<PAGE> 1
As filed with the Securities and Exchange Commission on January 5, 1999
Registration No. 333-
----------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
OMEGA WORLDWIDE, INC.
(Exact name of registrant as specified in charter)
Maryland 38-3382537
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
900 Victors Way Suite 345
Ann Arbor, Michigan 48108
(Address of principal executive offices) (Zip code)
OMEGA WORLDWIDE, INC. 1997 STOCK OPTION
AND RESTRICTED STOCK PLAN
(Full title of the plan)
SUSAN ALLENE KOVACH
Vice-President, General Counsel and Secretary
OMEGA WORLDWIDE, INC.
900 Victors Way, Suite 345
Ann Arbor, Michigan 48108
(Name and address of agent for service)
(734) 887-0300
(Telephone number, including area code, of agent for service)
-------------------------
The Commission is requested to send copies of all
communications to: DON M. PEARSON, ESQ.
Argue Pearson Harbison & Myers, LLP
801 South Flower Street, Suite 500
Los Angeles, California 90017
<PAGE> 2
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- --------------------------------------------------------------------------------
Common Stock
$.10 par value,
issuable upon
exercise of
Options........ 750,000 $4.34375 $3,257,813 $906
- --------------------------------------------------------------------------------
*Estimated solely for purposes of computing the registration fee
and computed in accordance with Rule 457(h) upon the basis of the
high and low prices per share of the Registrant's Common Stock on
December 29, 1998.
- --------------------------------------------------------------------------------
2
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The document(s) containing the information specified in Item 1 will be
sent or given to employees as specified in Rule 428(b)(1) under the Securities
Act and are not required to be filed as part of this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION.
The document(s) containing the information specified in Item 2 will be
sent or given to employees as specified in Rule 428(b)(1) under the Securities
Act and are not required to be filed as part of this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated herein by reference:
(1) Registrant's Annual Report on Form 10-K for the period ended
September 30, 1998;
(2) Registrant's Report on Form 8-K dated November 27, 1998
(3) The description of the Company's Common Stock, $.10 par value,
contained in its Initial Registration Statement on Form 8-A,
filed under Section 12 of the Securities Exchange Act of 1934
(the "Exchange Act") declared effective by the Commission
on April 2, 1998, together with any amendment
3
<PAGE> 4
or report filed subsequent to the date hereof for the purpose
of updating such description.
All documents subsequently filed by Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and Bylaws of the Registrant provide for
indemnification of directors and officers to the full extent permitted by
Maryland law.
Section 2-418 of the General Corporation Law of the State of Maryland
generally permits indemnification of any director or officer with respect to any
proceedings unless it is established that (a) the act or omission of the
director or officer was material to the matter giving rise to the proceeding and
was either committed in bad faith or the result of active or deliberate
dishonesty; (b) the director or officer actually received an improper personal
benefit in money, property or services, or; (c) in the case of criminal
proceedings, the director or officer had reasonable cause to believe that the
act or omission was unlawful. The indemnity may include judgments, penalties,
fines, settlements, and reasonable expenses actually incurred by the director or
officer in connection with the proceeding; provided, however, that if the
proceeding is one by, or in the right of, the corporation, indemnity is
permitted only for reasonable expenses and not with respect to any proceeding in
which the director shall have been adjudged to be liable to the corporation. The
termination of any proceeding by judgment, order or settlement does not create a
presumption that the director did not meet the requisite standard of conduct
required for permitted indemnification. The termination of any proceeding by
conviction, or a plea of nolo contendere or its equivalent, or an entry of an
order of probation prior to judgment, creates a
4
<PAGE> 5
rebuttable presumption that the director or officer did not meet that
standard of conduct.
Insofar as indemnification for liabilities arising under the Securities
Act is permitted to directors and officers of the Registrant pursuant to the
above-described provisions, the Registrant understands that the Commission is of
the opinion that such indemnification contravenes federal public policy as
expressed in said act and therefore is unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Omega Worldwide, Inc. 1997 Stock Option and Restricted Stock Plan,
as amended and restated.
5.1 Opinion of Argue Pearson Harbison & Myers, LLP regarding validity
of securities.
23.1 Consent of Argue Pearson Harbison & Myers, LLP (included in its
opinion filed as Exhibit 5.1 hereto).
23.2 Consent of Ernst & Young, LLP.
ITEM 9. UNDERTAKINGS.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
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,
represent a fundamental change in the information set forth in the
registration statement;
5
<PAGE> 6
(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 registration statement is on Form S-3 or Form S-8, and 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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any
financial statements required by Rule 3-19 of Regulation S-X at the start
of any delayed offering or throughout a continuous offering.
(b) 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment
6
<PAGE> 7
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, Registrant will, unless in
the opinion of the counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
7
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Ann Arbor, Michigan, on the 4th day of January,
1999.
OMEGA WORLDWIDE, INC.
By: /s/ Essel W. Bailey, Jr.
