<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 26, 1998
REGISTRATION NO. 333-47633
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-8
TO FORM S-4*
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
THE TITAN CORPORATION
(Exact name of Registrant as specified in its charter)
--------------------
Delaware 95-2588754
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
3033 Science Park Road
San Diego, CA 92121-1199
(Address of principal executive offices)
--------------------
Options Assumed By The Titan Corporation
Originally Granted Under the
Horizons Technology, Inc.
1988 Amended Stock Option Plan
(Full title of the Plan)
--------------------
Ira Frazer
Senior Vice President,
General Counsel and Secretary
THE TITAN CORPORATION
3033 Science Park Road
San Diego, California 92121-1199
(Name and address of agent for service)
--------------------
(619) 552-9500
(Telephone number, including area code, of agent for service)
Copies to:
M. Wainwright Fishburn, Esq.
Jeremy D. Glaser, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
--------------------
* See Explanatory Note following this cover page.
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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---------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED BE REGISTERED PER SHARE OFFERING PRICE FEE
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 3,675 shares (1) (1) (1)
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Registration fee with respect to these shares was previously
paid in connection with the filing of Registrant's Registration
Statement on Form S-4 (File No. 333-47633) which was declared
effective June 10, 1998. See Explanatory Note below.
EXPLANATORY NOTE
The Titan Corporation amends its Registration Statement on Form S-4
(File No. 333-47633), effective June 10, 1998 by filing this Post-Effective
Amendment No. 1 on Form S-8 to the Form S-4 relating to 3,675 shares of common
stock of Titan issuable under the Horizons Technology, Inc. 1988 Amended Stock
Option Plan.
On June 30, 1998, by virtue of a merger of Sunrise Acquisition Sub, a
wholly owned subsidiary of Titan with and into Horizons, each outstanding share
of common stock of Horizons was converted into .367507 shares of Titan's common
stock.
Pursuant to the merger agreement, Horizons and Titan have taken the
necessary actions to cause Titan's common stock to be issuable under Horizons
option plan. Accordingly, Horizons common stock is no longer issuable under its
option plan.
This Registration Statement relates to 3,675 shares of Titan's common
stock registered on the Form S-4, which were not issued at the time of the
merger and that are issuable under the Horizons' option plan.
- - -------------------------------------------------------------------------------
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2.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant's Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1997, the Registrant's Quarterly Report on Form 10-Q/A for the
quarter ended March 31, 1998, the Registrant's Quarterly Report Form 10-Q for
the quarter ended June 30, 1998, the Registrant's Proxy Statement for the
1997 Annual Meeting of Stockholders filed pursuant to Rule 14a-6 of the
Exchange Act, the Registrant's Prospectus/Joint Proxy Statement dated
September 25, 1998, the Registrant's Registration Statement on Form S-4 (No.
333-60122) filed on September 24, 1998, the Registrant's Current Report on
Form 8-K dated February 26, 1998 and June 30, 1998, as amended by Current
Report on Form 8-K/A dated June 30, 1998, and the description of the common
stock contained in the Registrant's Registration Statement on Form 8-A filed
with the Commission by Electronic Memories and Magnetics Corporation, dated
June 16, 1969; as amended by the Form 8 filed with the Commission by the
Registrant on January 22, 1986, and the Form 8-B/A filed with the Commission
by the Registrant on July 31, 1995, each as filed by the Registrant with the
Commission, are hereby incorporated by reference in this registration
statement except as superseded or modified herein. All documents subsequently
filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act prior to the filing of a post-effective amendment to this
registration statement which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference into this registration statement and
to be a part hereof from the date of filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement of such action, suit or proceeding, provided that
such officer or director acted in good faith and in a manner he or she
reasonably
II-1
<PAGE>
believed to be in or not opposed to the corporation's best interest,
and, for criminal proceedings, had no reasonable cause to believe his or her
conduct was illegal. A Delaware corporation may indemnify officers and directors
against expenses (including attorney's fees) in connection with the defense or
settlement of an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him or
her against the expenses which such officer or director actually and reasonably
incurred.
