SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
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BILLSERV.COM, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 98-0190072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
MARSHALL MILLARD LORI TURNER
SECRETARY, VICE PRESIDENT AND GENERAL TREASURER, VICE PRESIDENT AND CHIEF
COUNSEL FINANCIAL OFFICER
14607 SAN PEDRO AVE., SUITE 100, SAN ANTONIO, TEXAS 78232
(Address of principal executive office)
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BILLSERV.COM, INC.
1999 EMPLOYEE COMPREHENSIVE STOCK PLAN
(Full title of the Plan)
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TIMOTHY N. TUGGEY
MORRIS E. WHITE III
ARTER & HADDEN LLP
700 N. ST. MARY'S ST. #800
SAN ANTONIO, TEXAS 78205
210/354-4300
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
================================================================================
PROPOSED
MAXIMUM MAXIMUM
TITLE OF OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (2) PRICE (2) FEE
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Common Stock, Par
Value $.001 2,000,000 shares(1) $9.16 $18,320,000 $4836.49
================================================================================
(1) Pursuant to Rule 416 under the Securities Act, additional shares of the
common stock of the Company issued or which become issuable in order to
prevent dilution resulting from any future stock split, stock dividend or
similar transaction that are being registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c) and (h) under the Securities Act based upon the
average of the high and low sales prices of the Registrant's Common Stock on
the NASD OTC Bulletin Board on February 15, 2000.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents and reports filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are incorporated herein by
reference:
(a) Amendment No. 1 to the Form SB-2 Registration Statement, SEC File
No. 333-93799, filed on January 14, 2000 which became effective on
January 18, 2000.
(b) Annual Report of the Registrant on Form 10-K for the year ended
December 31, 1999, Commission File No. 000-30152.
(c) The description of the Registrant's Common Stock contained in the
Registration Statement (Commission File No. 001-15093) filed under
Section 12 of the Securities Exchange Act of 1934, including any
amendment or report filed for the purpose of updating such
description.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Nevada law generally sets forth the powers of the Company to indemnify
officers, directors, employees and agents. The Articles of Incorporation for the
Company provide as follows:
No director or officer shall have any personal liability to the
corporation or its stockholders for the damages for breach of
fiduciary duty as a director or officer, except that this Article
shall not eliminate or limit the liability of a director or officer
for (i) acts or omissions that involve intentional misconduct, fraud
or a knowing violation of the law, or (ii) the payment of dividends
in violation of Nevada Revised Statutes.
Except to the extent herein above set forth, there is no charter
provision, bylaw, contract, arrangement or statute pursuant to which any
director or officer of the Company is indemnified in any manner against any
liability which he may incur in his capacity as such. The Company also maintains
a standard director and officer liability policy to fund the Company's
obligations as stated herein above.
ITEM 8. EXHIBITS
Except as noted below, the following Exhibits are filed herewith and made
a part hereof:
EXHIBIT DESCRIPTION OF DOCUMENT
4.1 Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 1 to the
Company's Registration Statement on Form SB-2, SEC File No.
333-93799).
4.2 Bylaws of the Company (incorporated by reference to Exhibit 1
to the Company's Registration Statement on Form SB-2, , SEC
File No. 333-93799).
4.3 billserv.com, Inc. 1999 Employee Comprehensive Stock Plan.
5.1 Opinion of Arter & Hadden LLP (filed herewith).
23.1 Consent of Arter & Hadden LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, Independent Auditors (filed
herewith).
24.1 Power of Attorney
<PAGE>
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 prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflect in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the "calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) For the purpose of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Antonio, State of Texas, on this 14th day of
February, 2000.
BILLSERV.COM, INC.
By: /s/ LOUIS A. HOCH
Louis A. Hoch
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated as of the dates indicated.
Signatures Titles Date
/s/ MICHAEL R. LONG Chief Executive Officer
Michael R. Long* and Director February 14, 2000
/s/ LOUIS A. HOCH President, Director and
Louis A. Hoch* Chief Operating Officer February 14, 2000
/s/ DAVID S. JONES Executive Vice President
David S. Jones* and Director February 14, 2000
/s/ LORI TURNER Treasurer, Vice President
Lori Turner* and Chief Financial Officer February 14, 2000
/s/ MARSHALL MILLARD Secretary, Vice President
Marshall Millard and General Counsel February 14, 2000
/s/ E. SCOTT CRIST Director February 14, 2000
E. Scott Crist*
/s/ ROGER R. HEMMINGHAUS Director February 14, 2000
Roger R. Hemminghaus*
Marshall N. Millard, the undersigned attorney-in-fact, by signing his/her name
below, does hereby sign this Registration Statement on behalf of the directors
and officers of billserv.com, Inc. indicated above by asterisk (constituting a
majority of the directors) pursuant to a power of attorney executed by such
persons and filed with the Securities and Exchange Commission contemporaneously
herewith.
By: /s/______________________________
Marshall N. Millard, as attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
4.1 Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 1 to the
Company's Registration Statement on Form SB-2, SEC File No.
333-93799).
4.2 Bylaws of the Company (incorporated by reference to Exhibit 1
to the Company's Registration Statement on Form SB-2, SEC File
No. 333-93799).
