<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON January 2, 1998
REGISTRATION NO. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
DATA DIMENSIONS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 06-085248
(State of Incorporation) (I.R.S. Employer Identification No.)
-------------------------
DATA DIMENSIONS, INC.
1997 STOCK OPTION PLAN
(Full Title of the Plan)
Larry W. Martin, President
Data Dimensions, Inc.
411 108th Avenue NE
Suite 2100
Bellevue, Washington 98004
(425) 688-1000
(Name, Address and Telephone Number of Agent for Service)
-------------------------
COPY TO:
Bruce A. Robertson
GARVEY, SCHUBERT & BARER
1191 Second Avenue
Seattle, Washington 98101-2939
-------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Number to Be Offering Price Per Aggregate Offering
to be Registered Registered(1) Share(2) Price(2) Amount of Fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 1,000,000 $16.375 $16,375,000 $4830.63
par value per share
=============================================================================================================
</TABLE>
(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the 1997 Stock Option Plan as the result of any future stock split, stock
dividend or similar adjustment of the outstanding Common Stock of the
Registrant.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The price per share is estimated to be $16.375
based on the average of the high ($16.75) and low ($16.00) sales prices
for the Common Stock in the over-the-counter market on December 30,
1997 as reported on the Nasdaq National Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-KSB for the
year ended December 31, 1996, as amended;
(b) All other Reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, since December 31,
1996.
(c) The description of the Registrant's Common Stock
contained in the Registration Statement on Form SB-2 filed on February 9, 1996
(Registration No. 333-841), including all amendments and reports filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment, which indicate that the securities offered
hereby have been sold or which deregister the securities covered hereby then
remaining unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Delaware General Corporation Law ("DGCL") a
corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust of other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such
action, suit or proceeding if such person acted in good faith and
in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and with
respect to any criminal action or proceeding, had no reasonable
cause to believe such person's conduct was unlawful.
The DGCL permits similar indemnification in the case of
derivative actions, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability and in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
Indemnification for settlement of a suit by or in the right of
the corporation is not permitted under the DGCL. A director,
officer, employee or agent who is successful, on the merits or
otherwise, in defense of any proceeding subject to the DGCL's
indemnification provisions must be indemnified by the corporation
for reasonable expenses incurred in connection therewith,
including attorneys' fees.
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<PAGE> 3
The Company's By-Laws provide, in substance, that each
person made a party or threatened to be made a party to any type
of proceeding, by reason of the fact that he or she is or was a
director or officer of the Company or that, being or having been
such a director or officer or an employee of the Company, he or
she is or was serving at the request of an executive officer of
the Company as a director, officer, employee or agent of another
corporation, will be indemnified and held harmless by the Company
to the full extent permitted by the DGCL, against all expense,
liability and loss actually and reasonably incurred by such
person in connection therewith. In certain cases, the indemnified
party will be entitled to the advancement of certain expenses
relating to indemnification.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4.1 1997 Stock Option Plan
5.1 Opinion of Garvey, Schubert & Barer regarding
legality of the Common Stock being registered
23.1 Consent of Independent Certified Public Accountants
23.2 Consent of Garvey, Schubert & Barer (included in
opinion filed as Exhibit 5.1)
24.1 Power of Attorney of Thomas W. Fife
24.2 Power of Attorney of Robert T. Knight
24.3 Power of Attorney of Lucie Fjeldstad
</TABLE>
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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant
-2-
<PAGE> 4
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment 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 Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 5
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 Bellevue, State of Washington, on the 2nd day of
January, 1998.
DATA DIMENSIONS, INC.
By: /s/ Larry W. Martin
----------------------------------------
Larry W. Martin
Its: Chief Executive Officer, President,
and Chairman of the Board of
Directors
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
/s/ Larry W. Martin Chief Executive Officer, President,
- ------------------------------------- Director
Larry W. Martin
/s/ Gordon A. Gardiner Chief Financial Officer
- -------------------------------------
Gordon A. Gardiner
Thomas W. Fife (POA) Director
- -------------------------------------
Thomas W. Fife
Robert T. Knight (POA) Director
- -------------------------------------
Robert T. Knight
Lucie Fjeldstad (POA) Director
- -------------------------------------
Lucie Fjeldstad
By /s/ Larry W. Martin
----------------------------------
Larry W. Martin, Attorney in Fact
</TABLE>
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<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
4.1 Data Dimensions, Inc. 1997 Stock Option Plan
5.1 Opinion of Garvey, Schubert & Barer regarding legality of the
Common Stock being registered
23.1 Consent of Independent Certified Public Accountants
23.2 Consent of Garvey, Schubert & Barer (included in opinion filed
as Exhibit 5.1)
24.1 Power of Attorney of Thomas W. Fife
24.2 Power of Attorney of Robert T. Knight
24.3 Power of Attorney of Lucie J. Fjeldstad
</TABLE>
<PAGE> 1
Exhibit 4.1
DATA DIMENSIONS, INC.
