<PAGE> 1
As filed with the Securities and Exchange Commission on November 17, 1999.
Registration No. 333 -
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ESOFT, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 84-0938960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
295 INTERLOCKEN BLVD. # 500
BROOMFIELD, COLORADO 80021
(303) 444-1600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
TECHNOLOGIC, INC.
AMENDMENT TO TECHNOLOGIC, INC. 1994 STOCK OPTION PLAN
(Full title of plan)
---------------------------
JEFFREY FINN WITH A COPY TO:
CHIEF EXECUTIVE OFFICER LESTER R. WOODWARD, ESQ.
295 INTERLOCKEN BLVD. #500 DAVIS, GRAHAM & STUBBS LLP
BROOMFIELD, COLORADO 80021 370 17TH STREET, SUITE 4700
(303) 444-1600 DENVER, COLORADO 80202
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
Proposed maximum Proposed maximum
Title of each class of offering price per aggregate offering Amount
securities to be registered Amount to be registered share(1) price(1) registration fee
- ------------------------------ ----------------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value) 180,565 $7.28125 $1,314,738 $365
===================================================================================================================
</TABLE>
(1) Estimated solely for the purposes of calculating the amount of the
registration fee pursuant to Rule 457(c). The price per share and aggregate
offering price are based upon the average of the high and low prices of the
shares as of November 15, 1999, as reported on the Nasdaq Small Cap Market.
<PAGE> 2
EXPLANATORY NOTE
On September 10, 1999 eSoft, Inc.(the "Company") concluded a strategic
combination with Technologic, Inc. ("Technologic") that resulted in Technologic
becoming a wholly-owned subsidiary of the Company. Pursuant to the terms of the
merger, the Company assumed the plan under which options to purchase shares of
Technologic common stock were granted, and agreed to convert the right to
purchase Technologic shares to a right to purchase shares of the Company. This
registration statement covers shares of the Company's common stock issuable upon
exercise of such Technologic options.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which are filed with the Securities and
Exchange Commission, are incorporated in this Registration Statement by
reference:
(a) The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998, filed with the Commission on March 24, 1999.
(b) The Company's Amendment No. 1 to its Annual Report on Form 10-KSB
for the year ended December 31, 1998, filed with the Commission on April 21,
1999.
(c) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999, filed with the Commission on May 17, 1999.
(d) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1999, filed with the Commission on August 16, 1999.
(e) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1999, filed with the Commission on November 15, 1999.
(f) The Company's Current Report on Form 8-K, filed with the Commission
on June 9, 1999.
(g) The Company's Current Report on Form 8-K, filed with the Commission
on June 28, 1999.
(h) The Company's Current Report on Form 8-K, filed with the Commission
on August 9, 1999.
(i) The Company's Amendment No. 1 to its Current Report on Form 8-K,
filed with the Commission on August 9, 1999.
(j) The Company's Current Report on Form 8-K, filed with the Commission
of September 27, 1999.
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(k) All other documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent
to the date of this Registration Statement and prior to the filing of a
Post-Effective Amendment to this Registration Statement indicating that all
securities offered under the Registration Statement have been sold, or
deregistering all securities then remaining unsold.
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 statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
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4. DESCRIPTION OF SECURITIES.
The Company is authorized to issue 50,000,000 shares of common stock
and 5,000,000 shares of preferred stock. The holders of the Company's common
stock are entitled to vote at all meetings of stockholders, to receive dividends
if, as, and when declared by the board of directors, and to participate in any
distribution of property or assets on the liquidation, winding up, or other
dissolution of the Company. The Company's common stock has no preemptive or
conversion rights.
Certain provisions of our Amended and Restated Certificate of
Incorporation and Bylaws may make it difficult to change control of the Company.
Article 4 of the Amended and Restated Certificate of Incorporation allows the
Company's board of directors to determine or alter the rights, preferences,
privileges, and restrictions to be granted to or imposed upon any wholly
unissued series of preferred stock to fix the number of shares that constitute
any series of preferred stock, and to determine the designation and series of
preferred stock. Article III of the Bylaws establishes what is known as a
"classified board of directors," with three classes of directors designated as
Class I, Class II, and Class III. Each class is elected to serve for a
three-year term, with each class up for election in different years so that in
any one year, only one-third of all directors are up for election. At each
annual meeting of stockholders, the successors to the class of directors whose
terms expire at that meeting are elected to serve as directors for a three-year
term.
5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Bylaws and Certificate of Incorporation provide that the
Company shall, to the full extent permitted by the General Corporation Law of
the State of Delaware, as amended from time to time, indemnify all directors and
officers of the Company. Section 145 of the Delaware General Corporation Law
provides in part that a corporation shall have the power to 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 (other than an action by or in
the right of the corporation) by reason of the fact that such person 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 or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he 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 with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Similar indemnity is authorized for such persons against expenses (including
attorneys' fees) actually and reasonably incurred in defense or settlement of
any threatened, pending or completed action or suit by or in the right of the
corporation, if such 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
provided further that (unless a court of competent jurisdiction otherwise
provides) such person shall not have been adjudged liable to the corporation.
Any such indemnification may be made only as authorized in each specific case
upon a determination by the stockholders or disinterested directors that
indemnification is proper because the indemnitee has met the applicable standard
of conduct.
Additionally, the Certificate of Incorporation eliminates in certain
circumstances the monetary liability of directors of the Company for a breach of
their fiduciary duty as directors. This provision does not eliminate the
liability of a director (i) for a breach of the director's duty of loyalty to
the Company or its stockholders; (ii) for acts or omissions by the director not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware General Corporation Law); or
(iv) for any transaction from which the director derived an improper personal
benefit.
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7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
8. EXHIBITS
3.1 Certificate of Incorporation of the Company.1/
3.2 Amendment to Certificate of Incorporation.2/
3.3 Amended and Restated Bylaws of the Company.
3.4 Form of Common Stock Certificate of the Company.3/
4.1 Technologic, Inc. 1994 Stock Option Plan
4.2 Amendment to Technologic, Inc. 1994 Stock Option Plan
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP.
23.1 Consent of Davis, Graham & Stubbs LLP (included in Exhibit
5.1).
23.2 Consent of BDO Seidman LLP
23.3 Consent of Balukoff, Lindstrom & Co., P.A.
25.1 Power of Attorney (included in signature page).
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 to include
any material information with
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1/ Filed previously with Amendment No. 1 to the Registration Statement on
Form 10-SB on February 18, 1998 and incorporated herein by reference.
2/ Filed previously with the Registration Statement on Form S-4 on March
19, 1999 and incorporated herein by reference.
3/ Filed previously as an Exhibit to the Company's Registration Statement
on Form 10-SB, as filed with the Commission on December 22, 1997, and
incorporated herein by reference.
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respect to the plan of distribution not previously disclosed in the Registration
Statement, or any material change to such information in the Registration
Statement;
(2) that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boulder, State of Colorado, on the 17th day of
November, 1999.
eSOFT, INC.