4.3 billserv.com, Inc. 1999 Employee Comprehensive Stock Plan.
5.1 Opinion of Arter & Hadden LLP.
23.1 Consent of Arter & Hadden LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Powers of Attorney.
EXHIBIT 4.3
billserv.com INC.
1999 EMPLOYEE COMPREHENSIVE STOCK PLAN
1. PURPOSE. The purpose of this 1999 Employee Comprehensive Stock Plan
(the "Plan") is to further the success of billserv.com, a Nevada corporation
(the "Company"), and certain of its affiliates by making available Common Stock
of the Company to certain officers and employees of the Company and its
affiliates, and thus to provide an additional incentive to such individuals to
continue in the service of the Company or its affiliates and to give them a
greater interest as stockholders in the success of the Company. Subject to
compliance with the provisions of the Plan and the Code, Incentive Stock Options
as authorized by Section 422 of the Code and stock options which do not qualify
under Section 422 of the Code are authorized and may be granted under the Plan.
Further, the Company may grant Restricted Stock, as defined below.
2. DEFINITIONS. As used in this Plan the following terms shall have the
meanings indicated:
(a) "Award" means an award of stock options (including Incentive
Stock Options) or Restricted Stock, on a stand alone, combination or tandem
basis, as described in or granted under this Plan.
(b) "Award Agreement" means a written agreement setting forth the
terms of an Award, in the form prescribed by the Committee.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" shall mean, in the context of the termination of a
Participant, as determined by the Board, in the reasonable exercise of its
business judgment the occurrence of one of the following events: (i) conviction
of or a plea of nolo contendere to a charge of a felony (which, through lapse of
time or otherwise, is not subject to appeal); (ii) willful refusal without
proper legal cause to perform, or gross negligence in performing, Participant's
duties and responsibilities; (iii) material breach of fiduciary duty to the
Company through the misappropriation of Company funds or property or otherwise;
or (iv) the unauthorized absence of Participant from work (other than for sick
leave or disability) for a period of thirty working days or more during any
period of forty-five working days; provided, further, within one year following
a Change of Control, "Cause" shall be limited to the conviction of or a plea of
nolo contendere to the charge of a felony (which, through lapse of time or
otherwise, is not subject to an appeal), or a material breach of fiduciary duty
to the Company through the misappropriation of Company funds or property or
otherwise.
(e) "Change of Control" shall be deemed to have occurred if (i) any
"Person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing more
than 40% of the combined voting power of the Company's then outstanding voting
securities, or (ii) at any time during the 24-month period after a tender offer,
merger, consolidation, sale of assets or contested election, or any combination
of such transactions, at least a majority of the Board shall cease to consist of
"continuing directors" (meaning directors of the Company who either were
directors prior to such transaction or who subsequently became directors and
whose election, or nomination for election by the Company's stockholders, was
approved by a vote of at least two thirds of the directors then still in office
who were directors prior to such transaction), or (iii) the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 40% of the total voting
power represented by the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement of sale or disposition by the Company of all or
substantially all of the Company's assets.
<PAGE>
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means the Committee administering the Plan described
in Section 3 hereof.
(h) "Common Stock" means the Company's common stock, par value $.001
per share.
(i) "Continuous Status as an Employee" means that the employment
relationship with any one or more of (i) the Company, (ii) any Parent, (iii) any
Subsidiary has not been terminated or interrupted.
(j) "Date of Grant" means the date on which an Award is granted
under an Award Agreement executed by the Company and a Participant pursuant to
the Plan.
(k) "Disinterested Person" means a "disinterested person" as such
term is defined in Rule 16b-3 promulgated under the Exchange Act or any
successor provision.
(1) "Effective Date" means the effective date of this Plan specified
in Section 14 hereof.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as it
may be amended from time to time.
(n) "Good Reason" shall mean the occurrence of any of the following
events: (a) removal from the principal office held by the Participant on the
date of the most recent Award, or a material reduction in the Participant's
authority or responsibility, including, without limitation, involuntary removal
from the Board, but not including termination of the Participant for Cause; or
(b) the Company otherwise commits a material breach of this Plan, or the
Participant's employment agreement, if applicable; provided, however, that
within one year following a Change of Control, "Good Reason" shall mean (i)
removal from the principal office held by the Participant on the date of the
most recent Award, (ii) a material reduction in the Participant's authority or
responsibility, including, without limitation, involuntary removal from the
Board, but not including termination of the Participant for cause; (iii)
relocation of the Company's headquarters from the San Antonio, Texas
metropolitan area, (iv) a material reduction of participant's compensation, or
(v) the Company otherwise commits a material breach of this plan, or the
Participant's employment agreement, if applicable.
(o) "Incentive Stock Option" means an option qualifying under
Section 422 of the Code.
(p) "Parent" means a parent corporation of the Company as defined in
Section 424(e) of the Code.
(q) "Participants" means the employees and officers of the Company,
its Subsidiaries and its Parent (including those directors of the Company who
are also employees of the Company, its Parent or one or more of its
Subsidiaries).
(r) "Restricted Period" shall mean the period designated by the
Committee during which Restricted Stock may not be sold, assigned, transferred,
pledged, or otherwise encumbered, which period shall not be less than one year
nor more than two years from the Date of Grant.