1997 STOCK OPTION PLAN
1. STATEMENT OF PURPOSE.
The principal purposes of this Stock Option Plan ("Plan") are to secure
to Data Dimensions, Inc. (the "Company") the advantages of the incentive
inherent in stock ownership on the part of employees, officers, directors, and
consultants responsible for the continued success of the Company and to create
in such individuals a proprietary interest in, and a greater concern for, the
welfare of the Company through the grant of options to acquire shares of the
common stock of the Company ("Common Stock"). Each incentive stock option
("ISO") granted hereunder is intended to constitute an "incentive stock option,"
as such term is defined in Section 422 of the Internal Revenue Code of 1986, as
the same may be amended from time to time (the "Code"), and this Plan and each
such ISO is intended to comply with all of the requirements of said Section 422
and of all other provisions of the Code applicable to incentive stock options
and to plans issuing the same. Each nonstatutory stock option ("Non-ISO")
granted hereunder is intended to constitute a nonstatutory stock option that
does not comply with the requirements of Section 422 of the Code. ISO's and
Non-ISO's shall sometimes hereinafter be referred to collectively as "Options".
This Plan is expected to benefit shareholders by enabling the Company to attract
and retain personnel of the highest caliber by offering to them an opportunity
to share in any increase in the value of the Common Stock to which such
personnel have contributed.
2. ADMINISTRATION.
2.1 The Plan shall be administered by the Board of Directors
of the Company ("Board") or a committee or committees (which term includes
subcommittees) appointed by, and consisting of two or more members of, the Board
(hereinafter, "Plan Administrator"). If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended ("Exchange Act"), the Board shall consider in selecting the Plan
Administrator and the membership of any committee acting as Plan Administrator
of the Plan with respect to any persons subject or likely to become subject to
Section 16 under the Exchange Act the provisions regarding (a) "outside
directors," as contemplated by Section 162(m) of the Code, and (b) "nonemployee
directors," as contemplated by Rule 16b-3 under the Exchange Act. The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees, subject to such
limitations as the Board deems appropriate. Committee members shall serve for
such term as the Board may determine, subject to removal by the Board at any
time.
2.2 Except for the terms and conditions explicitly set forth
in the Plan, the Plan Administrator shall have exclusive authority, in its
discretion, to determine all matters relating to awards under the Plan,
including the selection of individuals to be granted awards of options, the type
of options, the number of shares of Common Stock subject to an Option, all
terms, conditions, restrictions and limitations, if any, of an Option, and the
<PAGE> 2
terms of any instrument that evidences the Option. The Plan Administrator shall
also have exclusive authority to interpret the Plan and may from time to time
adopt, and change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, shall be conclusive and binding on all
parties involved or affected. The Plan Administrator may delegate administrative
duties to such of the Company's officers as it so determines.
3. ELIGIBILITY.
3.1 ISO's may be granted to any employee of the Company or of
an Affiliate of the Company, as defined in Section 3.2 below. Non-ISO's may be
granted to any employee, officer or director (whether or not also an employee),
or consultant of the Company or of an Affiliate of the Company. Each employee,
officer, director, or consultant selected by the Plan Administrator to receive
an Option shall sometimes hereinafter be referred to as an "Optionee".
3.2 As used in this Plan, an "Affiliate" of a corporation
shall refer to a "parent corporation" of such corporation as described in
Section 424(e) of the Code or a "subsidiary corporation" of such corporation as
described in Section 424(f) of the Code.
3.3 An Optionee who is not an employee of the Company or of an
Affiliate of the Company shall not be eligible to receive an ISO hereunder and
no ISO's shall be granted to any such non-employee Optionee.
3.4 No Option shall be granted hereunder to any Optionee
unless the Plan Administrator shall have determined, based on the advice of
counsel, that the grant of such option (and the exercise thereof by the
Optionee) will not violate the securities law of the state where the Optionee
resides.
4. SHARES SUBJECT TO THE PLAN.
4.1 The Plan Administrator, from time to time, may provide for
the option and sale in the aggregate of up to One Million (1,000,000) shares of
Common Stock. The number of such shares shall be adjusted to take account of the
events referred to in Section 10 hereof.
