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Registration No. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
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 Identification No.)
of incorporation or organization)
3033 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121-1199
(Address of principal executive offices) (Zip code)
DELFIN SYSTEMS 1990 STOCK OPTION PLAN
DELFIN SYSTEMS 1988 STOCK OPTION PLAN
(Full title of the plan)
IRA FRAZER, ESQ.
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)
Telephone number, including area code, of agent for service: (619) 552-9500
This registration statement shall hereafter become effective in accordance
with Rule 462 promulgated under the Securities Act of 1933, as amended.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price Fee
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01 822,569 $5.09375 $4,189,960.80 $1,164.80
- -----------------------------------------------------------------------------------------------
</TABLE>
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(1) The securities to be registered include options and rights to acquire such
Common Stock issuable in connection with the Delfin Systems 1990 Stock
Option Plan and the Delfin Systems 1988 Stock Option Plan (assumed from
Maxim Technologies, Inc.).
(2) Estimated solely for the purpose of computing the amount of the
registration fee under Rule 457 of the Securities Act of 1933, as amended.
The price is based upon the average of the high and low prices of the
Common Stock on November 9, 1998 as reported on the New York Stock
Exchange.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") by The Titan Corporation (the "Registrant") are incorporated
by reference in this Registration Statement:
(1) Registrant's Annual Report on Form 10-K/A for the year ended
December 31, 1997;
(2) Registrant's Quarterly Report on Form 10-Q/A for the quarter ended
March 31, 1998;
(3) Registrant's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998;
(4) Registrant's Current Report on Form 8-K dated January 7, 1998;
(5) Registrant's Current Report on Form 8-K dated March 9, 1998;
(6) Registrant's Current Report on Form 8-K/A dated March 10, 1998;
(7) Registrant's Current Report on Form 8-K/A dated August 13, 1998;
(8) Registrant's Registration Statement on Form S-4 (No. 333-60122),
as amended, filed on September 24, 1998;
(9) The description of the Registrant's Common Stock contained in its
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, are hereby
incorporated by reference in this Registration Statement except as superseded or
modified herein;
(10) All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all shares of Common Stock offered pursuant to
this Registration Statement have been sold or which deregisters all shares of
Common Stock then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
The class of securities to be offered is registered under Section 12 of the
Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's By-laws provide for indemnification (to the full extent
permitted by law) of directors, officers, and other agents of the Registrant
against expenses, judgments, fines and amounts paid in settlements actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact that such person is, or was, an officer, director, or agent of the
Registrant. The Registrant also maintains directors and officers liability
insurance coverage and has entered into indemnification agreements with its
directors and officers.
Section 145 of the Delaware General Corporation Law provides generally that
a corporation shall have the power, and in some cases is required, to indemnify
an agent, including an officer or director, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he or she is or was a director, officer, employee or agent of the
corporation, against certain expenses, judgments, fines, settlements, and other
amounts under certain circumstances.
These indemnification provisions may be sufficiently broad to permit
indemnification of the Registrant's officers and directors for liabilities
(including reimbursement of expenses incurred) arising under the Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
ITEM 8. EXHIBITS
See Exhibit Index.
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the
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estimated maximum prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the 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 the registration statement or
any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
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 of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Diego, State of California, on
November 6, 1998.
THE TITAN CORPORATION
By: /s/ Ira Frazer
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Ira Frazer, Esq.
Senior Vice President,
General Counsel and Secretary
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POWER OF ATTORNEY
Each of the undersigned officers and directors of The Titan Corporation,
hereby constitutes and appoints Ira Frazer, Esq. his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
with power to act alone, to sign and execute on behalf of the undersigned any
amendment or amendments to this Registration Statement on Form S-8, and each of
the undersigned does hereby ratify and confirm all that said attorney-in-fact
and agent, or his substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on November 6, 1998.
SIGNATURE TITLE
/s/ J.S. WEBB
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J.S. Webb Chairman of the Board of Directors
/s/ GENE W. RAY
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Gene W. Ray President and Chief Executive Officer
/s/ ERIC M. DEMARCO
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Eric M. DeMarco Senior Vice President and Chief Financial
Officer
/s/ DEANNA H. PETERSEN
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Deanna H. Petersen Corporate Controller and Vice President
/s/ CHARLES R. ALLEN
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Charles R. Allen Director
/s/ JOSEPH F. CALIGIURI
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Joseph F. Caligiuri Director
/s/ DANIEL J. FINK
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Daniel J. Fink Director
/s/ ROBERT E. LABLANC
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Robert E. LaBlanc Director
/s/ THOMAS G. POWNALL
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Thomas G. Pownall Director
/s/ ROBERT HANISEE
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Robert Hanisee Director
/s/ JAMES ROTH
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James Roth Director
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EXHIBIT INDEX
EX. # DESCRIPTION
4.1 Delfin Systems 1990 Stock Option Plan
4.2 Delfin Systems 1988 Stock Option Plan (Assumed from Maxim
Technologies Inc.)
5 Opinion re: legality
23.1 Consent of Ira Frazer (included in Exhibit 5)
23.2 Consent of Independent Public Accountants
23.3 Consent of Independent Public Accountants
23.4 Consent of Ernst & Young LLP
24 Power of Attorney
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EXHIBIT 4.1
DELFIN SYSTEMS
1990 STOCK OPTION PLAN
(Assumed by The Titan Corporation effective October 26, 1998)
I. PURPOSES OF THE PLAN
This Plan is intended to promote the interests of the Company,
by providing a method whereby (i) key employees of the Company responsible
for the management, growth and financial success of the Company, (ii) the
non-employee members of the Board and (iii) consultants and independent
contractors who provide valuable services to the Company may be offered
incentives and rewards which will encourage them to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Company
and continue to render services to the Company.