(s) "Restricted Stock" shall mean those shares of Common Stock
issued pursuant to an Award that remain subject to the Restricted Period.
(t) "Retained Distributions" shall mean any securities or other
property (other than cash dividends) distributed by the Company or otherwise
received by the holder in respect of Restricted Stock during any Restricted
Period.
<PAGE>
(u) "Retirement" shall mean retirement of a Participant from the
employ of the Company, its Parent, or its Subsidiaries, as the case may be, in
accordance with the then existing employment policies of any such employer.
(v) "Subsidiary" means a subsidiary corporation of the Company as
defined in Section 424(f) of the Code.
3. ADMINISTRATION OF THE PLAN. The Board shall appoint a committee (the
"Committee") comprised of two or more directors to administer the Plan. Only
directors who are Disinterested Persons shall be eligible to serve as members of
the Committee. The Committee shall report all action taken by it to the Board,
which shall review and ratify or approve those actions that are by law required
to be so reviewed and ratified or approved by the Board. The Committee shall
have full and final authority in its discretion, subject to the provisions of
the Plan, to make determinations with respect to the participation of
Participants in this Plan, to prescribe the form of Award Agreements embodying
Awards made under the Plan, and, except as otherwise required by law or this
Plan, to set the size and terms of Awards (which need not be identical or
consistent with respect to each Participant) including vesting schedules, price,
whether stock options granted hereunder shall constitute an Incentive Stock
Option, restriction or option period, post-retirement and termination rights,
payment alternatives such as cash, stock or other means of payment consistent
with the purposes of this Plan, and such other terms and conditions as the
Committee deems appropriate. Except as otherwise required by this Plan, the
Committee shall have authority to interpret and construe the provisions of this
Plan and the Award Agreements, to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award Agreement in the manner
the Committee deems advisable for the administration of the Plan and make
determinations pursuant to any Plan provision or Award Agreement, which shall be
final and binding on all persons. The Committee may authorize any one or more of
their number or any officer of the Company to execute and deliver documents on
behalf of the Committee.
4. COMMON STOCK SUBJECT TO PROVISIONS OF THIS PLAN. Upon approval of this
Plan by the directors and shareholders of the Company, the total number of
shares to be subject to options under this Plan shall be 2,000,000 of the
authorized and unissued common shares of the Company. Thereafter, an amount of
additional shares to be subject to options shall automatically be available for
award under this Plan, such that at no time shall the total number of shares
subject to options under this Plan be less than five percent (5%) of the then
issued and outstanding common shares of the Company. In all events, the total
number of shares shall be subject to appropriate increase or decrease in the
event of a stock dividend, split or reclassification of shares subject to this
Plan.
5. ELIGIBILITY. Except as hereinafter provided, Awards may be granted to
any Participant as the Committee shall determine from time to time. In
determining the Participants to whom Awards shall be granted and the number of
shares to be covered by each such Award, the Committee may take into account the
nature of the services rendered by the respective Participants, their present
and potential contributions to the Company's success and such other factors as
the Committee in its sole discretion shall deem relevant. A Participant who has
been granted an Award under the Plan may be granted an additional Award or
Awards under the Plan, in the Committee's sole discretion.
6. AWARDS UNDER THIS PLAN. The Committee, in its sole discretion, may make
Awards of stock options (including Incentive Stock Options and stock options
that do not qualify as Incentive Stock Options) as described in Sections 7 and 8
hereof, and of Restrictive Stock, as described in Section 10 hereof.
7. OPTIONS AUTHORIZED. The options subject to Award under this Plan may be
Incentive Stock Options or stock options that do not qualify as Incentive Stock
Options (sometimes referred to herein as "nonqualified options" or "nonqualified
stock options"). The Committee shall have the full power and authority to (i)
determine which options shall be nonqualified stock options and which shall be
Incentive Stock Options, (ii) grant only Incentive Stock Options or,
alternatively, only nonqualified stock options, and (iii) in its sole
discretion, grant to the holder of an outstanding option, in exchange for the
surrender and cancellation of such option, a new option having a purchase price
lower than that provided in the option so surrendered and canceled and/or
<PAGE>
containing such other terms and conditions as the Committee may prescribe in
accordance with the provisions of the Plan. Under no circumstances may
nonqualified stock options be granted where the exercise of such nonqualified
stock options may affect the exercise of Incentive Stock Options granted
pursuant to the Plan. In addition to any other limitations set forth herein, (1)
no Participant shall receive any grant of options, whether Incentive Stock
Options or nonqualified stock options, exercisable for more than two hundred
fifty thousand (250,000) shares of Common Stock during any one fiscal year of
the Company and (2) the aggregate fair market value (determined in accordance
with Paragraph 8(a) of the Plan as of the time the option is granted) of the
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by a Participant in any calendar year (under all plans of the
Company and of any Parent or Subsidiary) shall not exceed one hundred thousand
dollars ($100,000.00).
