UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-15512.
ALPNET, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0356708
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4444 South 700 East Suite #204
Salt Lake City, Utah 84107-3075
(Address of principal executive offices) (Zip Code)
(801) 265-3300
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
The number of shares outstanding of the registrant's no par value Common Stock
as of November 3, 1995, was 16,154,341.
ALPNET, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited):
Consolidated Statements of Operations--Three months ended September
30, 1995 and 1994, and Nine months ended September 30, 1995 and
1994
Consolidated Balance Sheets--September 30, 1995 and December 31,
1994
Consolidated Statements of Cash Flows--Nine months ended September
30, 1995 and 1994
Notes to Consolidated Financial Statements--September 30, 1995
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
Thousands of dollars and shares 1995 1994 1995 1994
<S> <C> <C> <C> <C>
SALES OF SERVICES $7,386 $5,486 $19,751 $14,631
OPERATING EXPENSES:
Cost of services sold 6,174 4,718 16,898 13,209
Selling, general and administrative
expenses 597 553 1,785 1,501
Development costs 49 31 131 91
Amortization of goodwill 93 90 279 260
Total operating expenses 6,913 5,392 19,093 15,061
OPERATING INCOME (LOSS) 473 94 658 (430)
Interest expense 55 44 160 150
Income (loss) before income taxes 418 50 498 (580)
Income taxes 70 25 130 66
NET INCOME (LOSS) $ 348 $ 25 $ 368 $ (646)
NET INCOME (LOSS) PER SHARE $ .015 $.001 $ .016 $ (.036)
Weighted average shares of Common
Stock and Common Stock equivalents
outstanding 22,868 22,199 22,422 17,799
See accompanying notes.
</TABLE>
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<CAPTION>
September 30 December 31
Thousands of dollars 1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 786 $ 344
Trade accounts receivable, less
allowance of $193 in 1995
and $108 in 1994 5,150 4,328
Work-in-process 315 227
Income taxes receivable 51
Prepaid expenses and other 922 660
Total current assets 7,173 5,610
PROPERTY, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS:
Office facilities and leasehold
improvements 147 141
Equipment 3,746 3,471
3,893 3,612
Less accumulated depreciation and
amortization 2,929 2,682
Net property, equipment and leasehold
improvements 964 930
OTHER ASSETS:
Goodwill, less accumulated amortization
of $2,870 in 1995 and $2,492 in 1994 6,428 6,449
Other 128 234
Total other assets 6,556 6,683
TOTAL ASSETS $14,693 $13,223
See accompanying notes.
</TABLE>
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)--continued
<CAPTION>
September 30 December 31
Thousands of dollars and shares 1995 1994
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 1,516 $ 1,443
Accounts payable 1,847 1,561
Income taxes payable 31
Accrued payroll and related benefits 628 395
Other accrued expenses 879 822
Deferred revenue 62 78
Current portion of long-term debt 86 85
Current portion of long-term debt to
affiliates 42 39
Guarantee liability (Note 4) 800
Total current liabilities 5,891 4,423
Long-term debt, less current portion 118 155
Long-term debt to affiliates, less
current portion 116 378
Guarantee liability (Note 4) 1,090
Commitments and contingencies (Note 4)
SHAREHOLDERS' EQUITY:
Convertible Preferred Stock, no par value;
authorized 2,000 shares; issued and
outstanding 1,131 shares in 1995 and
1,044 shares in 1994 3,127 2,894
Common Stock, no par value; authorized
40,000 shares; issued and outstanding
16,144 shares in 1995 and 15,562 shares
in 1994 38,327 37,846
Accumulated deficit (31,582) (31,950)
Equity adjustment from foreign
currency translation (1,304) (1,613)
Total shareholders' equity 8,568 7,177
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $14,693 $13,223
See accompanying notes.
</TABLE>
<TABLE>
ALPNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30
Thousands of dollars 1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 368 $(646)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization of property,
equipment and leasehold improvements 266 230
Amortization of goodwill 279 260
Other 11 45
Changes in operating assets and liabilities:
Trade accounts receivable (641) (393)
Accounts payable and accrued expenses 226 63
Other 49 (30)
Net cash provided by (used in) operating
activities 558 (471)
INVESTING ACTIVITIES:
Purchase of property, equipment and
leasehold improvements (266) (413)
FINANCING ACTIVITIES:
Proceeds from notes payable to banks 375 424
Principal payments on notes payable to banks (354) (128)
Proceeds from long-term debt, including debt
to affiliates 11 251
Principal payments on long-term debt, including
debt to affiliates (87) (39)
Proceeds from issuance of common stock, net
of related costs 191
Net cash provided by financing activities 136 508
Effect of exchange rate changes on cash 14 23
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 442 (353)
Cash and cash equivalents at beginning of period 344 1,012
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 786 $ 659
CASH PAID (RECEIVED) DURING THE PERIOD FOR:
Interest $ 165 $ 151
Income taxes 71 (12)
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Effective August 1995, the Company issued 87,339 shares of Convertible Preferred
Stock in exchange for long-term debt to affiliates.
Effective March 1994, the Company issued 584,257 shares of Convertible Preferred
Stock in exchange for long-term debt to affiliates.
See accompanying notes.
</TABLE>
ALPNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1995
1. BASIS OF PRESENTATION
ALPNET, Inc. and its subsidiaries (the "Company"), together with its
independent affiliates, form a worldwide network dedicated to providing
specialized language services for businesses engaged in international trade.
The Company has combined computer translation technology with experienced
human translators in its worldwide network to provide a full spectrum of
services to fulfill the language needs of customers in international
business.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information
and footnote disclosures required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for
the periods presented are not necessarily indicative of the results that may
be expected for the respective complete years. For further information,
refer to the Consolidated Financial Statements and notes thereto included in
the Company's Annual Report on Form 10-K for the year ended December 31,
1994.
Certain amounts for the nine-month period ended September 30, 1994 have been
reclassified to conform to the 1995 presentation.
2. EQUITY TRANSACTIONS
Several equity-related transactions were approved by the Board of Directors
and consummated in August and September 1995, as described in the following
paragraphs.
Debt Conversion -- The Company converted 300,000 Swiss francs
(approximately $240,000) of 9% long-term debt to affiliates into 87,339
shares of a new series of convertible preferred stock. The former debt was
owed to a shareholder and director of the Company with repayment terms
which were to begin September 1996 and end in December 1998. Each share of
preferred stock issued in this transaction is convertible at the option of
the shareholder into nine shares of the Company's restricted common stock,
has voting rights as if the shares were already converted, and features a
10% non-cumulative dividend subject to the discretion of the Board of
Directors. These terms are essentially the same as the terms of the
Company's existing series of preferred stock. This conversion of debt to
equity will reduce annual interest expense by approximately $22,000.
Issuance of Common Stock -- The Company issued 581,818 shares of restricted
common stock to a new vice president of the Company for approximately
$191,000. The price per share was based upon the average of the closing
bid and ask prices of the Company's common stock on the day the Board of
Directors approved the transaction.
Grant of Stock Options -- The Board of Directors approved the grant of
stock options to several members of management, including a new vice
president of the Company. In total, options to purchase 3,450,000 shares
of restricted common stock were granted, with the following terms and
conditions:
- 500,000 optioned shares vest immediately and are exercisable at a price
of $.34375 per share; 983,333 optioned shares vest on September 1, 1996
and are exercisable at $.50 per share; 983,333 optioned shares vest on
September 1, 1997 and are exercisable at $.75 per share; 983,333
optioned shares vest on September 1, 1998 and are exercisable at $1.10
per share.
- All unexercised options expire on September 1, 2000 or when the employee
terminates employment with the Company, if sooner.
- All existing options (for the purchase of approximately 450,000 shares of
unrestricted common stock) previously granted to members of management
participating in the new grants, will be voluntarily forfeited. After
these forfeitures, the total number of granted but unexercised options
under the Company's existing stock option plans will be limited to
500,000 shares, a reduction of approximately 550,000 shares from what
could be issued under the terms of the existing plans.
Modifications to the Financial Monitoring Agreement -- The Board also
approved certain limited modifications to the current Financial Monitoring
Agreement between the Company and a major shareholder. This Financial
Monitoring Agreement, as amended, requires the Company, among other things,
to obtain prior approval for major financing transactions, significant asset
purchases or sale of a major portion of the Company's assets.
3. INCOME TAXES
The Company files a consolidated U.S. federal income tax return which
includes all domestic operations. Tax returns for states within the U.S.
and for foreign subsidiaries are filed in accordance with applicable laws.
Fluctuations in the amount of income taxes arise primarily from the varying
combinations of taxable income and losses of the Company's subsidiaries in
the various domestic and foreign tax jurisdictions, including the
utilization in various degrees of net operating loss carryforwards in many
of these jurisdictions.
4. ACQUISITION GUARANTEE
In 1988, the Company acquired its German subsidiary for a combination of
cash and shares of the Company's Common Stock. The acquisition agreement
required the Company to give additional consideration if the value of the
shares of Common Stock did not reach an agreed-upon level within a specified
period following the acquisition, and remain at that level until the former
owner was able to sell the shares of the Company's Common Stock for an
amount equal to the purchase price stipulated in the acquisition agreement.
As a result of this requirement, the Company issued additional shares to the
former owner in 1990.
In 1993, the Company and the former owner entered into an agreement which
amended the original acquisition agreement. This agreement waived the
requirement to pay any additional consideration if the value of all shares
of Common Stock previously issued reached the stipulated purchase price on
or before September 30, 1994 (which date was subsequently extended to
September 30, 1996). If the stock value does not reach such amount, the
Company is required to pay interest on the stock value deficiency beginning
on September 30, 1996. Alternatively, the Company could settle such
deficiency by making additional payments (in cash or stock) to the former
owner.
As a result of this waiver agreement, the Company recorded a guarantee
liability for the stock value deficiency, calculated based on the trading
value per share of the Company's Common Stock as compared to the guaranteed
value at the balance sheet dates. A decrease in shareholders' equity has
also been recorded for the same amounts.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis should be read in conjunction
with the Consolidated Financial Statements and notes thereto.
FOREIGN OPERATIONS
The Company serves its customers from 29 offices in 13 countries throughout
Europe, North America and Asia. The operations of the Company are predominantly
located outside the U.S. Accordingly, the Company is subject to the effects of
foreign currency exchange rate fluctuations between U.S. dollars and Canadian
dollars, British pounds sterling, German marks and other European and Asian
currencies. For all of the Company's foreign subsidiaries, the functional
currency has been determined to be the local currency. Accordingly, assets and
liabilities are translated at period-end exchange rates, and operating statement
items are translated at average exchange rates prevailing during the period.
The resultant cumulative foreign currency adjustments to the assets and
liabilities are recorded as a separate component of shareholders' equity.
For the three months ended September 30, 1995, the foreign currency equity
adjustment was negative $91,000 compared to a positive $249,000 adjustment for
the three months ended September 30, 1994. For the nine month period ended
September 30, 1995, the foreign currency equity adjustment was positive $309,000
compared to a positive adjustment of $655,000 for the nine months ended
September 30, 1994. As of September 30, 1995, the cumulative net effect to the
Company of the equity adjustment from movements in foreign currency exchange
rates was a reduction of $1.3 million in shareholders' equity. A significant
portion of the cumulative foreign currency adjustment relates to changes in the
recorded amount of goodwill, which fluctuates because it is denominated in
foreign currencies.
Because most of the Company's operations are located outside the U.S., and its
foreign operations' financial results must be translated into U.S. dollars, the
Company's actual and reported financial results and financial condition are
susceptible to movements in foreign currency exchange rates. Furthermore, since
the Company has relatively few long-term monetary assets and liabilities
denominated in currencies other than the U.S. dollar, it does not have any
ongoing hedging programs in place to manage currency risk.
RESULTS OF OPERATIONS
The following paragraphs discuss results of operations for the three- and nine-
month periods ended September 30, 1995 as compared with the three- and nine-
month periods ended September 30, 1994, including the significant effects of
fluctuating foreign currency exchange rates.
The Company reported net income of $348,000 for the three months ended September
30, 1995 compared to net income of $25,000 for the three months ended September
30, 1994. If foreign currency exchange rates for 1995 had remained unchanged
from 1994, the Company would have reported net income of $302,000 instead of net
income of $348,000. Therefore currency exchange rate fluctuations had the
effect of increasing reported net income for the three months ended September
30, 1995 by $46,000.
The Company reported net income of $368,000 for the nine months ended September
30, 1995 compared with a net loss of $646,000 for the nine months ended
September 30, 1994. If foreign currency exchange rates for 1995 had remained
unchanged from 1994, the Company would have reported net income of $291,000
instead of $368,000 of net income, or a difference of $77,000.
Sales of services were $7.4 million for the three months ended September 30,
1995 compared to $5.5 million for the three months ended September 30, 1994.
The $1.9 million increase in reported sales for 1995 consisted of an increase in
sales volume of $1.6 million and an increase of $300,000 due to currency
exchange rate fluctuations.
Sales of services were $19.8 million for the nine months ended September 30,
1995 as compared with $14.6 million for the nine months ended September 30,
1994. The $5.2 million increase in reported sales from 1994 to 1995 consisted
of an increase in sales volume of $4.0 million and an increase of $1.2 million
due to currency exchange rate fluctuations. The increases in sales volume are
the result of a general increase in demand for the Company's services in all of
its primary markets, especially in the U.K. and Germany. Demand was especially
weak in Germany in the first half of 1994 and sales for 1995 are somewhat more
representative of historical sales levels in this location than were the 1994
sales results.
Management believes that international trade agreements such as the North
American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and
Trade (GATT) have had a positive effect on demand for the language services
provided by the Company. Also having a positive effect is an increasingly
global marketplace where more and more businesses are entering foreign markets
and becoming involved in worldwide trade.
The Company competes on the basis of quality, service and geographical proximity
to clients and potential clients, and has opened several new offices in recent
years -- including four new offices in 1995: London, Shenzhen (China),
Amsterdam, and Dublin -- in order to increase its market share in what
management believes has been and will continue to be an expanding industry.
Intense price competition which the Company encountered in 1994 has persisted
into 1995 and continues to restrict the prices the Company can charge in the
marketplace, although some improvement in margins has occurred in recent months
in some of the Company's markets.
The following table shows a comparison of sales of services in each of the
Company's significant geographic areas for the nine months ended September 30,
1995 and 1994, along with the effect of foreign currency exchange rate
fluctuations on the sales between periods. Intercompany sales are normally
billed on a profit-sharing basis. All intercompany sales are eliminated in
determining the totals.
<TABLE>
<CAPTION>
(Thousands of dollars)
Increase (Decrease) in
Nine Months Sales of Services due to Total
Ended September 30 Sales Currency Increase
1995 1994 Volume Differences (Decrease)
<S> <C> <C> <C> <C> <C>
United States $ 1,911 $ 1,573 $ 338 $ $ 338
Canada 2,815 2,572 258 (15) 243
Europe 16,129 11,336 3,559 1,234 4,793
Asia 1,801 1,205 499 97 596
Eliminations (2,905) (2,055) (650) (200) (850)
Total Sales $19,751 $14,631 $4,004 $1,116 $5,120
</TABLE>
As shown in the above table, all major geographical regions reported increased
sales in 1995 over 1994. In the U.S., sales can fluctuate significantly from
period to period due to industry conditions which are often less predictable and
stable than those found in the Company's foreign markets. Such conditions are
the result of the relative inexperience of many U.S. companies in international
business and clients which may be unsophisticated in the nuances of marketing in
foreign countries and the importance of related language issues. These factors,
along with the unpredictable timing and the nonrecurring nature of most large
translation projects for U.S. companies, contribute to a deficiency of "core" or
repeat business and also have a tendency to depress the profitability of work
performed by the Company for U.S. clients. These conditions had a dramatic
effect in 1994 and while 1995 sales were also affected, the impact was not as
pronounced. It is difficult to estimate how much effect such factors will have
on future sales.
The increase in sales in Canada was due primarily to increased international
trading and ongoing marketing and sales efforts, and has occurred despite a
continuing difficult economic and political situation in Canada.