II. DEFINITIONS
A. BOARD shall mean the Board of Directors of Delfin Systems.
B. CHANGE IN CONTROL shall mean the acquisition of
twenty-five percent (25%) or more of the Company's outstanding voting stock
pursuant to a tender or exchange offer (I) which is made by a person or group
of related persons other than the Company or a person that directly or
indirectly controls, is controlled by or is under common control with the
Company and (II) which the Board does not recommend the Company's
shareholders to accept.
C. CODE shall mean the Internal Revenue Code of 1986, as
amended.
D. COMPANY shall mean Delfin Systems, a California
corporation, and its parent and subsidiary corporations.
D. CORPORATE TRANSACTION shall mean one or more of the
following transactions:
(i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation, or
(ii) any reverse merger in which The Company is the
surviving entity but in which all of The Company's outstanding voting stock
is transferred to the acquiring entity or its wholly-owned subsidiary.
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F. EMPLOYEE shall mean an individual who is in the employ
of the Company. An optionee shall be considered to be an Employee for so long
as such individual remains in the employ of the Company.
G. EXERCISE DATE shall be the first date on which the
Company shall have received both written notice of the exercise of an option
and payment of the option price for the purchased shares.
H. FAIR MARKET VALUE of a share of Common Stock on any
relevant date for all valuation purposes under the Plan shall mean the value
determined by the Board after taking into account such factors as the Board
shall deem appropriate. The Board's determination of Fair Market Value shall
be final and binding upon all persons having an interest in the Plan.
I. INCENTIVE OPTION shall mean an incentive stock option
which satisfies the requirements of Section 422 of the Code.
J. NON-STATUTORY OPTION shall mean an option not intended
to meet the requirements for an Incentive Option.
K. PARENT corporation shall have the meaning assigned to
such term in Section 424(e) of the Code.
L. PERMANENT DISABILITY shall have the meaning assigned to
such term in Section 22(e)(3) of the Code.
M. The PLAN shall mean this 1990 Stock Option Plan of the
Company.
N. SERVICE shall mean the provision of services to the
Company by an individual in the capacity of an Employee, a nonemployee member
of the board of directors or an independent consultant or advisor, unless a
different meaning is specified in the option agreement evidencing the option
grant and/or the purchase agreement evidencing the purchased optioned shares.
An optionee shall be deemed to remain in Service for so long as such
individual renders services to the Company on a periodic basis in the
capacity of an Employee, a non-employee member of the Board or an independent
consultant or advisor.
O. SUBSIDIARY corporation shall have the meaning assigned
to such term in Section 424(f) of the Code.
P. 10% SHAREHOLDER shall mean the owner of stock (as
determined under Section 424(d) of the Code) possessing 10% or more of the
total combined voting power of all classes of stock of the Company.
III. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board. The Board shall
have full power and authority (subject to the provisions of the Plan) to
establish such rules and regulations as it may deem appropriate for the
proper administration of the Plan and to make such determinations
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under, and issue such interpretations of, the Plan and any outstanding option
as it may deem necessary or advisable. Decisions of the Board shall be final
and binding on all parties who have an interest in the Plan or any
outstanding option.
IV. ELIGIBILITY FOR OPTION GRANTS
The persons eligible to receive option grants under the Plan
are as follows:
(i) key employees (including officers and directors)
of the Company;
(ii) the non-employee members of the Board; and
(iii) consultants or independent contractors to the
Company.
The Board shall have full authority to determine which eligible
individuals are to receive option grants under the Plan, the number of shares
to be covered by each such grant, whether the granted option is to be an
Incentive Option or a Non-Statutory Option, the time or times at which each
such option is to become exercisable, and the maximum term for which the
option is to be outstanding.
V. STOCK SUBJECT TO THE PLAN
The stock issuable under the Plan shall be shares of the
Company's authorized but unissued or reacquired Common Stock. The aggregate
number of shares which may be issued over the term of the Plan shall not
exceed 1,100,000 shares.(1) The total number of shares issuable under the
Plan shall be subject to adjustment from time to time in accordance with the
provisions of this Section V.
The shares available for subsequent option grants under the
Plan include (i) shares subject to the portion of an option which expires or
terminates for any reason prior to exercise in full and (ii) options
cancelled in accordance with the cancellation-regrant provisions of Section
IX of the Plan. The shares that shall NOT be available for subsequent option
grants under the Plan include (i) shares subject to any option or portion
thereof surrendered in accordance with the Limited Surrender Rights
provisions of Section X of the Plan and (ii) shares repurchased by The
Company pursuant to its repurchase rights under the Plan.
In the event any change is made to the Common Stock issuable
under the Plan by reason of (i) any Corporate Transaction or (ii) any stock
split, stock dividend, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without receipt of
consideration, then appropriate adjustments shall be made to (I) the
aggregate class and/or number of shares issuable under the Plan and (II) the
class and/or number of shares
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(1) This number would be 552,310 shares of The Titan Corporation Common
Stock after the assumption of the Delfin Systems 1990 Stock Option Plan by
The Titan Corporation in accordance with the terms set forth in the Agreement
and Plan of Reorganization by and among The Titan Corporation, Delsys Merger
Corp. and Delfin Systems, dated as of June 30, 1998, which provided for
conversion using an Exchange Ratio of .5021.
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and price per share of the Common Stock subject to each outstanding option in
order to prevent the dilution or enlargement of benefits thereunder. However,
no such adjustments shall be made to the extent that such change results in
the termination of all outstanding options under the Plan as a result of the
Corporate Transaction.
VI. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by
action of the Board and may, at the Board's discretion, be either Incentive
Options or Non-Statutory options. Individuals who are not Employees may only
be granted Non-Statutory options. Each granted option shall be evidenced by
one or more agreements in the form approved by the Board; PROVIDED, however,
that each such agreement shall comply with and incorporate the terms and
conditions specified below. Each agreement evidencing an Incentive Option
shall, in addition, be subject to the applicable provisions of Section VII.
