of the Plan,
increase the total number of shares reserved for the purpose of the Plan.
(b) except as is provided in Paragraphs 6(f) and 12 of the
Plan, decrease the option price of an option to less than 100% of the fair
market value on the date of the granting of the option.
(c) change the class of persons eligible to receive an award
of restricted stock or options under the Plan; or
(d) extend the duration of the Plan.
The Committee may amend the terms of any award of restricted
stock or option theretofore granted, retroactively or prospectively, but no such
amendment shall impair the rights of any holder without his consent.
15. Miscellaneous Provisions
(a) The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the issuance of shares upon exercise of any
option under the Plan.
(b) It is understood that the Committee may, at any time and
from time to time after the granting of an option or the award of restricted
stock or bonuses payable in Common Stock hereunder, specify such additional
terms, conditions and restrictions with respect to such option or stock as may
be deemed necessary or appropriate to ensure compliance with any and all
applicable laws, including, but not limited to, terms, restrictions and
conditions for compliance with federal and state securities laws and methods of
withholding or providing for the payment of required taxes.
(c) If at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of shares of Common
Stock upon any national securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
shares of Common Stock hereunder, no option or stock appreciation right may be
exercised or restricted stock or stock bonus may be transferred in whole or in
part unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained, or otherwise provided for, free
of any conditions not acceptable to the Committee.
(d) The Plan shall be governed by and construed in accordance
with the laws of the State of New Jersey.
16. Limits of Liability
(a) Any liability of the Company or a subsidiary of the
Company to any Participant with respect to an option or stock or other award
shall be based solely upon contractual obligations created by the Plan and the
Agreement.
(b) Neither the Company nor a subsidiary of the Company, nor
any member of the Committee or the Board, nor any other person participating in
any determination of any question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any liability to any party
for any action taken or not taken in connection with the Plan, except as may
expressly be provided by statute.
PITNEY, HARDIN, KIPP & SZUCH
(MAIL TO)
P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962-1945
------
(DELIVERY TO)
200 CAMPUS DRIVE
FLORHAM PARK, NEW JERSEY 07932-0950
(973) 966-6300
FACSIMILE (973) 966-1550
July 24, 1998
Base Ten Systems, Inc.
One Electronics Drive
Trenton, New Jersey 08619
Re: Registration Statement on Form S-8
1998 Stock Option and Stock Award Plan
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by Base Ten Systems, Inc. (the "Company")
with the Securities and Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended (the "Act"), of 1,720,000 shares of
Class A Common Stock of the Company, $1.00 par value (the "Shares") issuable
pursuant to awards granted under the 1998 Stock Option and Stock Award Plan (the
"Plan").
We have also examined originals, or copies certified or otherwise
identified to our satisfaction, of the Plan, the Certificate of Incorporation
and By-laws of the Company, as currently in effect, and relevant resolutions of
the Board of Directors of the Company; and we have examined such other documents
as we deemed necessary in order to express the opinion hereinafter set forth.
In our examination of such documents and records, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, and conformity with the originals of all documents submitted to us
as copies.
Based on the foregoing, we are of the opinion that, when the
Registration Statement has become effective under the Act, and the Shares shall
have been duly issued in the manner contemplated by the Registration Statement
and the Plan, the Shares will be legally issued, fully paid and non-assessable.
The foregoing opinion is limited to the federal laws of the United
States and the laws of the State of New Jersey, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
We hereby consent to use of this opinion as an Exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act, or the Rules and Regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
PITNEY, HARDIN, KIPP & SZUCH
Exhibit 23(a)
Consent of Deloitte & Touche LLP
We consent to the incorporation by reference in this Registration Statement of
Base Ten Systems, Inc. on Form S-8 of our report dated February 6, 1998,
appearing in the Annual Report on Form 10-K of Base Ten Systems, Inc. for the
year ended October 31, 1997.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
July 24, 1998