-------------------------------------
Essel W. Bailey, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Essel W. Bailey, Jr. President, Chief January 4, 1999
- ------------------------- Executive Officer,
Essel W. Bailey, Jr. and Director
(principal executive
officer)
/s/ David A. Stover Vice President and Chief January 4, 1999
- ------------------------- Financial Officer
David A. Stover (principal financial and
accounting officer)
/s/ Jacques Aigrain Director January 4, 1999
- -------------------------
Jacques Aigrain
/s/ James E. Eden Director January 4, 1999
- -------------------------
James E. Eden
/s/ Thomas F. Franke Director January 4, 1999
- -------------------------
Thomas F. Franke
8
<PAGE> 9
/s/ Anil Gupta Director January 4, 1999
- -------------------------
Anil Gupta
/s/ Harold J. Kloosterman Director January 4, 1999
- -------------------------
Harold J. Kloosterman
/s/ Bernard J. Korman Director January 4, 1999
- -------------------------
Bernard J. Korman
/s/ Edward Lowenthal Director January 4, 1999
- -------------------------
Edward Lowenthal
/s/ Robert L. Parker Director January 4, 1999
- -------------------------
Robert L. Parker
9
<PAGE> 10
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
4.1 Omega Worldwide, Inc. 1997 Stock Option and Restricted Stock Plan, as
amended and restated.
5.1 Opinion of Argue Pearson Harbison & Myers, LLP regarding validity of
securities.
23.2 Consent of Ernst & Young, LLP.
<PAGE> 1
EXHIBIT 4.1
OMEGA WORLDWIDE, INC.
1997 STOCK OPTION AND RESTRICTED STOCK PLAN
1. PURPOSE
The purpose of the Omega Worldwide, Inc. 1997 Stock Option and
Restricted Stock Plan (the "Plan") is to strengthen Omega Worldwide, Inc. (the
"Corporation") and those corporations which are or hereafter become subsidiary
corporations (the "Subsidiary" or "Subsidiaries") by providing additional means
of attracting and retaining competent managerial personnel and by providing to
participating directors, officers and employees added incentive for high levels
of performance and for unusual efforts to increase the earnings, value and
distributions of the Corporation and any Subsidiaries. The Plan seeks to
accomplish these purposes and achieve these results by providing a means whereby
such directors, officers and employees may receive Stock Options and/or shares
of Restricted Stock in accordance with this Plan.
Stock Options granted pursuant to this Plan are intended to be
Incentive Stock Options or Non-Qualified Stock Options, as shall be determined
and designated by the Plan Committee upon the grant of each Stock Option
hereunder.
2. DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
(a) Common Stock. This term shall mean shares of the Corporation's
common stock, $.1O par value, subject to adjustment pursuant to Section 18
(Adjustment Upon Changes in Capitalization) hereunder.
(b) Corporation. This term shall mean Omega Worldwide, Inc., a Maryland
corporation.
(c) Eligible Participants. This term shall mean all directors of the
Corporation or any Subsidiary, and all officers or employees (whether or not
they are also directors) of the Corporation or any Subsidiary.
(d) Fair Market Value. This term shall mean the fair market value of
the Common Stock as determined in accordance with any reasonable valuation
method selected by the Plan Committee, including the valuation methods described
in Treasury Regulations Section 20.2031-2. Unless determined otherwise by the
Plan Committee, "fair market value" shall be, as applied to any date specified
in the Plan, the closing price of a share of Common Stock as reported in the
Wall Street Journal on such date, or, if no such sales were made on such date,
the closing price of such share as reported in the Wall Street Journal on the
next preceding date on which there were such sales.
<PAGE> 2
(e) Grantee. This term shall mean any Eligible Participant to whom
Restricted Stock has been granted pursuant to this Plan.
(f) Incentive Stock Option. This term shall mean a Stock Option which
is an "incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
(g) Non-Qualified Stock Option. This term shall mean a Stock Option
which is not an Incentive Stock Option.
(h) Option Shares. This term shall mean Common Stock covered by and
subject to any outstanding unexercised Stock Option granted pursuant to this
Plan.
(i) Optionee. This term shall mean any Eligible Participant to whom a
Stock Option has been granted pursuant to this Plan, provided that at least part
of the Stock Option is outstanding and unexercised.
(j) Plan. This term shall mean the Omega Worldwide, Inc. 1997 Stock
Option and Restricted Stock Plan, as embodied herein and as may be amended from
time to time in accordance with the terms hereof and applicable law.
(k) Plan Committee. The Compensation Committee of the Board of
Directors of the Corporation shall constitute the Plan Committee and have full
authority to act in the matter. The Plan Committee shall consist at all times of
a committee of two or more non-employee directors. All references in the Plan to
the "Plan Committee" shall be deemed to refer to the Compensation Committee of
the Board of Directors. The Board of Directors of the Corporation shall have the
right, in its sole and absolute discretion, to remove or replace any person from
or on the Compensation Committee at any time for any reason whatsoever.
(l) Restricted Stock. This term shall mean shares of Common Stock of
the Company granted without cost to the Participant pursuant to Section 7, and
subject to the terms of Section 8.
(m) Stock Option. This term shall mean the right to purchase Common
Stock under this Plan in a specified number of shares, at a price and upon the
terms and conditions as specified in this Plan or as determined by the Plan
Committee.
