UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMTEX SCIENTIFIC CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-3055012
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4900 Seminary Road, Suite 800
Alexandria, Virginia 22311
(703) 820-2000
(Address, including zip code and telephone number,
of Principal Executive Offices)
COMTEX SCIENTIFIC CORPORATION
1995 STOCK OPTION PLAN
(Full title of the plan)
CHARLES W. TERRY
President and Chief Executive Officer
Comtex Scientific Corporation
4900 Seminary Road, Suite 800
(703) 820-2000
Alexandria, Virginia 22311
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share Price Fee
------------ ---------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C>
Common Stock 1,200,000 $.125 <F1> $150,000 $45.00
$.02 par
value
<FN>
<F1> Estimated solely for purposes of calculating the
registration fee. Based on the closing price on September 26, 1997.
</TABLE>
<PAGE>
PART II.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
Comtex Scientific Corporation (the "Company" or the
"Registrant") hereby incorporates by reference into this
Registration Statement the documents listed below which have been
filed with the Securities and Exchange Commission (the
"Commission"):
(a) the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997; and
(b) All reports filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") since the end of the fiscal year covered by the Annual
Report referred to in (a) above.
Each document or report subsequently filed by the Company
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, but prior to the filing of a posteffective amendment
to this Registration Statement which indicates that all
securities offered by this Registration Statement have been sold
or which deregisters all such securities then remaining unsold,
shall be deemed to be incorporated by reference into this
Registration Statement and to be a part of this Registration
Statement from the date of the filing of such document with the
Commission. Any statement contained in this Registration
Statement, or in a document incorporated in this Registration
Statement by reference, shall be deemed to be modified or
superseded for purposes of this Registration Statement to the
extent that a statement contained in any subsequently filed
document incorporated herein by reference which statement is also
incorporated herein by reference is inconsistent with such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
Item 4. Description of Securities
The following is an updated description of the Company's
securities:
Common Stock
The authorized capital stock of the Company consists of
18,000,000 shares of common stock, $0.01 par value per share
("Common Stock"). Holders of Common Stock are entitled to one
vote for each share held on all matters submitted to a vote of
shareholders and do not have cumulative voting rights.
Accordingly, holders of a majority of the Common Stock entitled
to vote in any election of directors may elect all the directors
standing for election. Holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the
Board of Directors at its discretion from funds legally available
therefore. Upon the liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to receive
ratably the net assets of the Company available after the payment
of debts and other liabilities. Holders of Common Stock have no
preemptive, subscription, redemption or conversion rights.
<PAGE>
Item 6. Indemnification of Directors and Officers
The New York Business Corporation Law allows, in general,
for indemnification, in certain circumstances, by a corporation
of any person threatened with or made a party to any action or
proceeding by reason of the fact that he or she is, or was, a
director or officer of such corporation. Indemnification is also
authorized with respect to a criminal action or proceeding where
the person had no reasonable cause to believe that his conduct
was unlawful.
The Company's Bylaws provide that the Company shall, subject
to conditions imposed by statute and in the discretion of the
Company's Board, indemnify its directors and officers against
judgments, fines, amounts paid in settlement and reasonable
expenses, necessarily incurred as a result of actions or
proceedings to which such persons are, or are threatened to be,
made a party because they were directors or officers of the
Company.
Item 8. Exhibits
See Index to Exhibits.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement;
(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 information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
<PAGE>
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 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.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all 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 Alexandria, Virginia on October 2, 1997.
COMTEX SCIENTIFIC CORPORATION
By: /S/ CHARLES W. TERRY
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities indicated on October 2, 1997.
/S/ CHARLES W. TERRY
Charles W. Terry Director, President and
Chief Executive Officer
(Principal Executive Officer)
/S/ DONALD E. ZIEGLER
Donald E. Ziegler Chief Financial Officer
(Principal Financial and
Accounting Officer)
/S/ C.W. GILLULY
C.W. Gilluly Chairman of the Board
/S/ ERIK HENDRICKS
Erik Hendricks Director
/S/ ROBERT A. NIGRO
Robert A. Nigro Director
<PAGE>
EXHIBITS
TO
COMTEX SCIENTIFIC CORPORATION
REGISTRATION STATEMENT ON FORM S-8
Exhibit Index
The following exhibits are filed herewith as part of this
Registration Statement:
Exhibit
No.