The Registrant's Bylaws contain a provision to limit the personal
liability of the directors of the Registrant for violations of their fiduciary
duty, except to the extent such limitation of liability is prohibited by the
Delaware Law. This provision eliminates each director's liability to the
Registrant or its stockholders for monetary damages except (i) for any breach of
the director's duty of loyalty to the Registrant or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware Law providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions, or (iv) for any transaction from which a director
derived an improper personal benefit. The Registrant's Bylaws provide that the
Registrant shall indemnify directors and officers to the fullest extent
permitted by law. The effect of these provisions is to eliminate the personal
liability of directors for monetary damages for actions involving a breach of
their fiduciary duty of care, including any such actions involving gross
negligence.
In addition, Registrant has entered into indemnity agreements with its
executive officers and directors whereby Registrant obligates itself to
indemnify such officers and directors from any amounts which the officer or
director becomes obligated to pay because of any claim made against him or her
arising out of any act or omission committed while he or she is acting in his or
her capacity as a director and/or officer of Registrant.
Registrant maintains directors and officers liability insurance coverage
that insures its officers and directors against certain losses that may arise
out of their positions with the Registrant and insures the Registrant for
liabilities it may incur to indemnify its officers and directors.
II-2
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
3.1 Registrant's Restated Certificate of Incorporation.(1)
3.2 Registrant's Certificate of Amendment of Restated Certificate of
Incorporation.(1)
3.3 Registrant's Bylaws, as amended.(2)
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Deloitte & Touche LLP.
23.4 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24.1 Power of Attorney (included in Part II of this Registration
Statement).
99.1 1988 Amended Stock Option Plan (the "1988 Plan").
99.2 Form of Stock Option under the 1988 Plan.
- - ------------------
(1) Filed as an exhibit to Registrant's 1987 Annual Report on Form 10-K and
incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q dated
November 13, 1995 and incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
(a) Rule 415 Offering.
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 the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) (Section 230.424(b) of this
chapter) if, in the aggregate, the
II-3
<PAGE>
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if this
Registration Statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 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 herein, and the
offering of such securities at that time shall be deemed to be the initial
bonafide 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) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
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 Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) REQUEST FOR ACCELERATION OF EFFECTIVE DATE OR FILING OF REGISTRATION
STATEMENT ON FORM S-8.
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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
The Titan Corporation has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Diego, County of San Diego, State of California, on October 23, 1998.
THE TITAN CORPORATION
By:
/s/Gene W. Ray
-----------------------------------------
Gene W. Ray,
Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gene W. Ray, Eric M. DeMarco and Ira
Frazer, and each or any one of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place, and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments, exhibits thereto and other
documents in connection therewith) to this Registration Statement and any
subsequent registration statement filed by the registrant pursuant to Rule
462(b) of the Securities Act of 1933, as amended, which relates to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/J. S. Webb
- - ---------------------------------------------
J. S. Webb Chairman of the Board of Directors October 23, 1998
/s/Gene W. Ray
- - --------------------------------------------- President and Chief Executive Officer
Gene W. Ray (Principal Executive Officer) and Director October 23, 1998
/s/Eric M. DeMarco Executive Vice President and
- - --------------------------------------------- Chief Financial Officer
Eric M. DeMarco (Principal Financial and Accounting Officer) October 23, 1998
/s/Charles R. Allen
- - ---------------------------------------------
Charles R. Allen Director October 23, 1998
/s/Joseph F. Caligiuri
- - ---------------------------------------------
Joseph F. Caligiuri Director October 23, 1998
/s/Daniel J. Fink
- - ---------------------------------------------
Daniel J. Fink Director October 23, 1998
/s/Robert E. La Blanc
- - ---------------------------------------------
Robert E. La Blanc Director October 23, 1998
/s/Thomas G. Pownall
- - ---------------------------------------------
Thomas G. Pownall Director October 23, 1998
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<S> <C>
3.1 Registrant's Restated Certificate of Incorporation.(1)
3.2 Registrant's Certificate of Amendment of Restated Certificate of
Incorporation.(1)
3.3 Registrant's Bylaws, as amended.(2)
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Deloitte & Touche LLP.
23.4 Consent of Cooley Godward LLP is contained in Exhibit 5.1 to this
Registration Statement.
24.1 Power of Attorney (included in Part II of this Registration
Statement).
99.1 1988 Amended Stock Option Plan (the "1988 Plan").