4.2 Upon exercise of an Option, the number of shares of Common
Stock thereafter available hereunder and under the Option shall decrease by the
number of shares of Common Stock as to which such Option was exercised; provided
that if such shares are pledged to secure a promissory note given in payment of
the Option Price for such shares and, as a result of a default on such note, the
pledged shares are returned to the Company, then such shares shall again be
available for the purposes of this Plan.
4.3 If any Option granted hereunder shall expire or terminate
for any reason without having been exercised in full, the unpurchased shares
subject thereto shall again be available for the purposes of this Plan.
4.4 The Company shall at all times during the term of this
Plan reserve and keep available such number of shares as shall be sufficient to
satisfy the requirements of the Plan.
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<PAGE> 3
4.5 Subject to any adjustment as provided in Section 10, if
and so long as the Common Stock is registered under Section 12 of the Exchange
Act, not more than One Hundred Thousand (100,000) shares of Common Stock may be
made subject to grants under the Plan to any one individual in the aggregate in
any one fiscal year of the Company, except the Company may make additional
one-time grants of up to Fifty Thousand (50,000) shares to a newly hired
individual, such limitation to be applied in a manner consistent with the
requirements of, and only to the extent required for compliance with, the
exclusion from the limitation on deductibility of compensation under Section
162(m) of the Code.
5. OPTION TERMS.
5.1 The Plan Administrator shall specify the following terms
to be contained in each Option granted to an Optionee hereunder, which Option
shall be executed by the Company and such Optionee:
5.1.1 Whether such Option is an ISO or a Non-ISO;
5.1.2 The number of shares of Common Stock subject to
purchase pursuant to such Option;
5.1.3 The date on which the grant of such Option shall be
effective (the "Date of Grant");
5.1.4 The period of time during which such Option shall be
exercisable, which shall in no event be more than ten (10) years following its
Date of Grant for ISO's; provided, however, that if an ISO is granted to an
Optionee who on the Date of Grant owns, either directly or indirectly within the
meaning of Section 424(d) of the Code, more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or an Affiliate of
the Company, the period of time during which such Option shall be exercisable
shall in no event be more than five (5) years following its Date of Grant;
5.1.5 The price at which such Option shall be exercisable
by the Optionee (the "Option Price"); provided, however, that the Option Price
shall in no event be less than the fair market value, as defined in Section 5.2
below, on the Date of Grant, of the shares of Common Stock subject thereto; and
provided further that, if such Option is granted to an Optionee who on the Date
of Grant owns, either directly or indirectly within the meaning of Section
424(d) of the Code, more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or an Affiliate of the Company,
then the Option Price specified in such Option shall be at least one hundred ten
percent (110%) of the fair market value, on the Date of Grant, of the Common
Stock subject thereto;
5.1.6 Any vesting schedule upon which the exercise of an
Option is contingent; provided that the Plan Administrator shall have complete
discretion with respect to the terms of any vesting schedule upon which the
exercise of an Option is contingent, including, without limitation, discretion
(a) to allow full and immediate vesting upon grant of such Option, (b) to permit
partial vesting in stated percentage amounts based on the length of the holding
period of such Option, or (c) to permit full vesting after a stated holding
period has passed; and
-3-
<PAGE> 4
5.1.7 Such other terms and conditions as the Plan
Administrator deems advisable and as are consistent with the purpose of this
Plan.
5.2 Fair market value shall be determined as follows:
5.2.1 If the Company's Common Stock is publicly traded at
the time an Option is granted hereunder, fair market value shall be determined
as of the last business day for which the prices or quotes discussed in this
Section 5.2.1 are available prior to the date such Option is granted and shall
mean:
(a) The average (on that date) of the high and low
prices of the Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; or
(b) The last reported sale price (on that date) of
the Common Stock on the NASDAQ National Market System, if the Common Stock is
not then traded on a national securities exchange; or
(c) The closing bid price (or average of bid prices)
last quoted on such date by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market System.
5.2.2 If the Common Stock is not publicly traded at the
time an Option is granted hereunder, fair market value shall be deemed to be the
fair value of the Common Stock as determined by the Plan Administrator after
taking into consideration all factors that it deems appropriate, including,
without limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
5.3 No Option shall be granted hereunder during the suspension
of this Plan or after the termination of this Plan pursuant to Section 11.2.
Except as expressly provided herein, nothing contained in this Plan shall
require that the terms and conditions of Options granted hereunder be uniform.