1. OPTION PRICE.
A. The option price per share shall be fixed by the Board;
PROVIDED, however, that in no event shall the option price per share be less
than eighty-five percent (85%) of the Fair Market Value of a share of Common
Stock on the date of the option grant.
B. The option price per share of the Common Stock subject
to an Incentive Option shall in no event be less than one hundred percent
(100%) of the Fair Market Value of a share of Common Stock on the date of
grant.
C. If any individual to whom an option is to be granted
pursuant to the provisions of the Plan is on the date of grant a 10%
Shareholder, then the option price per share shall not be less than one
hundred and ten percent (110%) of the Fair Market Value of one share of
Common Stock on the date of grant.
D. The option price shall become immediately due upon
exercise of the option and shall be payable in one of the alternative forms
specified below:
(i) full payment in cash or check; or
(ii) full payment in shares of Common Stock held by
the optionee for the requisite period necessary to avoid a charge to the
Company's earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date; or
(iii) payment through a combination of shares of Common
Stock held by the optionee for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes and valued
at Fair Market Value on the Exercise Date and cash or check, equal in the
aggregate to the option price.
2. EXERCISE OF OPTIONS. Each option granted under the Plan
shall be immediately exercisable upon grant, except to the extent the Board
shall determine that immediate exercise would contravene any applicable
limitations such as the $100,000 limitation
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set forth in Section VII.B below, in which case the Board shall indicate the
applicable exercise schedule in one or more of the instruments evidencing the
option grant.
3. TERM OF OPTIONS. No option shall have a maximum term in
excess of ten (10) years from the grant date.
4. OPTIONS NON-TRANSFERABLE. During the lifetime of the
optionee, the option shall be exercisable only by the optionee and shall not
be assignable or transferable by the optionee otherwise than by will or by
the laws of descent and distribution.
5. EFFECT OF TERMINATION OF EMPLOYMENT.
A. Should an optionee cease to remain in Service for any
reason (other than death or Permanent Disability) while the holder of one or
more outstanding options under the Plan, then such option or options shall
not remain exercisable for more than a three (3) month period (or such
shorter period determined by the Board and specified in the option agreement)
following the date of such cessation of Service.
B. Should an optionee cease to remain in Service due to
Permanent Disability while the holder of one or more outstanding options
under the Plan, then such option or options shall not remain exercisable for
more than a twelve (12) month period (or such shorter period determined by
the Board and specified in the option agreement) following the date of such
cessation of Service.
C. Any option granted to an optionee under the Plan and
exercisable in whole or in part on the date of the optionee's death may be
subsequently exercised by the personal representative of the optionee's
estate or by the person or persons to whom the option is transferred pursuant
to the optionee's will or in accordance with the laws of descent and
distribution, PROVIDED such exercise occurs at any time within eighteen (18)
months following the date of the optionee's cessation of Service.
D. Notwithstanding subparagraphs A, B, and C above, under no
circumstances shall an option be exercisable after the specified expiration date
of the option term. Upon the expiration of the permitted exercise period or (if
earlier) upon the expiration of the option term, the option shall terminate and
cease to be exercisable.
E. Each option exercisable after cessation of Service
shall, during the period specified in subparagraphs A, B, or C above (or such
shorter period specified in the option agreement), be exercisable only to the
extent of the number of shares (if any) for which the option is exercisable
on the date of such cessation of Service. However, the Board shall have
complete discretion, exercisable either at the time the option is granted or
at the time the optionee ceases Service, to establish as a provision
applicable to the exercise of one or more options granted under the Plan that
during the limited period of exercisability following the cessation of
Service, the option may be exercised not only with respect to the number of
shares for which it is exercisable at the time of the optionee's cessation of
Service but also with respect to one or more
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subsequent installments of purchasable shares for which the option would
otherwise have become exercisable had such cessation of Service not occurred.
F. The Board shall have full power and authority to extend
the period of time for which the option is to remain exercisable following
the optionee's termination of Service from the three (3) month (eighteen (18)
months in the case of death or twelve (12) months in the case of Permanent
Disability) or shorter period set forth in the option agreement to such
greater period of time as the Board shall deem appropriate; PROVIDED, that in
no event shall such option be exercisable after the specified expiration date
of the option term.
6. SHAREHOLDER RIGHTS.
An optionee shall have none of the rights of a
shareholder with respect to any shares covered by the option until such
individual shall have exercised the option and paid the option price.
7. REPURCHASE RIGHTS; RIGHT OF FIRST REFUSAL.
The shares of Common Stock acquired upon the exercise of
options granted under the Plan shall be subject to one or more repurchase
rights of the Company in accordance with the following provisions:
A. The Company shall have the right, exercisable upon the
optionee's cessation of Service, to repurchase at the option price all
unvested shares of Common Stock at the time held by the optionee under each
option granted under the Plan as a result of one or more prior exercises of
such option. The Company shall not have the right to elect to purchase less
than all of the unvested shares unless it obtains the consent of the optionee
to such purchase. Any such repurchase right shall be exercisable by The
Company upon such terms and conditions as the Board may specify in the option
agreement. Such terms and conditions shall include the establishment of the
appropriate vesting schedule and other provision for the expiration of such
right in one or more installments over the optionee's period of Service.
B. All of the Company's outstanding repurchase rights shall
automatically terminate, and all purchased shares under the Plan shall
immediately vest in full, upon the occurrence of any Corporate Transaction;
PROVIDED, however, that no such termination of the repurchase rights or
immediate vesting of the purchased shares shall occur if (and to the extent)
(i) the Company's outstanding repurchase rights are to be assigned to the
successor corporation (or parent thereof) in connection with the Corporate
Transaction or (ii) such termination of repurchase rights and acceleration of
vesting are precluded by other limitations imposed by the Board at the time
of the option grant. The Board shall, however, have the sole discretion,
exercisable at the time of the option grant, to provide that the repurchase
rights of the Company relating to the option shares purchasable under such
grant are automatically to lapse upon the Corporate Transaction and are not
to be assignable to the successor corporation.