By: /s/ Jeffrey Finn
------------------------------------
Jeffrey Finn
Director and Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Philip L. Becker, Lester R. Woodward, and
Jeffrey Finn, and each or any of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments and any registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said 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 all that said attorney-in-fact and agents, or any of them, or their
or his substitutes or substitute, 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 by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey Finn
- ------------------------------------
Jeffrey Finn President, Chief Executive November 17, 1999
Officer and Director
(Principal Executive
Officer)
/s/ Philip L. Becker
- ------------------------------------
Philip L. Becker Director, Chief November 17, 1999
Technology Officer and
Chairman of the Board
- ------------------------------------
Richard Eyestone Director November __, 1999
/s/ Brian E. Cohen
- ------------------------------------
Brian E. Cohen Director November 17, 1995
- ------------------------------------
Richard B. Rice Director November __, 1999
/s/ Amy Beth Hansman
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Amy Beth Hansman Principal Accounting and November 17, 1999
Financial Officer
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
No. Description Page No.
<S> <C> <C>
3.1 Certificate of Incorporation of the Company.4/
3.2 Amendment to Certificate of Incorporation.5/
3.3 Amended and Restated Bylaws of the Company.
3.4 Form of Common Stock Certificate of the Company.6/
4.1 Technologic, Inc. 1994 Stock Option Plan
4.2 Amendment to Technologic, Inc. 1994 Stock Option Plan
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP.
23.1 Consent of Davis, Graham & Stubbs LLP (included in Exhibit 5.1).
23.2 Consent of BDO Seidman LLP
23.3 Consent of Balukoff, Lindstrom & Co., P.A.
25.1 Power of Attorney (included in signature page).
</TABLE>
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4/ Filed previously with Amendment No. 1 to the Registration Statement on
Form 10-SB on February 18, 1998 and incorporated herein by reference.
5/ Filed previously with the Registration Statement on Form S-4 on March
19, 1999 and incorporated herein by reference.
6/ Filed previously as an Exhibit to the Company's Registration Statement
on Form 10-SB, as filed with the Commission on December 22, 1997, and
incorporated herein by reference.
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EXHIBIT 3.3
ESOFT, INC.
BYLAWS
Article I
OFFICES
The registered office of eSoft, Inc. (the "Corporation") in the State
of Delaware shall be in the City of Wilmington, County of New Castle, State of
Delaware. The Corporation shall have offices at such other places as the board
of directors may from time to time determine.
Article II
STOCKHOLDERS
Section 1. Annual Meetings.
The annual meeting of stockholders for the election of directors and
for the transaction of such other business as may properly come before the
meeting shall be held on the date and at the time fixed, from time to time, by
the board of directors. Each such annual meeting shall be held at such place,
within or without the State of Delaware, as shall be determined by the board of
directors. The day, place and hour of each annual meeting shall be specified in
the notice of such annual meeting. Any annual meeting of stockholders may be
adjourned from time to time and place to place until its business is completed.
Section 2. Special Meetings.
Except as otherwise required by law or by the certificate of
incorporation, special meetings of stockholders may be called by the chairman of
the board, the president, a vice president or the board of directors.
Section 3. Stockholder Action.
Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of such
stockholders, and no action shall be taken by the stockholders by written
consent.
<PAGE> 2
Section 4. Notice of Meeting.
Written notice stating the place, date and hour of the meeting and, in
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be given not less than ten nor more than sixty days before the
date of the meeting, except as otherwise required by statute or the certificate
of incorporation, either personally or by mail, prepaid telegram, telex,
facsimile transmission, cablegram, or radiogram, to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
given when deposited in the United States mail, postage prepaid, addressed to
the stockholder at his address as it appears on the stock records of the
Corporation. If given personally or otherwise than by mail, such notice shall be
deemed to be given when either handed to the stockholder or delivered to the
stockholder's address as it appears on the stock records of the Corporation.
Section 5. Waiver.
Attendance of a stockholder of the Corporation, either in person or by
proxy, at any meeting, whether annual or special, shall constitute a waiver of
notice of such meeting, except where a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. A written waiver of notice of any such meeting signed by a stockholder
or stockholders entitled to such notice, whether before, at or after the time
for notice or the time of the meeting, shall be equivalent to notice. Neither
the business to be transacted at, nor the purposes of, any meeting need be
specified in any written waiver of notice.
Section 6. Voting List.
The secretary shall prepare and make available, at least ten days
before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting or, if not so specified, at the place where the meeting is to be held.
The list shall be produced and kept at the place of the meeting during the whole
time thereof and may be inspected by any stockholder who is present.
Section 7. Quorum.
Except as otherwise required by law, the certificate of incorporation
or these bylaws, the holders of not less than one-half of the shares entitled to
vote at any meeting of the stockholders, present in person or by proxy, shall
constitute a quorum, and the act of the majority of such quorum shall be deemed
the act of the stockholders. If a quorum shall fail to attend any meeting, the
chairman of the meeting may adjourn the meeting from time to time, without
notice if the time and place are announced at the meeting, until a quorum shall
be present. At such adjourned meeting at which a quorum is present, any business
may be transacted which might have been transacted at the original meeting. If
the adjournment is for more than thirty days or if
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after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 8. Record Date.
In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting, or at any adjournment of a meeting of
stockholders; or entitled to receive payment of any dividend or other
distribution or allotment of any rights; or entitled to exercise any rights in
respect of any change, conversion or exchange of stock; or for the purpose of
any other lawful action; the board of directors may fix, in advance, a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the board of directors. The record date for
determining the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournments thereof shall not be more than sixty nor less
than ten days before the date of such meeting. The record date for any other
action shall not be more than sixty days prior to such action. If no record date
is fixed: (i) the record date for determining stockholders entitled to notice of
or to vote at any meeting shall be the close of business on the day on which
notice is given or, if notice is waived by all stockholders, at the close of
business on the day next preceding the day on which the meeting is held; and
(ii) the record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the board of directors adopts the
resolution relating to such other purpose. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
Section 9. Voting and Proxies.
At every meeting of the stockholders, each stockholder shall be
entitled to one vote, in person or by proxy, for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date unless the proxy provides for a longer period.
When a quorum is present at any meeting, the vote of the holders of a majority
of the stock having voting power present in person or represented by proxy shall
decide any question brought before such meeting, unless the question is one upon
which, by express provision of the statutes or of the certificate of
incorporation, a different vote is required, in which case such express
provision shall govern.
Section 10. Procedure.
The order of business and all other matters of procedure at every
meeting of the stockholders may be determined by the presiding officer.
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Article III
DIRECTORS
Section 1. Number.
Except as otherwise fixed pursuant to the provisions of the certificate
of incorporation, the number of directors shall be fixed from time to time
exclusively by resolutions adopted by the board of directors; provided, however,
that the number of directors shall at no time be less than one and further
provided that no decrease in the number of directors constituting the board of
directors shall shorten the term of any incumbent director.
Section 2. Election and Terms.
A director shall hold office until the annual meeting for the year in
which his term expires and until his successor shall be elected and qualified,
subject, however, to such director's prior death, resignation, retirement,
disqualification or removal from office.
Section 3. Classes of Directors.
Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, the directors shall
be divided into three classes designated as Class I, Class II and Class III,
respectively. Directors shall be assigned to each class in accordance with a
resolution or resolutions adopted by the board of directors. At the first annual
meeting of stockholders following the adoption and filing of the bylaws, the
term of office of the Class I directors shall expire and Class I directors shall
be elected for a full term of three years. At the second annual meeting of
stockholders following the adoption and filing of the bylaws, the term of office
of the Class II directors shall expire and Class II directors shall be elected
for a full term of three years. At the third annual meeting of stockholders
following the adoption and filing of this Certificate of Incorporation, the term
of office of the Class III directors shall expire and Class III directors shall
be elected for a full term of three years. At each succeeding annual meeting of
stockholders, directors shall be elected for a full term of three years to
succeed the directors of the class whose terms expire at such annual meeting.
