<PAGE>
As filed with the Securities and Exchange Commission on July 13, 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
____________
COMMAND SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1135009
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
76 Batterson Park Road
Farmington, CT 06032
(860) 409-2000
(Address, including zip code, of registrant's principal executive offices)
1997 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN
STOCK OPTION AGREEMENT WITH RUSSELL ADAMS
STOCK OPTION AGREEMENT WITH PAMELA A. BRODERICK
STOCK OPTION AGREEMENT WITH STEPHEN C. CHASSE
STOCK OPTION AGREEMENT WITH ROBERT B. DIXON
STOCK OPTION AGREEMENT WITH GLENN M. KING
STOCK OPTION AGREEMENT WITH HOLLY R. NEUMANN
STOCK OPTION AGREEMENT WITH WILLIAM L. TAMBURRO
STOCK OPTION AGREEMENT WITH DAVID R. WHEELAND
(Full title of the plans)
____________
Edward G. Caputo
President and Chief Executive Officer
COMMAND SYSTEMS, INC.
76 Batterson Park Road
Farmington, CT 06032
(860) 409-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
____________
Copies of all communications, including all communications sent to the agent for
service, should be sent to:
1
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PAUL JACOBS, ESQ.
WARREN J. NIMETZ, ESQ.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
(212) 318-3000
Facsimile: (212) 752-5958
___________
===============================================================
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of Securities to be registered Amount to be Proposed maximum Proposed maximum Amount of
registered(1) offering price per share aggregate offering price registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per 56,500(2) $ 4.00(5) $ 226,000.00 $ 63.00
share
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value per 99,825(3) $ 9.00(5) $ 898,425.00 $250.00
share
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value per 17,500(3) $ 12.00(5) $ 210,000.00 $ 58.00
share
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value per 15,175(3) $ 2.81(5) $ 42,642.00 $ 12.00
share
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value per 295,000(4) $ 2.375(6) $ 700,625.00 $195.00
share
- ------------------------------------------------------------------------------------------------------------------------------------
Total 484,000 $2,077,692.00 $578.00
====================================================================================================================================
</TABLE>
(1) An additional indeterminable number of shares are also being registered to
cover any adjustments required by anti-dilution provisions in the number of
shares issuable upon the exercise of options granted under the Command
Systems, Inc. 1997 Employee, Director and Consultant Stock Plan (the "Stock
Plan") and the option agreements (the "Option Agreements") relating to
options which were not granted under the Stock Plan.
(2) Represents 56,500 shares underlying options granted to certain employees
under the Option Agreements.
(3) Represents shares underlying options granted under the Stock Plan.
(4) Represents 295,000 shares which may be issuable upon the future grant of
options, if any, under the Stock Plan.
(5) Represents the price at which outstanding options may be exercised under
the applicable option grants.
(6) The price is estimated pursuant to Rule 457(h) of the Securities Act of
1933, as amended solely for the purpose of calculating the registration fee
and represents the average of the high and low prices of Command
Systems, Inc. Common Stock as reported on The Nasdaq National Market on
July 7, 1999.
2
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PART II
The documents containing the information called for in Part I of Form S-8
will be sent or given to individuals who are awarded options and stock grants
under the Command Systems, Inc. (the "Company" or the "Corporation") 1997
Employee, Director and Consultant Stock Plan, and to each of Russell Adams,
Pamela A. Broderick, Stephen C. Chasse, Robert B. Dixon, Glenn M. King, Holly R.
Neumann, William L. Tamburro and David R. Wheeland (the "Former Shadow Stock
Optionholders") and are not being filed with or included in this Form S-8 in
accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
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Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) The Company's quarterly report on Form 10-Q for the quarter ended
March 31, 1999, as filed with the Commission on May 17, 1999.
(2) The Company's annual report on Form 10-K for the year ended
December 31, 1998, as filed with the Commission on March 31, 1999.
(3) The description of the Company's common stock contained in its
Registration Statement on Form 8-A as filed with the Commission on
February 13, 1998.
In addition to the foregoing, all other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the filing of a post-effective
amendment indicating that all of the securities offered hereunder have been sold
or deregistering 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. Any statement contained in a
document incorporated by reference in this Registration Statement shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document that is also incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
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<PAGE>
Item 6. Indemnification of Directors and Officers.
Delaware Law
Section 145 of the Delaware General Corporation Law, as amended, provides
that a corporation has the power to indemnify a director, officer, employee or
agent of the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
The Company's Amended and Restated Certificate of Incorporation
Article NINTH of the Company's Amended and Restated Certificate of
Incorporation provides as follows:
NINTH: (i) To the fullest extent permitted by the Delaware General
Corporation Law as the same now exists or may hereafter be amended, the
Corporation shall indemnify, and advance expenses to, its directors, officers
and any person who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, if such person was or is
made a party to or is threatened to be made a party to or is otherwise involved
(including, without limitation, as a witness) in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan;
provided, however, that except with respect to proceedings to enforce rights to
indemnification or as is otherwise required by law, the By-Laws of the
Corporation may provide that the Corporation shall not be required to indemnify,
and advance expenses to, any director, officer or other person in connection
with a proceeding (or part thereof) initiated by such director, officer or other
person, unless such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The Corporation, by action of its Board of
Directors, may provide indemnification or advance expenses to employees and
other agents of the Corporation or other persons only on such terms and
conditions and to the extent determined by the Board of Directors in its sole
and absolute discretion.
(ii) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article NINTH shall not be deemed exclusive of any
other rights to which a person
II-3
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seeking indemnification or advancement of expenses may be entitled under any By-
Law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.
(iii) The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under this Article NINTH.
(iv) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article NINTH shall, unless otherwise specified when
authorized or ratified, continue as to a person who has ceased to be a director
or officer and shall inure to the benefit of the heirs, executors and
administrators of such director or officer. The indemnification and rights to
advancement of expenses that may have been provided to an employee or agent of
the Corporation by action of the Board of Directors, pursuant to the last
sentence of Paragraph 1 of this Article NINTH, shall, unless otherwise specified
when authorized or ratified, continue as to a person who has ceased to be an
employee or agent of the Corporation and shall inure to the benefit of the
heirs, executors and administrators of such person, after the time such person
has ceased to be an employee or agent of the Corporation, only on such terms and
conditions and to the extent determined by the Board of Directors in its sole
discretion. No repeal or amendment of this Article NINTH shall adversely affect
any rights of any person pursuant to this Article NINTH which existed at the
time of sor organization)uch repeal or amendment with respect to acts or
omissions occurring prior to such repeal or amendment.
Article TENTH of the Company's Amended and Restated Certificate of
Incorporation provides as follows:
TENTH: No director shall be personally liable to the Corporation or its
stockholders for any monetary damages for breaches of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability; provided
that this provision shall not eliminate or limit the liability of a director, to
the extent that such liability is imposed by applicable law, (i) for any breach
of the director's duty of loyalty to the Corporation or its Stockholders; (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) under Section 174 or successor provisions
of the General Corporation Law of the State of Delaware; or (iv) for any
transaction from which the director derived an improper personal benefit. This
provision shall not eliminate or limit the liability of a director for any act
or omission if such elimination or limitation is prohibited by the General
Corporation Law of the State of Delaware. No amendment to or repeal of this
provision shall apply to or have any effect on the liability or alleged
liability of any director for or with respect to any acts or omissions of such
director occurring prior to such amendment or
II-4
<PAGE>
repeal. If the Delaware General Corporation Law is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then liability of a director of the Corporation shall be eliminated
or limited to the fullest extent permitted by the Delaware General Corporation
Law, as so amended.
