FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ViaGrafix Corporation
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(Exact name of registrant as specified in its charter)
Oklahoma 73-1354168
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One American Way, Pryor, Oklahoma 74361
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(Address of Principal Executive Offices) (Zip Code)
ViaGrafix Corporation 1995 Stock Option Plan
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(Full title of the plan)
Michael A. Webster
One American Way, Pryor, Oklahoma 74361
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(Name and address of agent for service)
(918) 825-6700
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(Telephone number, including area code, of agent for service)
Calculation of Registration Fee
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Proposed Proposed
Title of maximum maximum
securities offering aggregate Amount of
to be Amount to be price per offering registration
registered registered share(1) price fee
- ---------- ---------- -------- ----- ---
Common Stock, 1,000,000(2) $6.562 $6,562,000 $1,935.79
$.01 par value
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(1) Estimated solely for the purpose of calculating the amount
of the registration fee, pursuant to Rules 457(c) and 457(h) of
the Securities Act of 1933, on the basis of the last sale
reported for shares of common stock on July 17, 1998.
(2) The 1,000,000 shares of common stock being registered
represent the maximum number of shares available for issuance by
the Plan.
<PAGE 2>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part
I, Item 1 (Plan Information) and Item 2 (Registrant Information
and Employee Plan Annual Information), will be delivered to
employees and/or directors in accordance with Form S-8 and the
Securities Act Rule 428(b)(1).
<PAGE 3>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents filed by ViaGrafix Corporation (the
"Registrant") are hereby incorporated by reference into this
Registration Statement:
(a) The Registrant's prospectus filed pursuant to Rule
424(b) with the Commission on March 4, 1998
("Prospectus"); and;
(b) All reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of
1934 since the end of the fiscal year covered by the
financial statements included in the Prospectus for the
year ended December 31, 1997.
All reports and other documents filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all
securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing such documents.
The description of the Registrant's common stock as provided
in the Prospectus ("Description of Capital Stock - Common Stock")
is incorporated herein by reference.
Item 4. Description of Securities.
Not applicable. The description of the Registrant's common
stock as provided in the Prospectus ("Description of Capital
Stock - Common Stock") is incorporated herein by reference. See
above.
Item 5. Interests of Named Experts and Counsel.
Members of the law firm of Johnson, Allen, Jones &
Dornblaser, including partners and associates, beneficially owned
approximately 14,000 shares of the Registrant common stock as of
July 13, 1998.
Item 6. Indemnification of Officers and Directors.
The Registrant's Amended and Restated Certificate of
Incorporation provides that the Registrant's directors shall not
be personally liable to the Registrant or its shareholders for
monetary damages for breach of the director's fiduciary duty as a
director, provided that this provision does not limit the
liability of a director for any (a) breach of the director's duty
of loyalty to the Registrant or its shareholders, (b) act or
omission not in good faith or which involves intentional
misconduct or a knowing violation of law, (c) liability for the
unlawful payment of dividends or redemption of stock, or (d)
transaction from which the director derived an improper personal
benefit. This provision in the Amended and Restated Certificate
of Incorporation does not eliminate the duty of care and, in
appropriate circumstances, equitable remedies such as an
injunction or other forms on non-monetary relief would remain
available under Oklahoma law. This provision also does not
affect a director's responsibilities under any other laws, such
as the federal securities laws or state or federal environmental
laws.
<PAGE 4>
The Registrant's Amended and Restated Certificate of
Incorporation provides for indemnification of directors and
officers of the Registrant and persons who serve at the request
of the Registrant as a director or officer of another corporation
in which the Registrant owns stock for all liabilities, expenses,
(including attorneys' fees) and costs incurred in a legal
proceeding in which he is a party by reason of his having been an
officer or director. The Amended and Restated Certificate of
Incorporation, however, excludes indemnification for matters in
which the officer or director is adjudged to have been guilty of
gross negligence or willful misconduct.
These indemnification provisions may be sufficiently broad
to permit indemnification of the Registrant's officers and
directors for liabilities (including reimbursement of expenses
incurred) arising under the Securities Act. In the opinion of
the Securities and Exchange Commission, indemnification for
liabilities arising under the Securities Act is against public
policy and, therefore, unenforceable. Accordingly, these
indemnification provisions may not limit the liability of
directors and executive officers under the Securities Act.
Item 7. Exemption from Registration Claimed.