Notwithstanding the foregoing provisions of this Article, each director
shall serve until his successor is duly elected and qualified or until his
death, resignation or removal.
Section 4. Vacancies.
Unless otherwise provided in the Certificate of Incorporation, any
vacancies on the board of directors resulting from death, resignation,
disqualification, removal or other causes and any newly created directorships
resulting from any increase in the number of directors, shall unless the board
of directors determines by resolution that any such vacancies or newly created
directorships shall be filled by stockholders, be filled only by the affirmative
vote of a majority of the directors then in office, even though less than a
quorum of the board of directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
director for which the vacancy occurred and until such director's successor
shall have been elected and qualified. A vacancy in the board of directors shall
be deemed to exist under this Bylaw in the case of the death, removal or
resignation of any director.
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Section 5. Resignation.
Any director may resign at any time by delivering his written
resignation to the Secretary, such resignation to specify whether it will be
effective at a particular time, upon receipt by the Secretary or at the pleasure
of the board of directors. If no such specification is made, it shall be deemed
effective at the pleasure of the board of directors. When one or more directors
shall resign from the board of directors, effective at a future date, a majority
of the directors then in office, including those who have so resigned, shall
have power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective, and each Director
so chosen shall hold office for the unexpired portion of the term of the
director whose place shall be vacated and until his successor shall have been
duly elected and qualified.
Section 6. Removal.
Subject to the rights of the holders of any series of Preferred Stock,
no director shall be removed without cause. Subject to any limitations imposed
by law, the board of directors or any individual director may be removed from
office at any time with cause by the affirmative vote of the holders of a
majority of the voting power of all the then-outstanding shares of voting stock
of the corporation, entitled to vote at an election of directors.
Section 7. Regular Meetings.
The first meeting of each newly elected board of directors elected at
the annual meeting of stockholders shall be held immediately after and at the
same place as, the annual meeting of the stockholders, provided a quorum is
present, and no notice of such meeting shall be necessary in order to legally
constitute the meeting. Regular meetings of the board of directors shall be held
at such times and places as the board of directors may from time to time
determine.
Section 8. Special Meetings.
Special meetings of the board of directors may be called at any time,
at any place and for any purpose by the chairman of the board, the president or
the vice president.
Section 9. Notice of Meetings.
Notice of regular meetings of the board of directors need not be given.
Notice of every special meeting of the board of directors shall be
given to each director at his usual place of business or at such other address
as shall have been furnished by him for such purpose. Such notice shall be
properly and timely given if it is: (a) deposited in the United States mail not
later than the third calendar day preceding the date of the meeting or
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<PAGE> 6
(b) personally delivered, telegraphed, sent by facsimile transmission or
communicated by telephone at least twenty-four hours before the time of the
meeting. Such notice need not include a statement of the business to be
transacted at, or the purpose of, any such meeting.
Section 10. Waiver.
Attendance of a director at a meeting of the board of directors shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. A written waiver of notice signed by a director or directors entitled
to such notice, whether before, at, or after the time for notice or the time of
the meeting, shall be equivalent to the giving of such notice.
Section 11. Quorum.
Except as may be otherwise provided by law, in the certificate of
incorporation, or in these bylaws, the presence of a majority of the directors
shall be necessary and sufficient to constitute a quorum for the transaction of
business at any meeting of the board of directors, and the act of a majority of
the directors present at a meeting at which a quorum is present shall be deemed
the act of the board of directors. Less than a quorum may adjourn any meeting of
the board of directors from time to time without notice.
Section 12. Participation in Meetings by Telephone.
Members of the board of directors, or of any committee thereof, may
participate in a meeting of such board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 13. Powers.
The business, property and affairs of the Corporation shall be managed
by or under the direction of its board of directors, which shall have and may
exercise all the powers of the Corporation to do all such lawful acts and things
as are not by law, by the certificate of incorporation or by these bylaws,
directed or required to be exercised or done by the stockholders.
Section 14. Action without a Meeting.
Unless otherwise restricted by the certificate of incorporation or
these bylaws, any action required or permitted to be taken at any meeting of the
board of directors or any committee thereof may be taken without a meeting if
written consent thereto is signed by all members of the board of directors or of
such committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the board or committee. Any such consent
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may be in counterparts and shall be effective on the date of the last signature
thereon unless otherwise provided therein.
Article IV
COMMITTEES
Section 1. Designation of Committees.
The board of directors may establish committees for the performance of
delegated or designated functions to the extent permitted by law, each committee
to consist of one or more directors of the Corporation. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of such absent or disqualified
member.
Section 2. Committee Powers and Authority.
The board of directors may provide, by resolution or by amendment to
these bylaws, that a committee may exercise all the power and authority of the
board of directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; provided, however, that a committee may not
exercise the power or authority of the board of directors in reference to
amending the certificate of incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or amending these bylaws; and, unless the resolution expressly so
provides, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock.
Section 3. Committee Procedures.
To the extent the board of directors or the committee does not
establish other procedures for the committee, each committee shall be governed
by the procedures established in Article III, Section 4 (except as they relate
to an annual meeting of the board of directors) and Article III, Sections 5, 6,
7, 9, 10, and 11 of these bylaws, as if the committee were the board of
directors.
Article V
OFFICERS
Section 1. Number.
The officers of the Corporation shall be appointed or elected by the
board of directors. The officers shall be a chairman of the board, a president
and chief executive officer, such number of vice presidents as the board of
directors may from time to time determine, a secretary, and a treasurer. Any
person may hold two or more offices at the same time.
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Section 2. Additional Officers.
The board of directors may appoint such other officers as it shall deem
appropriate.
Section 3. Term of Office, Resignation.
All officers, agents and employees of the Corporation shall hold their
respective offices or positions at the pleasure of the board of directors and
may be removed at any time by the board of directors with or without cause. Any
officer may resign at any time by giving written notice of his resignation to
the chief executive officer, the president or to the secretary, and acceptance
of such resignation shall not be necessary to make it effective unless the
notice so provides. Any vacancy occurring in any office shall be filled by the
board of directors.
Section 4. Duties.
The officers of the Corporation shall perform the duties and exercise
the powers as may be assigned to them from time to time by the board of
directors or the president and chief executive officer. In the absence of such
assignment, the officers shall have the duties and powers described in Sections
5 through 10 of this Article.
Section 5. Chairman of the Board.
The chairman of the board shall preside at all meetings of the
stockholders and directors at which he is present. In the event of a vacancy in
the office of president, or in the event of the absence, disability or inability
or refusal to act of the president, the chairman of the board shall perform the
duties and exercise the powers of the president, including the duties and powers
of the chief executive officer of the Corporation. The board of directors may
delegate such other authority and assign such additional duties to the chairman
of the board as it may from time to time determine.
Section 6. President and Chief Executive Officer.