The U.K. and Germany contributed over 85% of the European region's total
reported sales for both 1995 and 1994 with increases of 39% for the U.K. and 52%
for Germany in 1995 over 1994 levels. While the bulk of this growth represents
actual volume increases, a sizable portion is also due to currency exchange rate
fluctuations, especially in Germany where the German mark has been very strong
throughout 1995. This is also true for the overall increase in reported
European sales of 42% in 1995 over 1994.
The positive results in the U.K. were due to several factors, including enhanced
sales and marketing efforts, increased core business and significantly more
large project work, all of which was helped by a healthy economic situation.
The increase in sales in Germany was primarily attributable to an improvement in
the German economy in 1995, and an unusually steep decline in orders from large
customers in early 1994 which did not recur in 1995. Also boosting sales is the
continued growth of several new offices opened in the last several years in
Germany. Over the long-term, the Company expects sales to continue to expand in
Europe as the investments made in new offices and in human and equipment
resources in the past three years combine with growing demand for language
services and a generally positive economic outlook.
In Asia, 1995 sales increased 49% over 1994 levels as Hong Kong, Singapore and
Shenzhen increased sales by a combined total of 38%. In addition, the Company's
Korean office, which was opened in July 1994, contributed to the improved sales
results in 1995. While some of the increase in reported Asian sales in 1995 was
attributable to currency exchange rate fluctuations, most of the change was due
to actual volume increases. Management expects the increased demand for Asian
language services to continue, as many Asian countries are experiencing very
high economic growth rates and interest in Asia from the business communities in
the U.S., Europe and elsewhere is accelerating rapidly.
The Company's business can be impacted dramatically by changes in the strength
of the economies of the countries in which it has a presence, and results of
operations are highly influenced by general economic trends.
Cost of services sold as a percentage of sales of services has fluctuated
primarily as a result of competition in the marketplace, the volume and nature
of direct production costs of large projects in each period, and certain fixed
costs which do not vary with fluctuating sales levels. Also, the Company is
continuing its programs to contain direct and indirect production costs.
Due to increased competition in early 1994, especially with regard to pricing,
the Company's gross margins deteriorated significantly from earlier levels.
While the Company has largely been able to limit the growth in cost of services
sold to levels consistent with growth in the volume of work produced and at
rates at or below inflationary increases, prices charged to clients, especially
in the U.S. and Europe, have been limited by competitive price pressures which
have in turn severely compressed margins. Management expects pressures on gross
margins to continue in 1995 and into 1996, but does not expect pricing pressures
to intensify beyond current levels. The Company does not expect to be able to
return to pre-1994 pricing levels in the foreseeable future and is continuing
its efforts to control costs to offset the effects of these pricing pressures.
Total operating expenses, including cost of services sold, increased by $4.0
million in 1995 from 1994. This increase resulted from a $3.0 million increase
in actual expenses and an increase of $1.0 million due to currency exchange rate
fluctuations. The increase in actual expenses resulted primarily from the
increased volume of work produced. The increase in selling, general and
administrative expenses from 1994 to 1995 is primarily attributable to increased
marketing and sales expenses and additional costs for existing and new offices
and general corporate overhead.
Fluctuations in the amount of reported goodwill and related amortization
resulted solely from foreign currency exchange rate fluctuations from period to
period.
Interest expense, net of interest income, increased approximately $10,000 for
both the three- and nine month periods ended September 30, 1995 compared to the
same periods in 1994. This has occurred primarily for two reasons. First, the
Company's cash and cash equivalents experienced a decline during the nine months
ended September 30, 1994 as a result of losses incurred in that period, and
interest income has decreased accordingly in subsequent periods. Secondly, the
Company has used its available lines of credit more extensively in 1995 than in
1994, primarily to finance increases in receivables due to growth in sales.
These two situations more than offset the reduction in interest expense which
has resulted from the debt conversions in early 1994 and August 1995 which
eliminated approximately $1.8 million and $250,000 of long-term debt to
affiliates, respectively. For further information on the 1994 debt conversion,
refer to Note 3 of the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994. For
further information on the 1995 debt conversion, refer to Note 2 of the
Consolidated Financial Statements included in this Form 10-Q.
The U.S. parent company and each of its subsidiaries are separate legal and
taxable entities subject to the domestic or foreign taxes pertaining to
operations in their respective jurisdictions. For tax purposes, the U.S. parent
company and most of its subsidiaries have unused net operating loss
carryforwards which can be utilized to reduce future years taxable income of
the respective entities. The availability of these net operating loss
carryforwards is governed by applicable domestic and foreign tax rules and
regulations, some of which limit the utilization of such losses due to minimum
tax requirements and other provisions.
Income tax expense as presented in the Consolidated Financial Statements
represents the combined income tax expense and income tax credits of each of the
entities of the Company. Fluctuations in the amount of income taxes arise
primarily from the varying combinations of taxable income and losses of the
Company's subsidiaries in the various domestic and foreign tax jurisdictions,
including the utilization in various degrees of net operating loss carryforwards
in many of these jurisdictions.
LIQUIDITY AND SOURCES OF CAPITAL
For the nine months ended September 30, 1995, the Company had a net positive
cash flow from operations of approximately $560,000 compared with a negative
cash flow from operations for the same period in 1994 of approximately $470,000.
In 1995, as in prior years, the Company's investing activities consisted
primarily of the acquisition of equipment (approximately $270,000 in 1995 and
approximately $410,000 in 1994) needed to maintain or upgrade production
capability. Financing activities for both 1995 and 1994 included fluctuations
in the amounts utilized under bank lines of credit to finance the Company's
working capital needs. In 1995, the Company also issued approximately $190,000
of common stock and in 1994 received approximately $185,000 in proceeds from the
issuance of debt to affiliates.
At September 30, 1995, the Company's cash and cash equivalents were
approximately $790,000, representing an increase of approximately $440,000
during 1995. At September 30, 1995, the Company had working capital of
approximately $1.3 million, which compares favorably to working capital of
approximately $1.2 million at December 31, 1994.
The Company's primary working capital requirements relate to the funding of
accounts receivable. The Company funds its working capital needs with various
bank lines of credit extended by banks in Canada, the U.K., Germany and Spain.
Most of the lines of credit are secured by accounts receivable and other assets
of the respective subsidiaries. As of September 30, 1995, the Company had
unused amounts under these lines of credit of approximately $460,000. The
Company believes the amounts available under these lines of credit are
sufficient to fund the Company's operations at current levels as well as enable
the Company to grow at a modest level without seeking significant new sources of
working capital. Most of the Company's credit facilities are subject to annual
renewals and the Company expects them to be renewed on substantially the same
terms as those which currently exist. Some of the banks, which have loaned
funds to the Company's subsidiaries under the credit facilities noted above,
have placed certain limits on the flow of cash outside the respective countries.
Such limitations have not been an undue burden to the Company in the past, nor
are they expected to be unreasonably burdensome in the foreseeable future.
The Company has no present significant commitments for capital expenditures,
which generally consist almost entirely of computer equipment and related
peripheral hardware and software. Such equipment purchases in future periods
are not expected to vary materially from the general levels of equipment
purchases experienced in recent periods. However, the Company does plan to
acquire and place additional translation services workstations in its offices
worldwide in connection with future orders from customers, as such orders are
received. The Company expects to finance a certain portion of future equipment
costs through bank and/or leasing sources.
While there are no material current commitments, the Company may open additional
offices in strategic locations worldwide, as customer demands dictate and
opportunities arise. For example, the Company recently opened an office in
Dublin in order to increase sales to high-tech and other manufacturing companies
located in this growing international marketplace. The costs of opening this
office were not significant and are expected to be covered by revenues from
increased sales to existing and new customers. The costs of any future
additional offices are not expected to require a substantial amount of cash.
The Company's total shareholders' equity has increased from $7.2 million at
December 31, 1994 to $8.6 million at September 30, 1995. This has resulted from
several factors, including the August 1995 conversion of long-term debt to
preferred stock (approximately $230,000, net of related costs), the issuance of
common stock (approximately $190,000, net of related costs), net income
(approximately $370,000), positive foreign currency adjustments (approximately
$310,000), and a reduction in the guarantee liability of approximately $290,000
(for further information on the guarantee liability, refer to Note 4 of the
Consolidated Financial Statements included in this Form 10-Q). The Company
believes it has the ability to issue additional equity securities if necessary,
but does not currently have plans to do so.
Current working capital, anticipated cash flows and available lines of credit,
together with management s expectations of increased revenues and plans to
control expenses, will, in management's opinion, be adequate to meet financial
obligations during 1995 and into 1996. It is more difficult to assess cash
flows through 1996. The ability of the Company to meet its commitments without
additional sources of capital is directly related to the Company's operations
providing a positive cash flow. Should the Company's operations fail to provide
adequate funds to enable it to meet its future financial obligations, management
has the option, because of the Company's organizational structure, to cut costs
by selectively eliminating operations which are not contributing to the Company
financially.
Inflation has not been a significant factor in the Company s operations.
Competition, however, has been and is expected to remain a major factor. To the
extent permitted by competition and general economic and market conditions, the
Company will pass on increased costs from inflation and operations to customers
by increasing prices.
Due to prior years' operating losses, the Company and many of its subsidiaries
have net operating loss carryforwards available to offset future taxable income
in the various countries in which the Company operates. As a result, the
Company historically has not had significant income tax liabilities arise
requiring the expenditure of cash. Due to currently available net operating
loss carryforwards, the Company expects this general trend to continue through
1995 and beyond, with the exception that the Company's net operating loss
carryforwards for U.S. state purposes have expired and the Company is currently
paying state income taxes on taxable income attributed to U.S. operations.
Substantially all of the Company's deferred tax assets at September 30, 1995
were comprised of net operating loss carryforwards for which the Company has
provided allowances. The ability of the Company to utilize these loss
carryforwards in the future is dependent on profitable operations in the various
countries in which loss carryforwards were generated, and the specific rules and
regulations governing the utilization of such losses, including the timeframes
in which the losses must be used.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
3 Restated Articles of Incorporation, as Amended
4.1 Specimen Series B Preferred Stock Certificate
4.2 Specimen Series C Preferred Stock Certificate
4.3 Series D Preferred Stock Certificate
10.1 Debt Conversion Agreement dated 17 August 1995
between Michael F. Eichner and ALPNET, Inc.
10.2 Stock Purchase and Sale Agreement dated 20 October
1995 between ALPNET, Inc. and Jaap van der Meer.
11 Statement Re: Computation of Per Share Earnings
27 Financial Data Schedule
(b) The Company has filed the following reports on Form 8-K during the
three months ended September 30, 1995.
Date of
Report Item Reported
08/03/95 ALPNET Announces Second Quarter Results
08/17/95 Equity-Related Transactions
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALPNET, INC.
Registrant
Date: November 10, 1995 \s\ Thomas F. Seal
Thomas F. Seal
President and Chief Executive Officer
Date: November 10, 1995 \s\ D. Kerry Stubbs
D. Kerry Stubbs
Chief Financial Officer
EXHIBIT 3
RESTATED ARTICLES OF INCORPORATION
OF AUTOMATED LANGUAGE PROCESSING SYSTEMS, INC.
THESE RESTATED ARTICLES OF INCORPORATION are executed by the president
and secretary of AUTOMATED LANGUAGE PROCESSING SYSTEMS, INC. (the "CORPORATION")
in compliance with Utah Code Ann. Section 16-10-61 (1985) and pursuant
to the authorization and direction of the Board of Directors of the
Corporation. By the signatures of its officers below, the Board of Directors
of the Corporation and the Corporation certify that these Restated
Articles of Incorporation correctly set forth without change the
corresponding provisions of the Articles of Incorporation of the
Corporation as previously amended or otherwise modified pursuant to statute.
FIRST
The name of the Corporation is Automated Language Processing Systems,
Inc.
SECOND
The period of its duration is perpetual.
THIRD
The purpose or purposes for which the Corporation is organized are:
A. The research and development, sales, service and leasing of computer
hardware and software.
B. To do everything necessary and proper, advisable, or convenient for
the accomplishment of any of the purposes or attainment of any of the objects,
or the furtherance of any of the powers herein set forth, either alone or
associated with others, by or through subsidiaries or affiliates, such as is
incidental to or pertaining to, or growing out of, or connected with its
business or powers, provided the same be not inconsistent with the laws of the
State of Utah.
C. To such extent as a corporation organized under the Business
Corporation Act of the State of Utah may now or hereafter lawfully do, to do
each and every thing necessary, suitable, convenient or proper for or in
connection with, or incidental to, the accomplishment of any one or more of the
purposes or of the exercise of any one or more of the powers directly or
indirectly to promote the interests of the Corporation or to enhance the value
of its property; and in general, to do any and all things and to exercise any
and all powers, rights, and privileges for which a corporation may now or
hereafter be organized under the Business Corporation Act of the State of Utah,
or under any act amendatory thereto, supplemental thereto or substituted
therefor.
D. The foregoing provisions of this article shall be construed both as
purposes and powers and each as an independent purpose and power in furtherance
of and not in limitation of the powers which the Corporation may have under
present or future laws of the State of Utah, and the purposes and powers
hereinbefore specified shall, except as otherwise provided in this article, be
in no wise limited or restricted by reference to or inference from the terms or
any provisions of this or any other article of the Articles of Incorporation;
but such provisions shall not be construed to permit the Corporation to carry on
any business or exercise any power or to do any act which a corporation now or
hereafter organized under the Business Corporation Act of the State of Utah may
not at the time lawfuly carry on or do.
FOURTH
The aggregate number of shares of stock that the Corporation has
authority to issue is 10,000,000 shares of no par value common stock and
2,000,000 shares of preferred stock. The Board of Directors is authorized to
establish series of such preferred shares, to fix and determine variations in
the relative rights and preferences as between the series of preferred shares so
established, and to fix and determine the terms thereof, including dividend or
interest rates, conversion prices, voting rights, maturity dates and similar
matters relative thereto. There shall be no preemptive rights to the issuance
of shares of the stock of the Corporation.
FIFTH
The Corporation shall not commence business until consideration of the
value of at least One Thousand Dollars ($1,000.00) has been received by the
issuance of shares.
SIXTH
The address of the registered office of the Corporation is 190 West 800
North, Provo, Utah 84604, and the registered agent of the Corporation at such
address is A. T. Zirkle.
SEVENTH
No officer or director shall be personally liable for any obligations of
the Corporation nor for any duties or obligations arising out of acts or conduct
of any said officer or director performed for or on behalf of the Corporation.
The Corporation shall and does indemnify and hold harmless each person and his
heirs and administrators who shall serve at any time hereafter or who has
heretofore served as a director or officer of the Corporation from and against
all claims, judgments and liabilities to which such persons shall become subject
by reason of his having heretofore or hereafter been a director or officer of
the Corporation or by reason of any action alleged to have been heretofore or
hereafter taken or omitted by him as such director or officer, and shall pay on
behalf of or reimburse any such person for all legal and other expenses
reasonably incurred by him in connection with any liability arising out of his
own gross negligence or willful misconduct or failure to act in good faith in a
manner reasonably believed to be in or not opposed to the best interests of the
Corporation. The rights accruing to any person under this provision shall not
exclude any other right to which he may be lawfully entitled, nor shall anything
herein contained restrict the right of the Corporation to indemnify or reimburse
such person in any proper cause, even though not specifically herein provided
for. The Corporation and its directors, officers, employees and agents shall be
fully protected in taking any action or making any payment or in refusing so to
do in reliance upon the advice of counsel.
EIGHTH
The Articles of Incorporation may be amended by the affirmative vote of
the holders of a majority of the shares entitled to vote on each such amendment.
All other provisions as to meetings, voting and action taken by the shareholders
or the directors of the Corporation shall be as set forth in the By-Laws of the
Corporation and according to the provisions of the Utah Business Corporation
Act, where and otherwise pertinent.