8. TERMS AND CONDITIONS OF OPTIONS. The grant of an option under the Plan
shall be evidenced by an Award Agreement executed by the Company and the
applicable Participant and shall contain such terms and be in such form as the
Committee may from time to time approve, subject to the following limitations
and conditions:
(A) OPTION PRICE. The option exercise price per share with respect
to each option shall be determined by the Committee, but shall in no instance be
less than the par value of the shares subject to the option. In addition, the
option exercise price per share with respect to Incentive Stock Options granted
hereunder shall in no instance be less than the fair market value of the shares
subject to the option as determined by the Committee. For the purposes of this
Paragraph 8(a), fair market value shall be, where applicable, the closing price
of the Common Stock on the Date of Grant of such option as reported on any
national securities exchange on which the Common Stock may be listed. If the
Common Stock is not listed on a national securities exchange but is publicly
traded on the Nasdaq Stock Market's National Market or on another automated
quotation system, the fair market value shall be the closing price of the Common
Stock on the Date of Grant, or if traded on the Nasdaq Small Cap or Nasdaq
Over-The-Counter market, the fair market value shall be the mean between the
closing bid and ask prices on any such system or market. If the Common Stock was
not traded on the Date of Grant of such option, the nearest preceding date on
which there was a trade shall be substituted. Notwithstanding the foregoing,
however, fair market value shall be determined consistent with Code Section
422(b)(4) or any successor provisions. The Committee may permit the option
exercise price to be payable by transfer to the Company of Common Stock owned by
the option holder with a fair market value at the time of the exercise equal to
the option exercise price.
(B) PERIOD OF OPTION. The expiration date of each option shall be
fixed by the Committee, but notwithstanding any provision of the Plan to the
contrary, such expiration date shall not be more than ten (10) years from the
Date of Grant of the option.
(C) VESTING OF STOCKHOLDER RIGHTS. Neither the optionee nor his
successor in interest shall have any of the rights of a stockholder of the
Company until the shares relating to the option hereunder are issued by the
Company and are properly delivered to such optionee, or successor.
(D) EXERCISE OF OPTION. Each option shall be exercisable from time
to time (but not less than six (6) months after the Date of Grant) over such
period and upon such terms and conditions as the Committee shall determine, but
not at any time as to less than one hundred (100) shares unless the remaining
shares that have become so purchasable are less than twenty five (25) shares.
After the death of the optionee, an option may be exercised as provided in
Section 9(c) hereof.
(E) DISQUALIFYING DISPOSITION. The Award Agreement evidencing any
Incentive Stock Options granted under this Plan shall provide that if the
optionee makes a disposition, within the meaning of Section 424(c) of the Code
and regulations promulgated thereunder, of any share or shares of Common Stock
issued to him pursuant to exercise of the option within the two-year period
commencing on the day after the Date of Grant of such option or within the
one-year period commencing on the day after the date of issuance of the share or
shares to him pursuant to the exercise of such option, he shall, within ten (10)
days of such disposition date, notify the Company of the sales price or other
value ascribed to or used to measure the disposition of the share or shares
thereof and immediately deliver to the Company any amount of federal income tax
withholding required by law.
<PAGE>
(F) LIMITATION ON GRANTS TO CERTAIN STOCKHOLDERS. An Incentive Stock
Option may be granted to a Participant only if such Participant, at the time the
option is granted, does not own, after application of the attribution rules of
Code Section 424, stock possessing more than ten percent (10%) of the total
combined voting power of all classes of Common Stock of the Company or of its
Parent or Subsidiary. The preceding restrictions shall not apply if at the time
the option is granted the option price is at least one hundred ten percent (110
%) of the fair market value (as defined in Section 8(a) above) of the Common
Stock subject to the option and such option by its terms is not exercisable
after the expiration of five (5) years from the Date of Grant.
(G) RESTRICTION ON ISSUING SHARES. The exercise of each option shall
be subject to the condition that if at any time the Company shall determine in
its discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange or under
any state or federal law, or that the consent or approval of any regulatory
body, is necessary or desirable as a condition of, or in connection with, such
exercise or the delivery or purchase of shares pursuant thereto, then in any
such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.
(H) CONSISTENCY WITH CODE. Notwithstanding any other provision in
this Plan to the contrary, the provisions of all Award Agreements relating to
Incentive Stock Options pursuant to the Plan shall not violate the requirements
of the Code applicable to the Incentive Stock Options authorized hereunder.
9. EXERCISE OF OPTION.
(a) Any option granted hereunder shall be exercisable according to
the terms of the Plan and at such times and under such conditions as determined
by the Committee and set forth in the Award Agreement. An option shall be deemed
exercised when (i) the Company has received written notice of such exercise in
accordance with the terms of the Award Agreement, (ii) full payment of the
aggregate option exercise price of the shares as to which the option is
exercised has been made and (iii) arrangements that are satisfactory to the
Committee in its sole discretion have been made for the Participant's payment to
the Company of the amount, if any, that the Committee determines to be necessary
for the Company to withhold in accordance with applicable federal or state
income tax withholding requirements.