The president shall be the chief executive officer of the Corporation
and, subject to the direction and control of the board of directors shall manage
the business of the Corporation. The president may execute contracts, deeds and
other instruments on behalf of the Corporation. In the absence of the chairman
of the board or in the event of his disability, inability or refusal to act, the
president shall perform the duties and exercise the power of the chairman of the
board. The president shall have full authority on behalf of the Corporation to
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attend any meeting, give any waiver, cast any vote, grant any discretionary or
directed proxy to any person, and exercise any other rights of ownership with
respect to any shares of capital stock or other securities held by the
Corporation and issued by any other corporation or with respect to any
partnership, trust or similar interest held by the Corporation.
Section 7. Vice President.
Each vice president, if any, shall perform such functions as may be
prescribed by the board of directors, the chairman of the board, the president
or any executive vice president. Each vice president may execute contracts,
deeds and other instruments on behalf of the Corporation. In the event of
vacancies in the offices of chairman of the board and president, or in the event
of the absence, disability or inability or refusal to act of the chairman of the
board and the president, the vice president, or in the event that there is more
than one vice president, the vice presidents in order of designation by the
board of directors, shall perform the duties and exercise the powers of the
president.
Section 8. Secretary.
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and, upon the request of a person entitled to call a special
meeting of the board of directors, he shall give notice of any such special
meeting. He shall keep the minutes of all meetings of the stockholders, the
board of directors or any committee established by the board of directors. The
secretary shall be responsible for the maintenance of all records of the
Corporation and may attest documents on behalf of the Corporation. The secretary
shall perform such other duties as the board, the chairman of the board, the
president or any vice president may from time to time prescribe or delegate to
him.
Section 9. Treasurer.
The treasurer shall be responsible for the control of the funds of the
Corporation and the custody of all securities owned by the Corporation. The
treasurer shall perform such other duties as the board, the chairman of the
board, the president or any vice president may from time to time prescribe or
delegate to him.
Section 10. Assistant Officers.
The board of directors or the president may appoint such assistant
officers, including assistant secretary and assistant treasurer as the board of
directors or the president deem appropriate, and each such person may be
authorized to perform the duties and exercise the powers of the officer to which
the person is a designated assistant, with such limitations therein as the board
of directors or the president, as applicable, shall designate, and shall have
such other powers as the board of directors or the president shall prescribe in
writing.
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Section 11. Compensation.
Officers shall receive such compensation, if any, for their services as
may be authorized or ratified by the board of directors. Election or appointment
as an officer shall not of itself create a right to compensation for services
performed as such officer.
Article VI
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
Section 1. Directors and Officers.
Subject to the certificate of incorporation and the other sections of
this Article, the Corporation shall indemnify, to the fullest extent permitted
by, and in the manner permissible under, the laws of the State of Delaware in
effect on the date hereof and as amended from time to time, any person who was
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or officer 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, association or other enterprise, against expenses (including
attorneys' fees), judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding, including any action, suit or proceeding by or
in the right of the Corporation (a "Proceeding"). The Corporation shall advance
all reasonable expenses incurred by or on behalf of any such person in
connection with any Proceeding within ten days after the receipt by the
Corporation of a statement or statements from such person requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the expenses incurred by such person and, if such person is an officer
or director of the Corporation, shall include or be preceded or accompanied by
an undertaking by or on behalf of such person to repay any expenses advanced if
it shall ultimately be determined that such person is not entitled to be
indemnified against such expenses. Costs, charges or expenses of investigating
or defending Proceedings for which indemnity shall be sought hereunder may be
incurred without the Corporation's consent provided that no settlement of any
such Proceeding may be made without the Corporation's consent, which consent
shall not be unreasonably withheld.
Section 2. Determination of Right to Indemnification.
1. Any indemnification requested by any person under Section 1 of this
Article shall be made no later than forty-five days after receipt of the written
request of such person unless a determination is made within said forty-five day
period: (i) by a majority vote of directors who are not parties to such
Proceedings, or (ii) in the event a quorum of non-involved directors is not
obtainable, at the election of the Corporation, by independent legal counsel in
a written opinion, that such person is not entitled to indemnification
hereunder.
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2. Notwithstanding a determination under Section 2(a) above that any
person is not entitled to indemnification with respect to a Proceeding, such
person shall have the right to apply to any court of competent jurisdiction for
the purpose of enforcing such person's right to indemnification pursuant to
these bylaws. Neither the failure of the Corporation (including its board of
directors or independent legal counsel) to have made a determination prior to
the commencement of such action that such person is entitled to indemnification
hereunder, nor an actual determination by the Corporation (including its board
of directors or independent legal counsel) that such person is not entitled to
indemnification hereunder, shall be a defense to the action or create any
presumption that such person is not entitled to indemnification hereunder.
3. The Corporation shall indemnify any person against all expenses
incurred in connection with any hearing or Proceeding under this Section 2 if
such person prevails on the merits or otherwise in such Proceeding.
Section 3. Subrogation.
In the event of payment under these bylaws, the indemnifying party or
parties shall be subrogated to the extent of such payment to all of the rights
of recovery of the indemnified person therefor and such indemnified person shall
execute all papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents necessary to
enable the indemnifying party or parties to effectively bring suit to enforce
such rights.
Section 4. Presumptions and Effect of Certain Proceedings.
1. In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that such person is entitled to indemnification
under this Article, and the Corporation shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption.
2. The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in these Bylaws) of itself adversely affect the right of any person to
indemnification or create a presumption that such person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation or, with respect to any criminal
Proceeding, that such person had reasonable cause to believe that his conduct
was unlawful.
Section 5. Exception to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision of these bylaws, no person shall be
entitled to indemnification or advancement of expenses under these bylaws with
respect to any Proceeding brought by such person, unless the bringing of such
Proceeding or making of such claim shall have been approved by the board of
directors.
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Section 6. Contract.
The foregoing provisions of this Article shall be deemed to be a
contract between the Corporation and each director and officer who serves in
such capacity at any time while this bylaw is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any
Proceeding theretofore or thereafter brought based in whole or in part upon any
such state of facts.
The foregoing rights of indemnification shall not be deemed exclusive
of any other rights to which any director or officer may be entitled apart from
the provisions of this Article.
Section 7. Surviving Corporation.
The board of directors may provide by resolution that references to
"the Corporation" in this Article shall include, in addition to this
Corporation, all constituent corporations absorbed in a merger with this
Corporation so that any person who was a director or officer of such a
constituent corporation or is or was serving at the request of such constituent
corporation as a director, employee or agent of another corporation,
partnership, joint venture, trust, association or other entity shall stand in
the same position under the provisions of this Article with respect to this
Corporation as he would if he had served this Corporation in the same capacity
or is or was so serving such other entity at the request of this Corporation, as
the case may be.
Section 8. Inurement.
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such person.
Section 9. Employees and Agents.
To the same extent as it may do for a director or officer, the
Corporation may indemnify and advance expenses to a person who is not and was
not a director or officer of the Corporation but who is or was an employee or
agent of the Corporation.
Article VII
CAPITAL STOCK
Section 1. Certificates.
Each stockholder of the Corporation shall be entitled to a certificate
or certificates signed by or in the name of the Corporation by the chairman of
the board, the president or a vice
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president, and by the secretary or an assistant secretary, certifying the number
of shares of stock of the Corporation owned by such stockholder. Any or all the
signatures on the certificate may be a facsimile.
Section 2. Facsimile Signatures.
In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he, she
or it was such officer, transfer agent or registrar at the date of issue.
Section 3. Registered Stockholders.