5.1 Opinion and Consent of McGuire, Woods,
Battle & Boothe, L.L.P., Counsel to the Company
as to the validity of the Common Stock
offered hereunder
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young LLP
23.3 Consent of McGuire, Woods, Battle & Boothe,
L.L.P. (included in Exhibit 5.1)
28.1 Comtex Scientific Corporation 1995 Stock Option Plan
EXHIBIT 5.1
September 29, 1997
Board of Directors
Comtex Scientific Corporation
4900 Seminary Road
Alexandria, Virginia 22311
Gentlemen:
You propose to file as soon as possible with the Securities
and Exchange Commission a registration statement on Form S-8 (the
"Registration Statement") relating to the Comtex Scientific
Corporation 1995 Stock Option Plan (the "Plan"). The
Registration Statement covers 1,200,000 shares of Comtex
Scientific Corporation Common Stock, $.01 par value, which have
been, with the approval of the shareholders of Comtex Scientific
Corporation, reserved for issuance under the Plan.
We are of the opinion that the 1,200,000 shares of Common
Stock which are authorized for issuance under the Plan, when
issued and sold in accordance with the terms and provisions of
the Plan and as set forth in and contemplated by the Registration
Statement, will be duly authorized, legally issued, fully paid
and nonassessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ McGuire Woods Battle & Boothe, LLP
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Board of Directors
Comtex Scientific Corporation
We consent to the incorporation by reference in this
registration statement on Form S-8 of our report dated September
21, 1995, on our audits of the statements of operations,
stockholders' deficit and cash flows of Comtex Scientific
Corporation for the year ended June 30, 1995 which report appears
in the June 30, 1997 annual report on Form 10-K of Comtex
Scientific Corporation.
/S/ Coopers & Lybrand L.L.P.
Washington, D.C.
September 30, 1997
EXHIBIT 23.2
ACCOUNTANTS' CONSENT
The Board of Directors
Comtex Scientific Corporation
We consent to the incorporation by reference in the
Registration Statement pertaining to the Comtex Scientific
Corporation 1995 Stock Option Plan of our report dated
September 10, 1997, with respect to the financial statements
of Comtex Scientific Corporation included in its Annual Report
(Form 10-K) for the year ended June 30, 1997.
/S/ ERNST & YOUNG
Ernst & Young
Vienna, Virginia
september 30, 1997
EXHIBIT 28.1
COMTEX SCIENTIFIC CORPORATION
1995 STOCK OPTION PLAN
SECTION 1. Purpose of the Plan. The purpose of this Comtex
Scientific Corporation 1995 Stock Option Plan ("Plan") is to
encourage ownership of common stock, $.01 par value ("Common
Stock"), of Comtex Scientific Corporation, a New York corporation
(the "Company"), by eligible key employees, directors and
consultants of the Company and its Affiliates (as defined below)
and to provide increased incentive for such employees, directors
and consultants to render services and to exert maximum effort
for the business success of the Company. In addition, the Company
expects that the Plan will further strengthen the identification
of employees, directors and consultants with the stockholders.
Certain options to be granted under this Plan are intended to
qualify as Incentive Stock Options ("ISOs") pursuant to Section
422 of the Internal Revenue Code of 1986, as amended ("Code"),
while other options granted under this Plan will be nonqualified
options which are not intended to qualify as ISOs ("Nonqualified
Options"), either or both as provided in the agreements
evidencing the options as provided in Section 6 hereof. As used
in this Plan, the term "Affiliates" means any "parent corporation"
of the Company and any "subsidiary corporation" of the Company
within the meaning of Code Sections 424(e) and (f), respectively.
SECTION 2. Administration of the Plan.
(a) Administrators. The Plan shall be administered by
administrators (the "Administrators") designated by the
Board of Directors of the Company (the "Board"), and
consisting of not fewer than two members of the Board.
