<PAGE> 1
AS FILED WITH THE SECURITIES AND EXHCHANGE COMMISSION ON JULY 25, 1997
REGISTRATION STATEMENT NO.
---------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------
INTELLIGENT SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 58-1964787
------------------------------------ ------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
4355 SHACKLEFORD ROAD
NORCROSS, GEORGIA 30093
----------------------------------------------------
(Address, including zip code, of Registrant's
Principal Executive Offices)
----------------------------------------------------
INTELLIGENT SYSTEMS CORPORATION 1991 STOCK INCENTIVE PLAN
----------------------------------------------------
(Full Title of the Plan)
J. LELAND STRANGE
CHAIRMAN OF THE BOARD AND PRESIDENT
INTELLIGENT SYSTEMS CORPORATION
4355 SHACKLEFORD ROAD
NORCROSS, GEORGIA 30093
(770) 381-2900
----------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
PHILIP H. MOiSE, ESQ.
NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.
1201 PEACHTREE STREET, NE
400 COLONY SQUARE, SUITE 2200
ATLANTA, GA 30361
<TABLE>
CALCULATION OF REGISTRATION FEE
=====================================================================================
Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Aggregate Registration
Registered Registered(1) Price per Share(2) Offering Price(2) Fee
- --------------- ------------- ------------------ ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock
par value $0.01 80,000 $2.9375 $1,380,625 $418
per share 195,000 $5.875
=====================================================================================
</TABLE>
(1) Represents additional shares being registered for issuance under the
Intelligent Systems Corporation 1991 Stock Incentive Plan (the "Plan"). This
Registration Statement also covers such indeterminate number of shares as may
be issued pursuant to the anti-dilution provisions of the Intelligent Systems
Corporation 1991 Stock Incentive Plan.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h).
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Except for "Item 3. Incorporation of Documents by Reference" and "Item 8.
Exhibits" which are set forth herein, the contents of Registration Statement on
Form S-8 No. 33-99432 are incorporated herein by reference.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in this Registration Statement the
following documents and information heretofore filed by Intelligent Systems
Corporation (the "Company") with the Securities and Exchange Commission:
a. The Company's Annual Report on Form 10-K for the year ended December 31,
1996;
b. All other reports filed pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") since the
end of the fiscal year covered by the Annual Report referred to in
paragraph (a) above; and
c. The description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-B filed November 15, 1991, pursuant to
Section 12 of the Exchange Act, as amended by various reports and other
documents filed pursuant to the Exchange Act.
All documents filed by the Company pursuant to Sections 13, 14 and 15(d) of the
Exchange Act after the date of this Registration Statement and prior to the
filing of a post-effective amendment that indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be part hereof from the date of filing of such documents.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<S> <C>
3.1 Amended and Restated Articles of Incorporation of the Company dated
November 14, 1991. (Incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1991.)
3.2 Bylaws of the Company through March 11, 1997. (Incorporated by reference
to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996.)
4.1 Intelligent Systems Corporation 1991 Stock Incentive Plan, as amended.
5.1 Opinion of Nelson Mullins Riley & Scarborough, L.L.P.
23.1 Consent of Arthur Andersen LLP
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
23.2 Consent of Morley & Scott
23.3 Consent of Ernst & Young LLP
23.4 Consent of Nelson Mullins Riley & Scarborough, L.L.P. (contained in
Exhibit 5.1)
</TABLE>
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Norcross, State of Georgia, on July 25, 1997.
INTELLIGENT SYSTEMS CORPORATION
By: /s/ J. Leland Strange
-------------------------------------
J. Leland Strange
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons on July 25, 1997, in the
capacities indicated.
SIGNATURE TITLE
--------- -----
/s/ J. Leland Strange Chairman of the Board, President, Chief
- ---------------------- Executive Officer and Director (Principal
J. Leland Strange Executive Officer)
/s/ Henry H. Birdsong Chief Financial Officer (Principal Financial
- ---------------------- and Accounting Officer)
Henry H. Birdsong
/s/ Donald A. McMahon Director
- ----------------------
Donald A. McMahon
/s/ James V. Napier Director
- ----------------------
James V. Napier
Director
- ----------------------
Dr. John B. Peatman
/s/ Parker H. Petit Director
- ----------------------
Parker H. Petit
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
- ------- -------
<S> <C>
3.1 Amended and Restated Articles of Incorporation of the Company
dated November 14, 1991. (Incorporated by reference to Exhibit
3.1 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1991.)
3.2 Bylaws of the Company through March 11, 1997. (Incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on Form
10-K for the year ended December 31, 1996.)
4.1 Intelligent Systems Corporation 1991 Stock Incentive Plan, as
amended.