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock of the Corporation as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it has actual or other notice thereof, except as provided by law.
Section 4. Cancellation of Certificates.
All certificates surrendered to the Corporation shall be cancelled and,
except in the case of lost, stolen or destroyed certificates, no new
certificates shall be issued until the former certificate or certificates for
the same number of shares of the same class of stock have been surrendered and
cancelled.
Section 5. Lost, Stolen or Destroyed Certificates.
The board of directors may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed upon the making of an
affidavit of that fact by the person claiming the certificate or certificates to
be lost, stolen or destroyed. In its discretion, and as a condition precedent to
the issuance of any such new certificate or certificates, the board of directors
may require that the owner of such lost, stolen or destroyed certificate or
certificates, or such person's legal representative, give the Corporation and
its transfer agent or agents, registrar or registrars a bond in such form and
amount as the board of directors may direct as indemnity against any claim that
may be made against the Corporation and its transfer agent or agents, registrar
or registrars on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 6. Transfer of Shares.
Shares of stock shall be transferable on the books of the Corporation
by the holder thereof, in person or by duly authorized attorney, upon the
surrender of the certificate or certificates representing the shares to be
transferred, properly endorsed, with such proof or
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guarantee of the authenticity of the signature as the Corporation or its agents
may reasonably require.
Section 7. Transfer Agents and Registrars.
The Corporation may have one or more transfer agents and one or more
registrars of its stock, whose respective duties the board of directors may,
from time to time, define. No certificate of stock shall be valid until
countersigned by a transfer agent, if the Corporation shall have a transfer
agent, or until registered by the registrar, if the Corporation shall have a
registrar. The duties of transfer agent and registrar may be combined.
Article VIII
SEAL
The board of directors may adopt and provide a seal which shall be
circular in form and shall bear the name of the Corporation and the words "Seal"
and "Delaware," and which, when adopted shall constitute the corporate seal of
the Corporation.
Article IX
FISCAL YEAR
The fiscal year for the Corporation shall be established by resolution
of the board of directors.
Article X
AMENDMENTS
Subject to the provisions of the certificate of incorporation, these
bylaws may be altered, amended or repealed at any annual meeting of the
stockholders (or at any special meeting thereof duly called for that purpose) by
a vote of at least two-thirds of the outstanding shares of the Company, provided
that in the notice of such special meeting, notice of such purpose shall be
given. Subject to the laws of the State of Delaware, the certificate of
incorporation and these bylaws, the board of directors may, by majority vote of
those present at any meeting at which a quorum is present, amend these bylaws or
enact such other bylaws as in their judgment may be advisable for the regulation
of the conduct of the affairs of the Corporation.
/s/ Philip L. Becker
-------------------------------
Philip L. Becker, Secretary
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EXHIBIT 4.1
TECHNOLOGIC, INC.
1994 STOCK OPTION PLAN
SECTION I. PURPOSE.
The Technologic, Inc. 1994 Stock Option Plan is intended to provide an
incentive for directors, officers and other key employees of the Corporation and
its Parent, Subsidiaries and Affiliates and consultants and other
representatives of the Corporation and its Parent, Subsidiaries and Affiliates
by encouraging and enabling such persons to acquire a proprietary interest or to
increase their proprietary interest in the Corporation's success and/or to
encourage them to remain in the employ or engagement of the Corporation or its
Parent, Subsidiary or Affiliate.
The Corporation may grant both incentive stock options and
non-qualified stock options under this Plan.
SECTION II. DEFINITIONS.
Where the following words appear in this Plan, they shall have the
respective meanings set forth below, unless their context clearly indicates a
contrary meaning:
A. AFFILIATE - Any corporation or other business organization in
which the Parent owns, directly or indirectly, 25% or more of
the voting stock or capital at the time of the granting of the
Option.
B. BOARD OF DIRECTORS - The Board of Directors of the
Corporation.
C. CODE - The Internal Revenue Code of 1986, as amended,
including amendments hereafter adopted.
D. COMMITTEE - The Compensation Committee of the Board of
Directors or any successor Committee appointed by the Board of
Directors as provided in Section III.B of the Plan.
E. CONSULTANT - Consultant shall mean any consultant or other
representative of the Corporation or any present or future
Parent, Subsidiary or Affiliate.
F. CORPORATION - Technologic, Inc., a Georgia corporation, the
issuer of Options under this Plan.
G. EMPLOYEE - Employee shall mean any officer or other key
employee (including an officer or other key employee who is
also a director) employed on a full-time basis by the
Corporation or any present or future Parent, Subsidiary or
Affiliate.
H. INCENTIVE STOCK OPTION or ISO - An option granted under the
Plan which is intended and which qualifies as an incentive
stock option within the meaning of Section 422 of the Code.
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I. NON-QUALIFIED STOCK OPTION - An option granted under the Plan
which is not intended or does not qualify as an incentive
stock option within the meaning of Section 422 of the Code.
J. OPTION - An option granted under the Plan which may be either
an ISO or a Non-Qualified Stock Option.
K. OPTION AGREEMENT - A document setting forth the terms and
conditions of an Option.
L. OPTIONEE - The holder of an Option.
M. PARENT - Any present or future parent corporation of the
Corporation, as defined in Subsections 424(e) and (g) of the
Code.
N. PLAN - The Technologic, Inc. 1994 Stock Option Plan, as the
same may be amended from time to time in accordance with the
terms hereof.
O. SHARES - The shares of common stock of the Corporation, par
value $0.01 per share, subject to adjustment as provided in
Section V of the Plan.
P. SUBSIDIARY - Any present or future subsidiary corporation of
the Corporation, as defined in Subsections 424(f) and (g) of
the Code.
SECTION III. ADMINISTRATION.
A. AUTHORITY. The Board of Directors shall have full and complete
authority in its sole discretion, but subject to the express provisions of the
Plan, to grant Options, to determine the option price of the Shares covered by
each Option; to determine the directors, officers, Employees and Consultants of
the Corporation and of any Parent, Subsidiary and Affiliate to whom, and the
time or times at which, Options shall be granted and the number of Shares to be
covered by each Option; to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of the respective Option grants (which terms need not be identical);
to cancel and amend Options (with the consent of the holder of the Option where
required); to impose such conditions on the grant of Options as it determines to
be appropriate, including the surrender of outstanding stock options issued
under the Plan or any other stock option plan of the Corporation or of any
parent, Subsidiary or Affiliate, regardless of the option price; and to make all
other determinations and rules and take such other action deemed necessary or
advisable for the administration of the Plan. In addition, the Board of
Directors may extend the duration of any Option for a period not to exceed one
year subject to the provisions of Sections VI.B and VI.C without changing the
option price upon such terms as the Board of Directors may deem advisable.
Each determination, interpretation, rule or other action made or taken
pursuant to the Plan by the Board of Directors shall be final and conclusive for
all purposes and upon all persons, including, but without limitation thereto,
the Corporation, its Parent, Subsidiaries and Affiliates, the Board of
Directors, the Committee, directors, officers, Employees and Consultants of the
Corporation and its Parent, Subsidiaries and Affiliates, and Optionees and their
respective successors in interest.