(n) Subsidiary. This term shall mean each "subsidiary corporation"
(treating the Corporation as the employer corporation) as defined in Section
425(f) of the Internal Revenue Code of 1986, as amended.
3. ADMINISTRATION
2
<PAGE> 3
(a) Administration of the Plan. This Plan shall be administered by the
Plan Committee. Any action of the Plan Committee with respect to the
administration of the Plan shall be taken pursuant to a majority vote, or
pursuant to the unanimous written consent, of its members. Any such action taken
by the Plan Committee in the administration of this Plan shall be valid and
binding, so long as the same is not inconsistent with the terms and conditions
of this Plan. To the extent consistent with the availability to the Plan of Rule
16b-3 under the Securities Exchange Act of 1934 as amended, and subject to
compliance with the terms, conditions and restrictions set forth in this Plan,
the Plan Committee shall have the exclusive right, in its sole and absolute
discretion, to establish the terms and conditions of all Stock Options and
Restricted Stock granted under the Plan, including, without limitation, the
power to determine the duration and purposes, if any, of leaves of absence which
may be permitted to holders of unexercised, unexpired Stock Options without such
constituting a termination under the Plan, and to prescribe and amend the terms,
provisions and form of each instrument and agreement setting forth the terms and
conditions of Stock Options and Restricted Stock granted hereunder.
(b) Decisions and Determinations. Subject to the express provisions of
this Plan, the Plan Committee shall have the authority to construe and interpret
this Plan, to define the terms used herein, to prescribe, amend, and rescind
rules and regulations relating to the administration of the Plan, and to make
all other determinations necessary or advisable for administration of the Plan.
Determinations of the Plan Committee on matters referred to in this Section 3
shall be final and conclusive so long as the same are not inconsistent with the
terms of this Plan.
4. SHARES SUBJECT TO THE PLAN.
Subject to adjustments as provided in Section 18 hereof, the maximum
number of shares of Common Stock which may be issued as Restricted Stock or upon
exercise of all Stock Options granted under this Plan is limited to seven
hundred fifty thousand (750,000) shares in the aggregate.
If for any reason, unreleased shares of Restricted Stock do not vest,
said shares shall again be available for grants of Restricted Stock or Stock
Options under this Plan. If any Stock Option shall be canceled, surrendered, or
expire for any reason without having been exercised in full, the Shares
represented thereby shall again be available for grants of Restricted Stock or
Stock Options under this Plan.
5. ELIGIBILITY
Only Eligible Participants shall be eligible to receive grants of
Restricted Stock or Stock Options under this Plan.
6. FORMULA AWARDS OF STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS
3
<PAGE> 4
Initial Stock Option grants with respect to 10,000 shares shall be made
to each non-employee director. Additional Stock Option grants with respect to
1,000 shares shall be made to each non-employee director on or after each
anniversary of the initial grant.
Non-employee directors are not eligible for further grants of Stock
Options.
7. DISCRETIONARY AWARDS OF RESTRICTED STOCK AND STOCK OPTIONS
The Plan Committee, in its sole and absolute discretion, subject to the
provisions of the Plan, may grant Restricted Stock to any Eligible Participant
including a non-employee director. The Plan Committee, in its sole and absolute
discretion, subject to the provisions of the Plan, may grant Stock Options to
any Eligible Participant other than a non-employee director (whose Stock Option
Awards are specifically provided in Section 6 hereof), at such time and in such
amounts and on such terms and conditions as it deems advisable and specifies in
the respective grants.
8. RESTRICTED STOCK AND FORFEITURE RESTRICTIONS
(a) Certain Terms. The shares of Restricted Stock granted to a
Participant shall be released to him in accordance with such schedule as the
Plan Committee, in its sole discretion, shall determine at the time of grant but
in no event less than six (6) months from the date of the grant. All shares of
Restricted Stock shall be fully released not later than ten years from the date
of grant. Except for normal retirement, or pursuant to the terms of the written
agreement with a non-employee director, the Grantee shall have no vested
interest in the unreleased stock of any grant in the event of his termination
with the Corporation for any reason (unless the Plan Committee in its sole
discretion decides to terminate the forfeiture restrictions following the
termination of such Grantee) and the unreleased stock certificates shall be
canceled. During the Grantee's continued employment or affiliation, however, he
shall have the right to vote all shares and to receive all dividends as though
all shares granted were his without restrictions.
(b) Written Agreement. The details of each grant regarding shares of
Restricted Stock shall be evidenced by a written agreement covering terms and
conditions, not inconsistent with the Plan, as the Plan Committee shall approve.
Such agreement shall be promptly delivered by Management of the Corporation to
each Grantee.
9. STOCK OPTIONS
(a) Designation as Incentive or Nonqualified Options. The Plan
Committee shall designate in each grant of a Stock Option whether the Stock
Option is an Incentive Stock Option or a Non-Qualified Stock Option. The terms
upon which and the times at which, or the periods within which, the Option
Shares subject to such Stock Options may become acquired or such Stock Options
may be acquired and exercised shall be as set forth in the Plan and the related
Stock Option Agreements.