99.2 Form of Stock Option under the 1988 Plan.
</TABLE>
- - ------------------
(1) Filed as an exhibit to Registrant's 1987 Annual Report on Form 10-K and
incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q dated
November 13, 1995 and incorporated herein by reference.
<PAGE>
[LETTERHEAD]
October 26, 1998
The Titan Corporation
3033 Science Park Road
San Diego, CA 92121-1199
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by The Titan Corporation (the "Company") of a Post-Effective
Amendment on Form S-8 to the Form S-4 Registration Statement (File No.
333-47633) (the "Registration Statement") with the Securities and Exchange
Commission, covering the registration of up to 3,675 shares of the Company's
Common Stock, par value $.01 (the "Shares"), for issuance upon exercise of
options granted under the Horizons Technology, Inc. 1988 Amended Stock Option
Plan (the "Plan"). The options granted under the Plan are hereinafter referred
to as the "Options."
In connection with this opinion, we have examined and relied upon the
Registration Statement, the Plan, the Options, the Company's Amended and
Restated Certificate of Incorporation, as amended, and Bylaws, and the originals
or copies certified to our satisfaction of such records, documents,
certificates, memoranda and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when issued and sold in accordance with the Registration
Statement, the Plan and the Options, will be validly issued, fully paid and
nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
COOLEY GODWARD LLP
By: /s/ Jeremy D. Glaser
------------------------------
Jeremy D. Glaser
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report, with respect to the
consolidated financial statements of The Titan Corporation, dated June 10,
1998 (except with respect to the matters discussed in Note 16, as to which
the date is June 30, 1998) included in The Titan Corporation's Form S-4
Registration Statement dated September 24, 1998 (File No. 333-60122) and to
all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
San Diego, California
October 26, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report, with respect to the
consolidated financial statements of Horizons Technology, Inc. dated March 9,
1998 included in The Titan Corporation's Form S-4 Registration Statement
dated June 10, 1998 (File No. 333-47633) and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
San Diego, California
October 26, 1998
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 on Form s-8 to Form S-4 of The Titan Corporation of our report on DBA
Systems, Inc. as of June 30, 1997 and 1996 and for each of the years in the
three year period ended June 30, 1997, dated August 20, 1997, appearing in
the Registration Statement on Form S-4 (No. 333-45718) of the Titan
Corporation.
Orlando, Florida
October 23, 1998
<PAGE>
HORIZONS TECHNOLOGY, INC.
1988 AMENDED STOCK OPTION PLAN
1. PURPOSE
Under this 1988 Amended Stock Option Plan (the "Plan") of Horizons
Technology, Inc., a Delaware corporation (the "Corporation"), options may be
granted to eligible employees, consultants and directors to purchase shares of
the Corporation's one cent par value common stock ("Capital Stock"). The Plan is
designed to enable the Corporation to attract, retain and motivate such persons
by providing for or increasing their proprietary interest in the Corporation.
The Plan provides for options which qualify as incentive stock options
("Incentive Options") under section 422A of the Internal Revenue Code (the
"Code") as well as options which do not so qualify ("Non-incentive Options").
2. ADMINISTRATION
a) THE ADMINISTRATOR
The Plan shall be administered by the Board of Directors of the
Corporation (the "Board"), which at its sole discretion may delegate any or all
of its ministerial duties under the Plan to a Stock Option Committee (the
"Committee") of not less than three Directors of the Corporation to be appointed
by the Board and to serve at the pleasure of the Board. The Board shall fill
vacancies on the Committee and may from time to time remove members from or add
members to the Committee. The Committee shall act pursuant to a majority vote,
or the written consent of the majority of its members, and minutes shall be kept
of all of its meetings and copies thereof provided to the Board. The body which
is charged herein with the administration of this Plan, be it the Board or the
Committee, is hereinafter referred to as the "Administrator."
b) AUTHORITY OF THE ADMINISTRATOR
Subject to the express terms and conditions of the Plan and applicable
law, the Administrator shall have full power to determine (i) from among
eligible persons those individuals to whom, the time or times, and the price at
which options may be granted (ii) the number of shares of stock to be subject to
each option and (iii) the terms and conditions of each option that is granted.