Pursuant to Rule 16b-3 of the Securities Exchange Act of
1934, as amended ("Exchange Act"), no director shall serve
as an administrator unless he is a "disinterested person"
within the meaning of said Rule 16b-3.
(b) Administrators' Action. The Administrators shall
hold meetings at such times and places as they may
determine. A majority of Administrators shall constitute a
quorum, and all determinations of the Administrators shall
be made by not less than a majority thereof. Any decision or
determination reduced to writing and signed by a majority of
the Administrators shall be fully effective as if it had
been made by a majority vote of the Administrators at a
meeting duly called and held. The Administrators may
designate the Secretary of the Company or other Company
employees to assist the Administrators in the administration
of the Plan, and may grant authority to such persons to
execute award agreements or other documents on behalf of the
Administrators and the Company. Any duly constituted
committee of the Board satisfying the qualifications of this
Section 2 may be appointed as the Administrators.
<PAGE>
(c) Administrators' Expenses. All expenses and
liabilities incurred by the Administrators in the
administration of the Plan shall be borne by the Company.
The Administrators may employ attorneys, consultants,
accountants or other persons.
SECTION 3. Stock Reserved for the Plan. Subject to
adjustment as provided in Section 6(k) hereof, the maximum number
of shares of Common Stock for which options granted hereunder may
be exercised shall be 1,200,000. The shares subject to the Plan
shall consist of authorized but unissued shares of Common Stock
and such number of shares shall be and is hereby reserved for
sale for such purpose. Any of such shares which may remain unsold
and which are not subject to outstanding options at the
termination of the Plan shall cease to be reserved for the
purpose of the Plan, but until termination of the Plan or the
termination of the last of the options granted under the Plan,
whichever last occurs, the Company shall at all times reserve a
sufficient number of shares to meet the requirements of the Plan.
Should any option expire or be canceled prior to its exercise in
full, the shares theretofore subject to such option may again be
made subject to an option under the Plan.
SECTION 4. Eligibility.
(a) The persons eligible to participate in the Plan
as a recipient of options ("Optionee") shall include only
key employees, directors and consultants of the Company or
its Affiliates at the time the option is granted. An
employee or consultant who has been granted an option
hereunder may be granted an additional option or options, if
the Administrators shall so determine.
(b) During the term of the Plan, each non-employee
director elected or appointed to the Board (other than non-
employee directors holding office- on the date of adoption
of this Plan, whose initial grants are discussed below) will
automatically receive on the date of his first initial
appointment to the Board, an option to purchase 2,500 shares
of the Common Stock (the "Initial Option") at a per share
exercise price equal to the fair market value of the Common
Stock on the date of grant. Subject to acceleration upon the
occurrence of certain prescribed events, such option becomes
exercisable as to one-third upon the date of grant, one-
third upon the first anniversary of the date of grant and
one-third upon the second anniversary of the date of grant.
Each non-employee director holding office on the date
of adoption of this Plan by the Board shall receive on such
date two options, each to purchase 2,500 shares of the
Common Stock at a per share exercise price equal to the fair
market value of the Common Stock on such date. Subject to
acceleration upon the occurrence of certain prescribed
events, one of such options shall become exercisable as to
two-thirds on the date of grant, and shall become
exercisable as to the remaining one-third on the first
<PAGE>
anniversary of the date of grant (the "Two-Thirds Option"),
and the other option shall become exercisable as to one-
third upon the date of grant, one-third upon the first
anniversary of the date of grant and one-third upon the
second anniversary of the date of grant (the "One-Third
Option").
Each non-employee director (including non-employee
directors holding office on the date of adoption of this
Plan) will automatically receive on each anniversary of his
initial election or appointment to the Board or, in the case
of non-employee directors holding office as of the date of
adoption of this Plan on each anniversary of such date, an
option to purchase 2,500 shares of the Common Stock
exercisable at a per share value equal to the fair market
value for the Common Stock on the applicable additional
grant date. Subject to acceleration upon the occurrence of
certain prescribed events, each such option shall become
exercisable as to one-third upon the date of grant, one-
third upon the first anniversary of the date of grant and
one-third upon the second anniversary of the date of grant.