4
<PAGE> 5
(b) Date of Grant and Rights of Optionees. The determination of the
Plan Committee to grant a Stock Option shall not in any way constitute or be
deemed to constitute an obligation of the Corporation, or a right of the
Eligible Participant who is the proposed subject of the grant, and shall not
constitute or be deemed to constitute the grant of a Stock Option hereunder
unless and until both the Corporation and the Eligible Participant have executed
and delivered to the other a Stock Option Agreement in the form then required by
the Plan Committee as evidencing the grant of the Stock Option, together with
such other instrument or instruments as may be required by the Plan Committee
pursuant to this Plan; provided, however, that the Plan Committee may fix the
date of grant as any date on or after the date of its final determination to
grant the Stock Option (or if no such date is fixed, then the date of grant
shall be the date on which the determination was finally made by the Plan
Committee to grant the Stock Option), and such date shall be set forth in the
Stock Option Agreement. The date of grant as so determined shall be deemed the
date of grant of the Stock Option for purposes of this Plan.
(c) 10% Shareholder. A Stock Option granted hereunder to an Eligible
Participant who owns, directly or indirectly, at the date of the grant of the
Stock Option, more than ten percent (10%) of the total combined voting power of
all classes of capital stock of the Corporation or a Subsidiary shall not
qualify as an Incentive Stock Option unless: (i) the purchase price of the
Option Shares subject to said Stock Option is at least one hundred and ten
percent (110%) of the Fair Market Value of the Option Shares, determined as of
the date said Stock Option is granted; and (ii) the Stock Option by its terms is
not exercisable after five (5) years from the date that it is granted. The
attribution rules of Section 425(d) of the Internal Revenue Code of 1986, as
amended, shall apply in the determination of indirect ownership of stock.
(d) Maximum Value of Stock Options. No grant of Incentive Stock Options
hereunder may be made when the aggregate fair market value of Option Shares with
respect to which Incentive Stock Options pursuant to this Plan or any other
Incentive Stock Option Plan of the Corporation or any Subsidiary) are
exercisable for the first time by the Eligible Participant during any calendar
year exceeds $100,000.
(e) Non-Qualified Stock Options. Stock Options granted by the Plan
Committee shall be deemed Non-Qualified Stock Options under this Plan if they:
(i) are designated at the time of grant as Incentive Stock Options but do not so
qualify under the provisions of Section 422 of the Code or any regulations or
rulings issued by the Internal Revenue Service for any reason; (ii) are not
granted in accordance with the provisions of Section 9(c); (iii) are in excess
of the fair market value limitations set forth in Section 9(d); (iv) are granted
to an Eligible Participant who is not an employee of the Corporation or any
Subsidiary; or (v) are designated at the time of grant as Non-Qualified Stock
Options. Non-Qualified Stock Options granted hereunder shall be so designated in
the Stock Option Agreement entered into between the Corporation and the
Optionee.
10. STOCK OPTION EXERCISE PRICE
5
<PAGE> 6
The exercise price of Option Shares shall be determined by the
Committee at the date of grant, except that the exercise price of any Option
Shares designated as Incentive Stock Options shall be one hundred percent (100%)
of the Fair Market Value of the Common Stock represented by the Option Shares on
the date of grant.
The exercise price of Option Shares granted to non-employee directors
shall in all cases be one hundred percent (100%) of the Fair Market Value of the
Common Stock represented by the Option Shares on the date of grant.
11. EXERCISE OF STOCK OPTIONS
(a) Exercise. Except as otherwise provided elsewhere herein, if an
Optionee shall not in any given period exercise any part of a Stock Option which
has become exercisable during that period, the Optionee's right to exercise such
part of the Stock Option shall continue until expiration of the Stock Option or
any part thereof as may be provided in the related Stock Option Agreement. No
Stock Option shall, except as provided in Section 19 hereof, become exercisable
until one (1) year following the date of grant, and (i) as to non-employee
directors, a Stock Option first becomes exercisable as to one third (1/3) of the
Option Shares called for thereby during the second year following the date of
the grant, as to an additional one-third (1/3) during the third year and as to
the remaining one third (1/3) during the fourth year, and (ii) as to all other
Eligible Participants, Stock Options shall be exercisable as set forth by the
Committee. No Stock Option or part thereof shall be exercisable except with
respect to whole shares of Common Stock, and fractional share interests shall be
disregarded except that they may be accumulated.
(b) Prior Outstanding Incentive Stock Options. Incentive Stock Options
granted to an Optionee under the Plan shall be exercisable even while such
Optionee has outstanding and unexercised any Incentive Stock Option previously
granted to him or her pursuant to this Plan or any other Incentive Stock Option
Plan of the Corporation or any Subsidiary. An Incentive Stock Option shall be
treated as outstanding until it is exercised in full or expires by reason of
lapse of time, or is otherwise canceled by mutual action of the Optionee and the
Corporation.