Sales of the Registrant's common stock under the Plan prior
to the date hereof were made to officers and directors of the
Registrant in reliance on the exemption from registration under
Section 4(2) of the 1933 Act for transactions not involving a
public offering, and the rules promulgated thereunder.
Item 8. Exhibits.
(4) ViaGrafix Corporation 1995 Stock Option Plan.
(5) Opinion and consent of Johnson, Allen, Jones &
Dornblaser regarding legality of the securities being
registered.
(23) Consents of experts and counsel.
(23.1) Consent of Ernst & Young, LLP.
(23.2) Consent of Johnson, Allen, Jones &
Dornblaser - see (5) above.
Item 9. Undertakings.
(a) Rule 415 Offering Undertaking:
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:
<PAGE 5>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represents a fundamental change in the
information set forth in the registration
statement;
(iii)To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information
required to be included in a post-effective
amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by
reference 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.
(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) Filings Incorporating Subsequent Exchange Act Documents
By Reference Undertaking:
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 Section
15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit
plan's annual report pursuant to 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.
(h) Filing of Registration Statement in Form S-8
Undertaking:
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 Securities Act of 1933 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 to controlling precedent, submit to a
court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
<PAGE 6>
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pryor,
State of Oklahoma, on July 20, 1998.
VIAGRAFIX CORPORATION
By:/s/ Michael A. Webster
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Michael A. Webster, President
Pursuant to the requirements of Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the date indicated:
Signature Title Date
/s/ Michael A. Webster President and Director July 20, 1998
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Michael A. Webster
/s/ Robert E. Webster Executive Vice President July 20, 1998
- -------------------------- and Director
Robert E. Webster
/s/ Roy L. Bliss Director July 20, 1998
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Roy L. Bliss
/s/ Stephen P. Gott Director July 20, 1998
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Stephen P. Gott
/s/ Gerald R. Harris Director July 20, 1998
- --------------------------
Gerald R. Harris
<PAGE 7>
<EXHIBIT PAGE 1>
EXHIBIT 4
VIAGRAFIX CORPORATION
1995 VIAGRAFIX STOCK OPTION PLAN
--------------------------------
1. PURPOSE. The purpose of this 1995 ViaGrafix Stock Option
Plan (the "Plan") is to encourage employees of ViaGrafix
Corporation (tile "Company") and of any present or future parent
or subsidiary of the Company (collectively, "Related
Corporations"), and other individuals who render services to the
Company or a Related Corporation, by providing opportunities to
Purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" ("ISOs")
under Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code") and options which do not qualify as ISOs
("Non-Qualified Options"). Both ISOs and Non-Qualified Options
are referred to hereafter individually as an "Option" and
collectively as "Options". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary
corporation", respectively, as those terms are defined in Section
424 of the Code.
2. Administration of the Plan
A. Board Administration: The Plan shall be administered
by the Board of Directors of the Company (the "Board")
or by an Administrator appointed by the Board (the
"Administrator"). Hereinafter, all references in this
Plan to the "Administrator" shall mean the Board if no
Administrator has been appointed. Subject to
ratification of the grant or authorization of each
Option by the Board (if so required by applicable state
law), and subject to the terms of the Plan, the
Administrator shall have the authority to (i) determine
to whom (from among the class of employees eligible
under paragraph 3 to receive ISOs) ISOs shall be
granted, and to whom (from among the class of
individuals and entities eligible under paragraph 3 to
receive Non-Qualified Options) Non-Qualified Options
may be granted; (ii) determine the time or times at
which Options shall be granted; (iii) determine the
exercise price of shares subject to each Option, which
price shall not be less than the minimum price
specified in paragraph 6; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified
Option; (v) determine (subject to paragraph 7) the time
or times when each Option shall become exercisable and
the duration of the exercise period; (vi) extend the
period during which outstanding Options may be
exercised; (vii) determine whether restrictions such as
repurchase options are to be imposed on shares subject
to Options and the nature of such restrictions, if any;
and (viii) interpret the Plan and prescribe and rescind
rules and regulations relating to it. If the
Administrator determines to issue a Non-Qualified
Option, it shall take whatever actions it deems
necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such
Option is not treated as an ISO. The interpretation and
construction by the Administrator of any provisions of
the Plan or of any Option granted under it shall be
final unless otherwise determined by the Board.