Article VIII of the Company's By-Laws provides as follows:
Section 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved
(including, without limitation, as a witness) in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or an officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "Indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement), reasonably incurred or suffered by such Indemnitee in connection
therewith; provided, however, that, except as provided in Section 3 of this
Article with respect to proceedings to enforce rights to indemnification or as
otherwise required by law, the Corporation shall not be required to indemnify or
advance expenses to any such Indemnitee in connection with a proceeding (or part
thereof) initiated by such Indemnitee unless such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
Section 2. Right to Advancement of Expenses. The right to indemnification
conferred in Section 1 of this Article shall include the right to be paid by the
Corporation the expenses (including attorney's fees) incurred in defending any
such proceeding in advance of its final disposition; provided, however, that, if
the Delaware General Corporation Law requires, an advancement of expenses
incurred by an Indemnitee in his capacity as a director or officer (and not in
any other capacity in which service was or is rendered by such Indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking, by or on behalf of
such Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such Indemnitee is not entitled to be indemnified for such expenses
under this Section 2 or otherwise. The rights to indemnification and to the
advancement of expenses conferred in Sections 1 and 2 of this Article shall be
contract rights and such rights shall continue as to an Indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the Indemnitee's heirs, executors and administrators. Any repeal or
modification of any of the provisions of this Article shall
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not adversely affect any right or protection of an Indemnitee existing at the
time of such repeal or modification.
Section 3. Right of Indemnitees to Bring Suit. If a claim under Section 1
or 2 of this Article is not paid in full by the Corporation within sixty (60)
days after a written claim has been received by the Corporation, except in the
case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the Indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim.
If successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Indemnitee shall also be entitled to be paid the expenses of
prosecuting or defending such suit. In (i) any suit brought by the Indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the Indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the Corporation
shall be entitled to recover such expenses upon a final adjudication that, the
Indemnitee has not met any applicable standard for indemnification set forth in
the Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
Stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
Stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
Section 4. Non-Exclusivity of Rights. The rights to indemnification and
to the advancement of expenses conferred in this Article shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, the Corporation's Certificate of Incorporation as amended from time to
time, these By-laws, any agreement, any vote of stockholders or disinterested
directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
II-6
<PAGE>
Section 6. Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article with respect to the indemnification and advancement of expenses
of directors and officers of the Corporation.
The Company has obtained insurance which insures the officers and
directors of the Company against certain losses and which insures the
Company against certain of its obligations to indemnify such officers and
directors.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
5 Opinion of Fulbright & Jaworski L.L.P.
4.1 * 1997 Employee, Director, Consultant and Stock Plan.
4.2 Stock Option Agreement between Command Systems Incorporated and
Russell Adams, dated March 5, 1997.
4.3 Stock Option Agreement between Command Systems Incorporated and
Pamela A. Broderick, dated March 5, 1997.
4.4 Stock Option Agreement between Command Systems Incorporated and
Stephen C. Chasse, dated March 5, 1997.
4.5 Stock Option Agreement between Command Systems Incorporated and
Robert B. Dixon, dated March 5, 1997.
4.6 Stock Option Agreement between Command Systems Incorporated and
Glenn M. King, dated March 5, 1997.
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<PAGE>
4.7 Stock Option Agreement between Command Systems Incorporated and
Holly R. Neumann, dated March 5, 1997.
4.8 Stock Option Agreement between Command Systems Incorporated and
William L. Tamburro, dated March 5, 1997.
4.9 Stock Option Agreement between Command Systems Incorporated and
David R. Wheeland, dated March 5, 1997.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Fulbright & Jaworski L.L.P. (contained in their opinion
constituting Exhibit 5).
24 Power of Attorney (included in signature page).
____________
* Incorporated by reference to the registrant's Amendment No. 4 to Form S-
1 Registration Statement and Post-Effective Amendment No. 5 to Form S-1
Registration Statement on Form S-1 (Registration No. 333-66809 and 333-
43877).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any 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;
(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.
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<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the 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) 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) 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 of the registrant in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the 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 Farmington, Connecticut on the 30th day of June,
1999.
COMMAND SYSTEMS, INC.
By: /s/ Edward G. Caputo
---------------------------------------
Edward G. Caputo
President and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Edward G. Caputo and Stephen L. Willcox,
or either of them, as his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and any registration
statement relating to the offering hereunder pursuant to Rule 462 under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
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:
Signature Title Date
- --------- ----- ----
/s/ Edward G. Caputo President, Chief Executive Officer and June 30, 1999
- ------------------------ Chairman of the Board (Principal
Edward G. Caputo executive officer)
/s/ Stephen L. Willcox Executive Vice President, Chief June 30, 1999
- ------------------------ Operating Officer, Secretary and
Stephen L. Willcox Director (Principal financial
officer)
/s/ Robert B. Dixon Vice President of Finance and Treasurer June 30, 1999
- ------------------------ (Principal accounting officer)
Robert B. Dixon
/s/ John J.C. Herndon Director June 30, 1999
- ------------------------
John J.C. Herndon
/s/ James M. Oates Director June 30, 1999
- ------------------------
James M. Oates
/s/ Joseph D. Sargent Director June 30, 1999
- ------------------------
Joseph D. Sargent
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
No. -----------
---
5 Opinion of Fulbright & Jaworski L.L.P.
4.1 * 1997 Employee, Director, Consultant and Stock Plan.
4.2 Stock Option Agreement between Command Systems
Incorporated and Russell Adams, dated March 5, 1997.
4.3 Stock Option Agreement between Command Systems
Incorporated and Pamela A. Broderick, dated March 5, 1997.
4.4 Stock Option Agreement between Command Systems
Incorporated and Stephen C. Chasse, dated March 5, 1997.
4.5 Stock Option Agreement between Command Systems
Incorporated and Robert B. Dixon, dated March 5, 1997.
4.6 Stock Option Agreement between Command Systems
Incorporated and Glenn M. King, dated March 5, 1997.
4.7 Stock Option Agreement between Command Systems
Incorporated and Holly R. Neumann, dated March 5, 1997.
4.8 Stock Option Agreement between Command Systems
Incorporated and William L. Tamburro, dated March 5, 1997.
4.9 Stock Option Agreement between Command Systems
Incorporated and David R. Wheeland, dated March 5, 1997.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Fulbright & Jaworski L.L.P. (contained in their
opinion constituting Exhibit 5).
24 Power of Attorney (included in signature page).
__________________
* Incorporated by reference to the registrant's Amendment No. 4 to Form S-1
Registration Statement and Post-Effective Amendment No. 5 to Form S-1
Registration Statement on Form S-1 (Registration No. 333-66809 and 333-
43877).
<PAGE>
EXHIBIT 4.2
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
Russell Adams (the "Optionee").