(c) Notice and Payment. Stock Options granted hereunder shall be
exercised by written notice delivered to the Corporation specifying the number
of Option Shares with respect to which the Stock Option is being exercised,
together with concurrent payment in full of the exercise price as hereinafter
provided. If the Stock Option is being exercised by any person or persons other
than the Optionees, said notice shall be accompanied by proof, satisfactory to
the counsel for the Corporation, of the right of such person or persons to
exercise the Stock Option.
(d) Payment of Exercise Price. The exercise price of any Option Shares
purchased upon the proper exercise of a Stock Option shall be paid in full at
the time of each exercise of a Stock Option in cash or check and/or in Common
Stock of the Corporation which, when added
6
<PAGE> 7
to the cash payment, if any, has an aggregate Fair Market Value equal to the
full amount of the exercise price of the Stock Option, or part thereof then
being exercised. Payment by an Optionee as provided herein shall be made in full
concurrently with the Optionee 's notification to the Corporation of his
intention to exercise all or part of a Stock Option. If all or any part of a
payment is made in shares of Common Stock as heretofore provided, such payment
shall be deemed to have been made only upon receipt by the corporation of all
required share certificates and all stock power and all other required transfer
documents necessary to transfer the shares of Common Stock to the Corporation.
In addition, Options may be exercised and payment made by delivering a properly
executed exercise notice together with irrevocable instructions to a broker or
bank to promptly deliver to the Corporation the amount of sale proceeds
necessary to pay the exercise price and any applicable tax withholding. The date
of exercise shall be deemed to be the date the Corporation receives the notice.
12. [RESERVED]
13. NONTRANSFERABILITY
Except as otherwise provided herein each Stock Option and all
unreleased shares of Restricted Stock shall, by their terms, be nontransferable
by the Optionee other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act, or the rules thereunder. Incentive Stock Options shall be
exercisable during the lifetime of the Optionee only by the Optionee.
Notwithstanding the above, a Non-Qualified Stock Option may be transferred to an
inter vivos trust, provided the transferor of the Non-Qualified Stock Option is
both a trustor and a trustee of the trust.
14. AFFILIATION
Nothing contained in this Plan (or in any Stock Option or Restricted
Stock Agreement) shall obligate the Corporation or any Subsidiary to employ or
continue to employ or remain affiliated with any Participant for any period of
time or interfere in any way with the right of the Corporation or a Subsidiary
to reduce or increase the Participant's compensation.
Except as provided in Section 15 hereof if, for any reason other than
disability or death, an Optionee ceases to be affiliated with the Corporation or
a Subsidiary, the Stock Options granted to such Optionee shall expire on the
expiration dates specified for said Stock Options at the time of their grant, or
three (3) months after the Optionee ceases to be so affiliated, whichever is
earlier. During such period after cessation of affiliation, such Stock Options
shall be exercisable only as to those increments, if any, which had become
exercisable as of the date on which such Optionee ceased to be affiliated with
the Corporation or the Subsidiary, and any Stock Options or increments which had
not become exercisable as of such date shall expire automatically on such date.
15. TERMINATION FOR CAUSE
7
<PAGE> 8
If the Stock Option Agreement so provides and if an Optionee's
employment by or affiliation with the Corporation or a Subsidiary is terminated
for cause, the Stock Options granted to such Optionee shall automatically expire
and terminate in their entirety immediately upon such termination; provided,
however, that the Plan Committee may, in its sole discretion, within thirty (30)
days of such termination, reinstate such Stock Options by giving written notice
of such reinstatement to the Optionee. In the event of such reinstatement, the
Optionee may exercise the Stock Options only to such extent, for such time, and
upon such terms and conditions as if the Optionee had ceased to be employed by
or affiliated with the Corporation or a Subsidiary upon the date of such
termination for a reason other than cause, disability or death. Termination for
cause shall include, but shall not be limited to termination for malfeasance or
gross misfeasance in the performance of duties or conviction of illegal activity
in connection therewith and, in any event, the determination of the Plan
Committee with respect thereto shall be final and conclusive.
16. DEATH OF OPTIONEE
If an Optionee dies while employed by or affiliated with the
Corporation or a Subsidiary, or during the three-month period referred to in
Section 14, hereof, the Stock Options granted to such Optionee shall expire on
the expiration dates specified for said Stock Options at the time of their
grant, or one (1) year after the date of such death, whichever is earlier. After
such death, but before such expiration, subject to the terms and provisions of
the Plan and the related Stock Option Agreement, the person or persons to whom
such Optionee's rights under the Stock Options shall have passed by will or by
the applicable laws of descent and distribution, or the executor or
administrator of the Optionee's estate, shall have the right to exercise such
Stock Options to the extent that increments, if any, had become exercisable as
of the date on which the Optionee died.
17. DISABILITY OF OPTIONEE
If an Optionee is disabled while employed by or affiliated with the
Corporation or a Subsidiary or during the three-month period referred to in
Section 14 hereof, the Stock Options granted to such Optionee shall expire on
the expiration dates specified for said Stock Options at the time of their
grant, or one (1) year after the date such disability occurred, whichever is
earlier. After such disability occurs, but before such expiration, the Optionee
or the guardian or conservator of the Optionee's estate, as duly appointed by a
court of competent jurisdiction, shall have the right to exercise such Stock
Options to the extent that increments, if any, had become exercisable as of the
date on which the Optionee became disabled or ceased to be employed by or
affiliated with the Corporation or a Subsidiary as a result of the disability.