<PAGE 8>
<EXHIBIT PAGE 2>
The Administrator may from time to time adopt such
rules and regulations for carrying out the Plan as it
may deem advisable. No member of the Board or the
Administrator shall be liable for any action or
determination made in good faith with respect to the
Plan or any Option granted under it
B. Administrator Actions: The Administrator shall
hold meetings at such time and places as he may
determine. From time to time the Board may remove the
Administrator, (with or without cause) appoint a
replacement for the Administrator, or remove the
Administrator and thereafter directly administer the
Plan.
C. Grant of Options to Board Members: Subject to
the provisions of the first sentence of paragraph 2(A)
above, if applicable, Options may be granted to members
of the Board. All grants of Options to members of the
Board shall in all other respects be made in accordance
with the provisions of this Plan applicable to other
eligible persons. Consistent with the provisions of the
first sentence of paragraph 2(A) above, members of the
Board who either (i) are eligible to receive grants of
Options pursuant to the Plan or (ii) have been granted
Options may vote on any matters affecting the
administration of the Plan or the grant of any Options
pursuant to the Plan, except that no such member shall
act upon the granting to himself or herself of Options,
but any such member may be counted in determining the
existence of a quorum at any meeting of the Board
during which action is taken with respect to the
granting to such member of Options.
3. Eligible Employees and others: ISOs may be granted
only to employees of the Company or any Related Corporation. Non-
Qualified Options may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the
Company or any Related Corporation. The Administrator may take
into consideration a recipient's individual circumstances in
determining whether to grant an ISO or a Non-Qualified Option.
The granting of any Option to any individual or entity shall
neither entitle that individual or entity to, nor disqualify such
individual or entity from, participation in any other grant of
Options.
4. Stock: The stock subject to Options shall be
authorized but unissued shares of Common Stock of the Company,
par value $0.01 per share (the "Common Stock"), or shares of
Common Stock reacquired by the Company in any manner. The
aggregate number of shares which may be issued pursuant to the
Plan is 1,000,000 subject to adjustment as provided in paragraph
13. If any Option granted under the Plan shall expire or
terminate for any reason
<PAGE 9>
<EXHIBIT PAGE 3>
without having been exercised in full or shall cease for any
reason to be exercisable in whole or in part or shall be
repurchased by the Company, the shares subject to such Option
shall again be available for grants of Options under the Plan.
5. Granting of Options: Options may be granted under
the Plan at any time after January 1, 1995 and prior to January
1, 2005. The date of grant of an Option under the Plan will be
the date specified by the Administrator at the time it grants the
Option; provided, however; that such date shall not be prior to
the date on which the Administrator acts to approve the grant
(Options granted under the Plan are intended to qualify as
performance-based compensation to the extent required under
proposed Treasury Regulation 1.162-27.)
6. Minimum Option Price: ISO Limitations
A. Price for Non-Qualified Options: The exercise
price per share specified in the agreement relating to
each Non-Qualified Option granted under the Plan shall
in no event be less than the minimum legal
consideration required therefore under the laws of any
jurisdiction in which the Company or its successors in
interest may be organized.
B. Price for ISOs: The exercise price per share
specified in the agreement relating to each ISO granted
under the plan shall not be less than the fair market
value per share of Common Stock on the date of such
grant In the case of an ISO to be granted to any
employee owing stock possessing more than ten percent
(10%) of the total combined voting power of all classes
of stock of the Company or any Related Corporation, the
price per share specified in the agreement relating to
such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common
Stock on the date of grant For purposes of determining
stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply.
C. $100,000 Annual Limitation on ISO Vesting:
Each eligible employee may be granted Options treated
as ISOs only to the extent that, in the aggregate under
this Plan and all incentive stock option plans of the
Company and any Related Corporation, ISOs do not become
exercisable for the first time by such employee during
any calendar year with respect to stock having a fair
market value (determined at the time the ISOs were
granted) in excess of $100,000. The Company intends to
designate any Options granted in excess of such
limitation as Non-Qualified Options.