B. COMMITTEE. The Board of Directors may at any time hereafter appoint
a Committee consisting of not less than three (3) members and may from time to
time fix the number of members (subject to the foregoing minimum), appoint
members of the Committee in substitution for or in addition to members
previously appointed, and fill vacancies, however caused, on the Committee. Upon
its appointment, the Committee shall have all the powers and authority of the
Board of Directors granted under Sections III, IV and VI of the Plan unless, and
to the extent, otherwise limited from time to time by the Board of Directors.
Each member of the Committee shall be a member of the Board of
Directors who is not eligible to participate under the Plan and who has not been
granted or awarded equity securities of the Corporation for
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at least one year prior to the time the director becomes a member of the
Committee or during such service on the Committee pursuant to the Plan or any
other "plan" within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 ("34 Act") except as otherwise permitted under Rule 16b-3
(or any successor rule or regulation).
The Board of Directors may designate one (1) of the members of the
Committee as its chairman, and the Committee shall hold its meetings at such
times and places as it shall deem advisable. A majority of its members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members present at a meeting at which a quorum was present. Any
decision or determination reduced to writing and signed by all the members of
the Committee shall be effective as if it had been made by a vote at a meeting
duly called and held. The Committee shall keep minutes of its meetings and shall
make such rules and regulations for the conduct of its business as it shall deem
advisable.
C. DIRECTOR LIABILITY. No member of the Board of Directors or of the
Committee shall be liable for any action or determination made in good faith
with respect to the administration of the Plan and the granting of Options
thereunder.
SECTION IV. ELIGIBILITY AND LIMITATIONS.
Options may be granted only to directors, officers, Employees and
Consultants of the Corporation or of any present or future Parent, Subsidiary or
Affiliate. Notwithstanding the foregoing, Options may not be granted to
directors who are not Employees once the Corporation or any present or future
Parent has registered any class of any equity security pursuant to Section 12 of
the 34 Act. In determining the number of shares to be covered by each Option,
subject to Section V hereof, and persons to whom Options shall be granted, the
Board of Directors shall take into account such factors as it shall deem
relevant in connection with accomplishing the purposes of the Plan as set forth
in Section I hereof. Any person who has been granted an Option may be granted an
additional Option or Options if the Board of Directors shall so determine.
Incentive Stock Options may only be granted to persons who are
Employees of the Corporation or of a Parent or Subsidiary.
The aggregate fair market value (determined as of the time an ISO is
granted) of the Shares with respect to which an ISO is exercisable for the first
time by the Optionee during any calendar year (under all plans of the
Corporation and the Parent and Subsidiaries, if any) shall not exceed $100,000.
ISOs granted to an Optionee in excess of such limitation in any calendar year
shall be deemed to be Non-Qualified Stock Options.
Each Option must be granted within ten (10) years from the date on
which the Plan is adopted by the Board of Directors or the date the Plan is
approved by the shareholders of the Corporation, whichever is earlier.
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<PAGE> 4
SECTION V. AVAILABLE SHARES AND STOCK ADJUSTMENTS.
A. AVAILABLE SHARES. The total number of Shares that may be issued
pursuant to Options granted under this Plan shall not exceed Ten Thousand
(10,000) Shares, subject to adjustment as set forth hereinafter. Shares subject
to the Plan may be either authorized but unissued Shares or Shares that were
once issued and subsequently reacquired by the Corporation. If any Option is
surrendered before exercise or lapses without exercise or for any other reason
ceases to be exercisable (including by reason of the purchase of the Option by
the Corporation in lieu of issuing Shares), the Shares reserved therefor shall
continue to be available under the Plan. The Corporation will reserve and keep
available a sufficient number of authorized but unissued Shares and/or treasury
Shares to be issued upon the exercise of the Options.
B. ADJUSTMENTS. In the event of a stock split, stock dividend,
combination of Shares, or a reclassification of the Shares or other similar
action by the Corporation, the total number of Shares which may be issued under
the Plan upon the exercise of Options and the total number of Shares and/or the
option price contained in any outstanding Option pursuant to which Options were
granted under this Plan, shall be appropriately adjusted as determined by the
Board of Directors in its sole discretion. Any such adjustment in the number of
Shares and/or option price of an ISO shall be made in such manner as to not
constitute a modification as defined in Subsection 424(h)(3) of the Code and
only to the extent permitted by Sections 422 and 425 of the Code.
C. REORGANIZATIONS.
1. In the event of any merger or consolidation or other
reorganization in which the Corporation shall be the surviving
corporation and its shareholders have a right to receive (or retain),
in whole or in part, equity securities for the outstanding Shares held,
each holder of an outstanding Option shall be entitled to receive (or
retain), upon the exercise of the Option, in lieu of the number of
Shares as to which such holder of the Option would otherwise have been
entitled to receive upon the exercise of the Option immediately prior
to such merger or consolidation or other reorganization, the number and
class of shares or other securities and consideration to which such
holder of the Option would have been entitled pursuant to the terms of
the merger or consolidation or other reorganization if, at the time of
such merger or consolidation or other reorganization, such holder of
the Option had been the holder of record of a number of Shares equal to
the number of Shares to which such Option is then being so exercised.
Comparable rights shall accrue to each holder of an Option in the event
of successive mergers or consolidations or other reorganization.
2. In the event of any merger or consolidation or other
reorganization, in which the shareholders of the Corporation shall not
receive (or retain) any equity securities of the surviving corporation
for their Shares, regardless of whether the Corporation is the
surviving corporation, or upon the dissolution or liquidation of the
Corporation, except as hereinafter set forth, all Options (whether or
not vested in whole or in part) which have been granted hereunder shall
become immediately exercisable in full, unless and to the extent the
Board of Directors shall have provided for the substitution of other
options for, or for the assumption by another corporation of, any
unexercised options then outstanding. Such action by the Board of
Directors may be taken with respect to ISO's only to the extent
permitted by the Code, including Sections 422 and 424, unless the
Options are or are to become Non-Qualified Stock Options.
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3. In the event of any merger or consolidation or other
reorganization in which the Corporation is not the surviving
corporation and in which its shareholders shall receive equity
securities (regardless of whether they receive other consideration) for
their Shares, each holder of an outstanding Option shall be entitled to
receive, upon the exercise of the Option, in lieu of the number of
Shares as to which such holder of the Option would otherwise have been
entitled to receive upon the exercise of the Option immediately prior
to such merger or consolidation or other reorganization, the number and
class of shares and other securities and consideration to which such
holder of the Option would have been entitled pursuant to the terms of
the merger or consolidation or other reorganization if, at the time of
such merger or consolidation or other reorganization, such holder of
the Option had been the holder of record of a number of Shares equal to
the number of Shares to which such Option is then being so exercised.
Comparable rights shall accrue to each holder of an Option in the event
of successive mergers or consolidations or reorganizations.
D. Any adjustments pursuant to this Section V may provide for the
elimination of any fractional interest which might otherwise become subject to
an Option, with or without consideration, as determined by the Board of
Directors of the Corporation.
SECTION VI. OPTION TERMS.
The Options will be granted under terms and conditions set forth in a
written instrument as determined by the Board of Directors from time to time,
which will include (but not be limited to) the following:
A. PRICE AND PAYMENT. The purchase price of each Share covered by each
Option shall be determined by the Board of Directors. The purchase price of each
Share covered by an Option shall not be less than the fair market value of a
Share at the time of the granting of the Option. The fair market value of a
Share shall be determined without regard to any restriction other than
restrictions which by their terms will never lapse.