NINTH
The Board of Directors shall consist of not less than three (3) and not
more than nine (9). The number of directors constituting the initial Board of
Directors of the Corporation was three (3). The names and addresses of the
persons who served as directors of the Corporation until the first annual
meeting of the shareholders, or until their successors were elected and
qualified, were:
NAME ADDRESS
Richard L. Warner 1486 Roxbury Road
Salt Lake City, Utah 84108
Leo A. Jardine 1471 Penrose Drive
Salt Lake City, Utah 84103
John W. Wittwer 47 West 600 South
Salt Lake City, Utah 84111
The names and addresses of the persons who will serve as directors of the
Corporation until the next annual meeting of the shareholders, or until their
successors are elected and shall qualify, are:
NAME ADDRESS
Richard L. Warner 1486 Roxbury Road
Salt Lake City, Utah 84108
Leo A. Jardine 1471 Penrose Drive
Salt Lake City, Utah 84103
A. T. Zirkle 190 West 800 North
Provo, Utah 84604
Dee F. Andersen Brigham Young University
C-327 ASB
Provo, Utah 84602
David C. Evans 807 Juniper Point Drive
Salt Lake City, Utah 84103
B. Z. Kastler 1137 Golden Rod Circle
St. George, Utah 84770
T. H. Bell 88 Edgecombe Drive
Salt Lake City, Utah 84103
H. F. Boeckmann, II 15505 Roscoe Boulevard
Sepulveda, California 91343
TENTH
The name and address of each incorporator is:
NAME ADDRESS
Richard L. Warner 1486 Roxbury Road
Salt Lake City, Utah 84108
Leo A. Jardine 1471 Penrose Drive
Salt Lake City, Utah 84103
John W. Wittwer 47 West 600 South
Salt Lake City, Utah 84111
DATED effective the 21st day of April 1986.
\s\ A. T. Zirkle
A. T. ZIRKLE
President
\s\ Leo A. Jardine
LEO A. JARDINE
Secretary
ARTICLES OF AMENDMENT
OF
AUTOMATED LANGUAGE PROCESSING SYSTEMS, INC.
THESE ARTICLES OF AMENDMENT are executed in duplicate by the president
and secretary of Automated Language Processing Systems, Inc. (the
"CORPORATION") pursuant to, and in compliance with: (a) Article Eighth of the
Articles of Incorporation of the Corporation; (b) Utah Code Ann. Section
16-10-57 (1953, as amended); and (c) the authorization and direction of
the Board of Directors and shareholders of the Corporation.
ARTICLE I
NAME
The name of the Corporation is Automated Language Processing Systems,
Inc.
ARTICLE II
AMENDMENT ADOPTED
Article Seventh of the Articles of Incorporation, as previously amended,
is hereby further amended to read as follows:
SEVENTH
To the fullest extent permitted by the Utah Business
Corporation Act, as the same exists or may hereafter be amended, a
director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director and shall be indemnified against any
and all attorneys fees, costs and expenses incurred in conjunction
therewith.
In all other respects, the Articles of Incorporation shall remain in full
force and effect as previously amended.
ARTICLE III
ADOPTION OF AMENDMENT
The date of the adoption of the amendment by the shareholders of the
Corporation was May 15, 1987.
ARTICLE IV
OUTSTANDING SHARES
The number of outstanding shares of the Corporation at the time of the
adoption of the Amendment was 6,463,946, and the number of shares entitled to
vote thereon was also 6,463,946. All 6,463,946 shares entitled to vote on the
adoption of the Amendment were of the class of common stock.
ARTICLE V
VOTING OF SHARES
The number of shares voted for the Amendment was 4,530,808, the number of
shares voted against the Amendment was 700 and the number of shares abstaining
from a vote on the Amendment was 1,045. All such shares entitled to vote on the
Amendment were of the class of common stock.
ARTICLE VI
EXCHANGE, RECLASSIFICATION OR CANCELLATION
The Amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
ARTICLE VII
STATED CAPITAL
The Amendment does not affect the change in the amount of stated capital
of the Corporation.
DATED this 11th day of June, 1987.
AUTOMATED LANGUAGE PROCESSING
SYSTEMS, INC.
By: \s\ A. T. Zirkle
A.T. Zirkle, President
By: \s\ D. Marc Haws
D. Marc Haws, Secretary
ARTICLES OF AMENDMENT
OF
AUTOMATED LANGUAGE PROCESSING SYSTEMS, INC.
THESE ARTICLES OF AMENDMENT are executed in duplicate by the President
and Secretary of Automated Language Processing Systems, Inc. (the
"CORPORATION") pursuant to, and in compliance with: (a) Article Eighth of the
Articles of Incorporation of the Corporation; (b) Utah Code Ann. Section
16-10-57 (1953, as amended); and (c) the authorization and direction of the
Board of Directors and shareholders of the Corporation.
ARTICLE I
NAME
The name of the Corporation is Automated Language Processing Systems,
Inc.
ARTICLE II
AMENDMENT ADOPTED
Article Fourth of the Articles of Incorporation, as previously amended,
is hereby further amended to read as follows:
FOURTH
The aggregate number of shares of stock that the
Corporation has authority to issue is 20,000,000 shares of no par
value common stock and 2,000,000 shares of preferred stock. The
Board of Directors is authorized to establish series of such
preferred shares, to fix and determine variations in the relative
shares so established, and to fix and determine the terms thereof,
including dividend or interest rates, conversion prices, voting
rights, maturity dates and similar matters relative thereto.
There shall be no preemptive rights to the issuance of shares of
the stock of the Corporation.
In all other respects, the Articles of Incorporation shall remain in full
force and effect as previously amended.
ARTICLE III
ADOPTION OF AMENDMENT
The date of the adoption of the amendment by the shareholders of the
Corporation was May 11, 1988.
ARTICLE IV
OUTSTANDING SHARES
The number of outstanding shares of the Corporation at the time of the
adoption of the Amendment was 8,304,943 and the number of shares entitled to
vote thereon was also 8,304,943. All 8,304,943 shares entitled to vote on the
adoption of the Amendment were of the class of common stock.
ARTICLE V
VOTING OF SHARES
The number of shares voted for the Amendment was 6,780,843 and the number
of shares voted against the Amendment was 4,930. All such shares entitled to
vote on the Amendment were of the class of common stock.
ARTICLE VI
EXCHANGE, RECLASSIFICATION OR CANCELLATION
The Amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
ARTICLE VII
STATED CAPITAL
The Amendment does not affect the change in the amount of stated capital
of the Corporation.
DATED this 27th day of June, 1988.
AUTOMATED LANGUAGE PROCESSING
SYSTEMS, INC.
By: \s\ A. T. Zirkle
A. T. Zirkle, President
By: \s\ Leo A. Jardine
Leo A. Jardine, Secretary
ARTICLES OF AMENDMENT
OF
AUTOMATED LANGUAGE PROCESSING SYSTEMS, INC.
THESE ARTICLES OF AMENDMENT are executed in duplicate by the president
and secretary of AUTOMATED LANGUAGE PROCESSING SYSTEMS, INC. pursuant to, and in
compliance with: (a) the provisions of its Articles of Incorporation; (b)
Section 16-10-57 Utah Code Ann. (1953, as amended); (c) and the authorization
and direction of the board of directors and shareholders of said corporation.
ARTICLE I
NAME
The name of the corporation is AUTOMATED LANGUAGE PROCESSING SYSTEMS,
INC.
ARTICLE II
AMENDMENTS ADOPTED
Article I of the Articles of Incorporation is hereby amended to change
the name of the corporation to ALPNET, INC. In all other respects, the Articles
of Incorporation shall remain in full force and effect as previously
constituted.
ARTICLE III
DATE OF ADOPTION
The date of the adoption of the amendment by the shareholders of the
corporation was August 17, 1989.
ARTICLE IV
OUTSTANDING SHARES
The number of outstanding shares of the corporation at the time of the
adoption of the amendment was 8,703,991 and the number of shares entitled to
vote thereon was 8,703,991. All 8,703,991 shares were of the class of common
stock.
ARTICLE V
VOTING OF SHARES
The number of shares voted for the amendment was 5,656,448 and the number
of shares voted against the amendment was 4,030. All such shares were of the
class of common stock.
ARTICLE VI
EXCHANGE, RECLASSIFICATION OR CANCELLATION
The amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
ARTICLE VII
STATED CAPITAL
The amendment does not effect a change in the amount of the stated
capital of the corporation.
DATED this 29th day of August, 1989.
ALPNET, INC.
BY: \S\ THOMAS F. SEAL
THOMAS F. SEAL
PRESIDENT
ATTEST:
\S\ LEO A. JARDINE
SECRETARY
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
I, THOMAS F. SEAL, say: I am the president of ALPNET, INC., a Utah
corporation; I am authorized to make, and I do make, this verification for and
on behalf of said corporation; I have read the foregoing Articles of Amendment
and know the contents thereof; the same are true of my own knowledge, except as
to matters which are therein stated upon information and belief, and as to those
matters, I believe them to be true.
EXECUTED at Salt Lake City, Utah on August 29th, 1989.
\s\ Thomas F. Seal
THOMAS F. SEAL
ARTICLES OF AMENDMENT
OF
ALPNET, INC.
THESE ARTICLES OF AMENDMENT are executed in duplicate by the president and
the secretary of ALPNET, INC. (the "CORPORATION"), pursuant to and in compliance
with (a) Article Eighth of the Restated Articles of Incorporation of the
Corporation; (b) Utah Code Ann. Section 16-10-57 (1953, as amended); and
(c) theauthorization and direction of the board of directors and the
affirmative vote of the shareholders of the Corporation.
ARTICLE I
NAME
The name of the Corporation is ALPNET, INC.
ARTICLE II
AMENDMENTS ADOPTED
The first sentence of Article Fourth of the Restated Articles of
Incorporation of the Corporation, as previously amended, is hereby amended to
read as follows:
FOURTH
The aggregate number of shares of stock that the Corporation has
authority to issue is 40,000,000 shares of no par value Common Stock
and 2,000,000 shares of preferred stock.
ARTICLE III
DATE OF ADOPTION OF AMENDMENT
The date of the adoption of the amendment (the "AMENDMENT") described above
by the shareholders of the Corporation is effective 6 June 1991.
ARTICLE IV
OUTSTANDING SHARES
The number of issued and outstanding shares of common stock of the
Corporation at the time of the adoption of the Amendment was 11,480,399, and the
number of shares entitled to vote thereon was also 11,480,399. All 11,480,399
shares entitled to vote on the adoption of the Amendment were of the class of
common stock.
ARTICLE V
VOTING OF SHARES
The number of shares voted for the Amendment and the number of shares voted
against the Amendment, all of which shares are of the same class, is as follows:
In favor of the Amendment: 9,079,917
Against the Amendment: 161,928
Abstaining: 9,187
ARTICLE VI
EXCHANGE, RECLASSIFICATION, OR CANCELLATION
The Amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
ARTICLE VII
STATED CAPITAL
The Amendment does not effect a change in the amount of the stated
capital of the Corporation.
THESE ARTICLES OF AMENDMENT OF ALPNET, INC., a Utah corporation are dated
effective the 6th day of June 1991.
ALPNET, INC.,
a Utah corporation
ATTEST:
By:\s\ Thomas F. Seal
Thomas F. Seal, President
By: \s\ Leo A. Jardine
LEO A. JARDINE, Secretary
VERIFICATION
STATE OF UTAH )
) : ss.
COUNTY OF SALT LAKE )
I, THOMAS F. SEAL, say:
I am the president of ALPNET, INC., a Utah corporation; I am authorized
to make and I do make this Verification for and on behalf of said corporation; I
have read the foregoing Articles of Amendment and know the contents thereof, and
the same are true of my own knowledge, except as to matters which are therein
stated upon information and belief, and as to those matters I believe them to be
true.
EXECUTED at Salt Lake City, Utah and effective the 6th day of June 1991.
\s\ Thomas F. Seal
THOMAS F. SEAL
ARTICLES OF AMENDMENT
TO RESTATED ARTICLES OF INCORPORATION
OF
ALPNET, INC.
THESE ARTICLES OF AMENDMENT are executed in duplicate effective the 31st
day of March 1994 by the president and the secretary of ALPNET, Inc., a Utah
corporation (the "CORPORATION"), pursuant to and in compliance with (a) Articles
Fourth and Eighth of the "Restated Articles of Incorporation of Automated
Language Processing Systems, Inc." dated 21 April 1986, as subsequently amended
(the "RESTATED ARTICLES"); (b) Utah Code Ann. Sections 16-10a-1001
and 16-10a-1002(1)(e) (1953, as amended); and (c) the authorization and
direction of the Corporation's board of directors (the "BOARD").
ARTICLE I
NAME
The name of the Corporation is ALPNET, INC.
ARTICLE II
AMENDMENT ADOPTED
The following paragraphs are hereby inserted at the end of Article Fourth
of the Restated Articles:
Unless otherwise designated by the Board of Directors at the
time a series of preferred stock is established:
1. All shares of preferred stock of all series shall be of
equal rank.
2. If the stated dividends or distributions for each series
of preferred stock are not declared in full, are not set apart for
payment in full or are not paid in full, then the shares of all
series of preferred stock shall share ratably in the payment of
available distributions or dividends in proportion to the amounts
that would be payable with respect to the shares if all dividends
or distributions were declared and paid in full.
3. In any given fiscal year, unless and until a full
dividend or distribution has been declared and paid for all series
of preferred stock, the Corporation shall not (a) declare or pay
any dividends on its common stock; (b) make any distributions with
respect to its common stock; or (c) redeem, retire or otherwise
acquire for a valuable consideration any of its common stock.
4. If the assets of the Corporation that are available for
distribution to stockholders of preferred stock upon any voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation or upon a reduction in the capital of the Corporation
(collectively a "LIQUIDATION") are insufficient to pay in full the
amounts payable to the holders of all series of preferred stock
upon Liquidation, then the shares of all series of preferred stock
shall share ratably in any available distribution of assets in
proportion to the amounts that would be payable with respect to
the shares if the Corporation's assets were sufficient to permit
the payment in full of those amounts.
5. The holders of voting preferred shares that can be
converted into the Corporation's common stock shall have the right
to vote the number of shares of common stock into which the
preferred stock can be converted. The holders of the Corpora-
tion's common stock and the holders of such voting, convertible
preferred stock shall all vote as one class.
The Corporation is authorized to issue 459,411 shares of
$2.55 convertible, voting, non-cumulative 10% preferred stock,
series B, without par value (the "SERIES B PREFERRED STOCK"),
having the preferences, limitations and relative rights set forth
in the specimen Series B Preferred Stock certificate that is
attached hereto and that is incorporated herein by reference. The
Series B Preferred Stock shall take priority over the Series C
Preferred Stock as to rank, dividend preference and liquidation
preference, as set forth in paragraphs 2 and 3 of the specimen
Series B Preferred Stock certificate that is attached hereto.
The Corporation is authorized to issue 584,257 shares of
$3.09 convertible, voting, non-cumulative 10% preferred stock,
series C, without par value (the "SERIES C PREFERRED STOCK"),
having the preferences, limitations and relative rights set forth
in the specimen Series C Preferred Stock certificate that is
attached hereto and that is incorporated herein by reference.
ARTICLE III
DATE OF ADOPTION OF AMENDMENT
The Board adopted the amendment (the "AMENDMENT") described in Article II
above effective 31 March 1994.
ARTICLE IV
SHAREHOLDER APPROVAL NOT REQUIRED
Pursuant to the authority granted to the Board by the Fourth Article of
the Restated Articles and by Utah Code Ann. Sections 16-10a-602(1)(b)
and 16-10a-1002(1)(e), the Board, without shareholder action, may amend
the Restated Articles, and these Articles of Amendment have been so
adopted, approved and authorized by the Board.
ALPNET, INC.,
a Utah corporation
By: \s\ Thomas F. Seal
THOMAS F.SEAL
Its President
ATTEST:
By: \s\ Leo A. Jardine
LEO A. JARDINE
Its Secretary
ARTICLES OF AMENDMENT
TO RESTATED ARTICLES OF INCORPORATION
OF
ALPNET, INC.
THESE ARTICLES OF AMENDMENT are executed in duplicate effective the 17th
day of August 1995 by the president and the secretary of ALPNET, Inc., a Utah
corporation (the "CORPORATION"), pursuant to and in compliance with (a) Articles
Fourth and Eighth of the "Restated Articles of Incorporation of Automated
Language Processing Systems, Inc." dated 21 April 1986, as subsequently amended
(the "RESTATED ARTICLES"); (b) Utah Code Ann. Sections 16-10a-1001
and 16-10a-1002(1)(e) (1953, as amended); and (c) the authorization and
direction of the Corporation's board of directors (the "BOARD").