<PAGE 10>
<EXHIBIT PAGE 4>
D. Determination of Fair Market Value: if, at
the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market
value" shall be determined as of the last business day
for which the prices or quotes discussed in this
sentence are available prior to the date such Option is
granted and shall mean (i) the average (on that date)
of the high and low prices of the Common Stock on the
principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; or (ii) the
last reported sale price (on that date) of the Common
Stock on the Nasdaq National Market, if the Common
Stock is not then traded on a national securities
exchange; or (iii) the closing bid price (or average of
bid prices) last quoted (on that date) by an
established quotation service for over-the-counter
securities, if the Common Stock is not reported on the
Nasdaq National Market if the Common Stock is not
publicly traded at the time an Option is granted under
the Plan, "fair market value" shall be deemed to be the
fair value of the Common Stock as determined by the
Board of Directors after taking into consideration all
factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common
Stock in private transactions negotiated at arm's
length.
7. Option Duration: Subject to earlier termination as
provided in paragraphs 9 and 10 or in the agreement relating to
such Option, each Option shall expire on the date specified by
the Administrator, but not more than (i) ten years from the date
of grant in the case of Options generally and (ii) five years
from the date of grant in the case of ISOs granted to an employee
owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or
any Related Corporation, as determined under paragraph 6(B).
Subject to earlier termination as provided in paragraphs 9 and
10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any
part of such ISO that is converted into a NON-Qualified Option
pursuant to paragraph 16.
8. Exercise of Option: Subject to the provisions of
paragraphs 9 through 12, each Option granted under the Plan shall
be exercisable as follows:
A. Vesting: The Option shall either be fully
exercisable on the date of grant or shall become
exercisable thereafter in such installments at such
time or times as the Administrator may specify.
<PAGE 11>
<EXHIBIT PAGE 5>
B. Full Vesting of Installments: Once an
installment becomes exercisable it shall remain
exercisable until expiration or termination of the
Option, unless otherwise specified by the
Administrator.
C. Partial Exercise: Each Option or installment
may be exercised only between the 15th day of the
preceding December through the 31st day of January of
the year of the option each year for up to the total
number of shares with respect to which it is then
exercisable.
D. Acceleration of Vesting: The Administrator
shall have the fight to accelerate the date on which
any installment of any Option becomes exercisable;
provided that the Administrator shall not, without the
consent of an optionee, accelerate the permitted
exercise date of any installment of any Option granted
to any employee as an ISO (and not previously converted
into a Non-Qualified Option pursuant to paragraph 16)
if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as
described in paragraph 6(C).
9. Termination of Employment: Unless otherwise specified in
the agreement relating to such ISO, if an ISO optionee ceases to
be employed by the Company and all Related Corporations other
than by reason of death or disability as defined in paragraph 10,
no further installments of his or her ISOs shall become
exercisable, and his or her ISOs shall terminate after the date
of termination of his or her employment, but in no event later
than on their specified expiration dates, except to the extent
that such ISOs (or unexercised installments thereof) have been
converted into Non-Qualified Options pursuant to paragraph 16.
For purposes of this paragraph 9, employment shall be considered
as continuing uninterrupted during any bona fide leave of absence
(such as those attributable to illness, military obligations or
governmental service) provided that the period of such leave does
not exceed 90 days or, if longer, any period during which such
optionee's right to reemployment is guaranteed by statute. A bona
fide leave of absence with the written approval of the
Administrator shall not be considered an interruption of
employment under this paragraph 9, provided that such written
approval contractually obligates the Company or any Related
Corporation to continue the employment of the optionee after the
approved period of absence. ISOs granted under the Plan shall not
be affected by any change of employment within or among the
Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related
Corporation. Nothing in the Plan shall be deemed to give any
optionee the right to be retained in employment or other service
by the Company or any Related Corporation for any period time.
<PAGE 12>
<EXHIBIT PAGE 6>
10. Death; Disability
A. Death: if an ISO optionee ceases to be
employed by the Company and all Related Corporations by
reason of his or her death, any ISO owned by such
optionee may be exercised, to the extent otherwise
exercisable on the date of death, by the estate,
personal representative or beneficiary who has acquired
the ISO by will or by the laws of descent and
distribution, until the earlier of (i) the specified
expiration date of the ISO or (ii) 180 days from the
date of the optionee's death.
B. Disability: if an ISO optionee ceases to be
employed by the Company and all Related Corporations by
reason of his or her disability, such optionee shall
have the right to exercise any ISO held by him or her
on the date of shares with respect to which he or she
could have exercised it on that date, until the
earlier of (i) the specified expiration date of the ISO
or (ii) 180 days from the date of the termination of
the optionee's employment. For the purposes of the
Plan, the term "disability" shall mean "permanent and
total disability" as defined in Section 22(e) (3) of
the Code or any successor statute.