5.4 Notwithstanding anything in the Plan to the contrary, the
Plan Administrator may grant Options under the Plan in substitution for options
issued under other plans, or assume under the Plan awards issued under other
plans, if the other plans are or were plans of other acquired entities
("Acquired Entities") (or the parent of the Acquired Entity) and the new Option
is substituted, or the old option is assumed, by reason of a merger,
consolidation, acquisition of property or of stock, reorganization or
liquidation (the "Acquisition Transaction"). In the event that a written
agreement pursuant to which the Acquisition Transaction is completed is approved
by the Board and said agreement sets forth the terms and conditions of the
substitution for or assumption of outstanding awards of the Acquired Entity,
said terms and conditions shall be deemed to be the action of the Plan
Administrator without any further action by the Plan Administrator, and the
persons holding such Options shall be deemed to be Optionees.
6. LIMITATION ON GRANTS OF ISO'S.
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<PAGE> 5
In the event that the aggregate fair market value of Common Stock and
other stock with respect to which ISO's granted to an Optionee hereunder or
incentive stock options granted to such Optionee under any other plan of the
Company or any of its Affiliates are exercisable for the first time during any
calendar year, exceeds the maximum permitted under Section 422(d) of the Code,
then to the extent of such excess, such ISO's shall be treated as Non-ISO's.
7. EXERCISE OF OPTION.
7.1 Subject to any limitations or conditions imposed upon an
Option pursuant to Section 5 above, an Optionee may exercise an Option or any
part thereof (unless partial exercise is specifically prohibited by the terms of
the Option), by giving written notice thereof to the Company at its principal
place of business accompanied by payment as described in Section 7.2.
7.2 The exercise price for shares purchased under an Option
shall be paid in full to the Company by delivery of consideration equal to the
Option Price for the whole number of shares as to which it is exercised. Such
consideration must be paid in cash or by check, or, in the Plan Administrator's
discretion, a combination of cash and/or check and/or one or both of the
following alternative forms: (a) tendering (either actually or, if and so long
as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange
Act, by attestation) Common Stock already owned by the Optionee for at least six
(6) months (or any shorter period necessary to avoid a charge to the Company's
earnings for financial reporting purposes) having a fair market value on the day
prior to the exercise date equal to the aggregate Option Price or (b) if and so
long as the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, delivery of a properly executed exercise notice, together with
irrevocable instructions, to (i) a brokerage firm, that may from time to time be
designated by the Company in its discretion, to deliver to the Company the
aggregate amount of sale or loan proceeds to pay the Option Price and any
withholding tax obligations that may arise in connection with the exercise and
(ii) the Company, to deliver the certificates for such purchased shares directly
to such brokerage firm, all in accordance with the regulations of the Federal
Reserve Board. In addition, the exercise price for shares purchased under an
Option may be paid, either singly or in combination with one or more of the
alternative forms of payment authorized by this Section 7.2, by (y) a promissory
note; or (z) such other consideration as the Plan Administrator may permit. Any
promissory note delivered in connection with exercise of an Option shall bear
interest at a rate specified by the Plan Administrator but in no case less than
the rate required to avoid imputation of interest (taking into account any
exceptions) for federal income tax purposes.
7.3 As soon as practicable after exercise of an option in
accordance with Sections 7.1 and 7.2 above, the Company shall issue a stock
certificate evidencing the Common Stock with respect to which the Option has
been exercised. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) of
such stock certificate, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to such Common Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 10 below.
-5-
<PAGE> 6
7.4 The amount to be paid by the Optionee upon exercise shall
be the full Option Price together with the amount of any taxes required to be
withheld with respect to the grant or exercise of the Option. Subject to the
Plan and to applicable law, the Plan Administrator, in its sole discretion, may
permit such withholding obligations to be paid, in whole or in part, by electing
to have the Company withhold shares of Common Stock or by transferring shares of
Common Stock to the Company, in such amounts as are equivalent to the fair
market value of the withholding obligation.
8. TRANSFERABILITY AND POST-TERMINATION EXERCISES.
8.1 Except as provided otherwise in this Section 8, no Option
shall be transferable or exercisable by any person other than the Optionee to
whom such Option was originally granted.
8.2 The Plan Administrator shall establish and set forth in
each instrument that evidences an Option whether the Option will continue to be
exercisable and the terms and conditions of such exercise, if the Optionee
ceases to be employed by or provide services to the Company or its Affiliates,
which may be waived or modified by the Plan Administrator. If not so established
and subject to Section 8.3, the Option will be exercisable in accordance with
the following terms, which may be waived or modified by the Plan Administrator:
8.2.1 In case of termination of Optionee's employment or
services other than by reason of death, the Option shall be exercisable, to the
extent of the number of shares purchasable at the date of termination, only:
(a) Except as set forth in Section 8.3 with regard
to ISO's, within one year if termination is coincident with normal retirement
(as defined by the Plan Administrator), early retirement at the Company's
request, or disability; or
(b) Within three months after the date the Optionee
ceases to be an employee or consultant of the Company or Affiliate, if
termination is for reason other than as specified in (a), but, in either case,
no later than the remaining term of the Option.