ARTICLE I
NAME
The name of the Corporation is ALPNET, INC.
ARTICLE II
AMENDMENT ADOPTED
The last paragraph of Article Fourth, as amended in 1994, of the Restated
Articles, which reads as follows:
"The Corporation is authorized to issue 584,257 shares of $3.09
convertible, voting, non-cumulative 10% preferred stock, series C,
without par value (the "SERIES C PREFERRED STOCK"), having the
preferences, limitations and relative rights set forth in the
specimen Series C Preferred Stock certificate that is attached
hereto and that is incorporated herein by reference."
is hereby deleted, and the following paragraphs are hereby inserted at the end
of Article Fourth, as amended in 1994, of the Restated Articles:
The Corporation is authorized to issue 584,257 shares of
$3.09 convertible, voting, non-cumulative 10% preferred stock,
series C, without par value (the "SERIES C PREFERRED STOCK"),
having the preferences, limitations and relative rights set forth
in the specimen Series C Preferred Stock certificate that is
attached hereto and that is incorporated herein by reference. The
Series B and C Preferred Stock shall take priority over the Series
D Preferred Stock as to rank, dividend preference and liquidation
preference, as set forth in paragraphs 2 and 3 of the specimen
Series C Preferred Stock certificate and as set forth in
paragraphs 2 and 3 of the specimen Series D Preferred Stock
certificate which are each attached hereto.
The Corporation is authorized to issue 87,339 shares of $2.81
convertible, voting, non-cumulative 10% preferred stock, series D,
without par value (the "SERIES D PREFERRED STOCK"), having the
preferences, limitations and relative rights set forth in the
specimen Series D Preferred Stock certificate that is attached
hereto and that is incorporated herein by reference.
ARTICLE III
DATE OF ADOPTION OF AMENDMENT
The Board adopted the amendment (the "AMENDMENT") described in Article II
above effective 17 August 1995.
ARTICLE IV
SHAREHOLDER APPROVAL NOT REQUIRED
Pursuant to the authority granted to the Board by the Fourth Article of
the Restated Articles and by Utah Code Ann. Sections 16-10a-602(1)(b)
and 16-10a-1002(1)(e), the Board, without shareholder action, may amend
the Restated Articles, and these Articles of Amendment have been so
adopted, approved and authorized by the Board.
ALPNET, INC.,
a Utah corporation
ATTEST:
By: \s\ D. Kerry Stubbs By: \s\ Thomas F. Seal
D. Kerry Stubbs Thomas F. Seal
Its Secretary Its President
EXHIBIT 4.1
S P E C I M E N
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS SECURITY MAY NOT BE
SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
ALPNET, INC.
INCORPORATED UNDER THE LAWS OF THE
STATE OF UTAH
$2.55 CONVERTIBLE, VOTING, NON-CUMULATIVE 10%
PREFERRED STOCK, SERIES B, WITHOUT PAR VALUE
TOTAL AUTHORIZED ISSUE: 459,411 SHARES
CERTIFICATE NUMBER *000,000*
*PB000* SHARES OF SERIES B PREFERRED STOCK
THIS IS TO CERTIFY THAT, FOR VALUE RECEIVED, _________________ (the
"HOLDER"), is the registered holder of *000,000* shares of the $2.55
convertible, voting, non-cumulative 10% preferred stock, series B, without par
value (the "SERIES B PREFERRED STOCK") of ALPNET, INC., a Utah corporation (the
"COMPANY"), which stock is fully paid and nonassessable and which stock is
transferable on the books of Company by Holder in person or by Holder's attorney
upon surrender of this certificate (the "CERTIFICATE") properly endorsed.
In this Certificate, the term "COMMON STOCK" shall refer to the common
stock, no par value per share, of Company. The Series B Preferred Stock
represented by this Certificate is subject to the following terms and
conditions:
1. DESIGNATION. The shares of Series B Preferred Stock shall have such
designations, powers and preferences and related voting, dividend, conversion
and other rights, qualifications, limitations and restrictions as are set forth
herein.
2. DIVIDEND PREFERENCE. Holder shall be entitled to receive a cash
dividend (the "DIVIDEND") for each share of Series B Preferred Stock at the rate
of ten percent (10%) per annum on the original $2.55 issue amount of such share,
subject to the following terms and conditions:
2.1. Dividends shall be declared and paid, in full or in part, only
when funds for payment of the same are legally available and if, when and as the
board of directors (the "BOARD") of Company, in its sole discretion, shall deem
the same to be advisable. The determination by the Board of the amount
available for payment of Dividends shall be binding and conclusive on the
holders of all stock of Company outstanding at the time.
2.2. Dividends on Series B Preferred Stock shall be non-cumulative,
so that if the full amount of Dividends have not been paid on the Series B
Preferred Stock for any particular fiscal year of Company (the "FISCAL YEAR"),
then Holder shall not be entitled to receive a Dividend payment in later Fiscal
Years to make up for the earlier shortage.
2.3. In any given Fiscal Year, unless and until a full Dividend on
Series B Preferred Stock has been declared and paid for the Fiscal Year, Company
shall not (a) declare or pay any dividends on Common Stock or on shares of any
other series of Company's preferred stock; (b) make any distributions with
respect to Common Stock or shares of any other series of Company's preferred
stock; or (c) redeem, retire or otherwise acquire for a valuable consideration
any Common Stock or shares of any other series of Company's preferred stock.
3. LIQUIDATION PREFERENCE. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of Company, or any reduction in Company's
capital resulting in any distribution of assets to its stockholders, Holder
shall be entitled to receive the amount of $2.55 for each share of Series B
Preferred Stock owned by Holder, plus an amount equal to all declared, but
unpaid dividends, if any, on such shares, before any amount shall be paid to the
holders of Common Stock. Such payment may be in cash or out of the assets of
Company, and may be from Company's capital or earnings, but only to the extent
that the same are legally available. For the purposes of this paragraph, the
following events shall not be deemed to be a liquidation, dissolution or winding
up of Company: (a) a consolidation or merger of Company with or into any other
corporation or corporations; and (b) a disposition by Company of all or
substantially all of its assets. Holder shall not be entitled to receive any
amounts with respect to Series B Preferred Stock upon any liquidation,
dissolution or winding up of Company other than the amounts that are
specifically provided for in this paragraph.
4. VOTING RIGHTS. For each share of Series B Preferred Stock, Holder
shall have the right to that number of votes equal to the number of votes
appurtenant to the number of shares of Common Stock issuable upon conversion of
said share of Series B Preferred Stock into Common Stock. Holders of Series B
Preferred Stock and holders of Common Stock of Company shall vote as a single
class, except as otherwise provided by law or by Company's articles of
incorporation.
5. VOLUNTARY CONVERSION. Holder shall have the right, at its option, to
convert shares of Series B Preferred Stock into fully paid and nonassessable
shares of Common Stock (or to stock of Company to which said Common Stock may be
changed from time to time hereafter) on the following terms and conditions:
5.1. The conversion ratio (the "CONVERSION RATIO") shall be three
shares of Common Stock for each one share of Series B Preferred Stock (rounded
to the nearest whole number of shares); provided, however, that the Conversion
Ratio shall be subject to adjustment from time to time as provided in
subparagraph 5.4.
5.2. No fractional shares or scrip representing fractional shares
shall be issued upon conversion of Series B Preferred Stock into Common Stock.
5.3. Holder may effect a conversion of all or part of the Series B
Preferred Stock into Common Stock at any time or from time to time on or after
the date hereof by presentation and surrender of this Certificate to Company,
together with a written election to exercise such conversion option. If the
conversion option is exercised in part only, then upon surrender of this
Certificate for cancellation, Company shall execute and deliver a new
Certificate for the remaining Series B Preferred Stock in form and substance
otherwise identical to the Certificate. Upon receipt by Company of this
Certificate, in proper form for exercise of the conversion option, Holder shall
be deemed to be the holder of record of the shares of Common Stock issuable upon
such conversion, notwithstanding that the stock transfer books of Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to Holder.
5.4. The Conversion Ratio shall be subject to adjustment in
accordance with the following terms and conditions:
5.4.1. If at any time, or from time to time, Company shall (a)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (b) pay a dividend in shares of its Common Stock or (c) make a
distribution in shares of its Common Stock, then the number of shares of Common
Stock then deliverable upon conversion of Series B Preferred Stock into Common
Stock shall be proportionately increased, and, conversely, if the outstanding
shares of the Common Stock shall be combined into a smaller number of shares,
then the number of shares of Common Stock then deliverable upon conversion of
Series B Preferred Stock into Common Stock shall be proportionately decreased.
5.4.2. In the case of (a) any classification, reclassification
or other reorganization of the capital stock of Company, (b) the consolidation
or merger of Company with or into another corporation or (c) the conveyance to
another corporation of all or any major portion of the assets of Company
(collectively referred to herein as the "RECONFIGURATION"), then as part of such
Reconfiguration:
5.4.2.1. Adequate provision shall be made
whereby Holder, upon conversion of Series B Preferred Stock as herein provided,
shall be entitled to receive on the same basis and conditions as holders of
Common Stock, the stock, securities or other property which Holder would have
been entitled to receive upon such Reconfiguration, if Holder had converted the
Series B Preferred Stock into Common Stock immediately prior to the
Reconfiguration.
5.4.2.2. Appropriate provision shall be made with
respect to the rights and interests of Holder to the end that the provisions of
this paragraph 5 shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or other property thereafter
deliverable upon the conversion of Series B Preferred Stock as herein provided.
5.4.2.3. As a condition of any such
Reconfiguration, any corporation which shall become successor to Company by
reason of such Reconfiguration shall expressly assume the obligation to deliver,
upon the conversion of Series B Preferred Stock as herein provided, such shares
of stock, securities or other consideration as Holder shall be entitled to
receive pursuant to the provisions hereof.
The foregoing provisions shall similarly apply to successive Reconfigurations of
or by any such successor.
5.4.3. Notwithstanding anything in this subparagraph 5.4 to the
contrary, Company shall not be required to give effect to any adjustment in the
Conversion Ratio unless and until the net effect of one or more adjustments,
determined as provided above, shall have resulted in a change of the Conversion
Ratio by at least five percent (5%), but when the cumulative net effect of more
than one adjustment so determined shall be to change the Conversion Ratio by at
least five percent (5%), then such change in the Conversion Ratio shall
thereupon be given effect.
5.4.4. Upon any adjustment to the Conversion Ratio, Holder shall
surrender the Certificate to Company, and Company shall issue a new Certificate
to Holder reflecting such adjustments; provided, however, that nothing contained
herein shall modify or restrict such adjustments if the Certificate is not so
surrendered.
5.4.5. Whenever the Conversion Ratio is adjusted as herein
provided, Company shall promptly file with Company's transfer agent for the
Common Stock of Company a statement signed by appropriate officers of Company
setting forth the adjusted Conversion Ratio. The statement shall set forth in
reasonable detail the reason for and the manner of computing such adjustment.
5.4.6. Company shall pay any and all taxes which may be imposed
upon it with respect to the issuance and delivery of Common Stock upon
conversion of Series B Preferred Stock as herein provided. However, in no event
shall Company be required to pay any transfer or other taxes by reason of the
issuance of such Common Stock in names other than those in which the Series B
Preferred Stock surrendered for conversion may stand, and no conversion or
issuance of Common Stock in such case shall be made unless and until the person
requesting such issuance has paid to Company the amount of any such tax, or has
established to the satisfaction of Company and its transfer agent, if any, that
such tax has been paid. Upon any conversion of Series B Preferred Stock, as
herein provided, no adjustment or allowance shall be made for future Dividends
on the Series B Preferred Stock so converted, and all rights to future
Dividends, if any, shall cease and be deemed satisfied; provided, however, that
nothing contained herein shall relieve Company from its obligation to pay any
dividends which shall have been declared and shall be payable to Holder with
respect to the Series B Preferred Stock being converted as of a date prior to
the date of such conversion even though the payment date for such dividend is
subsequent to the date of conversion.
5.4.7. Series B Preferred Stock that is surrendered upon
conversion into Common Stock shall not be reissued, and no Series B Preferred
Stock shall be issued in lieu thereof or in exchange thereof.
5.5. At all times Company shall reserve for issuance and/or
delivery upon conversion of Series B Preferred Stock into Common Stock such
number of authorized but unissued shares of Common Stock as shall be required
for issuance or delivery upon such conversion.
5.6. All shares of Common Stock which may be issued upon conversion
of the shares of Series B Preferred Stock evidenced hereby will upon issuance by
Company be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof, and Company
shall take no action which shall cause a contrary result.
6. EXCHANGE, ASSIGNMENT OR LOSS OF CERTIFICATE. This Certificate is
exchangeable, without expense, at the option of Holder, upon presentation and
surrender hereof to Company for other certificates of different denominations.
This Certificate may only be transferred, assigned or hypothecated subject to
the provisions of paragraph 8. Any such assignment shall be made by surrender
of this Certificate to Company with such documentation as Company shall require
and funds sufficient to pay any transfer tax; whereupon Company shall, without
charge, execute and deliver a new Certificate in the name of the assignee named
in such instrument of assignment, and this Certificate shall promptly be
cancelled. This Certificate may be divided or combined with other certificates
which carry the same rights upon presentation hereof at the office of Company,
together with a written notice signed by Holder specifying the names and
denominations in which new certificates are to be issued. The term
"CERTIFICATE" as used herein includes any Certificates issued in substitution
for or replacement of this Certificate, or into which this Certificate may be
divided or exchanged. Upon receipt by Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Certificate, and in the
case of loss, theft or destruction, of an indemnification reasonably
satisfactory to Company, and in the case of mutilation, upon surrender and
cancellation of this Certificate, Company will execute and deliver a new
Certificate of like tenor. Any such new Certificate executed and delivered
shall be the legal valid and binding obligation of Company, whether or not this
Certificate so lost, stolen, destroyed, or mutilated shall be at any time
enforceable by anyone.
7. EXCLUSION OF ADDITIONAL RIGHTS. The shares of Series B Preferred
Stock shall have no preemptive or subscription rights.
8. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.
8.1. Neither the Series B Preferred Stock nor the Common Stock or
any other security issued or issuable upon an exercise of the conversion option
hereunder may be sold, transferred or otherwise disposed of except to a person
who, in the reasonable opinion of counsel for Company, is a person to whom the
Series B Preferred Stock or the Common Stock may legally be transferred
(pursuant to paragraph 6 or otherwise) without registration and without the
delivery of a current prospectus under the Act with respect thereto and then
only against receipt of an agreement of such person to comply with the
provisions of this paragraph with respect to any resale or other disposition of
such securities.
8.2. Company may, if it so elects, cause the following legend (or
one similar to it) to be set forth on each certificate representing the Common
Stock or any other security issued or issuable upon an exercise of the
conversion option hereunder, which security has not theretofore been registered
for distribution to the public unless counsel for Company is of the reasonable
opinion as to any such certificate that such legend is unnecessary:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, IN RELIANCE
UPON EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS
SECURITY MAY NOT BE SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE
ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS THE ISSUER
RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
9. REGISTRATION.
9.1. Company agrees to register with the United States Securities
and Exchange Commission (the "S.E.C.") and to qualify under any applicable Blue
Sky or other state securities laws, from time to time, the offer and sale by
Holder of the Common Stock issued, from time to time, as a result of the
conversion of shares of Series B Preferred Stock into Common Stock. Said
registration and qualification shall be accomplished within 90 days after
Company files its next annual Form 10-K report with the S.E.C. following the
exercise of Holder's conversion option hereunder; provided, however, Company
shall not be obligated to register and/or qualify on behalf of Holder fewer than
an aggregate of 200,000 such shares in any one registration and/or
qualification.
9.2. All expenses incurred in connection with any registration or
qualification pursuant to this paragraph 9, including, without limitation, all
registration, filing, and qualification fees, printing expenses, fees and
disbursements of counsel for Company, and expenses of any special audits
incidental to or required by such registration, shall be borne by Company.