(b) Upon Retirement or other termination of the Participant's
Continuous Status as an Employee, other than (a) a termination that is either
(i) for Cause or (ii) voluntary on the part of a Participant and without the
written consent of the Company, a Parent, or any Subsidiary (b) a termination by
reason of death, the Participant may (unless otherwise provided in his Award
Agreement) exercise his option at any time within three (3) months after such
termination of the Participant's Continuous Status as an Employee (or within one
(1) year after termination of the Participant's Continuous Status as an Employee
due to permanent and total disability within the meaning of Code Section
22(e)(3)), or within such other time as the Committee shall authorize, but in no
event may the Participant exercise his Option after ten (10) years from the Date
of Grant thereof (or such lesser period as may be specified in the Award
Agreement), and only to the extent of the number of shares for which his options
were exercisable by him at the date of the termination of the Participant's
Continuous Status as an Employee. In the event of the termination of the
Continuous Status as an Employee of a Participant to whom an option has been
granted under the Plan that is either (i) for Cause or (ii) voluntary on the
part of the Participant and without written consent, any option held by him
under the Plan, to the extent not previously exercised, shall forthwith
terminate on the date of such termination of the Participant's Continuous Status
as an Employee. Options granted under the Plan shall not be affected by any
change of employment so long as the holder continues to be an employee of the
Company, a Subsidiary or a Parent. The Award Agreement may contain such
provisions as the Committee shall approve with respect to the effect of approved
leaves of absence.
(c) In the event a Participant to whom an option has been granted
under the Plan dies during, or within three (3) months after the Retirement or
other termination of, the Participant's Continuous Status
<PAGE>
as an Employee, such option (unless it shall have been previously terminated
pursuant to the provisions of the Plan or unless otherwise provided in his Award
Agreement) may be exercised (to the extent of the entire number of shares
covered by the option whether or not purchasable by the Participant at the date
of his death) by the executor or administrator of the optionee's estate or by
the person or persons to whom the optionee shall have transferred such option by
will or by the laws of descent and distribution, at any time within a period of
one (1) year after his death, but not after the exercise termination date set
forth in the relevant Award Agreement.
(d) If as of the date of termination of the Participant's Continuous
Status as an Employee (other than as a result of the Participant's death) the
Participant is not entitled to exercise his or her entire options, the shares of
Common Stock covered by the unexercisable portion of the option shall revert to
the Plan. If the Participant (or his or her designee or estate as provided in
Section 9(c) above) does not exercise his or her options within the time
specified in the Plan and the Award Agreement, the unexercised options shall
terminate and the shares of Common Stock covered by such options shall revert to
the Plan.
10. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
(A) GENERAL. The Committee, in its sole discretion, may make Awards
of Restricted Stock to selected Participants, which Awards shall be evidenced by
an Award Agreement that contains such terms and conditions, including vesting,
as the Committee may determine. As a condition to any Award of Restricted Stock
hereunder, the Committee may require a Participant to pay to the Company the
amount (such as the par value of such shares) required to be received by the
Company in order to assure compliance with applicable state law. Any Award of
Restricted Stock for which such requirement is established shall automatically
expire if not purchased in accordance with the Committee's requirements within
sixty (60) days after the Date of Grant.
Subject to the terms and conditions of the respective Award Agreement, the
Participant, as the owner of the Common Stock issued as Restricted Stock and any
Retained Distributions with respect thereto, shall have the rights of a
stockholder, including, but not limited to, voting rights as to such Common
Stock and the right to receive cash dividends or distributions thereon when, as
and if paid.
Within the limits set forth in the Plan, an Award of Restricted Stock may
be subject to such vesting requirements as may be fixed by the Committee.
Vesting may be accelerated by a Change of Control. Vesting may also be
accelerated upon death, permanent disability or Retirement.
Unless otherwise provided in the Award Agreement, in the event that an
Award of Restricted Stock is made to a Participant whose employment or service
is subsequently terminated by reason of death, permanent disability or
Retirement or for such other reason as the Committee may provide, such
Participant (or his estate or beneficiary) will be entitled to receive such
additional portion of his Restricted Stock and any Retained Distributions with
respect thereto that the Participant would have received had the Participant
remained in the employment of the Company, Parent, or Subsidiary, as applicable,
through the date on which the next portion of the shares of non-vested
Restricted Stock subject to the Award of Restricted Shares would have vested.
Unless otherwise provided in the Award Agreement, in the event an Award of
Restricted Stock is made to a Participant whose. employment with the Company,
Parent, or Subsidiary, as applicable, is subsequently terminated by the
Participant for Good Reason or by the company, Parent or Subsidiary as
applicable, other than for Cause, then in any such event, the Participant will
be entitled to receive such additional portion of his or her shares of
Restricted Stock and any Retained Distributions with respect thereto that the
Participant would have received had the Participant remained in the employment
of the Company, Parent, or Subsidiary, as applicable, through the date on which
the next portion of the shares of unvested Restricted Stock subject to the Award
of Restricted Stock would have vested.
Unless otherwise provided in the Award Agreement, in the event that an
Award of Restricted Stock is made to a Participant who subsequently voluntarily
resigns or whose employment is terminated for Cause, then all
<PAGE>
such Restricted Stock and any Retained Distributions with respect thereto as to
which the Restricted Period still applies shall be forfeited by such Participant
and shall again become available for grant under the Plan.