8.2.2 Any Option exercisable at the time of the Optionee's
death may be exercised to the extent of the number of shares purchasable at the
date of death, by the personal representative of the Optionee's estate or the
person(s) to whom the Optionee's rights under the Option have passed by will or
applicable laws of descent and distribution at any time or from time to time
within one year after the date of death, but in no event later than the
remaining term of the Option.
8.2.3 Any portion of an Option not exercisable on the date
of termination of the Optionee's employment or services shall terminate on such
date, unless the Plan Administrator determines otherwise.
8.2.4 Subject to Section 8.3, the effect of a
Company-approved leave of absence on terms and conditions of an Option shall be
determined by the Plan Administrator in its sole discretion. A transfer of
services or employment between or among the Company and subsidiaries shall not
be considered a termination of employment or services.
-6-
<PAGE> 7
8.3 To the extent required by Section 422 of the Code, ISO's
shall be subject to the following additional terms and conditions: To qualify
for ISO tax treatment, an Option designated as an ISO must be exercised within
three months after termination of employment for reasons other than death,
except that in the case of termination of employment due to total disability,
such Option must be exercised within one year after such termination. Employment
shall not be deemed to continue beyond the first 90 days of a leave of absence
unless the Optionee's reemployment rights are guaranteed by statute or contract.
For purposes of this Section 8.3, "total disability" shall mean a mental or
physical impairment expected to result in death or that has lasted or is
expected to last for a continuous period of 12 months or more and that causes
the Optionee to be unable, in the opinion of the Company and two independent
physicians, to perform his or her duties for the Company and to be engaged in
any substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the Company and two independent physicians
furnish their opinion of total disability to the Plan Administrator.
8.4 In the event that a qualified domestic relations order, as
defined by Section 414(p) of the Code or Title I of the Employee Retirement
Income Security Act or the rules thereunder, mandates the transfer of any Option
that could have been exercised immediately prior to the issuance of such order,
such Option shall pass to the person or persons entitled thereto pursuant to the
order and shall be exercisable by such person or persons in accordance with the
terms thereof. In addition, a Non-ISO may be exercised during the Optionee's
lifetime, by the Optionee's guardian or legal representative.
8.5 The Plan Administrator may, in its discretion, authorize
all or a portion of the Non-ISO's granted to an Optionee to be on terms which
permit transfer by such Optionee to (i) the spouse, children or grandchildren of
the Optionee ("Immediate Family Members"), (ii) a trust or trusts for the
exclusive benefit of such Immediate Family Members, or (iii) a partnership in
which such Immediate Family Members are the only partners, provided that (x)
there may be no consideration for any such transfer, (y) the stock option
agreement pursuant to which such Options are granted must be approved by the
Plan Administrator and must expressly provide for transferability in a manner
consistent with this Section, and (z) subsequent transfers of transferred
Options are prohibited except those in accordance with Section 8 of the Plan.
The Plan Administrator may, in its discretion, in permitting transferability,
impose additional conditions in the Option Agreement consistent with this
section, including without limitation imposition of a post-exercise holding
period on transferees. Following transfer, any such Options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer; provided, the events of termination of employment of Sections 8 and 9
hereof shall continue to be applied with respect to the original Optionee,
following which the Options shall be exercisable by the transferee only to the
extent and for the periods specified. The Company disclaims any obligation to
provide notice to a transferee of early termination of the Option due to
termination of employment or otherwise. Notwithstanding a transfer pursuant to
the foregoing, the original Optionee will remain subject to applicable
withholding taxes upon exercise. No transfer will be effective until written
notice of transfer is delivered to the Company. The Company reserves the right
to approve transfers hereunder.
9. TERMINATION OF OPTIONS.
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To the extent not earlier exercised, an Option shall terminate at the
earliest of the following dates:
9.1 The termination date specified for such Option in the
respective Option Agreement;
9.2 As specified in Section 8 above:
9.3 The date of any sale, transfer, or hypothecation, or any
attempted sale, transfer or hypothecation, of such Option in violation of
Section 8 above; or
9.4 The date specified in Section 10.2 below for such
termination in the event of a Terminating Event.