9.3. In the case of each registration and qualification effected by
Company pursuant to this paragraph 9, Company will keep Holder advised in
writing as to the initiation of each such registration and qualification and as
to the completion thereof. At its expense Company will:
9.3.1. Keep such registration and qualification effective for a
period of 120 days or until the distribution described in the registration
statement relating thereto has been completed, whichever first occurs; and
9.3.2. Furnish such number of prospectuses and other documents
incident thereto as Holder from time to time may reasonably request.
9.4. Company and Holder shall be entitled to the following rights
of indemnification in connection with this Certificate:
9.4.1. Company will indemnify Holder with respect to any
registration and qualification effected pursuant to this paragraph 9 against all
claims, losses, damages, and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration or qualification, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
Company of any rule or regulation promulgated under the Act or any state
securities law applicable to Company and relating to action or inaction required
of Company in connection with any such registration or qualification, and will
reimburse Holder for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, provided that Company will not be liable in any such case
to the extent that any such claim, loss, damage or liability arises out of or
is based on any untrue statement or omission based upon written information
furnished to Company in an instrument duly executed by Holder specifically for
use therein.
9.4.2. Holder will indemnify Company, each of its directors and
officers who sign such registration statement, and each person who controls
Company within the meaning of the Act, with respect to any registration and
qualification effected pursuant to this paragraph 9, against all claims, losses,
damages, and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement of a material fact contained in any registration
statement, prospectus, offering circular or other document incident to any such
registration or qualification or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse Company, and such other directors, officers or
other persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent, but only to the extent, that
such untrue statement or omission is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to Company in an instrument duly
executed by Holder specifically for use therein.
9.4.3. Each party entitled to indemnification under this
paragraph 9 (the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this paragraph. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
9.5. Holder shall furnish to Company such written information
relating to him or it and the distribution proposed by him or it as Company may
request in writing and as shall be required in connection with any registration
or qualification referred to in this paragraph 9.
10. NO REDEMPTION PROVISIONS. The shares of Series B Preferred Stock
are not subject in any way to voluntary or involuntary redemption by Company.
11. PROTECTIVE PROVISIONS. The unanimous consent of each holder of
Series B Preferred Stock shall be required for any action which (a) alters or
changes the rights, preferences, privileges, designations, powers,
qualifications, limitations or restrictions of the Series B Preferred Stock
adversely; (b) increases the authorized number of shares of Series B Preferred
Stock; or (c) creates any new class or series of shares having preference over
or being on a parity with the Series B Preferred Stock.
12. APPLICABLE LAW. This Certificate shall be governed by, and
construed in accordance with, the laws of the State of Utah.
DATED effective 31 July 1991.
ALPNET, INC.
ATTEST: A UTAH CORPORATION
By:_____________________________
LEO A. JARDINE THOMAS F. SEAL
Secretary President
ELECTION OF CONVERSION OPTION
The undersigned irrevocably elects to convert _____________ shares (all
shares shall be presumed if the foregoing blank is not completed) of the Series
B Preferred Stock represented by this Certificate into Common Stock and requests
that the certificate for such shares be issued in the name of
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
______________________________________________________________ at
______________________________________________________________ and to be
delivered to: _________________________________________ at
______________________________________________________________
and, if the number of shares of Series B Preferred Stock that are converted
shall not be all of the shares of Series B Preferred Stock evidenced by this
Certificate, that a new certificate for the balance of shares of the Series B
Preferred Stock be registered in the name of, and delivered to,
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
______________________________________________________________ at
_______________________________________________________________ .
DATED: ______________ 19_____ ______________________________
Signature
_________________________________________________________________
ASSIGNMENT
For value received, ________________________________________ does hereby
sell, assign and transfer unto ______________________
_________________________________________________________________
_____________________ shares of the Series B Preferred Stock represented by this
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint
_________________________________________________________
as attorney to transfer said shares on the books of Company, with full power of
substitution.
DATED: 19
Signature
Signature Guaranteed:
______________________________
_________________________________________________________________
SEE NOTES ON FOLLOWING PAGE
_________________________________________________________________
NOTES:
1. SIGNATURES FOR THE ELECTION OF CONVERSION AND ASSIGNMENT ABOVE MUST BE
GUARANTEED BY A COMMERCIAL BANK, A TRUST COMPANY OR A MEMBER FIRM OF A
NATIONAL STOCK EXCHANGE.
2. ALL CAPITALIZED TERMS USED IN THE FOREGOING ELECTION OF CONVERSION OPTION
AND ASSIGNMENT SHALL HAVE THE MEANINGS FOR SUCH TERMS THAT ARE SET FORTH
IN THE SERIES B PREFERRED STOCK CERTIFICATE TO WHICH THE ELECTION AND
ASSIGNMENT PAGE IS ATTACHED.
3. THE SIGNATURE ON ANY ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR MODIFICATION.
EXHIBIT 4.2
S P E C I M E N
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS SECURITY MAY NOT BE
SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
ALPNET, INC.
INCORPORATED UNDER THE LAWS OF THE
STATE OF UTAH
$3.09 CONVERTIBLE, VOTING, NON-CUMULATIVE 10%
PREFERRED STOCK, SERIES C, WITHOUT PAR VALUE
TOTAL AUTHORIZED ISSUE: 584,257 SHARES
CERTIFICATE NUMBER *000,000*
*PC000* SHARES OF SERIES C PREFERRED STOCK
THIS IS TO CERTIFY THAT, FOR VALUE RECEIVED, ________________ (the
"HOLDER"), is the registered holder of *000,000* shares of the $3.09
convertible, voting, non-cumulative 10% preferred stock, series C, without par
value (the "SERIES C PREFERRED STOCK") of ALPNET, INC., a Utah corporation (the
"COMPANY"), which stock is fully paid and nonassessable and which stock is
transferable on the books of Company by Holder in person or by Holder's attorney
upon surrender of this certificate (the "CERTIFICATE") properly endorsed.
In this Certificate, the term "COMMON STOCK" shall refer to the common
stock, no par value per share, of Company. The Series C Preferred Stock
represented by this Certificate is subject to the following terms and
conditions:
1. DESIGNATION. The shares of Series C Preferred Stock shall have such
designations, powers and preferences and related voting, dividend, conversion
and other rights, qualifications, limitations and restrictions as are set forth
herein. Subject to the provisions of paragraph 13 relating to Company's Series
B Preferred Stock (as defined herein), all shares of Company's preferred stock
of all series shall be of equal rank.
2. DIVIDEND PREFERENCE. Holder shall be entitled to receive a cash
dividend or distribution (the "DIVIDEND") for each share of Series C Preferred
Stock at the rate of ten percent (10%) per annum on the original $3.09 issue
amount of such share, subject to the following terms and conditions:
2.1. Dividends shall be declared and paid, in full or in part, only
when funds for payment of the same are legally available and if, when and as the
board of directors (the "BOARD") of Company, in its sole discretion, shall deem
the same to be advisable. The determination by the Board of the amount
available for payment of Dividends shall be binding and conclusive on the
holders of all stock of Company outstanding at the time.
2.2. Dividends on Series C Preferred Stock shall be non-cumulative,
so that if the full amount of Dividends have not been paid on the Series C
Preferred Stock for any particular fiscal year of Company (the "FISCAL YEAR"),
then Holder shall not be entitled to receive a Dividend payment in later Fiscal
Years to make up for the earlier shortage.
2.3. If the stated dividends or distributions for each series of
Company's preferred stock are not declared in full, are not set apart for
payment in full or are not paid in full, then subject to the provisions of
paragraph 13 the shares of all series of Company's preferred stock shall share
ratably in the payment of available distributions or dividends in proportion to
the amounts that would be payable with respect to the shares if all dividends or
distributions were declared and paid in full.
2.4. In any given Fiscal Year, unless and until a full dividend or
distribution has been declared and paid for all series of preferred stock,
Company shall not (a) declare or pay any dividends on its Common Stock; (b) make
any distributions with respect to its Common Stock; or (c) redeem, retire or
otherwise acquire for a valuable consideration any of its Common Stock.
3. LIQUIDATION PREFERENCE. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of Company, or any reduction in Company's
capital resulting in any distribution of assets to its stockholders
(collectively the "LIQUIDATION"), Holder shall be entitled to receive the
amount of $3.09 for each share of Series C Preferred Stock owned by Holder, plus
an amount equal to all declared, but unpaid dividends, if any, on such shares,
before any amount shall be paid to the holders of Common Stock but subject to a
ratable sharing with holders of other series of Company's preferred stock as
described below. Such payment may be in cash or out of the assets of Company,
and may be from Company's capital or earnings, but only to the extent that the
same are legally available. For the purposes of this paragraph, the following
events shall not be deemed to be a liquidation, dissolution or winding up of
Company: (a) a consolidation or merger of Company with or into any other
corporation or corporations; and (b) a disposition by Company of all or
substantially all of its assets. Holder shall not be entitled to receive any
amounts with respect to Series C Preferred Stock upon any Liquidation other than
the amounts that are specifically provided for in this paragraph. Not-
withstanding the foregoing, if the assets of Company that are available for
distribution to stockholders of preferred stock upon a Liquidation are
insufficient to pay in full the amounts payable to the holders of all series of
Company's preferred stock upon Liquidation, then subject to the provisions of
paragraph 13 the shares of all series of Company's preferred stock shall share
ratably in any available distribution of assets in proportion to the amounts
that would be payable with respect to the shares if Company's assets were
sufficient to permit the payment in full of those amounts.
4. VOTING RIGHTS. For each share of Series C Preferred Stock, Holder
shall have the right to that number of votes equal to the number of votes
appurtenant to the number of shares of Common Stock issuable upon conversion of
said share of Series C Preferred Stock into Common Stock. Holders of Series C
Preferred Stock, holders of other series of Company's voting preferred shares
that can be converted into Common Stock (voting the number of shares of Common
Stock into which the preferred stock could be converted) and holders of Common
Stock shall vote as a single class, except as otherwise provided by law or by
Company's articles of incorporation.
5. VOLUNTARY CONVERSION. Holder shall have the right, at its option, to
convert shares of Series C Preferred Stock into fully paid and nonassessable
shares of Common Stock (or to stock of Company to which said Common Stock may be
changed from time to time hereafter) on the following terms and conditions:
5.1. The conversion ratio (the "CONVERSION RATIO")
shall be nine shares of Common Stock for each one share of Series C Preferred
Stock (rounded to the nearest whole number of shares); provided, however, that
the Conversion Ratio shall be subject to adjustment from time to time as
provided in subparagraph 5.4.
5.2. No fractional shares or scrip representing fractional shares
shall be issued upon conversion of Series C Preferred Stock into Common Stock.
5.3. Holder may effect a conversion of all or part of the Series C
Preferred Stock into Common Stock at any time or from time to time on or after
the date hereof by presentation and surrender of this Certificate to Company,
together with a written election to exercise such conversion option. If the
conversion option is exercised in part only, then upon surrender of this
Certificate for cancellation, Company shall execute and deliver a new
Certificate for the remaining Series C Preferred Stock in form and substance
otherwise identical to the Certificate. Upon receipt by Company of this
Certificate, in proper form for exercise of the conversion option, Holder shall
be deemed to be the holder of record of the shares of Common Stock issuable upon
such conversion, notwithstanding that the stock transfer books of Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to Holder.
5.4. The Conversion Ratio shall be subject to adjustment in
accordance with the following terms and conditions:
5.4.1. If at any time, or from time to time, Company shall (a)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (b) pay a dividend in shares of its Common Stock or (c) make a
distribution in shares of its Common Stock, then the number of shares of Common
Stock then deliverable upon conversion of Series C Preferred Stock into Common
Stock shall be proportionately increased, and, conversely, if the outstanding
shares of the Common Stock shall be combined into a smaller number of shares,
then the number of shares of Common Stock then deliverable upon conversion of
Series C Preferred Stock into Common Stock shall be proportionately decreased.
5.4.2. In the case of (a) any classification, reclassification
or other reorganization of the capital stock of Company, (b) the consolidation
or merger of Company with or into another corporation or (c) the conveyance to
another corporation of all or any major portion of the assets of Company
(collectively referred to herein as the "RECONFIGURATION"), then as part of such
Reconfiguration:
5.4.2.1. Adequate provision shall be made
whereby Holder, upon conversion of Series C Preferred Stock as herein provided,
shall be entitled to receive on the same basis and conditions as holders of
Common Stock, the stock, securities or other property which Holder would have
been entitled to receive upon such Reconfiguration, if Holder had converted the
Series C Preferred Stock into Common Stock immediately prior to the
Reconfiguration.
5.4.2.2. Appropriate provision shall be made with
respect to the rights and interests of Holder to the end that the provisions of
this paragraph 5 shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or other property thereafter
deliverable upon the conversion of Series C Preferred Stock as herein provided.
5.4.2.3. As a condition of any such
Reconfiguration, any corporation which shall become successor to Company by
reason of such Reconfiguration shall expressly assume the obligation to deliver,
upon the conversion of Series C Preferred Stock as herein provided, such shares
of stock, securities or other consideration as Holder shall be entitled to
receive pursuant to the provisions hereof.
The foregoing provisions shall similarly apply to successive Reconfigurations of
or by any such successor.
5.4.3. Notwithstanding anything in this subparagraph 5.4 to the
contrary, Company shall not be required to give effect to any adjustment in the
Conversion Ratio unless and until the net effect of one or more adjustments,
determined as provided above, shall have resulted in a change of the Conversion
Ratio by at least five percent (5%), but when the cumulative net effect of more
than one adjustment so determined shall be to change the Conversion Ratio by at
least five percent (5%), then such change in the Conversion Ratio shall
thereupon be given effect.
5.4.4. Upon any adjustment to the Conversion Ratio, Holder shall
surrender the Certificate to Company, and Company shall issue a new Certificate
to Holder reflecting such adjustments; provided, however, that nothing contained
herein shall modify or restrict such adjustments if the Certificate is not so
surrendered.
5.4.5. Whenever the Conversion Ratio is adjusted as herein
provided, Company shall promptly file with Company's transfer agent for the
Common Stock of Company a statement signed by appropriate officers of Company
setting forth the adjusted Conversion Ratio. The statement shall set forth in
reasonable detail the reason for and the manner of computing such adjustment.
5.4.6. Company shall pay any and all taxes which may be imposed
upon it with respect to the issuance and delivery of Common Stock upon
conversion of Series C Preferred Stock as herein provided. However, in no event
shall Company be required to pay any transfer or other taxes by reason of the
issuance of such Common Stock in names other than those in which the Series C
Preferred Stock surrendered for conversion may stand, and no conversion or
issuance of Common Stock in such case shall be made unless and until the person
requesting such issuance has paid to Company the amount of any such tax, or has
established to the satisfaction of Company and its transfer agent, if any, that
such tax has been paid. Upon any conversion of Series C Preferred Stock, as
herein provided, no adjustment or allowance shall be made for future Dividends
on the Series C Preferred Stock so converted, and all rights to future
Dividends, if any, shall cease and be deemed satisfied; provided, however, that
nothing contained herein shall relieve Company from its obligation to pay any
dividends which shall have been declared and shall be payable to Holder with
respect to the Series C Preferred Stock being converted as of a date prior to
the date of such conversion even though the payment date for such dividend is
subsequent to the date of conversion.
5.4.7. Series C Preferred Stock that is surrendered upon
conversion into Common Stock shall not be reissued, and no Series C Preferred
Stock shall be issued in lieu thereof or in exchange thereof.
5.5. At all times Company shall reserve for issuance and/or
delivery upon conversion of Series C Preferred Stock into Common Stock such
number of authorized but unissued shares of Common Stock as shall be required
for issuance or delivery upon such conversion.
5.6. All shares of Common Stock which may be issued upon conversion
of the shares of Series C Preferred Stock evidenced hereby will upon issuance by
Company be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof, and Company
shall take no action which shall cause a contrary result.
6. EXCHANGE, ASSIGNMENT OR LOSS OF CERTIFICATE. This Certificate is
exchangeable, without expense, at the option of Holder, upon presentation and
surrender hereof to Company for other certificates of different denominations.