5.1 Opinion of Nelson Mullins Riley & Scarborough, L.L.P.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Morley & Scott
23.3 Consent of Ernst & Young LLP
23.4 Consent of Nelson Mullins Riley & Scarborough, L.L.P.
(contained in Exhibit 5.1)
</TABLE>
5
<PAGE> 1
EXHIBIT 4.1
INTELLIGENT SYSTEMS CORPORATION
1991 STOCK INCENTIVE PLAN
[As amended June 6, 1997]
<PAGE> 2
INTELLIGENT SYSTEMS CORPORATION
1991 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS........................................................................................... 1
(a) "Award"..................................................................................... 1
(b) "Board"..................................................................................... 1
(c) "Code"...................................................................................... 1
(d) "Committee"................................................................................. 1
(e) "Company"................................................................................... 1
(f) "Director".................................................................................. 1
(g) "Disinterested Person"...................................................................... 1
(h) "Employee".................................................................................. 1
(i) "Employer".................................................................................. 1
(j) "Fair Market Value"......................................................................... 2
(k) "Grantee"................................................................................... 2
(l) "ISO"....................................................................................... 2
(m) "1934 Act".................................................................................. 2
(n) "Officer"................................................................................... 2
(o) "Option".................................................................................... 3
(p) "Option Agreement".......................................................................... 3
(q) "Optionee".................................................................................. 3
(r) "Option Price".............................................................................. 3
(s) "Parent".................................................................................... 3
(t) "Plan"...................................................................................... 3
(u) "Purchasable,".............................................................................. 3
(v) "Qualified Domestic Relations Order"........................................................ 3
(w) "Reload Option"............................................................................. 3
(x) "Restricted Stock".......................................................................... 3
(y) "Restriction Agreement"..................................................................... 3
(z) "Stock"..................................................................................... 4
(aa) "Subsidiary"................................................................................ 4
ARTICLE II THE PLAN............................................................................................ 4
Section 2.1 Name................................................................................. 4
Section 2.2 Purpose.............................................................................. 4
Section 2.3 Effective Date...................................................................... 4
Section 2.4 Termination Date..................................................................... 4
ARTICLE III ELIGIBILITY......................................................................................... 4
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS (CONT'D)
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IV ADMINISTRATION....................................................................................... 5
Section 4.1 Duties and Powers of the Committee................................................... 5
Section 4.2 Interpretation; Rules................................................................ 5
Section 4.3 No Liability......................................................................... 5
Section 4.4 Majority Rule........................................................................ 5
Section 4.5 Company Assistance................................................................... 6
ARTICLE V SHARES OF STOCK SUBJECT TO PLAN....................................................................... 6
Section 5.1 Limitations.......................................................................... 6
Section 5.2 Antidilution......................................................................... 6
ARTICLE VI OPTIONS.............................................................................................. 8
Section 6.1 Types of Options Granted............................................................. 8
Section 6.2 Option Grant and Agreement........................................................... 8
Section 6.3 Optionee Limitations................................................................. 8
Section 6.4 $100,000 Limitation.................................................................. 9
Section 6.5 Option Price.......................................................................... 9
Section 6.6 Exercise Period....................................................................... 9
Section 6.7 Option Exercise....................................................................... 9
Section 6.8 Nontransferability of Option......................................................... 10
Section 6.9 Termination of Employment............................................................ 10
Section 6.10 Employment Rights.................................................................... 11
Section 6.11 Certain Successor Options............................................................ 11
Section 6.12 Conditions to Issuing Option Stock................................................... 11
ARTICLE VII RESTRICTED STOCK.................................................................................... 12
Section 7.1 Awards of Restricted Stock........................................................... 12
Section 7.2 Non-Transferability.................................................................. 12
Section 7.3 Lapse of Restrictions................................................................ 12
Section 7.4 Termination of Employment............................................................ 12
Section 7.5 Treatment of Dividends............................................................... 13
Section 7.6 Delivery of Shares................................................................... 13
ARTICLE VIII TERMINATION, AMENDMENT AND
MODIFICATION OF PLAN................................................................................... 13
ARTICLE IX MISCELLANEOUS....................................................................................... 14
Section 9.1 Replacement or Amended Grants........................................................ 14
Section 9.2 Forfeiture for Competition........................................................... 14
Section 9.3 Plan Binding on Successors........................................................... 14
Section 9.4 Gender............................................................................... 14
Section 9.5 Headings Not a Part of Plan.......................................................... 14
</TABLE>
ii
<PAGE> 4
INTELLIGENT SYSTEMS CORPORATION
1991 STOCK INCENTIVE PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the meanings hereinafter
set forth unless the context clearly indicates to the contrary:
(a) "Award" shall mean a grant of Restricted Stock.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the United States Internal Revenue Code of
1986, as amended, including effective date and transition rules (whether or not
codified). Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
(d) "Committee" shall mean a committee of at least two Directors
appointed from time to time by the Board, having the duties and authority set
forth herein in addition to any other authority granted by the Board; provided,
however, that with respect to any Options or Awards granted to an individual who
is an Officer, the Committee shall consist of at least two Directors (who need
not be members of the Committee with respect to Options or Awards granted to any
other individuals) who are Disinterested Persons, and all authority and
discretion shall be exercised by such Disinterested Persons, and references
herein to the "Committee" shall mean such Disinterested Persons insofar as any
actions or determinations of the Committee shall relate to or affect Options or
Awards made to or held by any Officer.