10. ADJUSTMENTS TO OPTIONS.
10.1 In the event of a material alteration in the capital
structure of the Company on account of a recapitalization, stock split, reverse
stock split, stock dividend, or otherwise, then the Plan Administrator shall
make such adjustments to this Plan and to the Options then outstanding and
thereafter granted hereunder as the Plan Administrator determines to be
appropriate and equitable under the circumstances, so that the proportionate
interest of each holder of any such Option shall, to the extent practicable, be
maintained as before the occurrence of such event. Such adjustments may include,
without limitation (a) a change in the number or kind of shares of stock of the
Company covered by such Options, and (b) a change in the Option Price payable
per share; provided, however, that the aggregate Option Price applicable to the
unexercised portion of existing Options shall not be altered, it being intended
that any adjustments made with respect to such Options shall apply only to the
price per share and the number of shares subject thereto. For purposes of this
Section 10.1, neither (i) the issuance of additional shares of stock of the
Company in exchange for adequate consideration (including services), nor (ii)
the conversion of outstanding preferred shares of the Company into Common Stock
shall be deemed material alterations of the capital structure of the Company. In
the event the Plan Administrator shall determine that the nature of a material
alteration in the capital structure of the Company is such that it is not
practical or feasible to make appropriate adjustments to this Plan or to the
Options granted hereunder, such event shall be deemed a Terminating Event as
defined in Section 10.2 below.
10.2 Subject to Section 10.3, all Options granted hereunder
shall terminate upon the occurrence of any of the following events ("Terminating
Events"): (a) the dissolution or liquidation of the Company; or (b) a material
change in the capital structure of the Company that is subject to this Section
10.2 by virtue of the last sentence of Section 10.1 above.
10.3 The Plan Administrator shall give notice to Optionees not
less than thirty (30) days prior to the consummation of (a) a Terminating Event
as defined in Section 10.2 above; (b) a merger or consolidation of the Company
with one or more corporations as a result of which, immediately following such
merger or consolidation, the shareholders of the Company as a group will hold
less than a majority of the outstanding capital stock of the surviving
corporation; or (c) the sale or other disposition of all or substantially all of
the assets of the Company. Upon the giving of such notice, all Options granted
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<PAGE> 9
hereunder shall become immediately exercisable, without regard to any contingent
vesting provision to which such Options may have otherwise been subject.
10.4 All Options granted hereunder shall become immediately
exercisable, without regard to any contingent vesting provision to which such
Options may have otherwise been subject, upon the occurrence of an event whereby
any person or entity, including any "person" as such term is used in Section
13(d)(3) of the Exchange Act, becomes the "beneficial owner", as defined in the
Exchange Act, of Common Stock representing fifty percent (50%) or more of the
combined voting power of the voting securities of the Company.
10.5 In the event of a reorganization as defined in this
Section 10.5 in which the Company is not the surviving or acquiring company, or
in which the Company is or becomes a wholly-owned subsidiary of another company
after the effective date of the reorganization, then the plan or agreement
respecting the reorganization shall include appropriate terms providing for the
assumption of each Option granted hereunder, or the substitution of an option
therefor, such that no "modification" of any such Option occurs under Section
424 of the Code. For purposes of this Section 10.5, reorganization shall mean
any statutory merger, statutory consolidation, sale of all or substantially all
of the assets of the Company, or sale, pursuant to an agreement with the
Company, of securities of the Company pursuant to which the Company is or
becomes a wholly-owned subsidiary of another corporation after the effective
date of the reorganization.
10.6 The Plan Administrator shall have the right to accelerate
the date of exercise of any installment of any option; provided, however, that,
without the consent of the Optionee with respect to any Option, the Plan
Administrator shall not accelerate the date of any installment of any Option
granted to an employee as an ISO (and not previously converted into a Non-ISO
pursuant to Section 12 below) if such acceleration would violate the annual
vesting limitation contained in Section 422(d) of the Code, as described in
Section 6 above.
10.7 Adjustments and determinations under this Section 10
shall be made by the Plan Administrator (upon the advice of counsel), whose
decisions as to what adjustments or determination shall be made, and the extent
thereof, shall be final, binding, and conclusive.
11. TERMINATION AND AMENDMENT OF PLAN.
11.1 The Plan may be amended only by the Board as it shall
deem advisable; however, to the extent required for compliance with Section 422
of the Code or any applicable law or regulation, shareholder approval will be
required for any amendment that will (a) increase the total number of shares as
to which Options may be granted under the Plan, (b) modify the class of persons
eligible to receive Options, or (c) otherwise require shareholder approval under
any applicable law or regulation.
11.2 The Company's shareholders or the Board may suspend or
terminate the Plan at any time. The Plan will have no fixed expiration date;
provided, however, that no ISO may be granted more than ten (10) years after the
earlier of the Plan's adoption by the Board and approval by the shareholders.