This Certificate may only be transferred, assigned or hypothecated subject to
the provisions of paragraph 8. Any such assignment shall be made by surrender
of this Certificate to Company with such documentation as Company shall require
and funds sufficient to pay any transfer tax; whereupon Company shall, without
charge, execute and deliver a new Certificate in the name of the assignee named
in such instrument of assignment, and this Certificate shall promptly be
cancelled. This Certificate may be divided or combined with other certificates
which carry the same rights upon presentation hereof at the office of Company,
together with a written notice signed by Holder specifying the names and
denominations in which new certificates are to be issued. The term
"CERTIFICATE" as used herein includes any Certificates issued in substitution
for or replacement of this Certificate, or into which this Certificate may be
divided or exchanged. Upon receipt by Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Certificate, and in the case
of loss, theft or destruction, of an indemnification reasonably satisfactory to
Company, and in the case of mutilation, upon surrender and cancellation of this
Certificate, Company will execute and deliver a new Certificate of like tenor.
Any such new Certificate executed and delivered shall be the legal, valid and
binding obligation of Company, whether or not this Certificate so lost, stolen,
destroyed, or mutilated shall be at any time enforceable by anyone.
7. EXCLUSION OF ADDITIONAL RIGHTS. The shares of Series C Preferred
Stock shall have no preemptive or subscription rights.
8. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.
8.1. Neither the Series C Preferred Stock nor the Common Stock or
any other security issued or issuable upon an exercise of the conversion option
hereunder may be sold, transferred or otherwise disposed of except to a person
who, in the reasonable opinion of counsel for Company, is a person to whom the
Series C Preferred Stock or the Common Stock may legally be transferred
(pursuant to paragraph 6 or otherwise) without registration and without the
delivery of a current prospectus under the Act with respect thereto and then
only against receipt of an agreement of such person to comply with the
provisions of this paragraph with respect to any resale or other disposition of
such securities.
8.2. Company may, if it so elects, cause the following legend (or
one similar to it) to be set forth on each certificate representing the Common
Stock or any other security issued or issuable upon an exercise of the
conversion option hereunder, which security has not theretofore been registered
for distribution to the public unless counsel for Company is of the reasonable
opinion as to any such certificate that such legend is unnecessary:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, IN RELIANCE
UPON EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS
SECURITY MAY NOT BE SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE
ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS THE ISSUER
RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
9. REGISTRATION.
9.1. Upon the written request of Holder, Company agrees to register
with the United States Securities and Exchange Commission (the "S.E.C.") and to
qualify under any applicable Blue Sky or other state securities laws, from time
to time, the offer and sale by Holder of the Common Stock issued, from time to
time, as a result of the conversion of shares of Series C Preferred Stock into
Common Stock. Said registration and qualification shall be accomplished within
90 days after Company files its next annual Form 10-K report with the S.E.C.
following the exercise of Holder's conversion option hereunder; provided,
however, Company shall not be obligated to register and/or qualify on behalf of
Holder fewer than an aggregate of 200,000 such shares in any one registration
and/or qualification.
9.2. All expenses incurred in connection with any registration or
qualification pursuant to this paragraph 9, including, without limitation, all
registration, filing, and qualification fees, printing expenses, fees and
disbursements of counsel for Company, and expenses of any special audits
incidental to or required by such registration, shall be borne by Company.
9.3. In the case of each registration and qualification effected by
Company pursuant to this paragraph 9, Company will keep Holder advised in
writing as to the initiation of each such registration and qualification and as
to the completion thereof. At its expense Company will:
9.3.1. Keep such registration and qualification effective for a
period of 120 days or until the distribution described in the registration
statement relating thereto has been completed, whichever first occurs; and
9.3.2. Furnish such number of prospectuses and other documents
incident thereto as Holder from time to time may reasonably request.
9.4. Company and Holder shall be entitled to the following rights
of indemnification in connection with this Certificate:
9.4.1. Company will indemnify Holder with respect to any
registration and qualification effected pursuant to this paragraph 9 against all
claims, losses, damages, and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration or qualification, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
Company of any rule or regulation promulgated under the Act or any state
securities law applicable to Company and relating to action or inaction required
of Company in connection with any such registration or qualification, and will
reimburse Holder for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, provided that Company will not be liable in any such case
to the extent that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written information
furnished to Company in an instrument duly executed by Holder specifically for
use therein.
9.4.2. Holder will indemnify Company, each of its directors and
officers who sign such registration statement, and each person who controls
Company within the meaning of the Act, with respect to any registration and
qualification effected pursuant to this paragraph 9, against all claims, losses,
damages, and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement of a material fact contained in any registration
statement, prospectus, offering circular or other document incident to any such
registration or qualification or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse Company, and such other directors, officers or
other persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent, but only to the extent, that
such untrue statement or omission is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to Company in an instrument duly
executed by Holder specifically for use therein.
9.4.3. Each party entitled to indemnification under this
paragraph 9 (the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this paragraph. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
9.5. Holder shall furnish to Company such written information
relating to him or it and the distribution proposed by him or it as Company may
request in writing and as shall be required in connection with any registration
or qualification referred to in this paragraph 9.
10. NO REDEMPTION PROVISIONS. The shares of Series C Preferred Stock
are not subject in any way to voluntary or involuntary redemption by Company.
11. PROTECTIVE PROVISIONS. The unanimous consent of each holder of
Series C Preferred Stock shall be required for any action which (a) alters or
changes the rights, preferences, privileges, designations, powers,
qualifications, limitations or restrictions of the Series C Preferred Stock
adversely; (b) increases the authorized number of shares of Series C Preferred
Stock; or (c) creates any new class or series of shares having preference over
or being on a parity with the Series C Preferred Stock.
12. APPLICABLE LAW. This Certificate shall be governed by, and
construed in accordance with, the laws of the State of Utah.
13. SERIES B PREFERRED STOCK. Company has previously issued 459,411
shares of its $2.55 convertible, voting, non-cumulative 10% preferred stock,
series B, without par value (the "SERIES B PREFERRED STOCK"). Notwithstanding
any provisions of this Certificate to the contrary, the Series B Preferred Stock
shall take priority over the Series C Preferred Stock as to rank, dividend
preference and liquidation preference, as set forth in Company's articles of
incorporation, as amended.
DATED effective 31 March 1994.
ALPNET, INC., a Utah corporation
By:
THOMAS F. SEAL
President
ATTEST:
LEO A. JARDINE
Secretary
[THIS SPACE INTENTIONALLY LEFT BLANK]
__________________________________________________________________
ELECTION OF CONVERSION OPTION
The undersigned irrevocably elects to convert _______________ shares (all
shares shall be presumed if the foregoing blank is not completed) of the Series
C Preferred Stock represented by this Certificate into Common Stock and requests
that the certificate for such shares be issued in the name of
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_______________________________________________________________ at
______________________________________________________________ and be delivered
to: ______________________________________________ at
__________________________________________________________________ and, if the
number of shares of Series C Preferred Stock that are converted shall not be all
of the shares of Series C Preferred Stock evidenced by this Certificate, that a
new certificate for the balance of shares of the Series C Preferred Stock be
registered in the name of, and delivered to, ___________________________________
_______________________________________________________________ at
_________________________________________________________________.
DATED: ______________ 19_____ ______________________________
Signature
ASSIGNMENT
For value received, ________________________________________ does hereby
sell, assign and transfer unto ______________________
_________________________________________________________________
___________________________ shares of the Series C Preferred Stock represented
by this Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint
_________________________________________________________
as attorney to transfer said shares on the books of Company, with full power of
substitution.
DATED: _______________ 19____ _______________________________
Signature
Signature Guaranteed:
_______________________________
__________________________________________________________________
SEE NOTES ON FOLLOWING PAGE
__________________________________________________________________
NOTES:
1. SIGNATURES FOR THE ELECTION OF CONVERSION AND ASSIGNMENT ABOVE MUST BE
GUARANTEED BY A COMMERCIAL BANK, A TRUST COMPANY OR A MEMBER FIRM OF A
NATIONAL STOCK EXCHANGE.
2. ALL CAPITALIZED TERMS USED IN THE FOREGOING ELECTION OF CONVERSION OPTION
AND ASSIGNMENT SHALL HAVE THE MEANINGS FOR SUCH TERMS THAT ARE SET FORTH
IN THE SERIES C PREFERRED STOCK CERTIFICATE TO WHICH THE ELECTION AND
ASSIGNMENT PAGE IS ATTACHED.
3. THE SIGNATURE ON ANY ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR MODIFICATION.
EXHIBIT 4.3
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS SECURITY MAY NOT BE
SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
ALPNET, INC.
INCORPORATED UNDER THE LAWS OF THE
STATE OF UTAH
$2.81 CONVERTIBLE, VOTING, NON-CUMULATIVE 10%
PREFERRED STOCK, SERIES D, WITHOUT PAR VALUE
TOTAL AUTHORIZED ISSUE: 87,339 SHARES
CERTIFICATE NUMBER *87,339*
*PD001* SHARES OF SERIES D PREFERRED STOCK
THIS IS TO CERTIFY THAT, FOR VALUE RECEIVED, MICHAEL F. EICHNER (the
"HOLDER"), is the registered holder of *87,339* shares of the $2.81 convertible,
voting, non-cumulative 10% preferred stock, series D, without par value (the
"SERIES D PREFERRED STOCK") of ALPNET, INC., a Utah corporation (the "COMPANY"),
which stock is fully paid and nonassessable and which stock is transferable on
the books of Company by Holder in person or by Holder's attorney upon surrender
of this certificate (the "CERTIFICATE") properly endorsed.
In this Certificate, the term "COMMON STOCK" shall refer to the common
stock, no par value per share, of Company. The Series D Preferred Stock
represented by this Certificate is subject to the following terms and
conditions:
1. DESIGNATION. The shares of Series D Preferred Stock shall have such
designations, powers and preferences and related voting, dividend, conversion
and other rights, qualifications, limitations and restrictions as are set forth
herein. Subject to the provisions of paragraphs 13 and 14 relating to Company's
Series B and Series C Preferred Stock (as defined herein), all shares of
Company's preferred stock of all series shall be of equal rank.
2. DIVIDEND PREFERENCE. Holder shall be entitled to receive a cash
dividend or distribution (the "DIVIDEND") for each share of Series D Preferred
Stock at the rate of ten percent (10%) per annum on the original $2.81 issue
amount of such share, subject to the following terms and conditions:
2.1. Dividends shall be declared and paid, in full or in part, only
when funds for payment of the same are legally available and if, when and as the
board of directors (the "BOARD") of Company, in its sole discretion, shall deem
the same to be advisable. The determination by the Board of the amount
available for payment of Dividends shall be binding and conclusive on the
holders of all stock of Company outstanding at the time.
2.2. Dividends on Series D Preferred Stock shall be non-cumulative,
so that if the full amount of Dividends have not been paid on the Series D
Preferred Stock for any particular fiscal year of Company (the "FISCAL YEAR"),
then Holder shall not be entitled to receive a Dividend payment in later Fiscal
Years to make up for the earlier shortage.
2.3. If the stated dividends or distributions for each series of
Company's preferred stock are not declared in full, are not set apart for
payment in full or are not paid in full, then, subject to the provisions of
paragraphs 13 and 14, the shares of all series of Company's preferred stock
shall share ratably in the payment of available distributions or dividends in
proportion to the amounts that would be payable with respect to the shares if
all dividends or distributions were declared and paid in full.
2.4. In any given Fiscal Year, unless and until a full dividend or
distribution has been declared and paid for all series of preferred stock,
Company shall not (a) declare or pay any dividends on its Common Stock; (b) make
any distributions with respect to its Common Stock; or (c) redeem, retire or
otherwise acquire for a valuable consideration any of its Common Stock.
3. LIQUIDATION PREFERENCE. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of Company, or any reduction in Company's
capital resulting in any distribution of assets to its stockholders
(collectively the "LIQUIDATION"), Holder shall be entitled to receive the amount
of $2.81 for each share of Series D Preferred Stock owned by Holder, plus an
amount equal to all declared, but unpaid dividends, if any, on such shares,
before any amount shall be paid to the holders of Common Stock but subject to
the provisions of paragraphs 13 and 14 and subject to a ratable sharing with
holders of other series of Company's preferred stock as described below. Such
payment may be in cash or out of the assets of Company, and may be from
Company's capital or earnings, but only to the extent that the same are legally
available. For the purposes of this paragraph, the following events shall not
be deemed to be a liquidation, dissolution or winding up of Company: (a) a
consolidation or merger of Company with or into any other corporation or
corporations; and (b) a disposition by Company of all or substantially all of
its assets. Holder shall not be entitled to receive any amounts with respect to
Series D Preferred Stock upon any Liquidation other than the amounts that are
specifically provided for in this paragraph. Notwithstanding the foregoing, if
the assets of Company that are available for distribution to stockholders of
preferred stock upon a Liquidation are insufficient to pay in full the amounts
payable to the holders of all series of Company's preferred stock upon
Liquidation, then, subject to the provisions of paragraphs 13 and 14, the shares
of all series of Company's preferred stock shall share ratably in any available
distribution of assets in proportion to the amounts that would be payable with
respect to the shares if Company's assets were sufficient to permit the payment
in full of those amounts.
4. VOTING RIGHTS. For each share of Series D Preferred Stock, Holder
shall have the right to that number of votes equal to the number of votes
appurtenant to the number of shares of Common Stock issuable upon conversion of
said share of Series D Preferred Stock into Common Stock. Holders of Series D
Preferred Stock, holders of other series of Company's voting preferred shares
that can be converted into Common Stock (voting the number of shares of Common
Stock into which the preferred stock could be converted) and holders of Common
Stock shall vote as a single class, except as otherwise provided by law or by
Company's articles of incorporation.
5. VOLUNTARY CONVERSION. Holder shall have the right, at his option, to
convert shares of Series D Preferred Stock into fully paid and nonassessable
shares of Common Stock (or to stock of Company to which said Common Stock may be
changed from time to time hereafter) on the following terms and conditions:
5.1. The conversion ratio (the "CONVERSION RATIO")
shall be nine shares of Common Stock for each one share of Series D Preferred
Stock (rounded to the nearest whole number of shares); provided, however, that
the Conversion Ratio shall be subject to adjustment from time to time as
provided in subparagraph 5.4.
5.2. No fractional shares or scrip representing fractional shares
shall be issued upon conversion of Series D Preferred Stock into Common Stock.
5.3. Holder may effect a conversion of all or part of the Series D
Preferred Stock into Common Stock at any time or from time to time on or after
the date hereof by presentation and surrender of this Certificate to Company,
together with a written election to exercise such conversion option. If the
conversion option is exercised in part only, then upon surrender of this
Certificate for cancellation, Company shall execute and deliver a new
Certificate for the remaining Series D Preferred Stock in form and substance
otherwise identical to the Certificate. Upon receipt by Company of this
Certificate, in proper form for exercise of the conversion option, Holder shall
be deemed to be the holder of record of the shares of Common Stock issuable upon
such conversion, notwithstanding that the stock transfer books of Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to Holder.
5.4. The Conversion Ratio shall be subject to adjustment in
accordance with the following terms and conditions:
5.4.1. If at any time, or from time to time, Company shall (a)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (b) pay a dividend in shares of its Common Stock or (c) make a
distribution in shares of its Common Stock, then the number of shares of Common
Stock then deliverable upon conversion of Series D Preferred Stock into Common
Stock shall be proportionately increased, and, conversely, if the outstanding
shares of the Common Stock shall be combined into a smaller number of shares,
then the number of shares of Common Stock then deliverable upon conversion of
Series D Preferred Stock into Common Stock shall be proportionately decreased.
5.4.2. In the case of (a) any classification, reclassification
or other reorganization of the capital stock of Company, (b) the consolidation
or merger of Company with or into another corporation or (c) the conveyance to
another corporation of all or any major portion of the assets of Company
(collectively referred to herein as the "RECONFIGURATION"), then as part of such
Reconfiguration:
5.4.2.1. Adequate provision shall be made
whereby Holder, upon conversion of Series D Preferred Stock as herein provided,
shall be entitled to receive on the same basis and conditions as holders of
Common Stock, the stock, securities or other property which Holder would have
been entitled to receive upon such Reconfiguration, if Holder had converted the
Series D Preferred Stock into Common Stock immediately prior to the
Reconfiguration.