The Two-Thirds Options shall terminate, to the extent
not exercised prior thereto, upon the earlier to occur of
(i) the fourth anniversary of the date of grant and (ii)
ninety days after the cessation of the Optionee's service as
a member of the Board (to the extent vested upon the date of
such cessation). All other options granted to non-employee
directors (including, without limitation, the One-Thirds
Options) shall terminate, to the extent not exercised prior
thereto, upon the earlier to occur of (i) the fifth
anniversary of the date of grant and (ii) ninety days after
the cessation of the Optionee's service as a member of the
Board (to the extent vested upon the date of such
cessation).
SECTION 5. Grant of Options.
(a) Administrators' Discretion. The Administrators
shall have sole and absolute discretionary authority (i) to
determine, authorize, and designate those key employees,
directors and consultants of the Company or its Affiliates
who are to receive options under the Plan, (ii) to determine
the number of shares of Common Stock to be covered by such
options and the terms thereof, and (iii) to determine the
type of option granted: ISO, Nonqualified Option or a
combination of ISO and Nonqualified Options; provided that a
non-employee director may not receive any ISOs. The
Administrators shall thereupon grant options in accordance
with such determinations as evidenced by a written option
agreement. Subject to the express provisions of the Plan,
the Administrators shall have discretionary authority to
prescribe, amend and rescind rules and regulations relating
to the Plan, to interpret the Plan, to prescribe and amend
the terms of the option agreements (which need not be
identical) and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
<PAGE>
(b) Stockholder Approval. All options granted under
this Plan are subject to, and may not be exercised before,
the approval of this Plan by the affirmative vote of the
holders of a majority of the votes cast at a meeting of the
stockholders or by written consent in accordance with the
laws of the State of New York. If such approval by the
stockholders of the Company is not forthcoming, all options
previously granted under this Plan shall be void.
(c) Limitation on Incentive Stock Options. The
aggregate fair market value (determined in accordance with
Section 6(b) of this Plan at the time the option is granted)
of the Common Stock with respect to which ISOs may be
exercisable for the first time by any Optionee during any
calendar year under all such plans of the Company and its
Affiliates shall not exceed $100,000.
SECTION 6. Terms and Conditions. Each option granted under
the Plan shall be evidenced by an agreement, in a form approved
by the Administrators, which shall be subject to the following
express terms and conditions and to such other terms and
conditions as the Administrators may deem appropriate.
(a) Option Period. The Administrators shall promptly
notify the Optionee of the option grant and a written
agreement shall promptly be executed and delivered by and on
behalf of the Company and the Optionee, provided that the
option grant shall expire if a written agreement is not
signed by said Optionee (or his agent or attorney) and
returned to the Company within sixty (60) days from date of
receipt by the Optionee of such agreement. The date of grant
shall be the date the option is actually granted by the
Administrators, even though the written agreement may be
executed and delivered by the Company and the Optionee after
that date. Each option agreement shall specify the period
for which the option thereunder is granted (which in no
event shall exceed ten years from the date of grant) and
shall provide that the option shall expire at the end of
such period. If the original term of an option is less than
ten years from the date of grant, the option may be amended
prior to its expiration, with the approval of the
Administrators and the Optionee, to extend the term so that
the term as amended is not more than ten years from the date
of grant. In the case of an ISO granted to an individual
who, at the time of grant, owns stock comprising more than
ten (10) percent of the total combined voting power of all
classes of stock of the Company or its Affiliate ("Ten
Percent Stockholder), such period shall not exceed five
years from the date of grant.