C. Each option granted under the Plan shall be subject to a
right of first refusal in favor of the Company with respect to any proposed
sale or other disposition by the
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optionee and certain others of any shares of Common Stock issued upon the
exercise of such options. Any such right of first refusal shall be
exercisable by the Company in accordance with the terms and conditions set
forth in the instrument evidencing such right and shall in any event expire
upon an initial public offering of the Company's Common Stock, among other
events.
VII INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to
all Incentive Options granted under the Plan. Options which are specifically
designated as Non-Statutory options when issued under the Plan shall NOT be
subject to such terms and conditions.
A. EMPLOYEES. Incentive Options may only be granted to
individuals who are Employees.
B. OPTION PRICE. The option price limitation of Section VI.1.B
shall be applicable to Incentive Options.
C. DOLLAR LIMITATION. The aggregate Fair Market Value
(determined as of the respective date or dates of grant) of the Common Stock
for which one or more options granted to any Employee under this Plan (or any
other option plan of the Company) may for the first time become exercisable
as Incentive Options during any one calendar year shall not exceed the sum of
One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two
or more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability thereof as
Incentive Options shall be applied on the basis of the order in which such
options are granted.
Except as modified by the preceding provisions of this Section
VII, all the provisions of the Plan shall be applicable to the Incentive
Options granted hereunder.
VIII. CORPORATE TRANSACTIONS
A. In the event of a Corporate Transaction, each
outstanding option shall be automatically accelerated so that each such
option shall, immediately prior to the specified effective date for such
Corporate Transaction, become fully exercisable with respect to the total
number of shares of Common Stock purchasable under such option and may be
exercised for all or any portion of such shares. However, no option which is
either to be assumed by the successor corporation or parent thereof or to be
replaced with a comparable option to purchase shares of the capital stock of
such successor corporation or parent shall be accelerated and no unassumed
option shall be so accelerated if and to the extent (i) such option is to be
replaced by a comparable cash incentive program of the successor corporation
based on the value of the option at the time of the Corporate Transaction, or
(ii) the acceleration of such option is subject to other applicable
limitations imposed by the Board in the relevant option agreement. Upon the
consummation of a Corporate Transaction, all outstanding options under the
Plan shall, to the extent not previously exercised or assumed by the
successor corporation or its parent company, terminate and cease to be
outstanding.
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B. In connection with any such Corporate Transaction, the
exercisability as an Incentive Option of any accelerated options under the
Plan shall remain subject to the applicable dollar limitation of Section
VII.B.
C. If the outstanding options under the Plan are assumed by
the successor corporation (or parent thereof) in the Corporate Transaction or
are otherwise to continue in effect following such Corporate Transaction,
then each such assumed or continuing option shall, immediately after such
Corporate Transaction, be appropriately adjusted to apply and pertain to the
number and class of securities or other property which would have been
issuable to the option holder, in consummation of the Corporate Transaction,
had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
payable per share, PROVIDED the aggregate option price payable for such
securities or other property shall remain the same. In addition, the number
and class of securities or other property available for issuance under the
Plan following the consummation of such Corporate Transaction shall be
appropriately adjusted.
D. The grant of options under this Plan shall in no way
affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
IX. CANCELLATION AND REGRANT OF OPTIONS
The Board shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or
different numbers of shares of Common Stock but having an option price per
share not less than eighty-five percent (85%) of Fair Market Value (one
hundred percent (100%) of Fair Market Value in the case of an Incentive
Option or, in the case of a 10% Shareholder, not less than one hundred and
ten percent (110%) of Fair Market Value) on the new grant date.
X. LIMITED SURRENDER RIGHTS
A. In the event of a Change in Control at a time when one
or more classes of The Company's equity securities are registered under
Section 12(g) of the Securities Exchange Act of 1934 (as amended), then each
optionee who is an officer or director at the time subject to the short-swing
profit restrictions of the Federal securities laws shall have the right to
surrender any or all options held by such individual under this Plan, to the
extent such options are at the time exercisable for vested shares, and
receive in exchange therefor an appreciation distribution from the Company.
The appreciation distribution shall be equal in amount to the excess of (i)
the Change in Control Price (on the date of surrender) of the number of
shares in which the optionee is at the time vested under the surrendered
option or portion thereof over (ii) the aggregate option price payable for
such vested shares. The limited surrender right provided by this Section X
shall be exercisable for a period not to exceed thirty (30) days from the
occurrence of the Change in Control. The approval of the Board shall not be
required for such surrender, and the distribution
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<PAGE>
to which such individual shall become entitled upon such surrender shall be
made entirely in cash.
B. For purposes of subparagraph A above, the Change in
Control Price per share of the vested Common Stock subject to the surrendered
option shall be deemed to be equal to the GREATER of (a) the Fair Market
Value per share on the date of surrender or (b) the highest reported price
per share paid in effecting the Change in Control. However, if the
surrendered option is an Incentive Option, then the Change in Control Price
of the vested shares subject to the surrendered option shall not exceed the
Fair Market Value per share.
XI. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; PROVIDED,
however, that no such amendment or modification shall, without the consent of
the holders, adversely affect the rights and obligations with respect to
options at the time outstanding under the Plan; and PROVIDED, further that
the Board shall not, without the approval of the Company's shareholders, (i)
increase the maximum number of shares issuable under the Plan, except for
permissible adjustments under Section V, (ii) materially modify the
eligibility requirements for the grant of options under the Plan or (iii)
otherwise materially increase the benefits accruing to participants under the
Plan.