WHEREAS, the Company has previously granted Optionee 500 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 500 Shares on the terms
and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall become exercisable as follows:
On April 1, 1997 100 Shares
On April 1, 1998 an additional 100 Shares
On April 1, 1999 an additional 100 Shares
On April 1, 2000 an additional 100 Shares
On April 1, 2001 an additional 100 Shares
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
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6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares covered by the
Option for which certificates have in fact been delivered to him upon the due
exercise of the Option.
7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company
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shall be under no obligation to issue the Shares covered by such exercise unless
and until the following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the provisions of the following legend or a legend
in substantially similar form which shall be endorsed upon the
certificate(s) evidencing the Shares issued pursuant to such
exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, either (i) make appropriate provision for the
4
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continuation of the Option by substituting on an equitable basis for the Shares
then subject to the Option either the consideration payable with respect to the
outstanding shares of common stock in connection with the Acquisition or
securities of any successor or acquiring entity; or (ii) upon written notice to
the Optionee, provide that the Option must be exercised within a specified
number of days of the date of such notice, at the end of which period the Option
shall terminate; or (iii) terminate the Option in exchange for a cash payment
equal to the excess of the fair market value of the Shares subject to the
Option, as determined in good faith by the Company's board of directors or the
Successor Board, over the exercise price thereof. For purposes of this
Subparagraph, in the event of an Acquisition, the Option shall be made fully
exercisable.
C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in
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such notice, payable on the terms offered to the Optionee by the
proposed transferee (provided, however, that the Company shall not
be required to meet any non-monetary terms of the proposed transfer,
including, without limitation, delivery of other securities in
exchange for the Shares proposed to be sold). The Company shall give
written notice to the Optionee as to whether such offer has been
accepted in whole by the Company within sixty (60) days after its
receipt of written notice from the Optionee. The Company may only
accept such offer in whole and may not accept such offer in part.
Such acceptance notice shall fix a time, location and date for the
closing on such purchase ("Closing Date") which shall not be less
than ten (10) nor more than sixty (60) days after the giving of the
acceptance notice. The place for such closing shall be at the
Company's principal office. At such closing, the Optionee shall
accept payment as set forth herein and shall deliver to the Company
in exchange therefor certificates for the number of Shares stated in
the notice accompanied by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect
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(a) to establish a segregated account in the amount of the repurchase price,
such account to be turned over to the Optionee or his or her successor in
interest upon delivery of such Shares, and (b) immediately to take such action
as is appropriate to transfer record title of such Shares from the Optionee to
the Company and to treat the Optionee and such Shares in all respects as if
delivery of such Shares had been made as required by this Agreement. The
Optionee hereby irrevocably grants the Company a power of attorney which shall
be coupled with an interest for the purpose of effectuating the preceding
sentence.
11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the
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Optionee by the Company, including, without limitation, any information
concerning plans for the Company to make a public offering of its securities or
to be acquired by or merged with or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated March 5, 1997
with this Company, a copy of which Agreement is available for inspection at the
offices of the Company or will be made available upon request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: Russell Adams
390 River Drive
Hadley, MA 01035
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
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15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement made pursuant to the Company's Shadow
Stock Incentive Plan. No statement, representation, warranty, covenant or
agreement not expressly set forth in this Agreement shall affect or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
By /s/ Russell Adams
--------------------------------------
Russell Adams
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.01 par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
<PAGE>
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
__________________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and _________________, as joint tenants with right of
survivorship and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
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My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
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EXHIBIT 4.3
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
Pamela A. Broderick (the "Optionee").
WHEREAS, the Company has previously granted Optionee 10,000 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 10,000 Shares on the
terms and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall be exercisable as to 8,000 Shares immediately and
the remaining Shares shall become exercisable as follows:
On September 28, 1997 an additional 2,000 Shares
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares
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covered by the Option for which certificates have in fact been delivered to him
upon the due exercise of the Option.
7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company shall be under no
obligation to issue the Shares covered by such exercise unless and until the
following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the
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provisions of the following legend or a legend in substantially
similar form which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to such exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, either (i) make appropriate provision for the continuation of the Option
by substituting on an equitable basis for the Shares then subject to the Option
either the consideration payable with respect to the outstanding shares of
common stock in connection with the Acquisition or securities of any successor
or acquiring entity; or (ii) upon written notice to the Optionee, provide that
the Option must be exercised within a specified number of days of the date of
such notice, at the end of which period the Option shall terminate; or (iii)
terminate the Option in exchange for a cash payment equal to the excess of the
fair market value of the Shares subject to the Option, as determined in good
faith by the Company's board of
4
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directors or the Successor Board, over the exercise price thereof. For purposes
of this Subparagraph, in the event of an Acquisition, the Option shall be made
fully exercisable.
C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in such notice, payable
on the terms offered to the Optionee by the proposed transferee
(provided, however, that the Company shall not be required to meet
any non-monetary terms of the proposed transfer, including, without
limitation, delivery of other securities in exchange for the Shares
proposed to be sold). The Company shall give written notice to the
Optionee as to whether such offer has been accepted in whole by the
Company within sixty (60) days after its receipt of written notice
from the Optionee. The Company may only accept
5
<PAGE>
such offer in whole and may not accept such offer in part. Such
acceptance notice shall fix a time, location and date for the
closing on such purchase ("Closing Date") which shall not be less
than ten (10) nor more than sixty (60) days after the giving of the
acceptance notice. The place for such closing shall be at the
Company's principal office. At such closing, the Optionee shall
accept payment as set forth herein and shall deliver to the Company
in exchange therefor certificates for the number of Shares stated in
the notice accompanied by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect (a) to establish a segregated account in the amount of the
repurchase price, such account to be turned over to the Optionee or his or her
successor in interest upon delivery of such Shares, and (b) immediately to take
such action as is appropriate to transfer record title of such Shares from the
Optionee to the Company and to treat the Optionee and such Shares in all
respects as if delivery of such Shares had been made as required by this
Agreement. The Optionee hereby irrevocably grants the Company a power of
attorney which shall be coupled with an interest for the purpose of effectuating
the preceding sentence.
6
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11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the Optionee by the Company,
including, without limitation, any information concerning plans for the Company
to make a public offering of its securities or to be acquired by or merged with
or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated
7
<PAGE>
March 5, 1997 with this Company, a copy of which Agreement is available for
inspection at the offices of the Company or will be made available upon
request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: Pamela A. Broderick
1C The Hamlet
Enfield, CT 06083
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement made pursuant to the Company's Shadow
Stock Incentive Plan. No statement, representation,
8
<PAGE>
warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
/s/ Pamela A. Broderick
--------------------------------------
Pamela A. Broderick
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<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.01 par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
<PAGE>
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
__________________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and _________________, as joint tenants with right of
survivorship and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
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<PAGE>
My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
3
<PAGE>
EXHIBIT 4.4
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
Stephen C. Chasse (the "Optionee").
WHEREAS, the Company has previously granted Optionee 10,000 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 10,000 Shares on the
terms and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall be exercisable as to all 10,000 Shares immediately.
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares covered by the
Option for which certificates have in fact been delivered to him upon the due
exercise of the Option.