An Optionee shall be deemed to be "disabled" if it shall appear to the Plan
Committee, upon written certification delivered to the Corporation of a
qualified licensed physician, that the Optionee has become permanently and
totally unable to engage in any substantial gainful activity by reason of a
medically determinable physical or mental impairment which can be expected to
result in tile
8
<PAGE> 9
Optionee's death, or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
18. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of Common Stock of the Corporation are
increased, decreased, or changed into or exchanged for a different number or
kind of shares or securities of the Corporation, through a reorganization,
merger, recapitalization, reclassification, stock split, stock dividend, stock
consolidation, or otherwise, without consideration to the Corporation, or if
there is a spin-off or other distribution of stock or property with respect to
the holders of the Common Stock other than normal cash dividends, an appropriate
and proportionate adjustment shall be made in the number and kind of shares as
to which Stock Options may be granted. A corresponding adjustment changing the
number or kind of Option Shares and the exercise prices per share allocated to
unexercised Stock Options, or portions thereof, which shall have been granted
prior to any such change, shall likewise be made Such adjustments shall be made
without change in the total price applicable to the unexercised portion of the
Stock Option, but with a corresponding adjustment in the price of each share
subject to the Stock Option. Adjustments under this Section shall be made by the
Plan Committee, whose determination as to what adjustments shall be made, and
the extent thereof, shall be final and conclusive. No fractional shares of stock
shall be issued or made available under the Plan on account of such adjustments,
and fractional share interests shall be disregarded, except that they may be
accumulated.
19. TERMINATING EVENTS
Upon consummation of a plan of dissolution or liquidation of the
Corporation, or upon consummation of a plan or reorganization, merger or
consolidation of the Corporation with one or more corporations, as a result of
which the Corporation is not the surviving entity, or upon the sale of all or
substantially all the assets of the Corporation to another corporation, the Plan
shall automatically terminate and all unreleased shares of Restricted Stock
shall be released (but in no event during the first six months after the date of
grant of such shares of Restricted Stock if Rule 16b-3, or any successor
thereto, so provides) under such circumstances, and all Stock Options
theretofore granted shall be terminated, subject to provisions of the
immediately following paragraph in this Section 19, unless provision is made in
connection with such transaction for assumption of Stock Options theretofore
granted, or substitution for such Stock Options with new options covering stock
of a successor employer corporation, or a parent subsidiary corporation thereof,
solely at the discretion of such successor corporation, or parent or subsidiary,
corporation, with appropriate adjustments as to number and kind of shares and
prices.
Notwithstanding the immediately preceding paragraph and/or any
provision in any Stock Option pertaining to the time of exercise of a Stock
Option, or part thereof upon adoption by the requisite holders of the
outstanding shares of Common Stock of any plan of dissolution, liquidation,
reorganization, merger consolidation or sale of all or substantially all of the
assets of the Corporation to another corporation which would, upon consummation,
result in termination
9
<PAGE> 10
of a Stock Option, all Stock Options previously granted shall become immediately
exercisable (but in no event shall be exercisable during the first six months
after they are granted if Rule 1 6b-3, or any successor thereto, so provides) as
to all unexercised Shares for such period of time as may be determined by the
Plan Committee, but in any event not less than 30 days, on the conditions that
the terminating event is consummated. If such terminating event is not
consummated, Stock Options granted pursuant to the Plan shall be exercisable in
accordance with the terms of their respective Stock Option Agreement.
Notwithstanding any other provision of this Plan, in the event of a
Change of Control as hereinafter defined, all shares of Restricted Stock shall
immediately vest but not prior to six months after the date of grant, and all
outstanding options shall be immediately exercisable in full but not prior to
one year after the date of grant with respect to Incentive Stock Options, and
not prior to six months after the date of grant with respect to nonqualified
options. Change of Control shall mean a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A, Regulation 240, 14a-l0 1, promulgated under the Securities
Exchange Act of 1934, or, if Item 6(e) is no longer in effect, any regulation
issued by the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 which serves similar purposes; provided that, without
limitation, a Change of Control shall be deemed to have occurred if and when (a)
any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) is or becomes a beneficial owner, directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities,
(b) individuals who are members of the Board immediately prior to a meeting of
the shareholders of the Company involving a contest for the election of
directors shall not constitute a majority of the Board following such election,
or (c) a merger in which the Company is not the surviving corporation, and the
shareholders of the Company immediately prior to the merger do not own at least
a majority of the outstanding shares of the surviving corporation.
20. AMENDMENT AND TERMINATION
The Board of Directors of the Corporation may at any time and from time
to time suspend, amend, or terminate the Plan. However, except as permitted
under the provisions of Section 18 hereof, to the extent then required by Rule I
6b-3 to secure benefits thereunder or to avoid liability under Section 16 of the
Exchange Act (the Rules thereunder) or required under the provisions of the
Internal Revenue Code for qualification of Incentive Stock Options, or as
required by any applicable law, or deemed necessary or advisable by the Board,
such amendment shall be subject to shareholder approval.