XII. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan was initially adopted by the Board on December
14, 1990 and was approved by the Company's shareholders on March 1, 1991.
The Plan was subsequently amended by the Board on July 17, 1991 to effect
certain revisions to conform the Plan to the Maxim Technologies Inc. 1988
Stock Option Plan in order to facilitate the joint administration of the two
plans.(2) The amended Plan shall become effective when adopted by the Board,
but no option granted under the Plan shall become exercisable unless and
until the amendments to the Plan shall have been approved by the Company's
shareholders. If such shareholder approval is not obtained within twelve
(12) months after the date of the Board's adoption of the Plan, then all
options previously granted under the Plan shall terminate and no further
options shall be granted. Subject to such limitation, the Board may grant
options under the Plan at any time after the effective date and before the
date fixed herein for termination of the Plan.
B. Unless sooner terminated in accordance with Section
VIII, the Plan shall terminate upon the EARLIER of (i) December 13, 2000 or
(ii) the date on which all shares available for issuance under the Plan shall
have been issued pursuant to the exercise or surrender of options granted
hereunder. If the date of termination is determined under clause (i) above,
then options outstanding on such date shall thereafter continue to have force
and effect in accordance with the provisions of the instruments evidencing
such options.
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(2) The Plan was assumed by The Titan Corporation, pursuant to an Assignment
and Assumption Agreement by and between The Titan Corporation and Delfin
Systems, effective October 26, 1998.
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C. Options may be granted under this Plan to purchase
shares of Common Stock in excess of the number of shares then available for
issuance under the Plan, PROVIDED (i) an amendment to increase the maximum
number of shares issuable under the Plan is adopted by the Board prior to the
initial grant of any such option and within one year thereafter such
amendment is approved by the Company's shareholders and (ii) each option
granted is not to become exercisable, in whole or in part, at any time prior
to the obtaining of such shareholder approval.
XIII. USE OF PROCEEDS
Any cash proceeds received by the Company from the sale of
shares pursuant to options granted under the Plan shall be used for general
corporate purposes.
XIV. WITHHOLDING
The Company's obligation to deliver shares upon the exercise of
any options granted under Article II or upon the purchase of any shares
issued under Article III shall be subject to the satisfaction of all
applicable Federal, State and local income and employment tax withholding
requirements.
XV. REGULATORY APPROVALS
The implementation of the Plan, the granting of any option
hereunder, and the issuance of stock upon the exercise or surrender of any
such option shall be subject to the procurement by the Company of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it and the stock issued pursuant to
it.
XVI. FINANCIAL REPORTS
The Company shall deliver financial and other information
regarding the Company, on an annual or more frequent basis, to each
individual holding an outstanding option under the Plan, to the extent the
Company is required to provide such information pursuant to Section
260.140.41.2 of the Rules of the California Corporations Commissioner.
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EXHIBIT 4.2
DELFIN SYSTEMS
1988 STOCK OPTION PLAN
(Assumed Maxim Technologies Inc. 1988 Option Plan)
(Assumed by The Titan Corporation effective October 26, 1998)
I. PURPOSE.
A. The purpose of the Plan is to provide a means by which
selected employees and directors (if declared eligible under paragraph 4) of and
consultants to Delfin Systems, a California corporation (the "Company"), and its
Affiliates, as defined below, may be given an opportunity to purchase stock of
the Company. Delfin Systems is the successor by merger to Maxim Technologies
Inc., a Delaware corporation, which was merged with Delfin Systems on August 30,
1991. From and after August 30, 1991, all references to the Company throughout
this document shall be deemed to be references to Delfin Systems.(1)
B. The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
C. The Company, by means of the Plan, seeks to retain the
services of persons now employed by or serving as consultants or directors of
the Company, to secure and retain the services of persons capable of filling
such positions, and to provide incentives for such persons to exert maximum
efforts for the success of the Company.
D. The Company intends that the options issued under the Plan
shall, in the discretion of the Board of Directors of the Company (the "Board")
or any committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph II.C., be either incentive stock options as
that term is used in Section 422 of the Code ("Incentive Stock Options"), or
options which do not qualify as incentive stock options ("Non-Statutory Stock
Options"). All options shall be separately designated Incentive Stock Options or
Non-Statutory Stock Options at the time of grant, and in such form as issued
pursuant to Section V, and a separate certificate or certificates shall be
issued for shares purchased on exercise of each type of option. An option
designated as a Non-Statutory Stock Option shall not be treated as an incentive
stock option.
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(1) The Titan Corporation assumed the Plan and all obligations of the Company
thereunder from and after October 26, 1998.
<PAGE>
II. ADMINISTRATION.
A. The Plan shall be administered by the Board unless and
until the Board delegates administration to a committee, as provided in
subparagraph II.C. Whether or not the Board has delegated administration, the
Board shall have the final power to determine all questions of policy and
expediency that may arise in the administration of the Plan.
B. The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine from time to time which of the
persons eligible under the Plan shall be granted options; when and how the
option shall be granted; whether the option will be an Incentive Stock Option
or a Non-Statutory Stock Option; the provisions of each option granted (which
need not be identical), including the time or times during the term of each
option within which all or portions of such option may be exercised; and the
number of shares for which an option shall be granted to each such person.
(ii) To construe and interpret the Plan and options
granted under it, and to establish, amend and revoke rules and regulations
for its administration. The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any option agreement,
in a manner and to the extent it shall deem necessary or expedient to make
the Plan fully effective.
(iii) To amend the Plan as provided in Section X.