2
<PAGE>
7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company shall be under no
obligation to issue the Shares covered by such exercise unless and until the
following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the provisions of the following legend or a legend
in substantially similar
3
<PAGE>
form which shall be endorsed upon the certificate(s) evidencing the
Shares issued pursuant to such exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor
Board") shall, either (i) make appropriate provision for the continuation of the
Option by substituting on an equitable basis for the Shares then subject to the
Option either the consideration payable with respect to the outstanding shares
of common stock in connection with the Acquisition or securities of any
successor or acquiring entity; or (ii) upon written notice to the Optionee,
provide that the Option must be exercised within a specified number of days of
the date of such notice, at the end of which period the Option shall terminate;
or (iii) terminate the Option in exchange for a cash payment equal to the excess
of the fair market value of the Shares subject to the Option, as determined in
good faith by the Company's board of directors or the Successor Board, over the
exercise price thereof. For purposes of this Subparagraph, in the event of an
Acquisition, the Option shall be made fully exercisable.
4
<PAGE>
C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in such notice, payable
on the terms offered to the Optionee by the proposed transferee
(provided, however, that the Company shall not be required to meet
any non-monetary terms of the proposed transfer, including, without
limitation, delivery of other securities in exchange for the Shares
proposed to be sold). The Company shall give written notice to the
Optionee as to whether such offer has been accepted in whole by the
Company within sixty (60) days after its receipt of written notice
from the Optionee. The Company may only accept such offer in whole
and may not accept such offer in part. Such acceptance notice shall
fix a time, location and date for the closing on such purchase
5
<PAGE>
("Closing Date") which shall not be less than ten (10) nor more than
sixty (60) days after the giving of the acceptance notice. The place
for such closing shall be at the Company's principal office. At such
closing, the Optionee shall accept payment as set forth herein and
shall deliver to the Company in exchange therefor certificates for
the number of Shares stated in the notice accompanied by duly
executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect (a) to establish a segregated account in the amount of the
repurchase price, such account to be turned over to the Optionee or his or her
successor in interest upon delivery of such Shares, and (b) immediately to take
such action as is appropriate to transfer record title of such Shares from the
Optionee to the Company and to treat the Optionee and such Shares in all
respects as if delivery of such Shares had been made as required by this
Agreement. The Optionee hereby irrevocably grants the Company a power of
attorney which shall be coupled with an interest for the purpose of effectuating
the preceding sentence.
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11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the Optionee by the Company,
including, without limitation, any information concerning plans for the Company
to make a public offering of its securities or to be acquired by or merged with
or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated
7
<PAGE>
March 5, 1997 with this Company, a copy of which Agreement is available for
inspection at the offices of the Company or will be made available upon
request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: Stephen C. Chasse
10 Coleman Road
Manchester, CT 06040
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement made pursuant to the Company's Shadow
Stock Incentive Plan. No statement, representation,
8
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warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
/s/ Stephen C. Chasse
--------------------------------------
Stephen C. Chasse
9
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.01 par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
<PAGE>
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
__________________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and ________________, as joint tenants with right of
survivorship and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
2
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My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
3
<PAGE>
EXHIBIT 4.5
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
Robert B. Dixon (the "Optionee").
WHEREAS, the Company has previously granted Optionee 25,000 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 25,000 Shares on the
terms and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall become exercisable as follows:
On March 1, 1998 up to 5,000 Shares
On March 1, 1999 an additional 5,000 Shares
On March 1, 2000 an additional 5,000 Shares
On March 1, 2001 an additional 5,000 Shares
On March 1, 2002 an additional 5,000 Shares
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
2
<PAGE>
6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares covered by the
Option for which certificates have in fact been delivered to him upon the due
exercise of the Option.
7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company
3
<PAGE>
shall be under no obligation to issue the Shares covered by such exercise unless
and until the following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the provisions of the following legend or a legend
in substantially similar form which shall be endorsed upon the
certificate(s) evidencing the Shares issued pursuant to such
exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, either (i) make appropriate provision for the
4
<PAGE>
continuation of the Option by substituting on an equitable basis for the Shares
then subject to the Option either the consideration payable with respect to the
outstanding shares of common stock in connection with the Acquisition or
securities of any successor or acquiring entity; or (ii) upon written notice to
the Optionee, provide that the Option must be exercised within a specified
number of days of the date of such notice, at the end of which period the Option
shall terminate; or (iii) terminate the Option in exchange for a cash payment
equal to the excess of the fair market value of the Shares subject to the
Option, as determined in good faith by the Company's board of directors or the
Successor Board, over the exercise price thereof. For purposes of this
Subparagraph, in the event of an Acquisition, the Option shall be made fully
exercisable.
C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in
5
<PAGE>
such notice, payable on the terms offered to the Optionee by the
proposed transferee (provided, however, that the Company shall not
be required to meet any non-monetary terms of the proposed transfer,
including, without limitation, delivery of other securities in
exchange for the Shares proposed to be sold). The Company shall give
written notice to the Optionee as to whether such offer has been
accepted in whole by the Company within sixty (60) days after its
receipt of written notice from the Optionee. The Company may only
accept such offer in whole and may not accept such offer in part.
Such acceptance notice shall fix a time, location and date for the
closing on such purchase ("Closing Date") which shall not be less
than ten (10) nor more than sixty (60) days after the giving of the
acceptance notice. The place for such closing shall be at the
Company's principal office. At such closing, the Optionee shall
accept payment as set forth herein and shall deliver to the Company
in exchange therefor certificates for the number of Shares stated in
the notice accompanied by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect
6
<PAGE>
(a) to establish a segregated account in the amount of the repurchase price,
such account to be turned over to the Optionee or his or her successor in
interest upon delivery of such Shares, and (b) immediately to take such action
as is appropriate to transfer record title of such Shares from the Optionee to
the Company and to treat the Optionee and such Shares in all respects as if
delivery of such Shares had been made as required by this Agreement. The
Optionee hereby irrevocably grants the Company a power of attorney which shall
be coupled with an interest for the purpose of effectuating the preceding
sentence.
11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the
7
<PAGE>
Optionee by the Company, including, without limitation, any information
concerning plans for the Company to make a public offering of its securities or
to be acquired by or merged with or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated March 5, 1997
with this Company, a copy of which Agreement is available for inspection at the
offices of the Company or will be made available upon request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: Robert B. Dixon
39 South Main Street
Essex, CT 06426
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
8
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15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement made pursuant to the Company's Shadow
Stock Incentive Plan. No statement, representation, warranty, covenant or
agreement not expressly set forth in this Agreement shall affect or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
/s/ Robert B. Dixon
--------------------------------------
Robert B. Dixon
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<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.01 par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
<PAGE>
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
__________________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and ________________, as joint tenants with right of
survivorship and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
2
<PAGE>
My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
3
<PAGE>
EXHIBIT 4.6
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
Glenn M. King (the "Optionee").
WHEREAS, the Company has previously granted Optionee 25,000 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 25,000 Shares on the
terms and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall be exercisable as to 20,000 Shares immediately and
the remaining Shares shall become exercisable as follows:
On March 27, 1997] an additional 5,000 Shares
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares
2
<PAGE>
covered by the Option for which certificates have in fact been delivered to him
upon the due exercise of the Option.