Subject to the provisions of the Plan, the Administrator shall have authority to
construe and interpret the Plan, to promulgate, amend and rescind rules and
regulations relating to its administration, to determine the duration and
purpose of leaves of absence which may be granted to optionees without
constituting termination of their employment for purposes of the Plan, and to
make all other determinations necessary or advisable for the Plan's
administration. The interpretation and construction by the Administrator of any
provisions of the Plan or of any option granted under it shall be final. No
member of the Administrator shall be liable for any action or determination made
in good faith with respect to the Plan or any option granted under it.
1
<PAGE>
3. ELIGIBILITY
a) ANNUAL LIMITATION
Options may be granted on or after January 1, 1987 to any eligible
person for shares of any value, provided that the aggregate fair market value
(determined at the time each option is granted) of the shares subject to
incentive stock options first exercisable by such person in any calendar year
under all incentive stock option plans of the Company or any parent or
subsidiary of the Company shall not exceed $100,000. Options shall not be
granted to any person prior to January 1, 1987 which would otherwise cause
the aggregate fair market value (determined at the time each option is
granted) of the shares for which options have been granted to such person
during the calendar year under all incentive stock option plans of the
Company or any parent or subsidiary of the Company to exceed $100,000 plus
the "unused limit carryover" referred to in Code Section 422a(b)(8).
b) Eligible Employees
Key employees of the Corporation and its subsidiaries shall be
eligible to receive Incentive Options under the Plan. Such persons as well as
consultants to and directors of the Corporation are eligible to receive
Non-incentive Options. An optionee may hold more than one option. Nothing herein
contained shall prevent the grant of an option to a holder of options under any
other plan of the Corporation.
4. STOCK SUBJECT TO THE PLAN
The stock subject to the options granted under this Plan shall be
shares of the Corporation's authorized but unissued or reacquired Capital Stock.
Subject to the adjustment as provided in Article 5(g) of this Plan, the total
number of shares of Capital Stock which may be purchased through exercise of
options granted under this Plan shall be 5,700,000. If any option granted under
this Plan shall for any reason terminate or expire, any shares allocated thereto
but remaining unpurchased upon such expiration or termination shall again be
available for options under the Plan as though no option had been granted with
respect to such shares.
5. TERMS AND CONDITIONS OF OPTIONS
Options granted hereunder shall be evidenced by agreements between the
Corporation and the respective optionees, in such form and substance as the
Administrator shall from time to time approve. Such agreements need not be
identical, and in each case may include such provisions as the Administrator may
determine, but all such agreements shall be subject to and limited by the
following terms and conditions:
2
<PAGE>
a) RIGHTS AS A STOCKHOLDER
An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any shares covered by his/her option until the date
of the issuance of a stock certificate to him for such shares. No adjustment
shall be made for dividends (ordinary or extraordinary), whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
expressly provided in article 5(g) hereof.
b) NUMBER OF SHARES
Each option shall state the number of shares to which it pertains.
c) OPTION PRICE
Each option shall state an option price (the "Option Price") which
shall not be less than one hundred percent (100%) of the fair market value of
the shares of Capital Stock of the Corporation on the date of the granting of
the option; provided however, that the Option Price of an Incentive Option shall
not be less than 110% of the fair market value of such Capital Stock on the date
of the granting of the Incentive Option to an individual then owning (after the
application of the family and other attribution rules of Section 425(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Corporation or any subsidiary or parent corporation. Such fair market
value shall be as determined by the Board of Directors of the Corporation.
d) MEDIUM AND TIME OF PAYMENT
The Option Price shall be paid in full at the time of exercise of the
option, in cash, by a good check, by surrender of stock of the Corporation
standing in the name of the optionee, held by the optionee for a period of six
months or longer, having a fair market value at the time of exercise equal to
the Option Price or by any combination of the foregoing.
e) TERM AND EXERCISE OF OPTIONS
No Incentive Option granted under this Plan may be exercised in whole
or in part more than ten years after its date of grant, provided, however, that
an Incentive Option granted to an individual owning (after the application of
the family and other attribution rules of Section 425(d) of the Code), at the
time such Incentive Option was granted, more than 10% of the total combined
voting power of all classes of stock of the Corporation or any subsidiary or
parent corporation shall expire no later than five years from the date the
Incentive Option was granted.