The provisions of this Plan shall not be amended more than once every
six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement income Security Act, or the rules thereunder.
No Stock Option and no shares of Restricted Stock may be granted during
any suspension
10
<PAGE> 11
of the Plan or after termination of the Plan. Amendment, suspension, or
termination of the Plan shall not (except as otherwise provided in Section 19
hereof), without the consent of the Participant, alter or impair any rights or
obligations theretofore granted.
21. RIGHTS OF ELIGIBLE PARTICIPANTS
No Eligible Participant or other person shall have any claim or right
to be granted Restricted Stock or Stock Options under this Plan, and neither
this Plan nor any action taken hereunder shall be deemed to give or be construed
as giving any Eligible Participant or other person any right to be retained in
the employ of the Corporation or any subsidiary. Without limiting the generality
of the foregoing, no person shall have any rights as a result of his or her
classification as an Eligible Participant, such classification being made solely
to describe, define and limit those persons who are eligible for consideration
for privileges under the Plan.
22. PRIVILEGES OF STOCK OWNERSHIP; REGULATORY LAW COMPLIANCE; NOTICE OF
SALE
No Optionee shall be entitled to the privileges of stock ownership as
to any shares not actually issued and delivered. No shares may be purchased upon
the exercise of a Stock Option unless and until all then applicable requirements
of all regulatory agencies having jurisdiction and all applicable requirements
of the securities exchanges upon which securities of the Corporation are listed
(if any) shall have been fully complied with.
23. EFFECTIVE DATE OF THE PLAN
The Plan was adopted by the Board of Directors on December 1,1997 and
effective as of that date subject to the approval within twelve (12) months
thereof, by the holders of at least a majority of the Corporation's outstanding
shares of Common Stock.
24. TERMINATION
Unless previously terminated as aforesaid, the Plan shall terminate on
the date which is ten (10) years from the date of adoption of the Plan by the
Board of Directors. No Stock Options or shares of Restricted Stock shall be
granted under the Plan thereafter, but such termination shall not affect any
Stock Option or grant of Restricted Stock theretofore granted.
25. STOCK OPTION PERIOD
Each Stock Option and all rights and obligations thereunder shall
expire on such date as the Plan Committee may determine, but not later than ten
(10) years from the date such Stock Option is granted in the case of Incentive
Stock Options and eleven (II) years from the date of grant in the case of
Non-Qualified Stock Options, and each Stock Option shall be subject to earlier
termination as provided elsewhere in this Plan.
11
<PAGE> 12
26. EXCULPATION AND INDEMNIFICATION OF PLAN COMMITTEE
The present, former and future members of the Plan Committee, and each
of them, who is or was a director, officer or employee of the Corporation shall
be indemnified by the Corporation to the extent authorized in and permitted by
the Corporation's Certificate of Incorporation, and/or Bylaws in connection with
all actions, suits and proceedings to which they or any of them may be a party
by reason of any act or omission of any member of the Plan Committee under or in
connection with the Plan or any Stock Option granted thereunder.
27. COMPLIANCE WITH LAW AND REPRESENTATIONS OF PARTICIPANT
No shares of Common Stock shall be issued upon exercise of any Stock
Option, and an Optionee shall have no right or claim to such shares, unless and
until: (i) payment in full has been received by the Corporation with respect to
the exercise of any Stock Option; (ii) in the opinion of the counsel for the
Corporation, all applicable requirements of law and of regulatory bodies having
jurisdiction over such issuance and delivery have been fully complied with; and
(iii) if required by federal or state law or regulation, the Optionee shall have
paid to the Corporation the amount, if any, required to be withheld on the
amount deemed to be compensation to the Optionee as a result of the exercise of
his or her Stock Option, or made other arrangement satisfactory to the
Corporation, in its sole discretion, to satisfy applicable income tax
withholding requirements.
Unless the shares of Common Stock covered by this Plan have been
registered with the Securities and Exchange Commission pursuant to the
registration requirements under the Securities Act of 1933, each Participant
shall: (i) by and upon accepting shares of Restricted Stock or a Stock Option,
represent and agree in writing, that the Stock will be acquired for investment
purposes and not for resale or distribution; and (ii) by and upon the exercise
of a Stock Option, or a part thereof, furnish evidence satisfactory to counsel
for the Corporation, including written and signed representations to the effect
that the Shares are being acquired for investment purposes and not for resale or
distribution, and that the Shares being acquired shall not be sold or otherwise
transferred by the Participant except in compliance with the registration
provisions under the Securities Act of 1933, as amended, or an applicable
exemption therefrom. Furthermore, the Corporation, at its sole discretion, to
assure itself that any sale or distribution by the Participant complies with
this Plan and any applicable federal or state securities laws, may take all
reasonable steps, including placing stop transfer instructions with the
Corporation's transfer agent prohibiting transfers in violation of the Plan and
affixing the following legend (and/or such other legend or legends as the Plan
Committee shall require) on certificates evidencing the shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER TIW SECURITIES ACT OF 1933, AS AMENDED, ANDMAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION
12
<PAGE> 13
STATEMENT WITH RESPECT TO TIIEM UNDER THE ACT OR A WMTTEN OPINION OF
COUNSEL FOR THE HOLDER THEREOF, WHICH OPINION SHALL BE ACCEPTABLE TO
OMEGA WORLDWIDE, INC., THAT REGISTRATION IS NOT REQUIRED."