11.3 The amendment or termination of the Plan shall not,
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without the consent of the Optionee under the Plan, impair or diminish any
rights or obligations under any Option theretofore granted under the Plan. Any
change or adjustment to an outstanding ISO shall not, without the consent of the
holder, be made in a manner so as to constitute a "modification" that would
cause such ISO to fail to continue to qualify as an incentive stock option.
12. CONVERSION OF ISO'S INTO NON-ISO'S.
At the written request of any ISO Optionee, the Plan Administrator may
in its discretion take such actions as may be necessary to convert such
Optionee's ISO's (or any installments or portions of installments thereof) that
have not been exercised on the date of conversion into Non-ISO's at any time
prior to the expiration of such ISO's, regardless of whether the Optionee is an
employee of the Company or of an Affiliate of the Company at the time of such
conversion. Such actions may include, but shall not be limited to, extending the
exercise period or reducing the exercise price of the appropriate installments
of such ISO's. At the time of such conversion, the Plan Administrator, with the
consent of the Optionee, may impose such conditions on the exercise of the
resulting Non-ISO's as the Plan Administrator in its discretion may determine,
provided that such conditions shall not be inconsistent with this Plan. Nothing
in this Plan shall be deemed to give any Optionee the right to have such
Optionee's ISO's converted into Non-ISO's, and no such conversion shall occur
until and unless the Plan Administrator takes appropriate action. The Plan
Administrator, with the consent of the Optionee, may also terminate any portion
of any ISO that has not been exercised at the time of such conversion.
13. CONDITIONS UPON ISSUANCE OF SHARES.
13.1 Shares shall not be issued pursuant to the exercise of
any Option unless the exercise of such Option and the issuance and delivery of
such shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended
("Securities Act"), the Exchange Act, any applicable state securities law, the
rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed or otherwise traded, and such
compliance has been confirmed by counsel for the Company. The Company shall be
under no obligation to any participants to register for offering or resale or to
qualify for an exemption under the Securities Act, or to register or qualify
under state securities laws, any shares of Company's stock issued under the Plan
or to continue in effect any registrations or qualifications if made. The
Company may issue certificates for shares with such legends and subject to such
restrictions on transfer as counsel for the Company deems necessary or desirable
for compliance with federal and state securities laws.
13.2 As a condition to the exercise of any Option, the Company
may require the participant exercising such Option to represent and warrant at
the time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such representations and
warranties are required by any relevant provision of law.
13.3 The Company's inability to obtain authority from any
regulatory body having jurisdiction, which authority the Company's counsel has
determined to be necessary to the lawful issuance and sale of any shares
hereunder, shall relieve the Company of any liability with respect to the
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<PAGE> 11
failure to issue or sell such shares.
14. USE OF PROCEEDS.
Proceeds from the sale of Common Stock pursuant to the exercise of
Options granted hereunder shall constitute general funds of the Company and
shall be used for general corporate purposes.
15. NOTICES.
All notices, requests, demands and other communications required or
permitted to be given under this Plan and the Options granted hereunder shall be
in writing and shall be either served personally on the party to whom notice is
to be given (in which case notice shall be deemed to have been duly given on the
date of such service), or mailed to the party to whom notice is to be given, by
first class mail, registered or certified, return receipt requested, postage
prepaid, and addressed to the party at his or its most recent known address, in
which case such notice shall be deemed to have been duly given on the third
(3rd) postal delivery day following the date of such mailing.
16. MISCELLANEOUS PROVISIONS.
16.1 Optionees shall be under no obligation to exercise
Options granted hereunder.
16.2 Nothing contained in this Plan shall obligate the Company
to retain an Optionee as an employee, officer, director, or consultant for any
period, nor shall this Plan interfere in any way with the right of the Company
to reduce such Optionee's compensation.
16.3 The provisions of this Plan and each Option issued to an
Optionee hereunder shall be binding upon such Optionee, the Qualified Successor
or Guardian of such Optionee, and the heirs, successors, and assigns of such
Optionee.
16.4 This Plan is intended to constitute an "unfunded" plan
and nothing herein shall require the Company to segregate any monies or other
property or shares of Common Stock or create any trusts or deposits, and no
Optionee shall have rights greater than a general unsecured creditor of the
Company.