(iv) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
C. The Board may delegate administration of the Plan to a
committee composed of two (2) or more members (the "Committee"), all of the
members of which Committee shall be disinterested persons, if required and as
defined by the provisions of subparagraph II.D. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration
of the Plan. Additionally, prior to the date of the first registration of an
equity security of the Company under Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and notwithstanding anything to
the contrary contained herein, the Board may delegate administration of the
Plan to any person or persons and the term "Committee" shall apply to any
person or persons to whom such authority has been delegated.
D. The term "disinterested person," as used in this Plan,
shall mean an administrator of the Plan, whether a member of the Board or of
any Committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph II.C.: (i) who is not at the time he or
she exercises discretion in administering the Plan eligible and has not
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<PAGE>
at any time within one year prior thereto been eligible for selection as a
person to whom stock may be allocated or to whom stock options or stock
appreciation rights may be granted pursuant to the Plan or any other plan of
the Company or any of its affiliates entitling the participants therein to
acquire stock, stock options or stock appreciation rights of the Company or
any of its affiliates; or (ii) who is otherwise considered to be a
"disinterested person" in accordance with the rules, regulations or
interpretations of the Securities and Exchange Commission. Any such person
shall otherwise comply with the requirements of Rule 16b-3 promulgated under
the Exchange Act.
E. Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply if the Board or the Committee
expressly declares that such requirement shall not apply.
III. SHARES SUBJECT TO THE PLAN.
A. Subject to the provisions of Section IX relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
options granted under the Plan shall not exceeding the aggregate of one
million six hundred thirty-one thousand three hundred eighteen (1,631,318)
shares of the Company's common stock (2). If any option granted under the
Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such option shall again
become available for the Plan.
B. The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
C. An Incentive Stock Option may be granted to an eligible
person under the Plan only if the aggregate fair market value (determined at
the time the option is granted) of the stock with respect to which incentive
stock options (as defined in the Code) granted after 1986 are exercisable for
the first time by such optionee during any calendar year under all incentive
stock option plans of the Company and its Affiliate does not exceed one
hundred thousand dollars ($100,000). Should it be determined that an option
granted under the Plan exceeds such maximum for any reason other than the
failure of a good faith attempt to value the stock subject to the option,
such option shall be considered a Non-Statutory Stock Option to the extent,
but only to the extent, of such excess; provided, however, that should it be
determined that an entire option or any portion thereof does not qualify for
treatment as an incentive stock option by reason of exceeding such maximum,
such option or the applicable portion shall be considered a Non-Statutory
Stock Option.
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(2) This number would be 819,084.76 shares of The Titan Corporation Common
Stock after the assumption of the Delfin Systems 1988 Stock Option Plan by
The Titan Corporation in accordance with the terms set forth in the Agreement
and Plan of Reorganization by and among The Titan Corporation, Delsys Merger
Corp. and Delfin Systems, dated as of June 30, 1998, which provided for
conversion using an Exchange Ratio of .5021.
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<PAGE>
IV. ELIGIBILITY.
A. Incentive Stock Options may be granted only to employees
(including officers) of the Company or its Affiliates. A director of the
Company shall not be eligible to receive Incentive Stock Options unless such
director is also an employee of the Company or any Affiliate. Non-Statutory
Stock Options may be granted only to employees (including officers) of,
directors of or consultants to the Company or its Affiliates.
B. A director shall in no event be eligible for the
benefits of the Plan unless and until such director is expressly declared
eligible to participate in the Plan by action of the Board or the Committee,
and only if, at any time discretion is exercised by the Board in the
selection of a director as a person to whom options may be granted, or in the
determination of the number of shares which may be covered by options granted
to a director: (i) a majority of the Board and a majority of the directors
acting in such matter are disinterested persons, as defined in Section II.D.;
(ii) the Committee consists solely of "disinterested persons" as defined in
Section II.D.; or (iii) the Plan otherwise complies with the requirements of
Rule 16b-3 promulgated under the Exchange Act, as from time to time in
effect. The Board shall otherwise comply with the requirements of Rule 16b-3
promulgated under the Exchange Act, as from time to time in effect. This
Section IV.B shall not apply prior to the date of the first registration of
an equity security of the Company under Section 12 of the Exchange Act.
C. No person shall be eligible for the grant of an option
under the Plan if, at the time of grant, such person owns (or is deemed to
own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or any of its Affiliates unless the exercise price of such option
is at least one hundred ten percent (110%) of the fair market value of such
stock at the date of grant and the term of the option does not exceed five
(5) years from the date of grant.
V. OPTION PROVISIONS.
A. Each option shall be in such form and shall contain such
terms and conditions as the Board or the Committee shall deem appropriate.
The provisions of separate options need not be identical, but each option
shall include (through incorporation of provisions hereof by reference in the
option or otherwise) the substance of each of the following provisions:
B. The term of any option shall not be greater then ten
(10) years from the date it was granted.
C. The exercise price of each Incentive Stock Option shall
not be less than one hundred percent (100%) of the fair market value of the
stock subject to the option on the date the option is granted. The exercise
price of each Non-Statutory Stock Option shall not be less than eighty-five
percent (85%) of the fair market value of the stock subject to the option on
the date the option is granted.
D. The purchase price of stock acquired pursuant to an
option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the option
4
<PAGE>
is exercised, or (ii) at the discretion of the Board or the Committee, either
at the time of the grant or exercise of the option, (A) by delivery to the
Company of other common stock of the Company, (B) according to a deferred
payment or other arrangement (which may include, without limiting the
generality of the foregoing, the use of other common stock of the Company)
with the person to whom the option is granted or to whom the option is
transferred pursuant to Section V.F., or (C) in any other form of legal
consideration that may be acceptable to the Board or the Committee.
E. In the case of any deferred payment arrangement, interest
shall be payable at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
F. An option shall not be transferable except by will or by
the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the option is granted only by such person.