No Non-incentive Option granted under this Plan may be exercised in
whole or in part more than eleven years after its date of grant.
Unless the Administrator specifies a more rapid rate of vesting, each
option shall be exercisable to the nearest whole share, in five appropriately
equal
3
<PAGE>
annual installments, with the first installment exercisable after one full year
of employment. Unless otherwise determined by the Administrator, each
installment may only be exercised, in whole or in part, for the period specified
in the optionee's option agreement. At the end of such period, the portion of
any installment which has not been exercised shall expire.
f) RESTRICTION ON EXERCISE
An Incentive Option granted prior to August 1, 1988 shall not be
exercisable by an optionee to any extent at any time while there is outstanding
any Incentive Option which was granted at an earlier time to such optionee by
the Corporation, a parent or subsidiary thereof, or a predecessor of any such
corporations. For purposes of this rule, any Incentive Option shall be treated
as outstanding until such Incentive Option is exercised in full or expires by
reason of lapse of time. The foregoing restriction on exercise shall not apply
in respect of Incentive Options granted on or after August 1, 1988.
No option shall be transferable or assignable by the optionee.
g) RECAPITALIZATION, REORGANIZATION, MERGER OR CONSOLIDATION
Subject to any required action by the shareholders of the Corporation,
if the outstanding shares of Capital Stock of the Corporation are increased,
decreased or exchanged for a different number or kind of securities through
reorganization, merger, consolidation, recapitalization, reclassification, stock
split, stock dividend or like capital adjustment, a proportionate adjustment
shall be made in the number, price and kind of shares subject to any outstanding
option issued under the Plan. Upon the dissolution or liquidation of the
Corporation or upon any reorganization, merger or consolidation in which the
Corporation shall not survive or upon a sale of substantially all of the assets
or more than eighty percent of the then outstanding stock of the corporation to
another corporation, this Plan and each outstanding option shall terminate;
provided that in such event (i) each optionee to whom no option has been
tendered by the surviving corporation in accordance with all of the terms of
provision (ii) immediately below, shall have the right, for a thirty-day period
set by the Administrator, to exercise, in whole or in part, any unexpired option
or options issued to him, without regard to the installment provisions of
Article 5(e) of the Plan or the installment provision of the optionee's option
agreement; or (ii) in its sole and absolute discretion, the surviving
corporation may, but shall not be so obligated, tender to any optionee an option
or options to purchase shares of the surviving corporation, and such new option
or options shall contain such terms and provisions as shall be required
substantially to preserve the rights and benefits of any option then outstanding
hereunder.
To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as hereinbefore expressly provided in this Article 5(g), the optionee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, or the payment of any stock dividend or any other increase
or decrease in the number of shares of Capital
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Stock subject to any option shall not be affected by, and no adjustment shall be
made by reason of, any dissolution, liquidation, reorganization, merger or
consolidation, or any issue by the Corporation of shares of stock of any class,
or rights to purchase or subscribe for stock of any class, or securities
convertible into shares of stock of any class.
The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes in its capital or business structures or to merge,
consolidate, dissolve or liquidate or to sell or transfer all or any part of its
business or assets.
h) MODIFICATION, ACCELERATION, EXTENSION AND RENEWAL OF OPTIONS
Subject to the terms and conditions of the Plan and applicable law,
the Administrator may modify an option, or once an option is exercisable,
accelerate the rate at which it may be exercised, or may extend or renew
outstanding options granted under the Plan or accept the surrender of
outstanding options (to the extent not theretofore exercised) and authorize the
granting of new options in substitution therefore (to the extent not theretofore
exercised).
Notwithstanding the foregoing provisions of this Article 5(h),
however, no modification of an option shall, without the consent of the
optionee, alter or impair any rights or obligations under an option
theretofore granted under the Plan.
i) STATE AND FEDERAL SECURITIES REGULATIONS
Each option shall provide that no exercise of such option shall be
effective unless and until (i) all then applicable requirements of state and
federal laws and regulatory agencies shall have been fully complied with to the
satisfaction of the Corporation and its counsel, and (ii) the person exercising
the option shall execute and deliver to the Corporation a letter agreement, in
such form and substance as the Corporation may require, containing such
investment representations and/or other representations and undertakings by the
optionee (or his legal representative, heir or legatee) as the Corporation shall
in its sole discretion deem necessary or advisable.
j) OTHER PROVISIONS
The option agreements authorized under the Plan shall contain such
other provisions, including, without limitation, restrictions upon the exercise
of the options, as the Administrator shall deem advisable.