16.5 It is the Company's intention that, if and so long as any
of the Company's equity securities are registered pursuant to Section 12(b) or
12(g) of the Exchange Act, the Plan shall comply in all respects with Rule 16b-3
under the Exchange Act and, if any Plan provision is later found not to be in
compliance with such Rule 16b-3, the provision shall be deemed null and void,
and in all events the Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3. Notwithstanding anything in the Plan to the
contrary, the Board, in its sole discretion, may bifurcate the Plan so as to
restrict, limit or condition the use of any provision of the Plan to Optionees
who are officers or directors subject to Section 16 of the Exchange Act without
so restricting, limiting or conditioning the Plan with respect to other
Optionees. Additionally, in interpreting and applying the provisions of the
Plan, any Option granted as an ISO pursuant to the Plan shall, to be extent
permitted by law, be construed as an "incentive stock option" within the meaning
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of Section 422 of the Code.
16.6 Where the context so requires, references herein to the
singular shall include the plural, and vice versa, and references to a
particular gender shall include either or both genders.
17. EFFECTIVE DATE OF PLAN AND AMENDMENTS.
This Plan was initially adopted by the Board of Directors on March 25,
1997 and approved by the shareholders on May 20, 1997.
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Exhibit 5.1
December 30, 1997
Data Dimensions, Inc.
411 108th Avenue NE
Suite 2100
Bellevue, Washington 98004
RE: 1,000,000 SHARES OF COMMON STOCK ($.01 PAR VALUE PER SHARE)
OF DATA DIMENSIONS, INC. (THE "COMPANY")
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") pursuant to
the Securities Act of 1933, as amended (the "Act"), which you are filing with
the Securities and Exchange Commission with respect to 1,000,000 shares of
Common Stock, $.01 par value per share (the "Shares"), which are to be issued
pursuant to the Data Dimensions, Inc. 1997 Stock Option Plan (the "Plan"). We
have examined the Registration Statement and such other documents and records of
the Company as we have deemed relevant and necessary for the purposes of this
opinion.
Based upon and subject to the foregoing, we are of the opinion that the
Shares that will be issued pursuant to the Plan, upon the due execution by the
Company and the registration by its registrar of the Shares and the issuance
thereof by the Company in accordance with the terms of the Plan, and the receipt
of consideration therefor in accordance with the terms of the Plan, will be
validly issued, fully paid and nonassessable.
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 are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Garvey, Schubert & Barer
GARVEY, SCHUBERT & BARER
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Company's Form S-8 of
our report dated February 12, 1997, relating to the consolidated financial
statements of Data Dimensions, Inc. (the "Company") appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, as amended.
We also hereby consent to the incorporation by reference in the Form S-8 of our
report dated September 12, 1997, relating to the financial statements of Pyramid
Information Services, Inc. appearing in the Company's Current Form 8-K dated
October 30, 1997.
/s/ BDO Seidman, L.L.P.
BDO Seidman, L.L.P.
Seattle, Washington
December 31, 1997
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Thomas W. Fife,
hereby constitutes and appoints Larry W. Martin his true and lawful
attorney-in-fact and agent, for him and his name, place and stead, in any and
all capacities, to sign the Form S-8 Registration Statement of Data Dimensions,
Inc., a Delaware corporation, and any amendments or supplements thereto, and to
file this Power of Attorney and the Form S-8, with all exhibits thereto, and
other documents in connection therewith with the Securities and Exchange
Commission and the Nasdaq National Market System, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent may do or
cause to be done by virtue hereof.
Dated this 16th day of December, 1997.
Signature:
/s/ Thomas W. Fife
_____________________________
Thomas W. Fife
<PAGE> 1
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Robert T. Knight,
hereby constitutes and appoints Larry W. Martin his true and lawful
attorney-in-fact and agent, for him and his name, place and stead, in any and
all capacities, to sign the Form S-8 Registration Statement of Data Dimensions,
Inc., a Delaware corporation, and any amendments or supplements thereto, and to
file this Power of Attorney and the Form S-8, with all exhibits thereto, and
other documents in connection therewith with the Securities and Exchange
Commission and the Nasdaq National Market System, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent may do or
cause to be done by virtue hereof.
Dated this 16th day of December, 1997.
Signature:
/s/ Robert T. Knight
_____________________________
Robert T. Knight
<PAGE> 1
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Lucie Fjeldstad,
hereby constitutes and appoints Larry W. Martin her true and lawful
attorney-in-fact and agent, for her and her name, place and stead, in any and
all capacities, to sign the Form S-8 Registration Statement of Data Dimensions,
Inc., a Delaware corporation, and any amendments or supplements thereto, and to
file this Power of Attorney and the Form S-8, with all exhibits thereto, and
other documents in connection therewith with the Securities and Exchange
Commission and the Nasdaq National Market System, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent may do or
cause to be done by virtue hereof.
Dated this 18th day of December, 1997.
Signature:
/s/ Lucie Fjeldstad
_____________________________
Lucie Fjeldstad