<PAGE>
(b) Option Price. The purchase price of each share of
Common Stock subject to each option granted pursuant to the
Plan shall be determined by the Administrators at the time
the option is granted and, in the case of ISOs, shall not be
less than 100% of the fair market value of a share of Common
Stock on the date the option is granted, as determined by
the Administrators. In the case of an ISO granted to a Ten
Percent Stockholder, the option price shall not be less than
110% of the fair market value of a share of Common Stock on
the date the option is granted. The purchase price of each
share of Common Stock subject to a Nonqualified Option under
this Plan shall be determined by the Administrators prior to
granting the option. The Administrators shall set the
purchase price for each share subject to a Nonqualified
Option at such price as the Administrators in their sole
discretion shall determine, provided that the purchase price
of each share of Common Stock subject to a Nonqualified
Option shall not be greater than the fair market value of a
share of Common Stock on the date the option is granted as
determined by the Administrators.
For all purposes under the Plan, the fair market value
of a share of Common Stock on a particular date shall be
equal to the average of the reported high and low bid prices
of the Common Stock for the preceding ten (10) days. In the
event the Common Stock is not actively traded at the time a
determination of its value is required to be made hereunder,
the determination of its fair market value shall be made by
the Administrators in such manner as it deems appropriate.
(c) Exercise Period. The Administrators may provide
in the option agreement that an option may be exercised in
whole, immediately, or is to be exercisable in increments.
However, no portion of any option may be exercisable by an
Optionee prior to the approval of the Plan by the
stockholders of the Company.
(d) Procedure for Exercise. Options shall be exercised
by the delivery of written notice to the Secretary of the
Company setting forth the number of shares with respect to
which the option is being exercised. Such notice shall be
accompanied by cash or cashier's check, bank draft, postal
or express money order payable to the order of the Company,
or at the option of the Administrators, in Common Stock
theretofore owned by such Optionee (or any combination of
cash and Common Stock). Notice may also be delivered by
telefax provided that the purchase price of such shares is
delivered to the Company via wire transfer on the same day
the telefax is received by the Company. The notice shall
specify the address to which the certificates for such
shares are to be mailed. An Optionee shall be deemed to be a
stockholder with respect to shares covered by an option on
the date the Company receives such written notice and such
option payment.
<PAGE>
As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver
to the Optionee certificates for the number of shares with
respect to which such option has been so exercised, issued
in the Optionee's name or such other name as the Optionee
directs; provided, however, that such delivery shall be
deemed effected for all purposes when a stock transfer agent
of-the Company shall have deposited such certificates in the
United States mail, addressed to the Optionee at the address
specified pursuant to this Section 6(d).
(e) Termination of Employment or Service. If an
employee or consultant to whom an option is granted ceases
to be employed or engaged by the Company for any reason
other than death or disability or if a director to whom an
option is granted ceases to serve on the Board for any
reason other than death or disability, any option which is
exercisable on the date of such termination of employment or
engagement or cessation of service from the Board shall
expire ninety (90) days following such date of such
termination of employment or engagement or cessation of
service from the Board.
(f) Disability or Death of Optionee. In the event of
the determination of disability or death of an Optionee
under the Plan while he is employed or engaged by the
Company or while he serves on the Board, the options
previously granted to him may be exercised (to the extent he
would have been entitled to do so at the date of the
determination of disability or death) at any time and from
time to time, within a three-month period after such
determination of disability or death, by the former
employee, director or consultant, the guardian of his
estate, the executor or administrator of his estate or by
the person or persons to whom his rights under the option
shall pass by will or the laws of descent and distribution,
but in no event may the option be exercised after its
expiration under the terms of the option agreement. An
Optionee shall be deemed to be disabled if, in the opinion
of a physician selected by the Administrators, he is
incapable of performing services for the Company of the kind
he was performing at the time the disability occurred by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be
of long, continued and indefinite duration. The date of
determination of disability for purposes hereof shall be the
date of such determination by such physician. The
Administrators, in their sole discretion, may allow an
Optionee to exercise all or a portion of the Options granted
but unexercised for a longer period than three months after
disability or death.
<PAGE>
(g) Assignability. An option shall not be assignable
or otherwise transferable except by will or by the laws of
descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act, as amended, or the
rules thereunder. During the lifetime of an Optionee, an
option shall be exercisable only by him.
(h) Incentive Stock Options. Each option agreement
may contain such terms and provisions as the Administrators
may determine to be necessary or desirable in order to
qualify an option designated as an incentive stock option.