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6. PROVISION OF FINANCIAL INFORMATION TO OPTIONEES
The Corporation shall, within ninety days after the end of the fiscal year
of the Corporation, or as soon as available, deliver to each optionee holding an
unexpired option a balance sheet for the Corporation as of the end of such
fiscal year and a statement of profit and loss of the Corporation for such
fiscal year.
7. PLAN DURATION
Subject to shareholder approval within twelve months from the date the Plan
is adopted by the Board, options may not be granted more than ten years after
the date of the adoption of this Plan by the Board.
8. AMENDMENT OF THE PLAN
The Board of Directors of the Corporation may, insofar as permitted by law,
from time to time, with respect to any shares at the time not subject to
options, suspend or discontinue the Plan or revise or amend it in any respect
whatsoever, except that without the approval of the stockholders of the
Corporation, no such revision or amendment shall increase the number of shares
subject to the Plan, decrease the price at which options may be granted, change
the class of persons eligible to receive options under this Plan or otherwise
modify the Plan such that it fails to meet the requirements of Rule 16b-3 of the
Securities and Exchange Commission for the exemption of the acquisition,
cancellation, expiration or surrender of options from the operation of Section
16(b) of the Securities Exchange Act of 1934.
9. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the optionee to
exercise such option.
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HORIZONS TECHNOLOGY, INC.
1988 AMENDED STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
TO: DATE OF GRANT:
OPTION NO.:
I am pleased to notify you that Horizons Technology, Inc. (the
"Corporation") hereby grants to you on the date set forth above an incentive
stock option (the "Incentive Option") under the 1988 Amended Stock Option Plan
(the "Plan") to purchase shares of capital stock of the Corporation (the
"Stock") at the price of $ per share (the "Option Price"), upon the
following terms and conditions:
1. TERM OF OPTION. The Incentive Option hereinabove granted shall
expire on .
2. INSTALLMENTS. Subject to the provisions of Paragraphs 4 and 5
hereof, this Incentive Option shall become exercisable in the number of
installments set forth below. Each installment shall include the number of
shares, and shall become exercisable (in whole or in part) upon and after the
dates set forth below.
DATE NUMBER OF SHARES
The installments shall not be cumulative so that any and all option
shares covered by an installment which are not exercised by you within days
after an installment becomes exercisable shall expire and shall not be
exercisable in any subsequent installment period. In any event, if you choose to
exercise an installment or any portion of an installment under this Incentive
Option, a minimum number of shares must be purchased on each date that you
exercise a portion of your Incentive Option.
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3. EXERCISE. This Incentive Option may be exercised by delivery to the
Corporation, ATTN: Secretary of the Corporation of (i) a written notice of
exercise containing certain representations and stating the number of shares of
Stock then being purchased hereunder in the form attached hereto as Exhibit A or
in such other form and substance as the Corporation may require, and (ii) cash,
a good check or stock of the Corporation standing in the name of the optionee,
held by the optionee for a period of six months or longer, having a fair market
value at the time of exercise equal to the combined Option Prices of the
Incentive Options being exercised, or any combination of the foregoing, in the
amount of the purchase price of such shares. Subject to the provisions of
Paragraphs 6 and 10 hereof, certificates for shares so purchased will be issued
as soon as practicable, but no fractional shares shall be issued.
4. TERMINATION OF EMPLOYMENT. If you shall cease to be employed by the
Corporation or its parent or subsidiary, for any reason other than your death,
this Incentive Option and all rights hereunder, to the extent not exercised,
shall automatically expire on the date of such termination.
5. DEATH: ASSIGNMENT. This Incentive Option shall not be assignable or
transferable and may not be pledged or hypothecated in any way, whether by
operation of law or otherwise, and shall not be subject to execution, attachment
or similar process. If you die while you are in the employ of the Corporation or
its parent or subsidiary, the duly authorized executor of your last will, the
duly authorized administrator or special administrator of your estate, your
personal representative or any person or persons who shall have acquired this
Incentive Option directly from you by bequest or inheritance shall have the
right at any time within the period of two months immediately following such
death to exercise this Incentive Option to the extent, but only to the extent,
that this Incentive Stock Option was exercisable and had not previously been
exercised on the date of your death.