(e) "Company" shall mean Intelligent Systems Corporation, a
Georgia corporation.
(f) "Director" shall mean a member of the Board.
(g) "Disinterested Person" shall have the meaning set forth in
Rule 16b-3 under the 1934 Act, as the same may be in effect from time to time,
or in any successor rule thereto, and shall be determined for all purposes under
the Plan according to interpretative or "no-action" positions with respect
thereto issued by the Securities and Exchange Commission.
(h) "Employee" shall mean any employee of the Company or any
Subsidiary of the Company.
(i) "Employer" shall mean the corporation that employs a Grantee.
(j) "Fair Market Value" of the shares of Stock on any date shall
mean
(i) the closing sales price, regular way, or in the absence
thereof the mean of the last reported bid and asked
quotations, on such date on the exchange having the greatest
volume of trading in the shares during the thirty-day period
preceding such date (or if such exchange was not open for
trading on such date, the next preceding date on which it was
open); or
<PAGE> 5
(ii) if there is no price as specified in (i), the final
reported sales price or, if not reported, the mean of the
closing high bid and low asked prices in the over-the-counter
market for the shares as reported by the National Association
of Securities Dealers Automatic Quotation System or, if not so
reported, then as reported by the National Quotation Bureau
Incorporated, or if such organization is not in existence, by
an organization providing similar services, on such date (or
if such date is not a date for which such system or
organization generally provides reports, then on the next
preceding date for which it does so); or
(iii) if there also is no price as specified in (ii), the
price determined by the Committee by reference to
bid-and-asked quotations for the shares provided by members of
an association of brokers and dealers registered pursuant to
subsection 15(b) of the 1934 Act, which members make a market
in the shares, for such recent dates as the Committee shall
determine to be appropriate for fairly determining current
market value; or
(iv) if there also is no price as specified in (iii), the
amount determined in good faith by the Committee based on such
relevant facts, which may include opinions of independent
experts, as may be available to the Committee.
(k) "Grantee" shall mean an Employee who is an Optionee or who has
received an Award.
(l) "ISO" shall mean an Option that complies with and is subject
to the terms, limitations and conditions of Code section 422 and any regulations
promulgated with respect thereto.
(m) "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(n) "Officer" shall mean a person who constitutes an officer of
the Company for the purposes of Section 16 of the 1934 Act, as determined by
reference to such Section 16 and to the rules, regulations, judicial decisions,
and interpretative or "no-action" positions with respect thereto of the
Securities and Exchange Commission, as the same may be in effect or set forth
from time to time.
(o) "Option" shall mean a contractual right to purchase Stock
granted pursuant to the provisions of Article VI hereof.
(p) "Option Agreement" shall mean an agreement between the Company
and an Optionee setting forth the terms of an Option.
(q) "Optionee" shall mean a person to whom an Option has been
granted hereunder.
(r) "Option Price" shall mean the price at which an Optionee may
purchase a share of Stock pursuant to an Option.
2
<PAGE> 6
(s) "Parent" shall mean any corporation (other than the Employer)
in an unbroken chain of corporations ending with the Employer if, at the
relevant time, each of the corporations other than the Employer owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
(t) "Plan" shall mean the 1991 Stock Incentive Plan of the
Company.
(u) "Purchasable," when used to describe Stock, shall refer to
Stock that may be purchased by an Optionee under the terms of this Plan on or
after a certain date specified in the applicable Option Agreement.
(v) "Qualified Domestic Relations Order" shall have the meaning
set forth in the Code or in the Employee Retirement Income Security Act of 1974,
as amended, or the rules and regulations promulgated under the Code or such Act.
(w) "Reload Option" shall mean an Option that is granted, without
further action of the Committee, (i) to an Optionee who surrenders or authorizes
the withholding of shares of Stock in payment of amounts specified in paragraphs
6.7(c) or 6.7(d) hereof, (ii) for the same number of shares as is so paid, (iii)
as of the date of such payment and at an Option Price equal to the Fair Market
Value of the Stock on such date, and (iv) otherwise on the same terms and
conditions as the Option whose exercise has occasioned such payment, subject to
such contingencies, conditions or other terms as the Committee shall specify at
the time such exercised Option is granted.
(x) "Restricted Stock" shall mean Stock issued, subject to
restrictions, to an Employee pursuant to Article VII hereof.