11. Assignability:No Option shall be assignable or
transferable by the optionee except by will, or by the laws of
descent and distribution. Except as set forth in the preceding
sentence, during the lifetime of an optionee each Option shall be
exercisable only by such optionee.
12. Terms and Conditions of Options: Options shall be
evidenced by instruments (which need not be identical) in such
forms as the Administrator may from time to time approve. Such
instruments shall conform to the terms and conditions set forth
in paragraphs 6 through 11 hereof and may contain such other
provisions as the Administrator deems advisable which are not
inconsistent with the Plan, including restrictions applicable to
shares of Common Stock issuable upon exercise of Options. The
Administrator may specify that any Non-Qualified Option shall be
subject to the restrictions set forth herein with respect to
ISOs, or to such other termination and cancellation provisions as
the Administrator may determine. The Administrator may from time
to time confer authority and responsibility on one or more of its
Board of Directors members and/or one or more officers of the
Company to execute and deliver such instruments. The proper
officers of the Company are authorized and directed to take any
and all action necessary or advisable from time to time to carry
out the terms of such instruments.
13. Adjustments: Upon the occurrence of any of the
following events, an optionee's rights with respect to Options
granted to such optionee hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in
the written agreement between the optionee and the Company
relating to such Option:
<PAGE 13>
<EXHIBIT PAGE 7>
A. Stock Dividends and Stock Splits: if the shares
of Common Stock shall be subdivided or combined into a
greater or smaller number of shares or if the Company
shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number
of shares of Common Stock deliverable upon the
exercise of Options shall be appropriately increased
or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per
share to reflect such subdivision, combination or
stock dividend.
B. Consolidations or Mergers: if the Company is to
be consolidated with or acquired by another entity in
a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the
Administrator or the board of directors of any entity
assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding Options,
either (i) make appropriate provision for the
continuation of such Options by substituting on an
equitable basis for the shares then subject to such
Options either (a) the consideration payable with
respect to the outstanding shares of Common Stock in
connection with the Acquisition, (b) shares of stock
of the surviving corporation or (c) such other
securities as the Successor Board deems appropriate,
the fair market value of which shall not materially
exceed the fair market value of the shares of Common
Stock subject to such Options immediately prior to the
Acquisition; or (ii) upon written notice to the
Options, provide that all Options must be exercised,
to the extent then exercisable, within a specified
number of days of the date of such notice, at the end
of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment
equal to the excess of the fair market value of the
shares subject to such Options (to the extent then
exercisable) over the exercise price thereof.
C. Recapitalization or Reorganization: In the event
of a recapitalization or reorganization of the Company
(other than a transaction described in subparagraph B
above) pursuant to which securities of the Company or
of another corporation are issued with respect to the
outstanding shares of Common Stock, an optionee upon
exercising an Option shall be entitled to receive for
the purchase price paid upon such exercise the
securities he or she would have received if he or she
had exercised such Option prior to such
recapitalization or reorganization.
<PAGE 14>
<EXHIBIT PAGE 8>
D. Modification of ISOs: Notwithstanding the
foregoing, any adjustments made pursuant to
subparagraphs A, B or C with respect to ISOs shall be
made only after the Administrator, after consulting
with counsel for the Company, determines whether such
adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424 of the
Code) or would cause any adverse tax consequences for
the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to
ISOs would constitute a modification of such ISOs or
would cause adverse tax consequences to the holders,
it may refrain from making such adjustments.
E. Dissolution or Liquidation: In the event of the
proposed dissolution or liquidation of the Company,
each Option will terminate immediately prior to the
consummation of such proposed action or at such other
time and subject to such other conditions as shall be
determined by the Administrator.
F. Issuances of Securities: Except as expressly
provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to
Options. No adjustments shall be made for dividends
paid in cash or in property other than securities of
the Company.
G. Fractional Shares: No fractional shares shall be
issued under the Plan and the optionee shall receive
from the Company cash in lieu of such fractional
shares.
H. Adjustments: Upon the happening of any of the
events described in subparagraphs A, B or C above, the
class and aggregate number of shares set forth in
paragraph 4 hereof that are subject to Options which
previously have been or subsequently may be granted
under the Plan shall also be appropriately adjusted to
reflect the events described in such subparagraphs.