No ISO shall be granted to an individual who, at the time the ISO is
granted, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation or of its Parent or any Subsidiary, unless,
at the time the ISO is granted, the option price is at least one hundred and ten
percent (110%) of the fair market value of the Shares subject to the ISO.
The purchase price of the Shares to which an Option shall be exercised
shall be paid in full at the time of the exercise in cash or by check, subject
to collection. The Board of Directors may also provide that the purchase price
may be paid in whole or in part by the Optionee by assigning to the Corporation
a number of Shares having a fair market value, determined as of the date the
Option is exercised, equal to the cash amount of the option price for the Shares
being acquired upon the exercise of the Option in exchange for the Shares being
assigned. In such event, the Board of Directors may, in its sole discretion,
require certain representations and other conditions precedent to the acceptance
of the Shares from the Optionee.
B. DURATION. The duration of the Options shall be as determined by the
Board of Directors, but in no event shall an Option granted hereunder be
exercisable after the expiration of ten (10) years from the date the Option is
granted.
No ISO shall be granted to an individual who, at the time the ISO is
granted, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent (10%) of the total
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combined voting power of all classes of stock of the Corporation or of its
Parent or any Subsidiary, unless the ISO by its terms is not exercisable after
the expiration of five (5) years from the date the ISO is granted.
C. TERMINATION. Options granted hereunder shall terminate as determined
by the Board of Directors, subject to the following (as applicable):
1. Non-Qualified Stock Options shall terminate no more than one
(1) year after the cessation of employment, engagement, officership or
directorship, as the case may be, of the holder of the Option with the
Corporation, any Subsidiary, or the Parent or any Affiliate, except
that in the event of cessation of such employment, engagement or
election, as the case may be, by reason of death or disability (within
the meaning of Section 422(c)(6) of the Code), such NonQualified Stock
Option shall terminate no more than two (2) years after the cessation
of such employment, engagement, officership or directorship, as the
case may be.
2. Incentive Stock Options shall terminate no more than three (3)
months after the cessation of employment of the holder of the Option
with the Corporation, any Subsidiary, or the Parent, except that in the
event of cessation of such employment by reason of disability or death,
such ISO shall terminate no more than one (1) year after the cessation
of such employment due to such death or disability (within the meaning
of Section 422(c)(6) of the Code).
The Board of Director's determination as to whether such employment,
engagement or election of an Optionee has ceased and the effective date thereof
shall be final and conclusive on all persons affected thereby. Whether military
or other government or eleemosynary service or other leave of absence will
constitute termination of such employment, engagement or election shall be
determined in each case by the Board of Directors in its sole discretion.
D. NON-TRANSFERABILITY. Options granted under the Plan shall not be
transferable otherwise than by will or the laws of descent and distribution or
as otherwise permitted pursuant to Section 424(c)(4) of the Code (or any
successor provision). Options may be exercised during the lifetime of the
Optionee only by the Optionee personally or by the Optionee's legal
representative.
E. EXERCISE OF OPTION. Options granted hereunder shall be exercisable
in whole or in part as determined by the Board of Directors; provided, however,
that no ISO shall be exercisable in whole or in part prior to one (1) year from
the date the ISO is granted except as permitted pursuant to Section V.
F. CONDITIONS TO EXERCISE OF OPTIONS. Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with (or be exempt from) all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, any applicable state securities
law, and the requirements of any stock exchange or national market system on
which the Shares may then be listed. If the issuance or transfer of Shares to be
issued or issued pursuant to any Option granted under this Plan may in the
opinion of counsel to the Corporation conflict or be inconsistent with any
applicable laws or regulations of any governmental agency having jurisdiction,
including, without limitation, federal and state securities laws, the
Corporation reserves the right to delay the issuance of the Shares upon the
exercise of an Option and such delay shall be without liability to or other
obligation of the Corporation. The Corporation shall have no obligation
hereunder to file registration statements or other reports or notices or obtain
any license or permit or exemption under any federal or state law with respect
to the grant of an Option or the issuance of Shares upon the exercise of an
Option or the transfer of such Shares at any time thereafter. The Board of
Directors may require that the holder of an Option, as a condition to each
exercise of the Option in whole or in part, to represent to the Corporation in
writing that the Shares to be acquired upon the exercise of the Option are
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<PAGE> 7
to be acquired by the holder of the Option for investment purposes only, for
such person's own account, and not with a view to distribution and make such
other representations as counsel to the Corporation may reasonably request to
assure the availability of an exemption from or compliance with the
registration, notice, reporting or licensing requirements of applicable federal
or state securities laws. The Option may also set forth such other terms and
conditions relating to the non-registration or qualification of the Shares or
the issuance or transfer of the Shares by the Corporation under the federal and
state securities laws, as the Board of Directors may prescribe. Such
representations and other terms and conditions shall continue in effect as long
as counsel to the Corporation may reasonably request. Shares issued with respect
to any Option may be subject to a shareholders agreement restricting
transferability of the Shares and containing such other terms and conditions as
may be determined by the Board of Directors from time to time.
G. DISPOSITION OF SHARES. In the event the disposition of Shares
acquired upon the exercise of any Option is not covered by a then current
registration statement under the Securities Act of 1933, as amended, and under
state securities laws, the Shares so purchased shall be restricted against
transfer to the extent and for as long as required by such laws and regulations
promulgated thereunder or until, and as long as, the Shares are covered by
applicable registration statements filed by the Corporation in its sole
discretion.
H. TAX WITHHOLDINGS. The Committee may, in its sole discretion and on
terms it shall determine, withhold, or grant to an Optionee the right to elect
to have withheld, Shares having a fair market value not in excess of the amount
necessary to satisfy the withholding tax obligations of the Optionee, in whole
or in part, relating to the exercise of the Option. Any election granted to an
executive officer (as defined pursuant to rules promulgated under the 1934 Act)
or director of the Parent shall only be made during the period set forth in Rule
16b-3 promulgated under the 1934 Act (or any successor rule or regulation).
SECTION VII. EXERCISE.
An Option granted hereunder shall be exercisable in whole or in part
only by written notice delivered in person or by mail to the President or the
Chief Financial Officer of the Corporation at its principal executive office,
specifying the number of Shares to be purchased and accompanied by payment
therefor and other consideration in accordance with the Option. The holder of an
Option shall not be deemed to be a holder of any Shares subject to any Option
and shall not be entitled to the rights of a holder of any Shares, including the
right to receive dividends, unless and until a stock certificate representing
such Shares has been issued.
SECTION VIII. TERMINATION AND AMENDMENT.
The Board of Directors may at any time terminate the Plan, or make
such amendments thereto or modifications thereof as it shall deem advisable,
including amendments deemed necessary or desirable to conform any ISO to any
change in the Code or regulations thereto; provided, however, that the Board of
Directors may not, without further approval by the shareholders of the
Corporation, increase the maximum number of Shares for which Options may be
granted under the Plan or change the designation of the class of employees and
other persons eligible to receive Options. No termination, modification or
amendment of the Plan shall, without the consent of the person to whom an Option
shall theretofore have been granted, adversely affect the rights of such person
under such Option without such person's consent.
SECTION IX. MISCELLANEOUS.
A. APPLICABLE LAW. The Plan shall be governed and construed in
accordance with the laws of the State of Georgia.