(y) "Restriction Agreement" shall mean the agreement setting forth
the terms of an Award, and executed by a Grantee as provided in Section 7.1
hereof.
(z) "Stock" shall mean the $.01 par value common stock of the
Company or, in the event that the outstanding shares of such stock are hereafter
changed into or exchanged for shares of a different class of stock or securities
of the Company or some other corporation, such other stock or securities.
(aa) "Subsidiary" shall mean any corporation (other than the
Employer) in an unbroken chain of corporations beginning with the Employer if,
at the relevant time, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
ARTICLE II
THE PLAN
2.1 Name. This plan shall be known as the Company's "1991 Stock
Incentive Plan."
2.2 Purpose. The purpose of the Plan is to advance the interests of
the Company, its shareholders, and any Subsidiary of the Company, by offering
certain Employees an opportunity to acquire or increase their proprietary
interests in the Company. Options and Awards will promote the
3
<PAGE> 7
growth and profitability of the Company, and any Subsidiary of the Company,
because Grantees will be provided with an additional incentive to achieve the
Company's objectives through participation in its success and growth.
2.3 Effective Date. The Plan shall become effective on December 13,
1991.
2.4 Termination Date. No further Options or Awards shall be granted
hereunder on or after December 12, 2001, but all Options or Awards granted prior
to that time shall remain in effect in accordance with their terms; provided,
however, that the Plan shall terminate, and all Options or Awards theretofore
granted or awarded shall become void and may not be exercised, on December 13,
1992, if the shareholders of the Company shall not by that date have approved
the Plan's adoption.
ARTICLE III
ELIGIBILITY
The persons eligible to participate in this Plan shall consist only of
those Employees whose participation the Committee determines is in the best
interests of the Company.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee.
(a) The Plan shall be administered by the Committee. The
Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places as it may determine. The Committee shall keep
minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it may deem necessary. The Committee shall have the
power to act by unanimous written consent in lieu of a meeting, and shall have
the right to meet telephonically. In administering the Plan, the Committee's
actions and determinations shall be binding on all interested parties.
(b) The Committee shall have the power to grant Options or
Awards in accordance with the provisions of the Plan. Subject to the provisions
of the Plan, the Committee shall have the discretion and authority to determine
those individuals to whom Options or Awards will be granted and whether such
Options shall be accompanied by the right to receive Reload Options, the number
of shares of Stock subject to each Option or Award, such other matters as are
specified herein, and any other terms and conditions of an Option Agreement or
Restriction Agreement. Without limiting any of the foregoing, the adoption of
the Plan by the Board shall be deemed to be a delegation of its authority to
determine that the consideration received or to be received by the Company for
shares of Stock to be issued under Options or Awards is adequate.
(c) To the extent not inconsistent with the provisions of the
Plan, the Committee shall have the authority to amend or modify an outstanding
Option Agreement or Restriction Agreement, or to waive any provision thereof,
provided that the Grantee consents to such action.
4.2 Interpretation; Rules. Subject to the express provisions of the
Plan, the Committee also
4
<PAGE> 8
shall have complete authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, and to make all other
determinations necessary or advisable in the administration of the Plan,
including, without limitation, the amending or altering of any Options or Awards
granted hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.
4.3 No Liability. Neither any member of the Board nor any member of
the Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option or Award granted hereunder.
4.4 Majority Rule. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.
4.5 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations.
(a) Subject to any antidilution adjustment pursuant to the
provisions of Section 5.2 hereof, the maximum number of shares of Stock that may
be issued hereunder shall be 925,000. Shares subject to an Option or issued as
an Award may be either authorized and unissued shares or shares issued and later
acquired by the Company. The shares covered by any unexercised portion of an
Option that has terminated for any reason (except as set forth in the following
paragraph), or any forfeited portion of an Award (except any portion as to which
the Grantee has received, and not forfeited, dividends or other benefits of
ownership other than voting rights) may again be optioned or awarded under the
Plan, and such shares shall not be considered as having been optioned or issued
in computing the number of shares of Stock remaining available for option or
award hereunder.
(b) Pursuant to rules adopted by the American Stock Exchange,
unless and until the shareholders of the Company have approved the adoption of
the Plan:
(i) options may not be granted nor Awards made with respect
to more than 5% of the outstanding Stock in any one year; and
(ii) all arrangements adopted by the Company in any 5-year
period (including but not limited to the Plan) shall not
authorize, in the aggregate, the issuance of more than 10% of the
Stock.
In both cases, in calculating the percentage of Stock to be issued in the
aggregate, there shall be
5
<PAGE> 9
excluded from such calculations Stock previously covered by Options, Awards and
other arrangements that have expired or have been cancelled.