The Administrator or the Successor Board shall
determine the specific adjustments to be made under
this paragraph 13 and, subject to paragraph 2, its
determination shall be conclusive.
14. Means of Exercising Options: An Option (or any part or
installment thereof) shall be exercised by giving written notice
to the Company at its principal office address, or to such
transfer agent as the Company shall designate between December 15
of the preceding year, and January 31 of the Option year. Such
notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised,
accompanied by full payment of the purchase price therefore
either (a) in United States dollars in cash or by check, (b) at
the
<PAGE 15>
<EXHIBIT PAGE 9>
discretion of the Administrator, through delivery of shares of
Common Stock having a fair market value equal as of the date of
the exercise to the cash exercise price of the Option, (c) at the
discretion of the Administrator, by delivery of the optionee's
personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal
rate, as defined in Section 1274(d) of the Code, (d) at the
discretion of the Administrator and consistent with applicable
law, through the delivery of an assignment to the Company of a
sufficient amount of the proceeds from the sale of the Common
Stock acquired upon exercise of the Option and an authorization
to the broker or selling agent to pay that amount to the Company,
which sale shall be at the participant's direction at the time of
exercise, or (e) at the discretion of the Administrator, by any
combination of (a), (b), (c) and (d) above. If the Administrator
exercises its discretion to permit payment of the exercise price
of an ISO by means of the methods set forth in clauses (b), (c),
(d) or (e) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in
question. The holder of an Option shall not have the rights of a
shareholder with respect to the shares covered by his Option until
the date of issuance of a stock certificate to such holder for such
shares. Except as expressly provided above in paragraph 13 with
respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which
the record date is before the date such stock certificate is issued.
15. Term and Amendment of Plan: This Plan was
adopted by the Board on January 26, 1995, subject, with respect
to the validation of ISOs granted under the Plan, to approval of
the Plan by the stockholders of the Company at the next Meeting
of Stockholders or, in lieu thereof, by written consent If the
approval of stockholders is not obtained prior to January 26,
1996, any grants of ISOs under the Plan shall expire at the end
of the day on January 26, 1996, except as to Options
outstanding on that date. Subject to the provisions of
paragraph 5 above, Options may be granted under the Plan prior to
the date of stockholder approval of the Plan. The Board may
terminate or amend the Plan in any respect at any time, except
that, without the approval of the stockholders obtained within 12
months before or after the Board adopts a resolution authorizing
any of thee following actions: (a) the total number of shares
that may be issued under the Plan may not be increased (except by
adjustment pursuant to paragraph 13); (b) the benefits accruing
to participants under the Plan may not be materially increased;
(c) the requirements as to eligibility for participation in the
Plan may not be materially modified; (d) the provisions of
paragraph 3 regarding eligibility for grants of ISOs may not be
modified; (e) the provisions of paragraph 6(B) regarding the
exercise price at which shares may be offered pursuant to ISOs
may not be modified (except by adjustment pursuant to Paragraph
13); (f) the expiration date of the Plan may not be extended.
Except as otherwise provided in this paragraph 15, in no event
may action of the Board or stockholders alter or impair the
rights of an optionee, without such optionee's consent, under any
Option previously granted to such optionee.
<PAGE 16>
<EXHIBIT PAGE 10>
16. Conversion of ISOs into Non-Qualified
Options: The Administrator, at the written request or with the
written consent of any optionee, may in its discretion take such
actions as may be necessary to convert such optionee's ISOs (or
any installments or portions of installments thereof) that have
not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs,
regardless of whether the optionee is an employee of the Company
or a Related Corporation at the time of such conversion. Such
actions may include, but shall not be limited to, extending the
exercise period or reducing the exercise price of the appropriate
installments of such ISOs. At the time of such conversion, the
Administrator (with the consent of the optionee) may impose such
conditions on the exercise of the resulting Non-Qualified Options
as the Administrator in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan.
Nothing in the Plan shall be deemed to give any optionee the
right to have such optionee's ISOs converted into Non-Qualified
Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action.
17. Application of Funds: The proceeds
received by the Company from the sale of shares pursuant to
Options granted under the Plan shall be used for general
corporate purposes.