(B) TRANSFERABILITY. Restricted Stock and any Retained Distributions
with respect thereto may not be sold, assigned, transferred, pledged, or
otherwise encumbered during the Restricted Period, which shall be determined by
the Committee and shall not be less than one year nor more than two years from
the date such Restricted Stock was awarded. The Committee may, at any time,
reduce the Restricted Period with respect to any outstanding shares of
Restricted Stock and any Retained Distributions with respect thereto awarded
under the Plan.
<PAGE>
Shares of Restricted Stock, when issued, will be represented by a stock
certificate or certificates registered in the name of the Participant to whom
such Restricted Stock shall have been granted and shall bear a restrictive
legend to the effect that ownership of such Restricted Stock (and any related
Retained Distributions) and the enjoyment of all rights appurtenant thereto are
subject to the restrictions, terms and conditions provided in the Plan and the
applicable Award Agreement. Each certificate shall be deposited by the
Participant with the Company, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit transfer to the Company of
all or any portion of the Restricted Stock and any securities constituting
Retained Distributions that shall be forfeited or that shall not become vested
in accordance with the respective Award Agreement. The certificate or
certificates issued for the Restricted Stock may bear such legend or legends as
the Committee may, from time to time, deem appropriate to reflect the
restrictions under the Plan for such Restricted Stock.
(C) STOCK CERTIFICATES; ADDITIONAL RESTRICTIONS. Shares of
Restricted Stock shall constitute issued and outstanding shares of Common Stock
for all corporate purposes. Each Participant will have the right to vote the
Restricted Stock held by such Participant, to receive and retain all cash
dividends and distributions thereon and exercise all other rights, powers and
privileges of a holder of Common Stock with respect to such Restricted Stock,
with the exception that:
(i) the Participant will not be entitled to delivery of the
stock certificate or certificates representing such Restricted Stock until
the Restricted Period applicable to such shares or portion thereof shall
have expired and unless all other vesting requirements with respect
thereto shall have been fulfilled;
(ii) other than cash dividends and distributions and rights to
purchase stock which might be distributed to stockholders of the Company,
the Company will retain custody of all Retained Distributions made, paid,
declared or otherwise received by the holder thereof with respect to
Restricted Stock (and such Retained Distributions will be subject to the
same restrictions, terms and conditions as are applicable to the
Restricted Stock with respect to which they were made, paid or declared)
until such time, if ever, as the Restricted Period applicable to the
shares with respect to which such Retained Distributions shall have been
made, paid, declared or received shall have expired, and such Retained
Distributions shall not bear interest or be segregated in separate
accounts; and
(iii) upon the breach of any restrictions, terms or conditions
provided in the Plan or the respective Award Agreement or otherwise
established by the Committee with respect to any Restricted Stock or
Retained Distributions, such Restricted Stock and any related Retained
Distributions shall thereupon be automatically forfeited.
(D) MERGERS AND OTHER CORPORATE CHANGES. Unless otherwise provided
in the Award Agreement, upon the occurrence of a Change of Control, all
restrictions imposed on the Participant's Restricted Stock and any Retained
Distributions shall automatically terminate and lapse and the Restricted Period
shall automatically terminate; provided, however, that if the Change of Control
occurs within six months of the Date of Grant the restrictions and Restricted
Period shall terminate on the six month anniversary of the Date of Grant.
11. ADJUSTMENTS. The Committee, in its discretion, may make such
adjustments in the option price, the number or kind of shares and other
appropriate provisions covered by outstanding Awards that are required to
prevent any dilution or enlargement of the rights of the holders of such options
that would otherwise result from any reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger, consolidation, issuance of
rights or any other change in the capital structure of the Company. The
Committee, in its discretion, may also make such adjustments in the aggregate
number and class of shares that may be the subject of Awards which are
appropriate to reflect any transaction or event described in the preceding
sentence.
12. AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN. The Board may at
any time suspend or terminate the Plan or may amend it from time to time in such
respects as the Board may deem advisable in order that the Awards granted
thereunder may conform to any changes in the law or in any other respect that
the Board
<PAGE>
may deem to be in the best interests of the Company; provided, however, that
without approval by the stockholders of the Company voting the proper percentage
of its voting power, no such amendment shall make any change in the Plan for
which stockholder approval is required in order to comply with (i) Rule 16b-3,
as amended, promulgated under the Exchange Act, (ii) the Code or regulatory
provisions dealing with Incentive Stock Options, (iii) any rules for listed
companies promulgated by any national stock exchange on which the Company's
Common Stock is traded or (iv) any other applicable rule or law. Unless sooner
terminated hereunder, the Plan shall terminate ten (10) years after the
Effective Date. No amendment, suspension, or termination of the Plan shall,
without a Participant's consent, impair or negate any of the rights or
obligations under any Award theretofore granted to such Participant under the
Plan.
13. TAX WITHHOLDING. The Company shall have the right to withhold from any
payments made under this Plan, or to collect as a condition of payment, any
taxes required by law to be withheld. At any time when a Participant is required
to pay to the Company an amount required to be withheld under applicable income
tax laws in connection with a distribution of shares of Common Stock pursuant to
this Plan, the Participant may satisfy this obligation in whole or in part by
electing to have the Company withhold from such distribution shares of Common
Stock having a value equal to the amount required to be withheld. The value of
the shares of Common Stock to be withheld shall be based on the fair market
value, as determined pursuant to Section 8(a) hereof, of the Common Stock on the
date that the amount of tax to be withheld shall be determined (the "Tax Date").