G. The total number of shares of stock subject to an option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). From time to time during each of such installment periods,
the option may become exercisable ("vest") with respect to some or all of the
shares allotted to that period, and may be exercised with respect to some or
all of the shares allotted to such period and/or any prior period as to which
the option was not fully exercised. During the remainder of the term of the
option (if its term extends beyond the end of the installment periods), the
option may be exercised from time to time with respect to any shares then
remaining subject to the option. The provisions of this Section V.G. are
subject to any option provisions governing the minimum number of shares as to
which an option may be exercised.
H. The Company may require any optionee, or any person to
whom an option is transferred under Section V.D, as a condition of exercising
any such option, (i) to give written assurances satisfactory to the Company
as to the optionee's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory
to the Company who is knowledgeable and experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together with
the purchaser representative, the merits and risks of exercising the option;
and (ii) to give written assurances satisfactory to the Company stating that
such person is acquiring the stock subject to the option for such person's
own account and not with any present intention of selling or otherwise
distributing the stock. These requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (i) the issuance of the shares
upon the exercise of the option has been registered under a then currently
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act") or (ii) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need
not be met in the circumstances under the then applicable securities laws.
I. An option shall terminate three (3) months after
termination of the optionee's employment or relationship as a consultant or
director with the Company or an
5
<PAGE>
Affiliate, unless (i) such termination is due to such person's permanent and
total disability, within the meaning of Section 22(e)(3) of the Code, in
which case the option may, but need not, provide that it may be exercised at
any time within one (1) year following such termination of employment or
relationship as a consultant or director; or (ii) the optionee dies while in
the employ of or while serving as a consultant or director to the Company or
an Affiliate, or within not more than three (3) months after termination of
the optionee's employment or relationship as a consultant or director or
(iii) the option by its terms specifies either (a) that it shall terminate
sooner than three (3) months after termination of the relationship with the
Company or an Affiliate, or (b) that it may be exercised more than three (3)
months after termination of such relationship, in which case the option may,
but need not, provide that it may be exercised at any time within eighteen
(18) months following the death of the optionee by the person or persons to
whom the optionee's rights under such option pass by will or by the laws of
descent and distribution. This Section V.I. shall not be construed to
extend the term of any option or to permit anyone to exercise the option
after expiration of its term, nor shall it be construed to increase the
number of shares as to which any option is exercisable from the amount
exercisable on the date of termination of the optionee's employment or
relationship as a consultant or director.
J. The option may, but need not, include a provision
whereby the optionee may elect at any time during the term of his or her
employment or relationship as a consultant or director with the Company or
any Affiliate to exercise the option as to any part or all of the shares
subject to the option prior to the stated vesting date of the option or of
any installment or installments specified in the option. Any shares so
purchased from any unvested installment or option may be subject to a
repurchase right in favor of the Company or to any other restriction the
Board or the Committee determines to be appropriate.
K. To the extent provided by the terms of an option, the
optionee may satisfy any federal, state or local tax withholding obligation
relating to the exercise of such option by any of the following means or by a
combination of such means: (1) tendering a cash payment; (2) authorizing the
Company to withhold from the shares of the common stock otherwise issuable to
the participant as a result of the exercise of the stock option a number of
shares having a fair market value less than or equal to the amount of the
withholding tax obligation; or (3) delivering to the Company owned and
unencumbered shares of the common stock having a fair market value less than
or equal to the amount of the withholding tax obligation.
VI. COVENANTS OF THE COMPANY.
A. During the terms of the options granted under the Plan,
the Company shall keep available at all times the number of shares of stock
required to satisfy such options.
B. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may
be required to issue and sell shares of stock upon exercise of the options
granted under the Plan; provided, however, that this undertaking shall not
require the Company to register under the Securities Act either the Plan, any
option granted under the Plan or any stock issued or issuable pursuant to any
such option. If, after reasonable efforts, the Company or Titan is unable to
obtain from any such regulatory
6
<PAGE>
commission or agency the authority which counsel for the Company or Titan
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company and Titan shall be relieved from any liability for failure to issue
and sell stock upon exercise of such options unless and until such authority
is obtained.
VII. USE OF PROCEEDS FROM STOCK.
A. Proceeds from the sale of stock pursuant to options
granted under the Plan shall constitute general funds of the Company.
VIII. MISCELLANEOUS.
A. Neither an optionee nor any person to whom an option is
transferred under Section V.D. shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to
such option unless and until such person has satisfied all requirements for
exercise of the option pursuant to its terms.
B. Throughout the term of any option granted pursuant to
the Plan, Titan shall deliver to the holder of such option, not later than
one hundred twenty (120) days after the close of each of the Company's fiscal
years during the option term such financial and other information regarding
the Company as comprises the annual report to the stockholders of the Company
provided for in the bylaws of the Company.
C. Nothing in the Plan or any instrument executed or option
granted pursuant thereto shall confer upon any eligible employee or optionee
any right to continue in the employ of the Company or any Affiliate (or to
continue acting as a consultant or director) or shall affect the right of the
Company or any Affiliate to terminate the employment or consulting
relationship or directorship of any eligible employee or optionee with or
without cause. In the event that an optionee is permitted or otherwise
entitled to take a leave of absence, the Company shall have the unilateral
right to (i) determine whether such leave of absence will be treated as a
termination of employment for purpose of paragraph V.I. hereof and
corresponding provisions of any outstanding options, and (ii) suspend or
otherwise delay the time or times at which the shares subject to the option
would otherwise vest.
IX. ADJUSTMENTS UPON CHANGES IN STOCK.
A. If any change is made in the stock subject to the Plan,
or subject to any option granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Plan and outstanding options will be appropriately adjusted in the class(es)
and maximum number of shares subject to the Plan and the class(es) and number
of shares and price per share of stock subject to outstanding options.