5.2 Antidilution.
(a) In the event that the outstanding shares of Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of merger, consolidation, reorganization,
recapitalization, reclassification, combination or exchange of shares, stock
split or stock dividend, or in the event that any spin-off, spin-out or other
distribution of assets materially affects the price of the Company's stock:
(i) The aggregate number and kind of shares of Stock for
which Options or Awards may be granted hereunder shall be adjusted
proportionately by the Committee; and
(ii) The rights of Optionees (concerning the number of
shares subject to Options and the Option Price) under outstanding
Options and the rights of the holders of Awards (concerning the
terms and conditions of the lapse of any then-remaining
restrictions), shall be adjusted proportionately by the Committee.
(b) If the Company shall be a party to any reorganization in
which it does not survive, involving merger, consolidation, or acquisition of
the stock or substantially all the assets of the Company, in its discretion the
Committee may:
(i) notwithstanding other provisions hereof, declare that
all Options granted under the Plan shall become exercisable
immediately notwithstanding the provisions of the respective
Option Agreements regarding exercisability, that all such Options
shall terminate a specified period of time after the Committee
gives written notice of the immediate right to exercise all such
Options and of the decision to terminate all Options not exercised
within such period, and that all then-remaining restrictions
pertaining to Awards under the Plan shall immediately lapse;
and/or
(ii) notify all Grantees that all Options or Awards granted
under the Plan shall be assumed by the successor corporation or
substituted on an equitable basis with options or restricted stock
issued by such successor corporation.
(c) If the Company is to be liquidated or dissolved in
connection with a reorganization described in paragraph 5.2(b), the provisions
of such paragraph shall apply. In all other instances, the adoption of a plan of
dissolution or liquidation of the Company shall, notwithstanding other
provisions hereof, cause all then-remaining restrictions pertaining to Awards
under the Plan to lapse, and shall cause every Option outstanding under the Plan
to terminate to the extent not exercised prior to the adoption of the plan of
dissolution or liquidation by the shareholders, provided that, notwithstanding
other provisions hereof, the Committee may declare all Options granted under the
Plan to be exercisable at any time on or before the fifth business day following
such adoption notwithstanding the provisions of the respective Option Agreements
regarding exercisability.
(d) The adjustments described in paragraphs (a) through (c) of
this Section 5.2,
6
<PAGE> 10
and the manner of their application, shall be determined solely by the
Committee, and any such adjustment may provide for the elimination of fractional
share interests. The adjustments required under this Article V shall apply to
any successors of the Company and shall be made regardless of the number or type
of successive events requiring such adjustments.
ARTICLE VI
OPTIONS
6.1 Types of Options Granted. Within the limitations provided herein,
Options may be granted to one Employee at one or several times or to different
Employees at the same time or at different times, in either case under different
terms and conditions, as long as the terms and conditions of each Option are
consistent with the provisions of the Plan. Without limitation of the foregoing,
Options may be granted subject to conditions based on the financial performance
of the Company or any other factor the Committee deems relevant.
6.2 Option Grant and Agreement. Each Option granted or modified
hereunder shall be evidenced (a) by either minutes of a meeting or a written
consent of the Committee, and (b) by a written Option Agreement executed by the
Company and the Optionee. The terms of the Option, including the Option's
duration, time or times of exercise, exercise price, whether the Option is
intended to be an ISO, and whether the Option is to be accompanied by the right
to receive a Reload Option, shall be stated in the Option Agreement. Separate
Option Agreements shall be used for Options intended to be ISO's and those not
so intended, but any failure to use such separate Agreements shall not
invalidate, or otherwise adversely affect the Optionee's rights under and
interest in, the Options evidenced thereby.
6.3 Optionee Limitations. The Committee shall not grant an ISO to any
person who, at the time the ISO would be granted:
(a) is not an Employee; or
(b) owns or is considered to own stock possessing more than 10%
of the total combined voting power of all classes of stock of the Employer, or
any Parent or Subsidiary of the Employer; provided, however, that this
limitation shall not apply if at the time an ISO is granted the Option Price is
at least 110% of the Fair Market Value of the Stock subject to such Option and
such Option by its terms would not be exercisable after the expiration of five
years from the date on which the Option is granted. For the purpose of this
paragraph (b), a person shall be considered to own (i) the stock owned, directly
or indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors and lineal descendants, (ii) the stock owned, directly
or indirectly, by or for a corporation, partnership, estate, or trust in
proportion to such person's stock interest, partnership interest or beneficial
interest therein, and (iii) the stock which such person may purchase under any
outstanding options of the Employer or of any Parent or Subsidiary of the
Employer.