Any such election is subject to the following restrictions: (i) the election
must be made on or prior to the Tax Date; (ii) the election must be irrevocable;
and (iii) the election must be subject to the disapproval of the Committee. To
the extent required to comply with rules promulgated under Section 16 of the
Exchange Act, elections by Participants who are subject to Section 16 of the
Exchange Act are subject to the following additional restrictions: (i) no
election shall be effective for a Tax Date which occurs within six (6) months of
the grant of the Award; and (ii) the election must be made either (a) six (6)
months or more prior to the Tax Date or (b) during the period beginning on the
third business day following the date of release for publication for the
Company's quarterly or annual summary statements of sales and earnings and
ending on the twelfth business day following such date.
14. EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on the
date (the "Effective Date") of the last to occur of (i) the adoption of the Plan
by the Board and (ii) the approval, within twelve (12) months of such adoption,
by a majority (or such other proportion as may be required by state law) of the
outstanding voting shares of the Company, voted either in person or by proxy, at
a duly held stockholders meeting or by written stockholder consent but in any
event not before the effectiveness of the Company's Form 10 Registration
Statement filed under the Exchange Act.
15. SPECIAL PROVISIONS REGARDING CHANGE OF CONTROL. The Board or the
Committee may, from time to time, make special provisions for one or more
Participants respecting a possible Change of Control of the Company, a
Subsidiary, or Parent, and, to the extent that any such special provisions made
with the consent of the affected employee may have the effect of accelerating
vesting of stock options granted under the Plan or removal of restrictions on
Restricted Stock allotted under the Plan or the effect of preventing a
termination or dilution of benefits, such special provisions shall be
controlling over and shall be deemed to be an amendment of any inconsistent
terms of the applicable Award Agreement.
16. MISCELLANEOUS PROVISIONS.
(a) If approved by the Board, the Company or any Parent or
Subsidiary may lend money or guarantee loans by third parties to an individual
to finance the exercise of any option granted under the Plan to continue to hold
Common Stock thereby acquired. No such loans to finance the exercise of an
Incentive Stock Option shall have an interest rate or other terms that would
cause any part of the principal amount to be characterized as interest for
purposes of the Code.
(b) This Plan is intended and has been drafted to comply in all
respects with Rule 16b-3, as amended, under the Exchange Act ("Rule 16b-3"). If
any provision of this Plan does not comply with Rule 16b-3, this Plan shall be
automatically amended to comply with Rule 16b-3.
16
<PAGE>
(c) No person shall have any claim or right to be granted an Award,
and the grant of an Award shall not be construed as giving a Participant the
right to be retained in the employ of the Company, a Parent, or a Subsidiary.
Nothing in this Plan shall interfere with or limit in any way the right of the
Company, a Parent, any Subsidiary to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Company, a Parent, or any Subsidiary.
(d) To the extent that federal laws do not otherwise control, this
Plan shall be construed in accordance with and governed by the laws of the State
of Nevada or the property laws of any particular state.
(e) In case any one or more of the provisions of this Plan shall be
held invalid, illegal or unenforceable in any respect under applicable law and
regulation (including Rule 16b-3), the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
and the invalid, illegal or unenforceable provisions shall be deemed null and
void; however, to the extent permissible by law, any provision which could be
deemed null and void shall first be construed, interpreted or revised
retroactively to permit this Plan to be construed in compliance with all
applicable laws (including Rule 16b-3) so as to foster the intent of this Plan.
Notwithstanding anything in this Plan to the contrary, the Committee, in its
sole and absolute discretion, may bifurcate this Plan so as to restrict, limit
or condition the use of any provision of this Plan to Participants who are
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning this Plan with respect to other Participants.
(f) None of a Participant's rights or interests under the Plan may
be assigned or transferred in whole or in part, either directly or by operation
of law or otherwise (except pursuant to a qualified domestic relations order or,
in the event of a Participant's death, by will or the laws of descent and
distribution), including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner, and no such
right or interest of any Participant in the Plan shall be subject to any
obligation or liability of such individual.
(g) No Restricted Stock or any Retained Distributions shall be
issued hereunder unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, or other
securities laws.
(h) The expenses of the Plan shall be borne by the Company.
(i) By accepting any Award under the Plan, each Participant or
beneficiary claiming under or through him shall be conclusively deemed to have
indicated his acceptance ratification of, and consent to, any action taken under
the Plan by the Company, the Committee or the Board.
(j) Awards granted under the Plan shall be binding upon the Company,
its successors and assigns.
(k) The appropriate officers of the Company shall cause to be filed
any reports, returns, or other information regarding Awards hereunder or any
Common Stock issued pursuant hereto as may be required by Section 13 or 15(d) of
the Exchange Act, or any other applicable statute, rule or regulation.
(1) Nothing contained in this Plan shall prevent the Board of
Directors from adopting other or additional compensation arrangements, subject
to stockholder approval if such approval is required.