7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company shall be under no
obligation to issue the Shares covered by such exercise unless and until the
following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the
3
<PAGE>
provisions of the following legend or a legend in substantially
similar form which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to such exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, either (i) make appropriate provision for the continuation of the Option
by substituting on an equitable basis for the Shares then subject to the Option
either the consideration payable with respect to the outstanding shares of
common stock in connection with the Acquisition or securities of any successor
or acquiring entity; or (ii) upon written notice to the Optionee, provide that
the Option must be exercised within a specified number of days of the date of
such notice, at the end of which period the Option shall terminate; or (iii)
terminate the Option in exchange for a cash payment equal to the excess of the
fair market value of the Shares subject to the Option, as determined in good
faith by the Company's board of
4
<PAGE>
directors or the Successor Board, over the exercise price thereof. For purposes
of this Subparagraph, in the event of an Acquisition, the Option shall be made
fully exercisable.
C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in such notice, payable
on the terms offered to the Optionee by the proposed transferee
(provided, however, that the Company shall not be required to meet
any non-monetary terms of the proposed transfer, including, without
limitation, delivery of other securities in exchange for the Shares
proposed to be sold). The Company shall give written notice to the
Optionee as to whether such offer has been accepted in whole by the
Company within sixty (60) days after its receipt of written notice
from the Optionee. The Company may only accept
5
<PAGE>
such offer in whole and may not accept such offer in part. Such
acceptance notice shall fix a time, location and date for the
closing on such purchase ("Closing Date") which shall not be less
than ten (10) nor more than sixty (60) days after the giving of the
acceptance notice. The place for such closing shall be at the
Company's principal office. At such closing, the Optionee shall
accept payment as set forth herein and shall deliver to the Company
in exchange therefor certificates for the number of Shares stated in
the notice accompanied by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect (a) to establish a segregated account in the amount of the
repurchase price, such account to be turned over to the Optionee or his or her
successor in interest upon delivery of such Shares, and (b) immediately to take
such action as is appropriate to transfer record title of such Shares from the
Optionee to the Company and to treat the Optionee and such Shares in all
respects as if delivery of such Shares had been made as required by this
Agreement. The Optionee hereby irrevocably grants the Company a power of
attorney which shall be coupled with an interest for the purpose of effectuating
the preceding sentence.
6
<PAGE>
11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the Optionee by the Company,
including, without limitation, any information concerning plans for the Company
to make a public offering of its securities or to be acquired by or merged with
or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated
7
<PAGE>
March 5, 1997 with this Company, a copy of which Agreement is available for
inspection at the offices of the Company or will be made available upon
request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: Glenn M. King
135 Countryside Drive
Rocky Hill, CT 06067
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement made pursuant to the Company's Shadow
Stock Incentive Plan. No statement, representation,
8
<PAGE>
warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
/s/ Glenn M. King
-------------------------------------
Glenn M. King
9
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.01 par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
<PAGE>
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
__________________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and ______________ , as joint tenants with right of survivorship
and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
2
<PAGE>
My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
3
<PAGE>
EXHIBIT 4.7
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
Holly R. Neumann (the "Optionee").
WHEREAS, the Company has previously granted Optionee 2,500 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 2,500 Shares on the
terms and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall be exercisable as to 500 Shares immediately and the
remaining Shares shall become exercisable as follows:
On April 3, 1997 an additional 500 Shares
On April 3, 1998 an additional 500 Shares
On April 3, 1999 an additional 500 Shares
On April 3, 2000 an additional 500 Shares
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
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6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares covered by the
Option for which certificates have in fact been delivered to him upon the due
exercise of the Option.
7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company
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shall be under no obligation to issue the Shares covered by such exercise unless
and until the following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the provisions of the following legend or a legend
in substantially similar form which shall be endorsed upon the
certificate(s) evidencing the Shares issued pursuant to such
exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, either (i) make appropriate provision for the
4
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continuation of the Option by substituting on an equitable basis for the Shares
then subject to the Option either the consideration payable with respect to the
outstanding shares of common stock in connection with the Acquisition or
securities of any successor or acquiring entity; or (ii) upon written notice to
the Optionee, provide that the Option must be exercised within a specified
number of days of the date of such notice, at the end of which period the Option
shall terminate; or (iii) terminate the Option in exchange for a cash payment
equal to the excess of the fair market value of the Shares subject to the
Option, as determined in good faith by the Company's board of directors or the
Successor Board, over the exercise price thereof. For purposes of this
Subparagraph, in the event of an Acquisition, the Option shall be made fully
exercisable.
C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in
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such notice, payable on the terms offered to the Optionee by the
proposed transferee (provided, however, that the Company shall not
be required to meet any non-monetary terms of the proposed transfer,
including, without limitation, delivery of other securities in
exchange for the Shares proposed to be sold). The Company shall give
written notice to the Optionee as to whether such offer has been
accepted in whole by the Company within sixty (60) days after its
receipt of written notice from the Optionee. The Company may only
accept such offer in whole and may not accept such offer in part.
Such acceptance notice shall fix a time, location and date for the
closing on such purchase ("Closing Date") which shall not be less
than ten (10) nor more than sixty (60) days after the giving of the
acceptance notice. The place for such closing shall be at the
Company's principal office. At such closing, the Optionee shall
accept payment as set forth herein and shall deliver to the Company
in exchange therefor certificates for the number of Shares stated in
the notice accompanied by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect
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(a) to establish a segregated account in the amount of the repurchase price,
such account to be turned over to the Optionee or his or her successor in
interest upon delivery of such Shares, and (b) immediately to take such action
as is appropriate to transfer record title of such Shares from the Optionee to
the Company and to treat the Optionee and such Shares in all respects as if
delivery of such Shares had been made as required by this Agreement. The
Optionee hereby irrevocably grants the Company a power of attorney which shall
be coupled with an interest for the purpose of effectuating the preceding
sentence.
11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the
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Optionee by the Company, including, without limitation, any information
concerning plans for the Company to make a public offering of its securities or
to be acquired by or merged with or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated March 5, 1997
with this Company, a copy of which Agreement is available for inspection at the
offices of the Company or will be made available upon request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: Holly R. Neumann
7 Jackson Court
Ridgefield, CT 06877
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
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15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement made pursuant to the Company's Shadow
Stock Incentive Plan. No statement, representation, warranty, covenant or
agreement not expressly set forth in this Agreement shall affect or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
/s/ Holly R. Neumann
--------------------------------------
Holly R. Neumann
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.0l par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
<PAGE>
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
_______________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and _______________, as joint tenants with right of survivorship
and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
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My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
3
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EXHIBIT 4.8
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
William L. Tamburro (the "Optionee").
WHEREAS, the Company has previously granted Optionee 25,000 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 25,000 Shares on the
terms and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall be exercisable as to all 25,000 Shares immediately.
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares covered by the
Option for which certificates have in fact been delivered to him upon the due
exercise of the Option.