6. NO RIGHTS AS SHAREHOLDER. You shall have no rights as a shareholder
with respect to the Stock until the date of the issuance to you of a stock
certificate or stock certificates representing the Stock. Except as may be
provided under Article 5(g) of the Plan, no adjustment will be made for
dividends or other rights for which the record date is prior to the date such
stock certificate or certificates are issued.
7. ADJUSTMENTS IN STOCK. Subject to the provisions of the Plan, if the
outstanding shares of the Corporation of the class subject to this Incentive
Option are increased or decreased, or are changed into or exchanged for a
different number or kind of shares or securities as a result of one or more
reorganizations, mergers, consolidations, recapitalizations, reclassifications,
stock splits, stock dividends or like capital adjustments, appropriate
adjustments, to be conclusively determined by the Administrator, shall be made
in the number, price and kind of shares subject to this Incentive Option and the
Option Price, so that the total purchase price of the shares then subject to
this Incentive Option shall remain unchanged.
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8. NONTRANSFERABILITY OF OPTION. This Incentive Option is not
transferable otherwise than by will or the laws of descent and distribution.
This Incentive Option shall not be otherwise transferred, assigned, pledged,
hypothecated or otherwise disposed of in any way, whether by operation of law or
otherwise, and shall not be subject to execution, attachment or similar process.
Upon any attempt to transfer this Incentive Option otherwise than by will or the
laws of descent and distribution or to assign, pledge, hypothecate or otherwise
dispose of this Incentive Option, or upon the levy of any execution, attachment
or similar process upon this Incentive Option, this Incentive Option shall
immediately terminate and become null and void.
9. TERMINATING TRANSACTIONS. Upon the dissolution or liquidation of the
Corporation, or upon a reorganization, merger or consolidation of the
Corporation in which the Corporation shall not survive, or upon the sale of
substantially all of the assets or more than eighty percent of the then
outstanding stock of the Corporation to another corporation, this Incentive
Option shall terminate, provided that in such event: (i) each optionee to whom
no option has been tendered by the surviving corporation in accordance with all
of the terms of provision (ii) immediately below, shall have the right, for a
thirty-day period, to exercise, in whole or in part, any unexpired option or
options issued to him/her, without regard to the installment provisions of
Article 5(e) of the Plan or the installment provisions of this Option Agreement;
or (ii) in its sole and absolute discretion, the surviving corporation may, but
shall not be so obligated, tender to any optionee an option or options to
purchase shares of the surviving corporation, and such new option or options
shall contain such terms and provisions as shall be required substantially to
preserve the rights and benefits of any option then outstanding under the Plan.
10. STATE AND FEDERAL REGULATIONS. No exercise of this Incentive Option
shall be effective unless and until any then applicable requirements of state
and federal laws and regulatory agencies shall have been fully complied with to
the satisfaction of the Corporation and its counsel.
11. RIGHTS AND RESTRICTIONS WITH RESPECT TO STOCK. You specifically
acknowledge and agree that the Stock shall be acquired by you subject to certain
restrictions relating to any attempted lifetime transfer, as well as certain
rights in favor of the Corporation to purchase the Stock in the event of your
(i) dissolution of marriage and (ii) death, all as set forth in the Stock
Restriction Agreement attached hereto and incorporated herein as Exhibit B. You
agree that each stock certificate representing the Stock acquired by you upon
exercise of this Incentive Option shall bear an appropriate legend reflecting
the foregoing rights and restrictions, as provided in Exhibit B.
12. THIS AGREEMENT SUBJECT TO PLAN. This Agreement is made pursuant to all
of the provisions of the Plan, and is intended and shall be interpreted in
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a manner to comply therewith. Any provision hereof inconsistent with the Plan
shall be superseded and governed by the Plan, a copy of which has been provided
to you.
Sincerely yours,
HORIZONS TECHNOLOGY, INC.
---------------------------------
J. P. Boyce
President
Date:
AGREED:
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