5.4.2.2. Appropriate provision shall be made with
respect to the rights and interests of Holder to the end that the provisions of
this paragraph 5 shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or other property thereafter
deliverable upon the conversion of Series D Preferred Stock as herein provided.
5.4.2.3. As a condition of any such Recon-
figuration, any corporation which shall become successor to Company by reason of
such Reconfiguration shall expressly assume the obligation to deliver, upon the
conversion of Series D Preferred Stock as herein provided, such shares of stock,
securities or other consideration as Holder shall be entitled to receive
pursuant to the provisions hereof.
The foregoing provisions shall similarly apply to successive Reconfigurations of
or by any such successor.
5.4.3. Notwithstanding anything in this subparagraph 5.4 to the
contrary, Company shall not be required to give effect to any adjustment in the
Conversion Ratio unless and until the net effect of one or more adjustments,
determined as provided above, shall have resulted in a change of the Conversion
Ratio by at least five percent (5%), but when the cumulative net effect of more
than one adjustment so determined shall be to change the Conversion Ratio by at
least five percent (5%), then such change in the Conversion Ratio shall
thereupon be given effect.
5.4.4. Upon any adjustment to the Conversion Ratio, Holder shall
surrender the Certificate to Company, and Company shall issue a new Certificate
to Holder reflecting such adjustments; provided, however, that nothing contained
herein shall modify or restrict such adjustments if the Certificate is not so
surrendered.
5.4.5. Whenever the Conversion Ratio is adjusted as herein
provided, Company shall promptly file with Company's transfer agent for the
Common Stock of Company a statement signed by appropriate officers of Company
setting forth the adjusted Conversion Ratio. The statement shall set forth in
reasonable detail the reason for and the manner of computing such adjustment.
5.4.6. Company shall pay any and all taxes which may be imposed
upon it with respect to the issuance and delivery of Common Stock upon
conversion of Series D Preferred Stock as herein provided. However, in no event
shall Company be required to pay any transfer or other taxes by reason of the
issuance of such Common Stock in names other than those in which the Series D
Preferred Stock surrendered for conversion may stand, and no conversion or
issuance of Common Stock in such case shall be made unless and until the person
requesting such issuance has paid to Company the amount of any such tax, or has
established to the satisfaction of Company and its transfer agent, if any, that
such tax has been paid. Upon any conversion of Series D Preferred Stock, as
herein provided, no adjustment or allowance shall be made for future Dividends
on the Series D Preferred Stock so converted, and all rights to future
Dividends, if any, shall cease and be deemed satisfied; provided, however, that
nothing contained herein shall relieve Company from its obligation to pay any
dividends which shall have been declared and shall be payable to Holder with
respect to the Series D Preferred Stock being converted as of a date prior to
the date of such conversion even though the payment date for such dividend is
subsequent to the date of conversion.
5.4.7. Series D Preferred Stock that is surrendered upon
conversion into Common Stock shall not be reissued, and no Series D Preferred
Stock shall be issued in lieu thereof or in exchange thereof.
5.5. At all times Company shall reserve for issuance and/or
delivery upon conversion of Series D Preferred Stock into Common Stock such
number of authorized but unissued shares of Common Stock as shall be required
for issuance or delivery upon such conversion.
5.6. All shares of Common Stock which may be issued upon conversion
of the shares of Series D Preferred Stock evidenced hereby will upon issuance by
Company be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof, and Company
shall take no action which shall cause a contrary result.
6. EXCHANGE, ASSIGNMENT OR LOSS OF CERTIFICATE. This Certificate is
exchangeable, without expense, at the option of Holder, upon presentation and
surrender hereof to Company for other certificates of different denominations.
This Certificate may only be transferred, assigned or hypothecated subject to
the provisions of paragraph 8. Any such assignment shall be made by surrender
of this Certificate to Company with such documentation as Company shall require
and funds sufficient to pay any transfer tax; whereupon Company shall, without
charge, execute and deliver a new Certificate in the name of the assignee named
in such instrument of assignment, and this Certificate shall promptly be
cancelled. This Certificate may be divided or combined with other certificates
which carry the same rights upon presentation hereof at the office of Company,
together with a written notice signed by Holder specifying the names and
denominations in which new certificates are to be issued. The term
"CERTIFICATE" as used herein includes any Certificates issued in substitution
for or replacement of this Certificate, or into which this Certificate may be
divided or exchanged. Upon receipt by Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Certificate, and in the case
of loss, theft or destruction, of an indemnification reasonably satisfactory to
Company, and in the case of mutilation, upon surrender and cancellation of this
Certificate, Company will execute and deliver a new Certificate of like tenor.
Any such new Certificate executed and delivered shall be the legal, valid and
binding obligation of Company, whether or not this Certificate so lost, stolen,
destroyed, or mutilated shall be at any time enforceable by anyone.
7. EXCLUSION OF ADDITIONAL RIGHTS. The shares of Series D Preferred
Stock shall have no preemptive or subscription rights.
8. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.
8.1. Neither the Series D Preferred Stock nor the Common Stock or
any other security issued or issuable upon an exercise of the conversion option
hereunder may be sold, transferred or otherwise disposed of except to a person
who, in the reasonable opinion of counsel for Company, is a person to whom the
Series D Preferred Stock or the Common Stock may legally be transferred
(pursuant to paragraph 6 or otherwise) without registration and without the
delivery of a current prospectus under the Act with respect thereto and then
only against receipt of an agreement of such person to comply with the
provisions of this paragraph with respect to any resale or other disposition of
such securities.
8.2. Company may, if it so elects, cause the following legend (or
one similar to it) to be set forth on each certificate representing the Common
Stock or any other security issued or issuable upon an exercise of the
conversion option hereunder, which security has not theretofore been registered
for distribution to the public unless counsel for Company is of the reasonable
opinion as to any such certificate that such legend is unnecessary:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, IN RELIANCE
UPON EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS
SECURITY MAY NOT BE SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE
ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS THE ISSUER
RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
9. REGISTRATION.
9.1. Upon the written request of Holder, Company agrees to register
with the United States Securities and Exchange Commission (the "S.E.C.") and to
qualify under any applicable Blue Sky or other state securities laws, from time
to time, the offer and sale by Holder of the Common Stock issued, from time to
time, as a result of the conversion of shares of Series D Preferred Stock into
Common Stock. Said registration and qualification shall be accomplished within
90 days after Company files its next annual Form 10-K report with the S.E.C.
following the exercise of Holder's conversion option hereunder; provided,
however, Company shall not be obligated to register and/or qualify on behalf of
Holder fewer than an aggregate of 200,000 such shares in any one registration
and/or qualification.
9.2. All expenses incurred in connection with any registration or
qualification pursuant to this paragraph 9, including, without limitation, all
registration, filing, and qualification fees, printing expenses, fees and
disbursements of counsel for Company, and expenses of any special audits
incidental to or required by such registration, shall be borne by Company.
9.3. In the case of each registration and qualification effected by
Company pursuant to this paragraph 9, Company will keep Holder advised in
writing as to the initiation of each such registration and qualification and as
to the completion thereof. At its expense Company will:
9.3.1. Keep such registration and qualification effective for a
period of 120 days or until the distribution described in the registration
statement relating thereto has been completed, whichever first occurs; and
9.3.2. Furnish such number of prospectuses and other documents
incident thereto as Holder from time to time may reasonably request.
9.4. Company and Holder shall be entitled to the following rights
of indemnification in connection with this Certificate:
9.4.1. Company will indemnify Holder with respect to any
registration and qualification effected pursuant to this paragraph 9 against all
claims, losses, damages, and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration or qualification, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
Company of any rule or regulation promulgated under the Act or any state
securities law applicable to Company and relating to action or inaction required
of Company in connection with any such registration or qualification, and will
reimburse Holder for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, provided that Company will not be liable in any such case
to the extent that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written information
furnished to Company in an instrument duly executed by Holder specifically for
use therein.
9.4.2. Holder will indemnify Company, each of its directors and
officers who sign such registration statement, and each person who controls
Company within the meaning of the Act, with respect to any registration and
qualification effected pursuant to this paragraph 9, against all claims, losses,
damages, and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement of a material fact contained in any registration
statement, prospectus, offering circular or other document incident to any such
registration or qualification or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse Company, and such other directors, officers or
other persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent, but only to the extent, that
such untrue statement or omission is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to Company in an instrument duly
executed by Holder specifically for use therein.
9.4.3. Each party entitled to indemnification under this
paragraph 9 (the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this paragraph. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
9.5. Holder shall furnish to Company such written information
relating to him or it and the distribution proposed by him or it as Company may
request in writing and as shall be required in connection with any registration
or qualification referred to in this paragraph 9.
10. NO REDEMPTION PROVISIONS. The shares of Series D Preferred Stock
are not subject in any way to voluntary or involuntary redemption by Company.
11. PROTECTIVE PROVISIONS. The unanimous consent of each holder of
Series D Preferred Stock shall be required for any action which (a) alters or
changes the rights, preferences, privileges, designations, powers,
qualifications, limitations or restrictions of the Series D Preferred Stock
adversely; (b) increases the authorized number of shares of Series D Preferred
Stock; or (c) creates any new class or series of shares having preference over
or being on a parity with the Series D Preferred Stock.
12. APPLICABLE LAW. This Certificate shall be governed by, and
construed in accordance with, the laws of the State of Utah.
13. SERIES B PREFERRED STOCK. Company has previously issued 459,411
shares of its $2.55 convertible, voting, non-cumulative 10% preferred stock,
series B, without par value (the "SERIES B PREFERRED STOCK"). Notwithstanding
any provisions of this Certificate to the contrary, the Series B Preferred Stock
shall take priority over the Series C and Series D Preferred Stock as to rank,
dividend preference and liquidation preference, as set forth in Company's
articles of incorporation, as amended.
14. SERIES C PREFERRED STOCK. Company has previously issued 584,257
shares of its $3.09 convertible, voting, non-cumulative 10% preferred stock,
series C, without par value (the "SERIES C PREFERRED STOCK"). Notwithstanding
any provisions of this Certificate to the contrary, the Series C Preferred Stock
shall take priority over the Series D Preferred Stock as to rank, dividend
preference and liquidation preference, as set forth in Company's articles of
incorporation, as amended.
DATED effective 17 August 1995.
ALPNET, INC., a Utah corporation
By: \s\ Thomas F. Seal
THOMAS F. SEAL
President
ATTEST:
\s\ D. Kerry Stubbs
D. KERRY STUBBS
Secretary
[THIS SPACE INTENTIONALLY LEFT BLANK]
__________________________________________________________________
ELECTION OF CONVERSION OPTION
The undersigned irrevocably elects to convert _______________ shares (all
shares shall be presumed if the foregoing blank is not completed) of the Series
D Preferred Stock represented by this Certificate into Common Stock and requests
that the certificate for such shares be issued in the name of
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_______________________________________________________________ at
______________________________________________________________ and be delivered
to: ______________________________________________ at
__________________________________________________________________ and, if the
number of shares of Series D Preferred Stock that are converted shall not be all
of the shares of Series D Preferred Stock evidenced by this Certificate, that a
new certificate for the balance of shares of the Series D Preferred Stock be
registered in the name of, and delivered to, ___________________________________
_______________________________________________________________ at
_________________________________________________________________.
DATED: ______________ 19_____ ______________________________
Signature
ASSIGNMENT
For value received, ________________________________________ does hereby
sell, assign and transfer unto ______________________
_________________________________________________________________
___________________________ shares of the Series D Preferred Stock represented
by this Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint
_________________________________________________________
as attorney to transfer said shares on the books of Company, with full power of
substitution.
DATED: _______________ 19____ _______________________________
Signature
Signature Guaranteed:
_______________________________
__________________________________________________________________
SEE NOTES ON FOLLOWING PAGE
__________________________________________________________________
NOTES:
1. SIGNATURES FOR THE ELECTION OF CONVERSION AND ASSIGNMENT ABOVE MUST BE
GUARANTEED BY A COMMERCIAL BANK, A TRUST COMPANY OR A MEMBER FIRM OF A
NATIONAL STOCK EXCHANGE.
2. ALL CAPITALIZED TERMS USED IN THE FOREGOING ELECTION OF CONVERSION OPTION
AND ASSIGNMENT SHALL HAVE THE MEANINGS FOR SUCH TERMS THAT ARE SET FORTH
IN THE SERIES D PREFERRED STOCK CERTIFICATE TO WHICH THE ELECTION AND
ASSIGNMENT PAGE IS ATTACHED.
3. THE SIGNATURE ON ANY ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR MODIFICATION.
EXHIBIT 10.1
DEBT CONVERSION AGREEMENT
This Debt Conversion Agreement (the "AGREEMENT") is made effective as
of 17 August 1995 by and between Michael F. Eichner ("EICHNER") and ALPNET,
Inc., a Utah corporation ("ALPNET" or the "COMPANY").
R E C I T A L S:
A. ALPNET has heretofore issued in favor of Eichner a promissory note
in the principal amount of SFr300,000, dated 18 September 1992, a copy of which
note is attached hereto as Exhibit "A" (the "NOTE").
B. As of 17 August 1995, the entire principal balance of the Note
remains unpaid; accrued interest has been paid in full to and including 17
August 1995.
C. In conjunction with ALPNET issuing the Note in favor of Eichner,
ALPNET granted Eichner a security interest (the "SECURITY INTEREST") in certain
assets of ALPNET as more fully set forth on Exhibit A to Form UCC-1 Financing
Statement dated 18 September 1992, a copy of which UCC-1 is attached hereto as
Exhibit "B" (the "UCC-1").
D. The UCC-1 was filed with the state of Utah on 18 September 1992 as
UCC File #336426 and is scheduled to expire on 18 September 1997.
E. Eichner desires to (i) convert all of the principal balance of the
debt evidenced by the Note, in the amount of SFr300,000 into "ALPNET Preferred
Stock" (as herein defined) and (ii) terminate the Security Interest as evidenced
by the UCC-1, and ALPNET desires to issue to Eichner such ALPNET Preferred Stock
and have the Security Interest terminated, all on the terms and conditions as
herein set forth.
NOW, THEREFORE, for and in consideration of the mutual promises and
other consideration herein set forth, it is agreed by the parties as follows:
A G R E E M E N T:
1. CONVERSION OF NOTE TO EQUITY; TERMS OF CONVERSION.
a. CONVERSION PREFERRED SHARES; NUMBER; PRICE.
(1) Contemporaneously herewith, ALPNET shall deliver to Eichner
87,339 newly issued shares of ALPNET Preferred Stock, (the "CONVERSION PREFERRED
SHARES"). It is understood and agreed that the total number of Conversion
Preferred Shares has been determined by dividing the principal amount of the
Note converted to equity, SFr300,000 (U.S. $245,640), by the conversion per
share price of $0.3125, and by dividing that quotient by the conversion ratio of
9 to 1.
(2) Delivery of the Conversion Preferred Shares to Eichner shall
constitute payment in full satisfaction of the total amount due on the Note in
the amount of SFr300,000 (U.S. $245,640). Contemporaneously herewith, Eichner
shall surrender and deliver to ALPNET the original Note for cancellation.
(3) The term "ALPNET PREFERRED STOCK" for purposes of this
Agreement shall mean ALPNET $2.81 convertible, voting, non-cumulative 10%
preferred stock, series D, without par value, in the form attached hereto as
Exhibit "C."
(4) The term "ALPNET COMMON STOCK" for purposes of this
Agreement shall mean ALPNET common, voting, no par value stock.
b. ALPNET PREFERRED STOCK.
(1) ENTIRE ADJUSTMENTS. In case ALPNET shall at any time (i)
subdivide its outstanding shares of ALPNET Common Stock into a greater number of
shares or (ii) pay a dividend in shares of ALPNET Common Stock or make a
distribution in shares of ALPNET Common Stock, the conversion of Conversion
Preferred Shares into ALPNET Common Stock shall be proportionately increased,
and, conversely, in case the outstanding shares of the ALPNET Common Stock shall
be combined into a smaller number of shares, the conversion of the Conversion
Preferred Shares into ALPNET Common Stock shall be proportionately decreased.