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7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company shall be under no
obligation to issue the Shares covered by such exercise unless and until the
following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the provisions of the following legend or a legend
in substantially similar
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<PAGE>
form which shall be endorsed upon the certificate(s) evidencing the
Shares issued pursuant to such exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, either (i) make appropriate provision for the continuation of the Option
by substituting on an equitable basis for the Shares then subject to the Option
either the consideration payable with respect to the outstanding shares of
common stock in connection with the Acquisition or securities of any successor
or acquiring entity; or (ii) upon written notice to the Optionee, provide that
the Option must be exercised within a specified number of days of the date of
such notice, at the end of which period the Option shall terminate; or (iii)
terminate the Option in exchange for a cash payment equal to the excess of the
fair market value of the Shares subject to the Option, as determined in good
faith by the Company's board of directors or the Successor Board, over the
exercise price thereof. For purposes of this Subparagraph, in the event of an
Acquisition, the Option shall be made fully exercisable.
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C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in such notice, payable
on the terms offered to the Optionee by the proposed transferee
(provided, however, that the Company shall not be required to meet
any non-monetary terms of the proposed transfer, including, without
limitation, delivery of other securities in exchange for the Shares
proposed to be sold). The Company shall give written notice to the
Optionee as to whether such offer has been accepted in whole by the
Company within sixty (60) days after its receipt of written notice
from the Optionee. The Company may only accept such offer in whole
and may not accept such offer in part. Such acceptance notice shall
fix a time, location and date for the closing on such purchase
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("Closing Date") which shall not be less than ten (10) nor more than
sixty (60) days after the giving of the acceptance notice. The place
for such closing shall be at the Company's principal office. At such
closing, the Optionee shall accept payment as set forth herein and
shall deliver to the Company in exchange therefor certificates for
the number of Shares stated in the notice accompanied by duly
executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect (a) to establish a segregated account in the amount of the
repurchase price, such account to be turned over to the Optionee or his or her
successor in interest upon delivery of such Shares, and (b) immediately to take
such action as is appropriate to transfer record title of such Shares from the
Optionee to the Company and to treat the Optionee and such Shares in all
respects as if delivery of such Shares had been made as required by this
Agreement. The Optionee hereby irrevocably grants the Company a power of
attorney which shall be coupled with an interest for the purpose of effectuating
the preceding sentence.
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11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the Optionee by the Company,
including, without limitation, any information concerning plans for the Company
to make a public offering of its securities or to be acquired by or merged with
or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated
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March 5, 1997 with this Company, a copy of which Agreement is available for
inspection at the offices of the Company or will be made available upon
request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: William L. Tamburro
Tech Trainers
332 Cavan Lane
Glastonbury, CT 06033
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement
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made pursuant to the Company's Shadow Stock Incentive Plan. No statement,
representation, warranty, covenant or agreement not expressly set forth in this
Agreement shall affect or be used to interpret, change or restrict, the express
terms and provisions of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
/s/ William L. Tamburro
--------------------------------------
William L. Tamburro
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.0l par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
<PAGE>
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
______________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and _______________, as joint tenants with right of survivorship
and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
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My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
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EXHIBIT 4.9
STOCK OPTION AGREEMENT
COMMAND SYSTEMS INCORPORATED
AGREEMENT made as of this 5th day of March, 1997 (the "Effective Date"),
between COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having a
principal place of business in Farmington, Connecticut (the "Company"), and
David R. Wheeland (the "Optionee").
WHEREAS, the Company has previously granted Optionee 25,000 units of the
Company's Shadow Stock ("Shadow Grants") pursuant to its Shadow Stock Incentive
Plan;
WHEREAS, the Company desires to exchange the Shadow Grants for an option
to purchase shares of its common stock $.01 par value (the "Shares"); and
WHEREAS, the Company and the Optionee each intend that the Option granted
herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION
The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 25,000 Shares on the
terms and conditions and subject to all the limitations set forth herein.
The Optionee understands and agrees that any and all other prior grants by
the Company, of rights to purchase or otherwise obtain an equity interest in the
Company pursuant to the Shadow Grants are hereby terminated effective as of the
date hereof and shall be of no further force or effect. The Optionee releases
and holds harmless the Company and any Affiliate and their respective officers,
directors, agents, advisors and employees from any claims related to the Shadow
Grants.
2. PURCHASE PRICE
The purchase price of the Shares covered by the Option shall be $2.00 per
Share, subject to adjustment as provided herein.
3. TERM OF OPTION
The Option shall terminate on March 5, 2007, but shall be subject to
earlier termination as provided herein.
<PAGE>
4. EXERCISABILITY OF OPTION
Subject to the terms and conditions set forth in this Agreement, the
Option granted hereby shall be exercisable as to 10,000 Shares immediately and
the remaining Shares shall become exercisable as follows:
On September 19, 1997 an additional 5,000 Shares
On September 19, 1998 an additional 5,000 Shares
On September 19, 1999 an additional 5,000 Shares
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement.
5. EXERCISE OF OPTION
The Option granted hereby shall be exercisable, subject to the provisions
of the preceding Paragraphs 3 and 4, in whole or in part, at any time and from
time to time during the term of the Option, provided such exercise is for a
whole number of Shares. The Option shall be exercised by signing and returning
to the Company, at the office of the Company at the address set forth in
Paragraph 11 hereof, to the attention of the President of the Company, the
"Notice of Exercise" which is set forth as Exhibit A hereto, together with the
tender of the purchase price which shall be payable in United States dollars.
Such Notice of Exercise shall be signed by the person exercising the Option,
shall state the number of Shares with respect to which the Option is being
exercised and shall otherwise comply with the terms and conditions of this
Agreement. The Company shall deliver a certificate or certificates representing
such Shares as soon as practicable after the Notice of Exercise is received. The
certificate or certificates for the Shares as to which the Option shall have
been exercised shall be registered in the name of the person or persons
exercising the Option (or if the Optionee requests in the Notice of Exercise,
shall be registered in the name of the Optionee and another person jointly with
right of survivorship). In the event of the death of the Optionee, the Option,
to the extent exercisable but not exercised as of the date of death, may be
exercised by the estate of the Optionee or by any person or person who acquired
the right to exercise the Option by bequest or inheritance from the Optionee or
by reason of the death of such Optionee. In such event, the Option must be
exercised, if at all, within the originally prescribed term of the Option. In
the event that the Option shall be exercised by any person or persons other than
the Optionee, such Notice of Exercise shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
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<PAGE>
6. ISSUE OF STOCK UPON EXERCISE OF OPTION
The Company shall at all times during the term of the Option reserve and
keep available such number of Shares as will be sufficient to satisfy the
requirements of the Option, shall pay all original issue taxes with respect to
the issue of Shares pursuant hereto, and all other fees and expenses necessarily
incurred by the Company in connection therewith. The holder of this Option shall
have the rights of a stockholder only in respect of those Shares covered by the
Option for which certificates have in fact been delivered to him upon the due
exercise of the Option.
7. NON-ASSIGNABILITY
The Option shall not be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Optionee's lifetime, only by the Optionee. The Option shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Paragraph 7, or the levy of any attachment or similar process upon the Option or
such rights, shall be null and void.