6.4 $100,000 Limitation. Except as provided below, the Committee shall
not grant an ISO to, or modify the exercise provisions of outstanding ISO's held
by, any person who, at the time the ISO is granted (or modified), would thereby
receive or hold any incentive stock options (as described in Code section 422)
of the Employer and any Parent or Subsidiary of the Employer, such that the
aggregate Fair Market Value (determined as of the respective dates of grant or
modification of each
7
<PAGE> 11
option) of the stock with respect to which such incentive stock options are
exercisable for the first time during any calendar year is in excess of
$100,000; provided, that the foregoing restriction on modification of
outstanding ISO's shall not preclude the Committee from modifying an outstanding
ISO if, as a result of such modification and with the consent of the Optionee,
such Option no longer constitutes an ISO; and provided that, if the $100,000
limitation described in this Section 6.4 is exceeded, an Option that otherwise
qualifies as an ISO shall be treated as an ISO up to the limitation and the
excess shall be treated as an Option not qualifying as an ISO. The preceding
sentence shall be applied by taking options intended to be ISO's into account in
the order in which they were granted.
6.5 Option Price. The Option Price under each Option shall be
determined by the Committee. However, the Option Price shall not be less than
50% of the Fair Market Value of the Stock, or in the case of an ISO less than
the Fair Market Value of the Stock, in each case on the date that the Option is
granted (or, in the case of an ISO that is subsequently modified, on the date of
such modification).
6.6 Exercise Period. The period for the exercise of each Option
granted hereunder shall be determined by the Committee, but
(a) the Option Agreement with respect to each Option intended to
be an ISO shall provide that such Option shall not be exercisable after the
expiration of ten years from the date of grant (or modification) of the Option,
and
(b) no Option granted to an Employee who is also an Officer shall
be exercisable prior to the expiration of six months from the date such Option
is granted, other than in the case of the death or disability of such Employee.
6.7 Option Exercise.
(a) Unless otherwise provided in the Option Agreement, an Option
may be exercised at any time or from time to time during the term of the Option
as to any or all whole shares that have become Purchasable under the provisions
of the Option, but not at any time as to less than 100 shares unless the
remaining shares that have become so Purchasable are less than 100 shares. The
Committee shall have the authority to prescribe in any Option Agreement that the
Option may be exercised only in accordance with a vesting schedule during the
term of the Option.
(b) An Option shall be exercised by (i) delivery to the Treasurer
of the Company at its principal office of written notice of exercise with
respect to a specified number of shares of Stock, and (ii) payment to the
Company at that office of the full amount of the Option Price for such number of
shares.
(c) The Option Price shall be paid in full upon the exercise of
the Option; provided, however, that the Committee may provide in an Option
Agreement that, in lieu of cash, all or any portion of the Option Price may be
paid by tendering to the Company shares of Stock duly endorsed for transfer and
owned by the Optionee, to be credited against the Option Price at the Fair
Market Value of such shares on the date of exercise (however, no fractional
shares may be so transferred, and the Company shall not be obligated to make any
cash payments in consideration of any excess of the aggregate Fair Market Value
of shares transferred over the aggregate Option Price).
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(d) In addition to and at the time of payment of the Option Price,
the Optionee shall pay to the Company in cash the full amount of any federal,
state and local income, employment or other taxes required to be withheld from
the income of such Optionee as a result of such exercise; provided, however,
that in the discretion of the Committee any Option Agreement may provide that
all or any portion of such tax obligations, together with additional taxes not
exceeding the actual additional taxes to be owed by the Optionee as a result of
such exercise, may, upon the irrevocable election of the Optionee, be paid by
tendering to the Company whole shares of Stock duly endorsed for transfer and
owned by the Optionee, or by authorization to the Company to withhold shares of
Stock otherwise issuable upon exercise of the Option, in either case in that
number of shares having a Fair Market Value on the date of exercise equal to the
amount of such taxes thereby being paid, and subject to such restrictions as to
the approval and timing of any such election as the Committee may from time to
time determine to be necessary or appropriate to satisfy the conditions of the
exemption set forth in Rule 16b-3 under the 1934 Act.
(e) The holder of an Option shall not have any of the rights of a
shareholder with respect to the shares of Stock subject to the Option until such
shares have been issued upon the exercise of the Option.
6.8 Nontransferability of Option. No Option or any rights therein
shall be transferable by an Optionee other than by will or the laws of descent
and distribution, or pursuant to a Qualified Domestic Relations Order. During
the lifetime of an Optionee, an Option granted to that Optionee shall be
exercisable only by such Optionee (or by such Optionee's guardian or other legal
representative, should one be appointed).
6.9 Termination of Employment. The Committee shall have the power to
specify, with respect to the Options granted to any particular Optionee, the
effect upon such Optionee's right to exercise an Option of the termination of
such Optionee's employment under various circumstances, which effect may include
immediate or deferred termination of such Optionee's rights under an Option, or
acceleration of the date at which an Option may be exercised in full.
6.10 Employment Rights. Options granted under the Plan shall not be
affected by any change of employment so long as the Optionee continues to be an
Employee. Nothing in the Plan or in any Option Agreement shall confer on any
person any right to continue in the employ of the Company or any Subsidiary of
the Company, or shall interfere in any way with the right of the Company or any
such Subsidiary to terminate such person's employment at any time.