18. Notice to Company of Disqualifying
Disposition: By accepting an ISO granted under the Plan, each
optionee agrees to notify the Company in writing immediately
after such optionee makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and
regulations thereunder) of any stock acquired pursuant to the
exercise of ISOs granted under the Plan. A Disqualifying
Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO
was granted, or (b) the date one year following the date the ISO
was exercised.
19. Withholding of Additional Income Taxes:
Upon the exercise of a Non-Qualified Option, the making of a
Disqualifying Disposition (as defined in paragraph 18), the
vesting or transfer of restricted stock or securities acquired on
the exercise of a Option hereunder, or the making of a
distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts
that constitute compensation includable in gross income. The
Administrator in its discretion may condition (i) the exercise of
an Option, or (ii) the vesting or transferability of restricted
stock or securities acquired by exercising an Option, on the
optionee's making satisfactory arrangement for such withholding.
Such arrangement may include payment by the optionee in cash or
by check of the amount of the withholding taxes or, at the
discretion of the Administrator, by the optionee's delivery of
previously held shares of Common Stock or the withholding from
the shares of Common Stock otherwise deliverable upon exercise of
any Option shares having an aggregate fair market value equal to
the amount of such withholding taxes.
<PAGE 17>
<EXHIBIT PAGE 11>
20. Governmental Regulation: The Company's
obligation to sell and deliver shares of the Common Stock under
this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance
or sale of such shares.
Government regulations may impose reporting or other
obligations on the Company with respect to the Plan. For example,
the Company may be required to send tax information statements to
employees and former employees that exercise ISOs under the Plan,
and the Company may be required to file tax information returns
reporting the income received by optionees in connection with the
Plan.
21. Governing Law: the validity and construction
of the Plan and the instruments evidencing Options shall be
governed by the laws of Oklahoma, or the laws of any jurisdiction
in which the Company or its successors in interest may be
organized.
ADOPTED AND APPROVED BY THE BOARD OF DIRECTORS this 26th day of
January, 1995.
Attest:
/s/ Robert E. Webster /s/ Michael A. Webster
------------------------- -------------------------
Secretary President
RATIFIED, ADOPTED AND APPROVED BY SHAREHOLDERS this 26th day of
January, 1995.
/s/ Michael A. Webster /s/ Robert E. Webster
------------------------- -------------------------
Michael A. Webster Robert E. Webster
<PAGE 18>
EXHIBIT 5
Johnson, Allen, Jones & Dornblaser, Inc.
900 Petroleum Club Building
601 South Boulder
Tulsa, Oklahoma 74119
July 20, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: ViaGrafix Corporation Stock Option Plan:
Registration on Form S-8
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8
(the "Registration Statement") of ViaGrafix Corporation, an
Oklahoma corporation (the "Company"), filed on the date hereof
with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, in connection with a proposed offering
by the Company to certain of its employees and directors of the
Company's common stock, $.01 par value per share, under the
ViaGrafix 1995 Stock Option Plan (the "Plan"). Of the 1,000,000
shares being registered, 913,466 shares will be newly
issued by the Company and will hereinafter be referred to as the
"Shares". The remaining 86,534 shares constitute
"restricted" shares and are being registered for resale by the
holders thereof. No opinion is being expressed thereon.
As counsel for the Company, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of
such corporate records or other documents as we have deemed
relevant as a basis for our opinion hereinafter expressed. Where
factual matters material to this opinion were not independently
established, we have relied upon certificates and/or
representations of current executive officers and responsible
employees of the Company and upon such other data as we deem to
be appropriate under the circumstances.
This opinion is limited to the corporate laws of the State
of Oklahoma and we express no opinion with respect to the laws of
any other jurisdiction.
Based upon and subject to the foregoing, it is our opinion
that the Shares have been duly and validly authorized and, when
issued pursuant to the offering and in the manner contemplated in
the Registration Statement, will be validly issued, fully paid
and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Kenneth E. Dornblaser
---------------------------
Kenneth E. Dornblaser
For the Firm
<PAGE 19>
EXHIBIT 23.1
Consent of Independant Accountants
We consent to the incorporation by reference in the
Registration Statement (Form S-8) pertaining to the ViaGrafix
Corporation 1995 Stock Option Plan of our report dated
January 30, 1998, with respect to the financial statements and
schedule of ViaGrafix Corporation included in Amendment No. 1
to the Registration Statement (Form S-1) and related Prospectus,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Tulsa, Oklahoma
July 20, 1998