B. A CORPORATE TRANSACTION shall mean one or more of the
following transactions:
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<PAGE>
(i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation, or
(ii) any reverse merger in which the Company is the
surviving entity but in which all of the Company's outstanding voting stock
is transferred to the acquiring entity or its wholly-owned subsidiary.
C. In the event of a Corporate Transaction as defined in
section IX.B above, each outstanding option shall be automatically accelerated
so that each such option shall, immediately prior to the specified effective
date for such corporate transaction, become fully exercisable with respect to
the total number of shares of Common Stock purchasable under such option and may
be exercised for all or any portion of such shares. However, no option which is
either to be assumed by the successor corporation or parent thereof or to be
replaced with a comparable option to purchase shares of the capital stock of
such successor corporation or parent shall be accelerated and no unassumed
option shall be so accelerated if and to the extent (i) such option is to be
replaced by a comparable cash incentive program of the successor corporation
based on the value of the option at the time of the Corporate Transaction, or
(ii) the acceleration of such option is subject to other applicable limitations
imposed by the Board in the relevant option agreement. To the extent not
assumed, each option outstanding under the Plan shall terminate upon the
consummation of such Corporate Transaction and cease to be exercisable.
X. AMENDMENT OF THE PLAN.
A. The Board at any time, and from time to time, may amend
the Plan. However, except as provided in paragraph IX relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by the
vote or written consent of the holders of the outstanding shares of Titan
entitled to vote, to the degree necessary under applicable laws to obtain
incentive stock option treatment under Section 422 of the Code, within twelve
(12) months before or after the adoption of the amendment, where the
amendment will:
(i) Increase the number of shares reserved for
options under the Plan;
(ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires
stockholder approval in order for the Plan to satisfy the requirements of
Section 422(b) of the Code); or
(iii) Modify the Plan in any other way if such
modification requires stockholder approval in order for the Plan to satisfy
the requirements of Section 422(b) of the Code or to comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act.
B. It is expressly contemplated that the Board may amend the
Plan in any respect the Board deems necessary or advisable to provide optionees
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to employee incentive
stock options and/or to bring the Plan and/or incentive stock options granted
under it into compliance therewith.
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<PAGE>
C. Rights and obligations under any option granted before
amendment of the Plan shall not be altered or impaired by any amendment of
the Plan unless (i) the Board requests and receives the consent of the person
to whom the option was granted and (ii) such person consents in writing.
XI. TERMINATION OR SUSPENSION OF THE PLAN.
A. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate ten (10) years from the
date the Plan is adopted by the Board or approved by the stockholders of the
Company, whichever is earlier(3). No options may be granted under the Plan
while the Plan is suspended or after it is terminated.
B. Rights and obligations under any option granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except with the consent of the person to whom the
option was granted.
XII. EFFECTIVE DATE OF PLAN.
(i) The Plan shall be considered effective as determined by
the Board, but no options granted under the Plan shall be exercised unless
and until the Plan has been approved by the vote or written consent of the
holders of the outstanding shares of the Company entitled to vote, to the
degree necessary under applicable laws to obtain incentive stock option
treatment under Section 422 of the Code, and, if required, an appropriate
permit has been issued by the Commissioner of Corporations of the State of
Delaware.(4)
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(3) Termination of the Plan occurred September 1, 1998.
(4) The Plan was originally adopted by the Board of Directors on September 1,
1998, and approved by the stockholders on August 29, 1989.
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EXHIBIT 5
November 6, 1998
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
RE: DELFIN SYSTEMS 1990 STOCK OPTION PLAN AND DELFIN SYSTEMS 1988 STOCK
OPTION PLAN
Ladies and Gentlemen:
I am the General Counsel for The Titan Corporation, a Delaware
corporation ("Titan"), and am rendering this opinion in connection with the
registration under the Securities Act of 1933, as amended, of an additional
822,569 shares of Titan Common Stock, $0.01 par value which may be issued
pursuant to the exercise of options granted under the Delfin Systems 1990
Stock Option Plan and the Delfin Systems 1988 Stock Option Plan
(collectively, the "Assumed Option Plans") pursuant to a registration
statement on Form S-8 (the "Registration Statement").
In rendering this opinion I have examined all instruments, documents and
records which I deemed relevant and necessary for the basis of this opinion
hereinafter expressed. In such examination, I have assumed the genuineness of
all signatures and the authenticity of all documents submitted to me as
originals and the conformity to the originals of all documents submitted to
me as copies.
This opinion is expressed only with respect to the law of the State of
California, the General Corporation Law of the State of Delaware and the
federal laws of the United States. As to matters of General Corporation Law
of the State of Delaware, I have based my opinion solely upon examination of
such laws and the rules and regulations of the authorities administering such
laws, all as reported in standard, unofficial compilations. I have not
obtained opinions of counsel licensed to practice in jurisdictions other than
the State of California.
On the basis of the foregoing, I am of the opinion that the additional
822,569 shares of Titan Common Stock which may be issued upon the exercise of
options granted under the Assumed Option Plans are duly authorized shares of
Titan Common Stock, and, when issued against payment of the purchase price
therefor in accordance with the provisions of the Assumed Option Plans will
be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of my name wherever it
appears in said Registration Statement.
Very truly yours,
/s/ IRA FRAZER
--------------
Ira Frazer
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, we hereby consent to the incorporation by
reference in this registration statement of our report, with respect to the
consoldiated 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
November 11, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, 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 Corproation'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
November 11, 1998
<PAGE>
EXHIBIT 23.4
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of The Titan Corporation (the parent company of Delfin Systems)
pertaining to the Delfin Systems 1990 Stock Option Plan and the Delfin
Systems 1998 Stock Option Plan, of our report dated December 9, 1997 with
respect to the financial statements of Delfin System included in the
Registration Statement on Form S-4 (No. 333-60122) of The Titan Corporation,
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
November 13, 1998