6.11 Certain Successor Options. To the extent not inconsistent with the
terms, limitations and conditions of Code section 422, and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or any Subsidiary of the Company) may contain terms that differ
from those stated in this Article VI, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code section 424(a).
6.12 Conditions to Issuing Option Stock. The Company shall not be
required to issue or deliver any Stock purchased upon the full or partial
exercise of any Option granted hereunder prior to fulfillment of all of the
following conditions:
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(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed;
(b) The completion of any registration or other qualification
of such shares that the Company shall determine to be necessary or advisable
under any federal or state law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body, or
the Company's determination that an exemption is available from such
registration or qualification;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency that the Company shall determine to be
necessary or advisable; and
(d) The lapse of such reasonable period of time following
exercise as shall be appropriate for reasons of administrative convenience.
Unless the shares of Stock covered by the Plan shall be the subject of an
effective registration statement under the Securities Act of 1933, as amended,
stock certificates issued and delivered to Optionees shall bear such restrictive
legends as the Company shall deem necessary or advisable pursuant to applicable
federal and state securities laws.
ARTICLE VII
RESTRICTED STOCK
7.1 Awards of Restricted Stock.
(a) The Committee may grant Awards of Restricted Stock upon
determination by the Committee, acting pursuant to the delegation by the Board
of authority to make such determinations, that the value or other benefit to the
Company of the services of a Grantee theretofore performed or to be performed as
a condition of the lapse of restrictions applicable to such Restricted Stock, or
the benefit to the Company of the incentives created by the issuance thereof, is
adequate consideration for the issuance of such shares. Each Award shall be
governed by a Restriction Agreement between the Company and the Grantee. Each
Restriction Agreement shall contain such restrictions, terms and conditions as
the Committee may, in its discretion, determine, and may require that an
appropriate legend be placed on the certificates evidencing the subject
Restricted Stock.
(b) Shares of Restricted Stock granted pursuant to an Award
hereunder shall be issued in the name of the Grantee as soon as reasonably
practicable after the Award is granted, provided that the Grantee has executed
the Restriction Agreement governing the Award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow agreement and any
other documents which the Committee may require as a condition to the issuance
of such shares. If a Grantee shall fail to execute the foregoing documents,
within any time period prescribed by the Committee, the Award shall be null and
void. At the discretion of the Committee, Restricted Stock issued in connection
with an Award shall be deposited together with the stock powers with an escrow
agent designated by the Committee. Unless the Committee determines otherwise and
as set forth in the Restriction Agreement, upon delivery of the Restricted Stock
to the escrow agent, the Grantee shall have all of the rights of a shareholder
with respect to such Restricted Stock, including the right to vote the
Restricted Stock and to receive all dividends or other distributions paid or
made with respect to the Restricted Stock.
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7.2 Non-Transferability. Until any restrictions upon Restricted Stock
awarded to a Grantee shall have lapsed in a manner set forth in Section 7.3,
such shares of Restricted Stock shall not be transferable other than by will or
the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, nor shall they be delivered to the Grantee.
7.3 Lapse of Restrictions. Restrictions upon Restricted Stock awarded
hereunder shall lapse at such time or times (but, with respect to any Award to
an Employee who is also an Officer, not less than six months after the date of
the Award) and on such terms and conditions as the Committee may, in its
discretion, determine at the time the Award is granted or thereafter.
7.4 Termination of Employment. The Committee shall have the power to
specify, with respect to each Award granted to any particular Employee, the
effect upon such Grantee's rights with respect to such Restricted Stock of the
termination of such Grantee's employment under various circumstances, which
effect may include immediate or deferred forfeiture of such Restricted Stock or
acceleration of the date at which any then-remaining restrictions shall lapse.
7.5 Treatment of Dividends. At the time an Award of Restricted Stock is
made the Committee may, in its discretion, determine that the payment to the
Grantee of any dividends, or a specified portion thereof, declared or paid on
such Restricted Stock shall be (i) deferred until the lapsing of the relevant
restrictions, and (ii) held by the Company for the account of the Grantee until
such time. In the event of such deferral, there shall be credited at the end of
each year (or portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum determined by the Committee. Payment
of deferred dividends, together with interest thereon, shall be made upon the
lapsing of restrictions imposed on such Restricted Stock, and any dividends
deferred (together with any interest thereon) in respect of Restricted Stock
shall be forfeited upon any forfeiture of such Restricted Stock.