8. TAXES
The Optionee acknowledges that upon exercise of the Option the Optionee
will be deemed to have taxable income measured by the difference between the
then fair market value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement. The Optionee acknowledges that any
income or other taxes due from him or her with respect to this Option or the
Shares issuable pursuant to this Option shall be the Optionee's responsibility.
The Optionee agrees that the Company may withhold from the Optionee's
renumeration, if any, the appropriate amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such renumeration,
or in kind from the Shares otherwise deliverable to the Optionee on exercise of
the Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's renumeration sufficient to satisfy the Company's
income tax withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount under-withheld.
9. PURCHASE FOR INVESTMENT
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Securities Act"), the Company
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<PAGE>
shall be under no obligation to issue the Shares covered by such exercise unless
and until the following conditions have been fulfilled:
(a) The person(s) who exercises the Option shall warrant to the Company,
at the time of such exercise, that such person(s) is acquiring such
Shares for his or her own account, for investment and not with a
view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares
shall be bound by the provisions of the following legend or a legend
in substantially similar form which shall be endorsed upon the
certificate(s) evidencing the Shares issued pursuant to such
exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be effective under the
Securities Act of 1933, as amended, or (b) the Company shall have
received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws;" and
(b) The Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance
with the Securities Act without registration thereunder.
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining of any consent, which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
10. ADJUSTMENTS
A. If (i) the shares of the Company's 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, or (ii) additional shares or new or different shares or other securities
of the Company or non-cash assets are distributed with respect to such shares of
common stock, the number of Shares of common stock deliverable upon the exercise
of such Option may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such events.
B. 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 board of directors of the Company or of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, either (i) make appropriate provision for the
4
<PAGE>
continuation of the Option by substituting on an equitable basis for the Shares
then subject to the Option either the consideration payable with respect to the
outstanding shares of common stock in connection with the Acquisition or
securities of any successor or acquiring entity; or (ii) upon written notice to
the Optionee, provide that the Option must be exercised within a specified
number of days of the date of such notice, at the end of which period the Option
shall terminate; or (iii) terminate the Option in exchange for a cash payment
equal to the excess of the fair market value of the Shares subject to the
Option, as determined in good faith by the Company's board of directors or the
Successor Board, over the exercise price thereof. For purposes of this
Subparagraph, in the event of an Acquisition, the Option shall be made fully
exercisable.
C. 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, the Optionee upon exercising the Option
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization. In addition, in the event that
the outstanding shares of common stock of the Company are surrendered and
extinguished in connection with the merger of the Company into a parent
corporation incorporated under the laws of Delaware in order to effectuate a
reincorporation of the Company from Connecticut to Delaware ("Reincorporation"),
this option shall automatically become exercisable for an equal number of shares
of common stock of the Delaware corporation.
11. RESTRICTIONS ON TRANSFER OF SHARES
11.1 The Shares acquired by the Optionee pursuant to the exercise of the
Option granted hereby shall not be transferred by the Optionee except as
permitted herein.
11.2 It shall be a condition precedent to the validity of any sale or
other transfer of any Shares by the Optionee that the following restrictions be
complied with (except as hereinafter otherwise provided):
(i) No Shares owned by the Optionee may be sold, pledged or otherwise
transferred (including by gift or devise) to any person or entity,
voluntarily, or by operation of law, except in accordance with the
terms and conditions hereinafter set forth.
(ii) Before selling or otherwise transferring all or part of the Shares,
the Optionee shall give written notice of such intention to the
Company, which notice shall include the name of the proposed
transferee, the proposed purchase price per share, the terms of
payment of such purchase price and all other matters relating to
such sale or transfer and shall be accompanied by a copy of the
binding written agreement of the proposed transferee to purchase the
Shares of the Optionee. Such notice shall constitute a binding offer
by the Optionee to sell to the Company such number of the Shares
then held by the Optionee as are proposed to be sold in the notice
at the monetary price per share designated in
5
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such notice, payable on the terms offered to the Optionee by the
proposed transferee (provided, however, that the Company shall not
be required to meet any non-monetary terms of the proposed transfer,
including, without limitation, delivery of other securities in
exchange for the Shares proposed to be sold). The Company shall give
written notice to the Optionee as to whether such offer has been
accepted in whole by the Company within sixty (60) days after its
receipt of written notice from the Optionee. The Company may only
accept such offer in whole and may not accept such offer in part.
Such acceptance notice shall fix a time, location and date for the
closing on such purchase ("Closing Date") which shall not be less
than ten (10) nor more than sixty (60) days after the giving of the
acceptance notice. The place for such closing shall be at the
Company's principal office. At such closing, the Optionee shall
accept payment as set forth herein and shall deliver to the Company
in exchange therefor certificates for the number of Shares stated in
the notice accompanied by duly executed instruments of transfer.
(iii) If the Company shall fail to accept any such offer, the Optionee
shall be free to sell all, but not less than all, of the Shares set
forth in his or her notice to the designated transferee at the price
and terms designated in the Optionee's notice, provided that (i)
such sale is consummated within six (6) months after the giving of
notice by the Optionee to the Company as aforesaid, and (ii) the
transferee first agrees in writing to be bound by the provisions of
this Section 11 so that such transferee (and all subsequent
transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof. After the expiration
of such six (6) months, the provisions of this Section 11.2 shall
again apply with respect to any proposed voluntary transfer of the
Optionee's Shares.
(iv) The restrictions on transfer contained in this Section 11.2 shall
not apply to (a) transfers by the Optionee to his or her spouse,
children, guardian or conservator, (b) transfers by the Optionee to
the trustee or trustees of a trust for the benefit of himself or
herself or of a spouse or child, and (c) transfers by the Optionee,
in the event of his or her death, to his or her executor(s) or
administrator(s) or to trustee(s) under his or her will
(collectively, "Permitted Transferees"); provided however, that in
any such event the Shares so transferred in the hands of each such
Permitted Transferee shall remain subject to this Agreement, and
each such Permitted Transferee shall so acknowledge in writing as a
condition precedent to the effectiveness of such transfer.
(v) The provisions of this Section 11.2 may be waived by the Company.
Any such waiver may be unconditional or based upon such conditions
as the Company may impose.
11.3 In the event that the Optionee or his or her successor in interest
fails to deliver the Shares to be purchased by the Company under this Agreement,
the Company may elect
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(a) to establish a segregated account in the amount of the repurchase price,
such account to be turned over to the Optionee or his or her successor in
interest upon delivery of such Shares, and (b) immediately to take such action
as is appropriate to transfer record title of such Shares from the Optionee to
the Company and to treat the Optionee and such Shares in all respects as if
delivery of such Shares had been made as required by this Agreement. The
Optionee hereby irrevocably grants the Company a power of attorney which shall
be coupled with an interest for the purpose of effectuating the preceding
sentence.
11.4 If the Company shall pay a stock dividend or declare a stock split on
or with respect to any of its common stock, or otherwise distribute securities
of the Company to the holders of its common stock, the number of Shares of stock
or other securities of Company issued with respect to the Shares then subject to
the restrictions contained in this Agreement shall be added to the Shares
subject to the Company's rights to purchase pursuant to this Agreement. If the
Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
11.5 If the outstanding shares of common stock of the Company shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of
common stock of the Company, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights to
repurchase pursuant to this Agreement.