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B. EMPLOYEE/EMPLOYER RIGHTS. The granting of Options hereunder shall be
entirely discretionary and nothing in the Plan shall be deemed to give any
Employee, Consultant, officer or director any right of continued employment,
engagement, officership, or directorship, as the case may be, or give any person
any right to receive Options or additional Options hereunder or interfere in any
way with the right of the Corporation, its Parent, Subsidiary or Affiliate to
terminate the Optionee's employment, engagement or election, as the case may be,
for any reason or the right of the Employee, Consultant, officer or director to
terminate his/her employment, engagement, officership or directorship, as the
case may be, for any reason.
C. ISO GRANTS. This Plan is intended to provide in part for the grant
of incentive stock options pursuant to Section 422 of the Code, including
amendments thereto hereafter adopted, and the provisions of the Plan as they
relate to ISO's and the ISO's granted shall be construed to effectuate such
purpose. If for any reason it is subsequently determined that an Option intended
to qualify as an ISO does not so qualify, the Corporation, Parent and Subsidiary
shall have no liability to the Optionee.
SECTION X. EFFECTIVE DATE.
The Plan shall become effective on the date of its adoption by the
Board of Directors subject to the approval of the Plan by the shareholders of
the Corporation within twelve (12) months after the date of its adoption. The
date of granting of an Option shall be the date on which the Board of Directors
or the Committee, as the case may be, makes the determination of granting such
Option or such later date as designated by the Board of Directors or the
Committee.
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EXHIBIT 4.2
AMENDMENT
TO
TECHNOLOGIC, INC.
1994 STOCK OPTION PLAN
THIS AMENDMENT ("Amendment") to the TECHNOLOGIC 1994 STOCK OPTION PLAN
(the "Plan") is entered into by TECHNOLOGIC, INC., a Georgia corporation (the
"Corporation") as of 26th day of July, 1998.
WHEREAS, the Board of Directors and Shareholders of the Corporation
adopted the Technologic, Inc. 1994 Stock Option Plan to promote the best
interests of the Corporation.
WHEREAS, due to a stock dividend declared with respect to the issued
and outstanding shares of ommon Stock of the Corporation, the Board of
Directors has determined that it is in the best interests of the
Corporation to authorize a proportionate increase in the number of shares of
Common Stock of the Corporation reserved under the Plan from 10,000 to 500,000;
and
WHEREAS, the Board of Directors and the Shareholders of the Corporation
have both determined that it is in the best interests of the Corporation to
authorize a further increase in the number of shares of Common Stock of the
Corporation reserved under the Plan from 500,000 to 1,000,000.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the Corporation agrees as follows:
1. INCREASED IN NUMBER OF RESERVED SHARES. The number of shares of
Common Stock of the Corporation reserved under the Plan is increased from 10,000
to 1,000,000.
2. MISCELLANEOUS. Except as modified or amended by this Amendment, all
of the terms, covenants and conditions of the Plan shall remain unmodified and
in full force and effect.
IN WITNESS WHEREOF, the undersigned has executed this First
Amendment effective as of July 26, 1998.
TECHNOLOGIC, INC.
By: /s/ Brian E. Cohen
-------------------------------
Brian E. Cohen, President
<PAGE> 1
EXHIBIT 5.1
November 16, 1999
Board of Directors
eSoft, Inc.
5335 Sterling Drive, Suite C
Boulder, Colorado 80301
Re: Sale of Common Stock Pursuant to Registration
Statement on Form S-8 Covering Technologic, Inc.
1994 Stock Option Plan.
Ladies and Gentlemen:
We have acted as special counsel to eSoft, Inc., a Delaware
corporation, (the "Company") in connection with the registration pursuant to a
Registration Statement on Form S-8 (the "Registration Statement") of 180,565
shares of the Company's common stock, par value $.01 per share (the "Common
Stock@), issuable upon exercise of options or awards that have been or may be
granted under the Technologic, Inc. 1994 Stock Option Plan (the "Plan"). On
September 10, 1999, the Company and Technologic, Inc.("Technologic") concluded a
merger pursuant to which Technologic became a wholly-owned subsidiary of the
Company. Pursuant to the terms of the acquisition, the Company agreed to assume
the Plan and to convert the right to purchase shares of Technologic common stock
into the right to purchase shares of the Company's common stock. The 180,565
shares of Common Stock being registered under the Registration Statement are
referred to herein as the "Shares." This opinion is delivered to you pursuant to
Item 601 (b)(5) of Regulation S-K under the Securities Act of 1933, as amended.
With your permission, all assumptions and statement of reliance herein have been
made without independent investigation or verification on our part except to the
extent otherwise expressly stated, and we express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records of
the Company, (iii) examined such certificates of public officials, officers or
other representatives of the Company, and other persons, and such other
documents, and (iv) reviewed such information from officers and representatives
of the Company and others as we have deemed necessary or appropriate for the
purposes of this opinion.
In all such examinations, we have assumed the legal capacity of all
natural persons executing documents (other than the capacity of officers of the
Company executing documents in such capacity), the genuineness of all signatures
on original or certified copies, and the conformity to original or certified
documents of all copies submitted to us s conformed or reproduction copies. As
to various questions of fact relevant to the opinion expressed herein,
<PAGE> 2
we have relied upon and assumed the accuracy of, certificates and oral or
written statements and other information of or from public officials, officers
or other representatives of the Company, and other persons.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Shares, when issued and paid for (with
the consideration received by the Company being not less than the par value
thereof) in accordance with the Plan and any agreement applicable to the Shares,
will be validly issued, fully paid, and non-assessable.
The opinion expressed herein is limited to the General Corporation Law
of the State of Delaware. We assume no obligation to supplement this letter if
any applicable laws change after the date hereof or if we become aware of any
facts that may change the opinion expressed herein after the date hereof. While
we are not licensed to practice law in the State of Delaware, we have reviewed
applicable provisions of the General Corporation Law of Delaware as we have
deemed appropriate in connection with the opinions expressed herein that are
governed or affected by the General Corporation Law of Delaware.
The opinion expressed herein is solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person and may not be
quoted in whole or in part without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 relating to the registration of the Shares,
as amended from time to time, as the attorneys who will pass upon legal matters
in connection with the issuance of the Shares, and to the filing of this opinion
as an exhibit to the aforesaid Registration Statement. In giving this consent,
we do not admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended or the rules of the
Securities and Exchange Commission.
Very truly yours,
/s/ DAVIS, GRAHAM & STUBBS LLP
DAVIS, GRAHAM & STUBBS LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated January
29, 1999, relating to the financial statements of eSoft, Inc. appearing in the
Company's Annual Report on Form 10-KSB/A-1 for the year ended December 31, 1998
and our report dated July 16, 1999, relating to the supplemental consolidated
financial statements of eSoft, Inc. appearing in the Company's Form 8-K dated
August 9, 1999.
/s/ BDO SEIDMAN, LLP
Denver, Colorado
November 17, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of eSoft, Inc. of our report dated February
4, 1999, relating to the balance sheet of Apexx Technology, Inc. as of December
31, 1998 and the statements of operations, stockholders' deficit and cash flows
for each of the two years in the period ended December 31, 1998 appearing in
eSoft's 8-K dated August 9, 1999. Our report contains an explanatory paragraph
regarding Technologic, Inc.'s ability to continue as a going concern.
/s/ Balukoff, Lindstrom & Co., P.A.
Boise, Idaho
November 1, 1999