7.6 Delivery of Shares. Within a reasonable period of time following the
lapse of the restrictions on shares of Restricted Stock, the Committee shall
cause a stock certificate to be delivered to the Grantee with respect to such
shares. Such shares shall be free of all restrictions hereunder, except that if
the shares of stock covered by the Plan shall not be the subject of an effective
registration statement under the Securities Act of 1933, as amended, such stock
certificates shall bear such restrictive legends as the Company shall deem
necessary or advisable pursuant to applicable federal and state securities laws.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time, (i) cause the Committee to cease granting
Options and Awards, (ii) terminate the Plan, or (iii) in any respect amend or
modify the Plan; provided, however, that the Board (unless its actions are
approved or ratified by the shareholders of the Company within twelve months of
the date the Board amends the Plan) may not amend the Plan to:
(a) Materially increase the number of shares of Stock subject to
the Plan;
(b) Materially change or modify the class of persons that may
participate in the Plan; or
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(c) Otherwise materially increase the benefits accruing to
participants under the Plan.
No termination, amendment or modification of the Plan shall affect
adversely an Optionee's rights under an Option Agreement or Restriction
Agreement without the consent of the Grantee or his legal representative.
ARTICLE IX
MISCELLANEOUS
9.1 Replacement or Amended Grants. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or Awards or accept the surrender of outstanding Options or
Awards and grant new Options or Awards in substitution for them. However no
modification of an Option or Award shall adversely affect a Grantee's rights
under an Option Agreement or Restriction Agreement without the consent of the
Grantee or his legal representative.
9.2 Forfeiture for Competition. If a Grantee provides services to a
competitor of the Company or any of its Subsidiaries, whether as an employee,
officer, director, independent contractor, consultant, agent or otherwise, such
services being of a nature that can reasonably be expected to involve the skills
and experience used or developed by the Grantee while an Employee, then that
Grantee's rights under any Options outstanding hereunder shall be forfeited and
terminated, and any shares of Restricted Stock held by such Grantee subject to
remaining restrictions shall be forfeited, subject in each case to a
determination to the contrary by the Committee.
9.3 Plan Binding on Successors. The Plan shall be binding upon the
successors of the Company.
9.4 Gender. Whenever used herein, the masculine pronoun shall include the
feminine gender.
9.5 Headings Not a Part of Plan. Headings of Articles and Sections hereof
are inserted for convenience and reference, and do not constitute a part of the
Plan.
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EXHIBIT 5.1
LAW OFFICES
NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
KEENAN BUILDING, THIRD FLOOR OTHER OFFICES:
1330 LADY STREET Atlanta, Georgia
POST OFFICE BOX 11070 (29211) Charleston, South Carolina
COLUMBIA, SOUTH CAROLINA 29201 Charlotte, North Carolina
TELEPHONE (803) 799-2000 Greenville, South Carolina
FACSIMILE (803) 256-7500 Myrtle Beach, South Carolina
www.nmrs.com
July 25, 1997
Intelligent Systems Corporation
4355 Shackleford Road
Norcross, GA 30093
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you with
the Securities and Exchange Commission in connection with the registration under
the Securities Act of 1933 of 275,000 additional shares of Common Stock, $.01
par value per share (the "Shares"), which may be offered for sale pursuant to
the Company's 1991 Stock Incentive Plan (the "Incentive Plan"). We have also
examined the Incentive Plan and the proceedings taken by you in connection with
the adoption of the amendment to the Incentive Plan and the sale and issuance of
the Shares under the Incentive Plan.
It is our opinion that the Shares, when issued and sold in the manner referred
to in the Incentive Plan, will be validly issued, fully paid and nonassessable.
This opinion is being furnished to you solely in connection with the issuance of
the Shares, and is not to be relied upon by any other person. The opinions
expressed herein are rendered and speak only as of the date hereof, and we
specifically disclaim any undertaking to update such opinion or to advise you of
subsequent developments affecting the same that hereafter may come to our
attention.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement.
NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in Intelligent Systems Corporation's Form S-8 Registration Statement
of our report dated February 27, 1997, appearing on page F-2 of Intelligent
Systems Corporation's Form 10-K for the year ended December 31, 1996.
Arthur Andersen LLP
Atlanta, Georgia
July 23, 1997
<PAGE> 1
EXHIBIT 23.2
18 July 1997
Our Ref: MJB/SC/1789/HG
The Directors
Intelligent Systems Corporation
4355 Shackleford Road
Norcross
GA 30093
USA
Dear Sirs
INTERQUAD SERVICES LIMITED
As independent public accountants, we hereby consent to the incorporation of our
report included in the Form 10-K for the fiscal year ended December 31, 1996
into Intelligent Systems Corporation's Registration Statement on Form S-8.
Yours faithfully
MORLEY & SCOTT
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Intelligent Systems Corporation of our report dated February 7,
1997, with respect to the consolidated financial statements of PaySys
International, Inc. and Subsidiaries for the years ended December 31, 1996 and
1995 included in the Form 10-K of Intelligent Systems Corporation for the year
ended December 31, 1996, filed with the Securities and Exchange Commission.
Ernst & Young LLP
July 23, 1997