(i) No Rights as Stockholder. No Optionee shall have
any rights as a stockholder with respect to shares covered
by an option until the option is exercised by the written
notice and accompanied by payment as provided in clause (d)
above.
(j) Extraordinary Corporate Transactions. The
existence of outstanding options shall not affect in any way
the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations, exchanges, or other changes in the
Company's capital structure or its business, or any merger
or consolidation of the Company, or any issuance of Common
Stock or other securities or subscription rights thereto, or
any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise. If
the Company recapitalizes or otherwise changes its capital
structure, or merges, consolidates, sells all of its assets
or dissolves (each of the foregoing a "Fundamental Change"),
then thereafter upon any exercise of an option theretofore
granted, the Optionee shall be entitled to purchase under
such option, in lieu of the number of shares of Common Stock
as to which option shall then be exercisable, the number and
class of shares of stock and securities to which the
Optionee would have been entitled pursuant to the terms of
the Fundamental Change if, immediately prior to such
Fundamental Change, the Optionee had been the holder of
record of the number of shares of Common Stock as to which
such option is then exercisable. If (i) the Company shall
not be the surviving entity in any merger or consolidation
(or survives only as a subsidiary of another entity), (ii)
the Company sells all or substantially all of its assets to
any other person or entity (other than a wholly-owned
subsidiary), (iii) any person or entity (including a "group"
as contemplated by Section 13(d) (3) of the Exchange Act)
acquires or gains ownership or control of (including,
without limitation, power to vote) more than 50% of the
outstanding shares of Common Stock, (iv) the Company is to
be dissolved and liquidated, or (v) as a result of or in
connection with a contested election of directors, the
<PAGE>
persons who were directors of the Company before such
election shall cease to constitute a majority of the Board,
the Administrators, in their sole discretion, may accelerate
the time at which all or a portion of an Optionee's Options
may be exercised for a limited period of time before or
after a specified date.
(k) Changes in Company's Capital Structure. If the
outstanding shares of Common Stock or other securities of
the Company, or both, for which the option is then
exercisable shall at any time be changed or exchanged by
declaration of a stock dividend, stock split, or combination
of shares, the number and kind of shares of Common Stock or
other securities which are subject to the Plan or subject to
any options theretofore granted, and the option prices,
shall be appropriately and equitably adjusted so as to
maintain the proportionate number of shares or other
securities without changing the aggregate option price.
(l) Acceleration of Options. Except as hereinbefore
expressly provided, (i) the issuance by the Company of
shares of stock of any class of securities convertible into
shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares
or obligations of the Company convertible into such shares
or other securities, (li) the payment of a dividend in
property other than Common Stock or (iii) the occurrence of
any similar transaction, and in any case whether or not for
fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares
of Common Stock subject to options theretofore granted or
the purchase price per share, unless the Administrators
shall determine in their sole discretion that an adjustment
is necessary to provide equitable treatment to the Optionee.
Notwithstanding anything to the contrary contained in this
Plan, the Administrators may in their sole discretion
accelerate the time at which any option may be exercised,
including, but not limited to, upon the occurrence of the
events specified in this Section 6.
SECTION 7. Amendments or Termination. The Board may amend,
alter or discontinue the Plan, but no amendment or alteration
shall be made which would impair the rights of any Optionee,
without his consent, under any option theretofore granted, or
which, without the approval of the stockholders, would: (i)
except as is provided in Section 6(k) of the Plan, increase the
total number of shares reserved for the purposes of the Plan,
(il) change the class of persons eligible to participate in the
Plan as provided in Section 4 of the Plan, (iii) extend the
applicable maximum option period provided for in Section 6(a) of
the Plan, (iv) extend the expiration date of this Plan set forth
in Section 14 of the Plan, (v) except as provided in Section 6(k)
of the Plan, decrease to any extent the option price of any
option granted under the Plan, or (vi) withdraw the
administration of the Plan from the Administrators.