17
[ARTER & HADDEN LLP ATTORNEYS AT LAW LETTERHEAD]
EXHIBIT 5.1
February 14, 2000
billserv.com, Inc.
14607 San Pedro Avenue, Suite 100
San Antonio, Texas 78232
RE: billserv.com, Inc. 1999 Employee Comprehensive Stock Plan (the
"Plan") Form S-8 Registration Statement No. (the "Registration
Statement")
Ladies and Gentlemen:
We have been advised that on or about February 14, 2000, billserv.com,
Inc., a Nevada corporation (the "Company"), expects to file under the Securities
Act of 1933, as amended (the "Act") with the Securities and Exchange Commission
(the "Commission"), a Registration Statement on Form S-8 (the "Registration
Statement"). Such Registration Statement relates to the Offering ("Offering"),
from time to time of 2,000,000 shares of common stock, par value $.001 each, of
the Company, which may be issued pursuant to the Plan. This firm has acted as
counsel to you in connection with the preparation and filing of the Registration
Statement and you have requested our opinion with respect to certain legal
aspects of the Offering of the Offered Securities.
In rendering our opinion, we have participated in the preparation of the
Registration Statement and have examined and relied upon the original or copies,
certified to our satisfaction, of such documents and instruments of the Company
as we have deemed necessary and have made such other investigations as we have
deemed appropriate in order to express the opinions set forth herein. In our
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of all documents submitted to us as certified or
reproduction copies. In addition, we have assumed and have not verified the
accuracy of factual matters of each document we have reviewed.
As to certain questions of fact material to this opinion, we have relied,
to the extent we deem reasonably appropriate, upon the representations or
certificates of officers or directors of the Company.
Based upon the following examination and subject to the comment and
assumptions as noted below, we are of the opinion that shares of common stock,
par value $.001 each, of the Company which may be issued pursuant to the Plan
will be, when so issued or transferred and delivered in accordance with the
Plan, duly authorized, validly issued, fully paid and non-assessable.
18
<PAGE>
billserv.com, Inc.
February 14, 2000
Page Two
Insofar as the foregoing opinions relate to the legality, validity,
binding effect or enforceability of any agreement or obligations of the company,
(i) we have assumed that each party to such agreement or obligation has
satisfied those legal requirements that are applicable to it to the extent
necessary to make such agreement or obligation enforceable against it; (ii) such
opinions are subject to applicable bankruptcy, insolvency, reorganization,
liquidation, receivership, fraudulent conveyance or similar laws, now or
hereafter in effect, relating to creditors' rights generally, and (iii) such
opinions are subject to the general principals of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding at law or in equity).
This opinion is limited in all respect to the laws of the State of Nevada.
We do not purport to be admitted to practice in the State of Nevada, and for the
purposes of rendering the opinions set in this letter we have assumed that the
applicable laws of the State of Nevada are the same as the laws of the State of
Texas.
We bring to your attention the fact that this legal opinion is an
expression of professional judgment and not a guaranty of results. This opinion
is given as of the date hereof, and we assume no obligation to update or
supplement such opinion to reflect any facts or circumstances that may hereafter
come to our attention or any changes in laws or judicial decisions that may
hereafter occur.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we have
come within the category of persons whose consent is required by the Section 7
of the Act or the rules and regulations of the Commission thereunder.
Respectfully submitted,
ARTER & HADDEN LLP
19
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to billserv.com, Inc. 1999 Employee Comprehensive Stock Plan, of
our report dated January 27, 2000, appearing in Annual Report Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, File No. 000-30152
(Form 10-K) filed with the Securities and Exchange Commission on February 11,
2000.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
San Antonio, Texas
February 14, 2000
20
EXHIBIT 24.1
BILLSERV.COM, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That each person whose signature appears
below has made, constituted and appointed, and by this instrument does make,
constitute and appoint Marshall N. Millard, Timothy N. Tuggey or Morris E. White
III, his or her true and lawful attorney, with full power of substitution and
resubstitution, to affix for him or her and in his or her name, place and stead,
as attorney-in-fact, his or her signature as director (including as a member of
any committee of the board of directors) or officer, or both, of billserv.com,
Inc., a Nevada corporation (the "Company"), to a Form S-8 Registration Statement
("Registration Statement") and any other form that may be used from time to
time, with respect to the issuance and sale of its Common Stock and other
securities pursuant to the billserv.com, Inc. 1999 Employee Comprehensive Stock
Option Plan (the "Plan") and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications and other documents pertaining thereto, giving and granting to each
such attorney-in-fact full power and authority to do and perform every act and
thing whatsoever necessary to be done in the premises, as fully as they might or
could do if personally present, and hereby ratifying and confirming all that
each of such attorney-in-fact or any such substitute shall lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed this 14th day
of February, 2000.
/s/ MICHAEL R. LONG
Michael R. Long
/s/ LOUIS A. HOCH
Louis A. Hoch
/s/ DAVID S. JONES
David S. Jones
/s/ LORI TURNER
Lori Turner
/s/ MARSHALL MILLARD
Marshall Millard
/s/ E. SCOTT CRIST
E. Scott Crist
/s/ ROGER R. HEMMINGHAUS
Roger R. Hemminghaus
21