28. Notices
All notices and demands of any kind which the Plan Committee, or any
Participant, or other person may be required or desires to give under the terms
of this Plan shall be in writing and shall be delivered in hand to the person or
persons to whom addressed (in the case of the Plan Committee, with the Chairman,
Chief Executive Officer, Chief Financial Officer, Treasurer, any Vice President
or Secretary or any Assistant Secretary of the Corporation), by leaving a copy
of such notice or demand at the address of such person or persons as may be
reflected in the records of the Corporation, or by mailing a copy thereof,
properly addressed as above, by certified or registered mail, postage prepaid,
with return receipt requested. Delivery by mail shall be deemed made upon
receipt by the notifying party of the return receipt acknowledging receipt of
the notice or demand.
29. LIMITATION ON OBLIGATIONS OF THE CORPORATION
All obligations of the Corporation arising under or as a result of this
Plan or Stock Options or Restricted Stock granted hereunder shall constitute the
general unsecured obligations oft he Corporation, and neither the Plan Committee
nor any member thereof, nor any officer of the Corporation, nor any other person
or any Subsidiary, shall be liable for any debt, obligation, cost or expense
hereunder.
30. LIMITATION OF RIGHTS
Except as otherwise provided by the terms of the Plan, the Plan
Committee, in its sole and absolute discretion, is entitled to determine who, if
anyone, is an Eligible Participant under this Plan, and which, if any, Eligible
Participant shall receive any grant. No oral or written agreement by any other
person not acting on behalf of the Plan Committee relating to this Plan is
authorized, and such may not bind the Corporation or the Plan Committee to make
any grant to any person.
31. SEVERABILITY
If any provision of this Plan as applied to any person or to any
circumstance shall be adjudged by a court of competent jurisdiction to be void,
invalid, or unenforceable, the same shall in no was affect any other provision
hereof, the application of any such provision in any other circumstances, or the
validity or enforceability hereof.
32. CONSTRUCTION
13
<PAGE> 14
Where the context or construction requires, all words applied in the
plural herein shall be deemed to have been used in the singular and vice versa,
and the masculine gender shall include the feminine and the neuter and vice
versa.
33. HEADINGS
The headings of the several paragraphs herein are inserted solely for
convenience of reference and are not intended to form a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.
34. SUCCESSORS
This Plan shall be binding upon the respective successors, assigns,
heirs, executors, administrators, guardians and personal representatives of the
Corporation and Participants.
14
<PAGE> 1
EXHIBIT 5.1
December 29, 1998
Omega Worldwide, Inc.
900 Victors Way, Suite 350
Ann Arbor, Michigan 48108
RE: OMEGA WORLDWIDE, INC./FORM S-8
------------------------------
Gentlemen:
At your request, we have examined the Registration Statement
to be filed by Omega Worldwide, Inc. with the Securities and Exchange Commission
in connection with the registration under the Securities Act of 1933, as
amended, of 750,000 shares of common stock, par value $.10 (the "Common Stock"),
all of which Common Stock may be offered and sold from time to time pursuant to
the terms of the Company's 1997 Stock Option and Restricted Stock Plan, and as
set forth in the prospectus which forms a part of the Registration Statement.
In connection with this opinion, we have examined and relied
upon such records, documents and other instruments as in our judgment are
necessary or appropriate in order to express the opinions hereinafter set forth
and have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as certified or photocopies. Moreover, we have
assumed that the issuance and sale of the Common Stock to be offered from time
to time has been or will be duly authorized by proper action of the Board of
Directors of the Company and in accordance with the Company's Articles of
Incorporation, as amended, and applicable Maryland law.
It is our opinion that, subject to completion of any
additional proceedings referred to above, the Common Stock will, upon sale and
issuance thereof in the manner described in the Registration Statement, be
legally issued, fully paid and nonassessable.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion letter
has been prepared solely for your use in connection with the transmitting for
filing of the Registration Statement and should not be quoted in whole or in
part or otherwise be referred to, nor filed with or furnished to any person or
entity, without the prior written consent of this firm.
We consent to the use of this opinion as an exhibit to said
Registration Statement.
Very truly yours,
/s/ Argue Pearson Harbison & Myers, LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Omega Worldwide, Inc. 1997 Stock Option and
Restricted Stock Plan, as Amended and Restated and to the incorporation by
reference therein of our report dated December 21, 1998, with respect to the
consolidated financial statements of Omega Worldwide, Inc. incorporated by
reference in its Annual Report (Form 10-K) for the year ended September 30,
1998 and the related financial statement schedule included therein,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
Detroit, Michigan
January 5, 1999