11.6 The Company shall not be required to transfer any Shares on its books
which shall have been sold, assigned or otherwise transferred in violation of
this Agreement, or to treat as owner of such Shares, or to accord the right to
vote as such owner or to pay dividends to, any person or organization to which
any such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.
11.7 The provisions of Sections 10.1 and 10.2 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.
11.8 If, in connection with a registration statement filed by the Company
pursuant to the Securities Act, the Company or its underwriter so requests, the
Optionee will agree not to sell any Shares for a period not to exceed 180 days
following the effectiveness of such registration.
11.9 The Optionee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Optionee any material information regarding the business of the
Company or affecting the value of the Shares before, at the time of, or
following a termination of the employment of the
7
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Optionee by the Company, including, without limitation, any information
concerning plans for the Company to make a public offering of its securities or
to be acquired by or merged with or into another firm or entity.
11.10 All certificates representing the Shares to be issued to the
Optionee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows: "The shares represented by this certificate are
subject to restrictions set forth in an Option Agreement dated March 5, 1997
with this Company, a copy of which Agreement is available for inspection at the
offices of the Company or will be made available upon request."
12. NOTICES
Any notices required or permitted by the terms of this Agreement shall be
given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
To the Company: Command Systems Incorporated
76 Batterson Park Road
Farmington, CT 06032
Attn: President
To the Optionee: David R. Wheeland
38 Copplestone
Avon, CT 06001
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given on the
earlier of receipt, one business day following delivery to a recognized courier
service or three business days following mailing by registered or certified
mail.
13. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the law
of the State of Connecticut, without giving effect to the conflict of law
principles thereof. However, if the Option granted hereunder is automatically
converted into an option for common stock of a Delaware corporation pursuant to
a Reincorporation as set forth in Paragraph 9.C herein, this Agreement shall be
construed and enforced in accordance with the law of the State of Delaware,
without giving effect to the conflict of law principles thereof.
14. BENEFIT OF AGREEMENT
Subject to the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
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15. ENTIRE AGREEMENT
This Agreement, embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof, including any agreement made pursuant to the Company's Shadow
Stock Incentive Plan. No statement, representation, warranty, covenant or
agreement not expressly set forth in this Agreement shall affect or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Optionee has hereunto set his hand, all as of the day and year first
above written.
COMMAND SYSTEMS INCORPORATED
By /s/ Edward G. Caputo
--------------------------------------
Edward G. Caputo, President
/s/ David R. Wheeland
--------------------------------------
David R. Wheeland
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF STOCK OPTION
Command Systems Incorporated
76 Batterson Park Road
Farmington, Connecticut 06032
Attn: President
Ladies and Gentlemen:
I hereby exercise my Stock Option to purchase ___________ shares of the
common stock, $.0l par value (the "Shares"), of Command Systems Incorporated
(the "Company"), at the option exercise price of $2.00 per Share as provided in
the Stock Option Agreement dated March 5, 1997 (the "Option Agreement") granting
such Option.
I am aware that the Shares have not been registered under the Securities
Act of 1933, as amended (the "1933 Act"), or any state securities laws. I
understand that the reliance by the Company on exemptions under the 1933 Act is
predicated in part upon the truth and accuracy of the statements by me in this
Notice of Exercise.
I hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been answered
to my satisfaction; (3) I have been given the opportunity to obtain any
additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.
I hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.
I understand that because the Shares have not been registered under the
1933 Act, I must continue to bear the economic risk of the investment for an
indefinite time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.
I agree that I will in no event sell or distribute or otherwise dispose of
all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any
such transaction involving the Shares or (2) the Company receives an opinion of
my legal counsel (concurred in by legal counsel for the
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Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
I consent to the placing of a legend on my certificate for the Shares
stating that the Shares have not been registered and setting forth the
restriction on transfer contemplated hereby and to the placing of a stop
transfer order on the books of the Company and with any transfer agents against
the Shares until the Shares may be legally resold or distributed without
restriction.
I understand that at the present time Rule 144 of the Securities and
Exchange Commission (the "SEC") may not be relied on for the resale or
distribution of the Shares by me. I understand that the Company has no
obligation to me to register the sale of the Shares with the SEC and has not
represented to me that it will register the sale of the Shares.
I understand the terms and restrictions on the right to dispose of the
Shares set forth in the Option Agreement, which I have carefully reviewed. I
consent to the placing of a legend on my certificate for the Shares referring to
the restrictions on transfer set forth in the Option Agreement and the placing
of stop transfer orders until the Shares may be transferred in accordance with
the terms of such restrictions.
I have considered the Federal, state and local income tax implications of
the exercise of my Option and the purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
_______________________________________________
Please issue the stock certificate for the Shares (check one):
|_| to me; or
|_| to me and _______________, as joint tenants with right of survivorship
and mail the certificate to me at the following address:
___________________________________
___________________________________
___________________________________
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My mailing address for shareholder communications, if different from the
address listed above is:
___________________________________
___________________________________
___________________________________
Very truly yours,
________________________________________
Optionee (signature)
________________________________________
Print Name
________________________________________
Date
________________________________________
Social Security Number
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Exhibit 5
[LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P.]
July 9, 1999
Command Systems, Inc.
76 Batterson Park Road
Farmington, CT 06032
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), on behalf of Command Systems,
Inc. (the "Company"), relating to 484,000 shares of the Company's Common Stock,
$.01 par value per share (the "Shares"), to be issued under the Command Systems,
Inc. 1997 Employee, Director and Consultant Stock Plan, as amended (the "Plan")
and certain stock option agreements entered into with each of Russell Adams,
Pamela A. Broderick, Stephen C. Chase, Robert B. Dixon, Glenn M. King, Holly R.
Neumann, William L. Tamburro and David R. Wheeland in exchange for their units
of the Company's Shadow Stock upon termination of the Command Systems
Incorporated Shadow Stock Incentive Plan (the "Agreements").
As securities counsel for the Company, we have examined such corporate
records, other documents, and such questions of law as we have considered
necessary or appropriate for the purposes of this opinion and, upon the basis of
such examination, advise you that, in our opinion, all necessary corporate
proceedings by the Company have been duly taken to authorize the issuance of the
Shares pursuant to the Plan and the Agreements and that the Shares being
registered pursuant to the Registration Statement, when issued and paid for
under the Plan and the Agreements in accordance with the terms of the Plan and
the Agreements, will be duly authorized, validly issued, fully paid and non-
assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. This consent is not to be construed as an admission
that we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Act.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Command Systems, Inc. 1997 Employee, Director and
Consultant Stock Plan, the Stock Option Agreement with Russell Adams, the Stock
Option Agreement with Pamela A. Broderick, the Stock Option Agreement with
Stephen C. Chasse, the Stock Option Agreement with Robert B. Dixon, the Stock
Option Agreement with Glenn M. King, the Stock Option Agreement with Holly R.
Neumann, the Stock Option Agreement with William L. Tamburro and the Stock
Option Agreement with David R. Wheeland, of our report dated February 16, 1999,
with respect to the consolidated financial statements and schedule of Command
Systems, Inc. included in its annual report (Form 10-K) for the year ended
December 31, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Hartford, Connecticut
July 9, 1999