<PAGE>
SECTION 8. Compliance With Other Laws and Regulations. The
Plan, the grant and exercise of options thereunder, and the
obligation of the Company to sell and deliver shares under such
options, shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any
governmental or regulatory agency as may be required. The Company
shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any
registration or qualification of such shares under any federal or
state law or issuance of any ruling or regulation of any
government body which the Company shall, in its sole discretion,
determine to be necessary or advisable. Any adjustments provided
for in subparagraphs 6(j), (k) and (l) shall be subject to any
shareholder action required by New York corporate law.
SECTION 9. Purchase for Investment. Unless the options and
shares of Common Stock covered by this Plan have been registered
under the Securities Act of 1933, as amended, or the Company has
determined that such registration is unnecessary, each person
exercising an option under this Plan may be required by the
Company to give a representation in writing that he is acquiring
such shares for his own account for investment and not with a
view to, or for sale in connection with, the distribution of any
part thereof.
SECTION 10. Taxes.
(a) The Company may make such provisions as it may
deem appropriate for the withholding of any taxes which it
determines is required in connection with any options
granted under this Plan.
(b) Notwithstanding the terms of Paragraph 11(a), any
Optionee may pay all or any portion of the taxes required to
be withheld by the Company or paid by him in connection with
the exercise of a Nonqualified option by electing to have
the Company withhold shares of Common Stock, or by
delivering previously owned shares of Common Stock, having a
fair market value, determined in accordance with Paragraph
6(b), equal to the amount required to be withheld or paid.
An Optionee must make the foregoing election on or before
the date that the amount of tax to be withheld is determined
("Tax Date"). All such elections are irrevocable and subject
to disapproval by the Administrators.
SECTION 11. Replacement of Options. The Administrators
from time to time may permit an Optionee under the Plan to
surrender for cancellation any unexercised outstanding option and
receive from the Company in exchange an option for such number of
shares of Common Stock as may be designated by the
Administrators. The Administrators may, with the consent of the
person entitled to exercise any outstanding option, amend such
option, including reducing the exercise price of any option to
not less than the fair market value of the Common Stock at the
time of the amendment and extending the term thereof.
<PAGE>
SECTION 12. No Right to Company Employment. Nothing in
this Plan, or as a result of any option granted pursuant to this
Plan, shall confer on any individual any right to continue in the
employ of the Company or interfere in any way with the right of
the Company to terminate an individual's employment at any time.
The option agreements may contain such provisions as the
Administrators may approve with reference to the effect of
approved leaves of absence.
SECTION 13. Liability of Company. The Company and any
Affiliate which is in existence, or hereafter comes into
existence, shall not be liable to an Optionee or other persons as
to:
(a) The Non-Issuance of Shares. The non-issuance or
sale of shares as to which the Company has been unable to
obtain from any regulatory body having jurisdiction the
authority deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected,
but not realized, by any Optionee or other person due to the
exercise of any option granted hereunder.
SECTION 14. Effectiveness and Expiration of Plan. The Plan
shall be effective on the date the Board adopts the Plan. If the
stockholders of the Company fail to approve the Plan within
twelve months of the date the Board approved the Plan, the Plan
shall terminate and all options previously granted under the Plan
shall become void and of no effect. The Plan shall expire ten
years after the date the Board approves the Plan and thereafter
no option shall be granted pursuant to the Plan.
SECTION 15. Non-Exclusivity of the Plan. Neither the
adoption by the Board, nor the submission of the Plan to the
stockholders of the Company for approval, shall be construed as
creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including
without limitation, the granting of restricted stock or stock
options otherwise than under the Plan, and such arrangements may
be either generally applicable or applicable only in specific
cases.
SECTION 16. Governing Law. This Plan and any agreements
hereunder shall be interpreted and construed in accordance with
the laws of the State of New York and applicable federal law.
SECTION 17. Cashless Exercise. The Administrators also may
allow cashless exercises as permitted under Federal Reserve
Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Administrators
determine to be consistent with the Plan's purpose and applicable
law. The proceeds from such a payment shall be added to the
general funds of the Company and shall be used for general
corporate purposes.