In case of any classification, reclassification, or other reorganization of the
capital stock of ALPNET, or in case of the consolidation or merger of ALPNET
with or into another corporation, or the conveyance to another corporation of
all or any major portion of the assets of ALPNET, then, as part of such
classification, reclassification, reorganization, consolidation, merger, or
conveyance, adequate provision shall be made whereby Eichner upon the conversion
of the Conversion Preferred Shares into ALPNET Common Stock shall be entitled to
receive on the same basis and conditions as holders of ALPNET Common Stock, the
stock, securities or other property which Eichner would have been entitled to
receive upon such classification, reclassification or other reorganization,
consolidation, merger or conveyance, if Eichner had converted the Conversion
Preferred Shares immediately prior to such classification, reclassification or
other reorganization, consolidation, merger or conveyance; and, in any such
case, appropriate provision shall be made with respect to the rights and
interests of Eichner to the end that the provisions hereof (including, without
limitation, provisions for adjustment of the number of shares deliverable upon
the conversion of the Conversion Preferred Shares into ALPNET Common Stock)
shall thereafter be applicable, as nearly as may be, in relation to any shares
of stock, securities or other property thereafter deliverable upon the
conversion of the Conversion Preferred Shares into ALPNET Common Stock; and, as
a condition of any such consolidation, merger, or conveyance, any corporation
which shall become successor to ALPNET by reason of such consolidation, merger
or conveyance shall expressly assume the obligation to deliver, upon the
conversion of the Conversion Preferred Shares into ALPNET Common Stock, such
shares of stock, securities or other consideration as Eichner shall be entitled
to receive pursuant to the provisions hereof. The foregoing provisions shall
similarly apply to successive classifications, reclassifications, or other
reorganizations and to successive consolidations, mergers, and conveyances of or
by any such successor.
c. RESTRICTIONS.
(1) The Conversion Preferred Shares shall bear a restrictive
legend (the "RESTRICTIVE LEGEND") that is substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS. THIS SECURITY MAY
NOT BE SOLD OR TRANSFERRED UNLESS IT IS REGISTERED UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE ISSUER RECEIVES AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
(2) Eichner does hereby represent and warrant to ALPNET that all
shares and securities acquired or to be acquired by Eichner hereunder are being
acquired for investment purposes only, for his own account and not with a view
to resale or redistribution.
d. REGISTRATION.
(1) ALPNET does hereby agree to register with the United States
Securities and Exchange Commission (the "S.E.C.") and to qualify under any
applicable Blue Sky or other state securities laws, from time to time, the offer
and sale by Eichner of ALPNET Common Stock issued, from time to time, as a
result of the conversion of the Conversion Preferred Shares. Any registrations
and qualifications provided for herein shall be accomplished within 90 days
after ALPNET files its next annual Form 10-K report with the S.E.C. following
the conversion of the Conversion Preferred Shares into ALPNET Common Stock;
provided, however, that ALPNET shall not be required to register and/or qualify
fewer than 200,000 shares in any one registration and/or qualification.
(2) All expenses incurred in connection with any registration or
qualification pursuant to this Paragraph 1.d., including, without limitation,
all registration, filing, and qualification fees, printing expenses, fees and
disbursements of counsel for ALPNET, and expenses of any special audits
incidental to or required by such registration, shall be borne by ALPNET.
(3) In the case of each registration and qualification effected
by ALPNET pursuant to this Paragraph 1.d., ALPNET will keep Eichner advised in
writing as to the initiation of each such registration and qualification and as
to the completion thereof. At its expense ALPNET will:
(a) Keep such registration and qualification effective for
a period of 120 days (or for successive 12-month periods, as necessary, for
preregistrations), or until the distribution described in the registration
statement relating thereto has been completed, whichever first occurs; and
(b) Furnish such number of prospectuses and other documents
incident thereto as Eichner from time to time may reasonably request.
(4) ALPNET will indemnify Eichner with respect to any
registration and qualification effected pursuant to this Paragraph 1.d. against
all claims, losses, damages, and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration or qualification, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
ALPNET of any rule or regulation promulgated under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), or any state securities law applicable to
ALPNET and relating to action or inaction required of ALPNET in connection with
any such registration or qualification, and will reimburse Eichner for any legal
and any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, provided that
ALPNET will not be liable in any such case to the extent that any such claim,
loss, damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to ALPNET by an instrument
duly executed by Eichner specifically for use therein.
Eichner will indemnify ALPNET, each of its directors and officers who sign such
registration statement, and each person who controls ALPNET within the meaning
of the Securities Act, with respect to any registration and qualification
effected pursuant to this Paragraph 1.d., against all claims, losses, damages,
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement of a material fact contained in any registration statement,
prospectus, offering circular or other document incident to any such
registration or qualification or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse ALPNET, and such other directors, officers or
other persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent, but only to the extent, that
such untrue statement or omission is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to ALPNET by an instrument duly
executed by Eichner specifically for use therein.
Each party entitled to indemnification under this Paragraph 1.d.(4) (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying party of
its obligations under this paragraph. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(5) Eichner shall furnish to ALPNET such written information
relating to him and the distribution proposed by him as ALPNET may request in
writing and as shall be required in connection with any registration or
qualification referred to in this Paragraph 1.d.
e. RESERVATION OF SHARES. There have been reserved, and ALPNET shall
at all times keep reserved, out of its authorized and unissued ALPNET Common
Stock a number of shares of ALPNET Common Stock sufficient to provide for the
exercise of the rights of purchase represented by the conversion of the issued
and outstanding ALPNET Preferred Stock. The transfer agent for the ALPNET
Common Stock (the "TRANSFER AGENT") and every subsequent transfer agent for any
shares of ALPNET's capital stock issuable upon the exercise of any of the rights
of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be requisite for such
purpose. ALPNET will keep a copy of this Agreement on file with the Transfer
Agent and with every subsequent transfer agent for any shares of ALPNET's
capital stock issuable upon the conversion of the Conversion Preferred Shares
into ALPNET Common Stock.
2. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company hereby
represents and warrants to Eichner that on and as of the date hereof:
a. DUE INCORPORATION AND STANDING. The Company is duly incorporated
and validly existing in good standing under the laws of the state of Utah, with
full corporate power to own its properties and conduct its business as currently
conducted. The Company is not qualified, nor to its knowledge is it required
under applicable local law to be qualified, to do business in any other
jurisdiction.
b. AUTHORIZATION. The execution, delivery and performance of this
Agreement and each of the transactions contemplated hereby have been duly and
validly authorized by the board of directors of the Company, and the Company has
taken all other necessary corporate action to authorize and approve this
Agreement and the consummation of the transactions contemplated hereby.
c. RESTRICTED SECURITIES. The securities issued or to be issued
under this Agreement will be issued as restricted securities in a private
offering pursuant to an exemption from registration therefor under the
Securities Act.
d. MATERIAL CONTRACTS. The Company is not in violation of any
material provision of any material contract or agreement to which the Company is
a party, by which it is bound or to which its property is subject (collectively
the "MATERIAL CONTRACTS").
e. ABSENCE OF CONFLICT. The execution and delivery of this Agreement
by the Company and the consummation of the transactions contemplated hereby do
not conflict with or breach any provision of the articles of incorporation or
bylaws of the Company or of any Material Contract, and the Company does not know
of any breach of its articles of incorporation.
f. LITIGATION. There are no existing or pending, and the Company
does not know of any threatened, material claims of any kind or any actions,
suits, proceedings or investigations against (i) the Company, (ii) any director,
officer, agent or employee of the Company, in his or her business capacity as
such, or (iii) the business or properties of the Company.
g. AUTHORIZED CAPITAL. The Company is authorized to issue 40,000,000
shares of ALPNET Common Stock, of which 15,562,223 shares are issued and
outstanding. The Company is authorized to issue 2,000,000 shares of preferred
stock (in different series, as authorized by the Company's board of directors,
from time to time), of which 459,411 shares of Series B Preferred Stock and
584,257 shares of Series C Preferred Stock are presently issued and outstanding.
The Company currently has no warrants issued or outstanding. The Company has
reserved 1,200,000 shares of Common Stock for issuance under employee stock
option plans, of which approximately 690,000 shares are presently subject to
outstanding options which have not been exercised. There are no other shares of
the Company's capital stock issued and outstanding except as set forth above,
nor are there outstanding (i) any other securities convertible into or
exchangeable for any of the Company's capital stock or (ii) any other rights to
purchase or subscribe for capital stock, or securities convertible into or
exchangeable for capital stock, of the Company.
3. MISCELLANEOUS PROVISIONS.
a. NOTICES. Notice required by this Agreement shall be given in
writing sent by U.S. Mail, Federal Express (or equivalent courier service) or
facsimile telecopy addressed as follows (or to such other address subsequently
provided in writing by such party):
Eichner: Ashurstwoodhouse Hammerwood Rd.
Ashurstwood
Sussex, U.K. RH193RX
Fax No. 011-44-34-282-3755
ALPNET: 4444 South 700 East, #200
Salt Lake City, UT 84107-3075
Fax No. (801) 265-3310
b. ASSIGNMENT. Except as herein provided, this Agreement may not be
assigned by either party without the written consent of the other party first
had and obtained.
c. ENTIRE AGREEMENT. The parties acknowledge that this Agreement and
the instruments referred to herein contain their entire understanding with
respect to the specific matters referred to herein and supersede all prior
understandings, correspondence, memoranda, representations, negotiations,
letters of intent or other prior agreements with respect thereto and that this
Agreement may not be amended or modified except by a written instrument signed
by all parties affected thereby.
d. APPLICABLE LAW. It is understood and agreed that the laws of the
state of Utah shall apply to all aspects of this transaction which may relate to
the issuance, purchase, sale or transfer of securities. As to all other aspects
of this transaction, the substantive laws of the United Kingdom (or at the sole
option of Eichner, the laws of the state of Utah) shall govern the construction
and interpretation of this Agreement and the rights and remedies of the parties.
In that regard, the parties expressly submit themselves to the jurisdiction of
Utah state courts and/or the United States District Court for the District of
Utah, Central Division (if Eichner elects Utah law), in any action or proceeding
arising out of this Agreement.
e. WAIVER. No waiver of any breach or default by any party to this
Agreement shall be considered to be a waiver of any other breach or default.
f. SEVERABILITY. Whenever possible, each provision of this Agreement
and every related document shall be interpreted in such manner as to be valid
under applicable law; however, if any provision of any of the foregoing is
invalid or prohibited under applicable law, then such provision shall be
ineffective to the extent of such invalidity or prohibition without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
g. COUNTERPARTS. For the convenience of the parties, this Agreement
may be executed in counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument. The counterparts are in all respects identical, and each of the
counterparts shall be deemed to be complete in itself so that any one may be
introduced in evidence or used for any other purpose without the production of
the other counterparts. This Agreement shall be effective when one or more of
such counterparts has been executed by each party and delivered. If a party
receives a facsimile transmission of this Agreement from another party, which
transmission bears the signature of the other party, then it shall be deemed
that (a) the Agreement that is sent by facsimile transmission conforms to the
original, (b) the original Agreement bears a genuine signature of the other
party, and (c) the Agreement has been delivered by the other party. In such
event, the other party shall send an original of the Agreement to the receiving
party by regular mail.
h. AUTHORIZATION. Each individual executing this Agreement does
thereby represent and warrant to any other individual so signing (and to each
other entity for which another individual is signing) that the individual has
been duly authorized to deliver this Agreement in the capacity and for the
entity that is set forth where he signs.
i. COSTS AND ATTORNEYS' FEES. In the event that either party shall
be required to engage legal counsel to enforce the provisions of this Agreement,
the prevailing party shall be entitled to recover all cost and expenses,
including reasonable attorneys' fees, whether suit be instituted or not.
IN WITNESS WHEREOF, the parties have signed this Agreement effective as of
the day and year first set forth above.
\s\ Michael F. Eichner
MICHAEL F.EICHNER
ALPNET, INC.
By: \s\ Thomas F. Seal
THOMAS F. SEAL
President
ATTEST:
\s\ D. Kerry Stubbs
D. KERRY STUBBS
Secretary
Schedule of Exhibits
to
Debt Conversion Agreement
Referred to in
Exhibit Description Paragraph
Exhibit A SFr300,000 Promissory Note, A
dated 18 September 1992
Exhibit B UCC-1 Financing Statement, C
dated 18 September 1992
Exhibit C Form of ALPNET Preferred Stock
Certificate 1(a)(3)
EXHIBIT 10.2
STOCK PURCHASE AND SALE AGREEMENT
THIS STOCK PURCHASE AND SALE AGREEMENT (this "AGREEMENT"), is made and
entered into this 20th day of November 1995, by and between ALPNET, INC. whose
address is 4444 South 700 East, Suite 204, Salt Lake City, Utah, 84107-3075, USA
("ALPNET" or the "SELLER"), and JAAP VAN DER MEER of Oosteinde No. 9, 1483 AB De
Rijp, The Netherlands, (the "PURCHASER").
R E C I T A L S:
WHEREAS, Purchaser desires to purchase US$200,000 worth of Seller's
restricted common stock at a purchase price of $0.34375 per share solely for
investment purposes in reliance on Regulation D promulgated under the Securities
Act of 1933 (the "ACT"); and
WHEREAS, in connection with the acquisition of ALPNET restricted common
stock by Purchaser, Seller desires to grant Purchaser an option to purchase an
additional 500,000 shares of Seller's restricted common stock (collectively, the
"OPTION SHARES"); and
WHEREAS, Purchaser and Seller have entered into a Heads of Agreement dated
29 September 1995 with regard to these transactions which is being superseded by
this Agreement and its Exhibits; and
WHEREAS, the parties desire to set forth herein the terms and conditions
governing the purchase and sale of ALPNET restricted common stock and the Option
Shares.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
conditions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. SALE AND DELIVERY OF SHARES AND PAYMENT THEREFOR. Seller hereby sells,
assigns, transfers and herewith delivers to Purchaser Five Hundred Eighty-One
Thousand Eight Hundred and Eighteen (581,818) restricted common shares of ALPNET
(collectively, the "PURCHASED SHARES"). In exchange and as payment in full for
the Purchased Shares and against delivery thereof, Purchaser shall pay to Seller
the sum of One Hundred Ninety-Nine Thousand Nine Hundred Ninety-Nine and
94/100ths Dollars (US$199,999.94), payable in cash or by cashier's or other
funds acceptable to Seller.
2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Purchaser as follows:
2.1. OWNERSHIP OF PURCHASED SHARES. Seller owns and holds beneficially
and of record the Purchased Shares and has good and marketable title to said
Purchased Shares free and clear of all liens, pledges and encumbrances of any
kind whatsoever.
2.2. AUTHORIZATION. Seller has the absolute right, power, authority and
capacity to enter into and perform this Agreement in accordance with its terms
and to assign, transfer and deliver the record, legal and beneficial ownership
of the Purchased Shares to the Purchaser as provided in this Agreement without
any other or further authorization, action or proceeding.
2.3. EXECUTION. The execution and performance of this Agreement by
Seller will not violate, or result in a breach of, or constitute a default under
any agreement, instrument, judgment, order or decree to which Seller is a party
or to which Seller may be subject, nor will such execution or performance
constitute a violation of any fiduciary duty to which Seller is subject.
2.4. CAPITALIZATION. ALPNET's authorized capitalization consists of (i)
40,000,000 shares of common stock, no par value per share, of which 15,562,223
shares are issued and outstanding, 1,200,000 shares of which are reserved for
issuance under ALPNET's stock option plans, and (ii) 2,000,000 shares of
convertible preferred stock, no par value per share, of which 1,131,007 shares
are issued and outstanding, which are convertible into 7,422,597 shares of
common stock.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller as follows:
3.1. INVESTMENT INTENT. The Purchased Shares being acquired by
Purchaser hereunder from Seller are for investment and not with a view to or for
sale in connection with any distribution of the Purchased Shares, and Purchaser
will sign and deliver to Seller, upon Seller's demand, an "investment letter" at
such time and in such form and content as may be acceptable to Seller or
Seller's counsel.
3.2. RESTRICTED NATURE OF PURCHASED SHARES. Purchaser acknowledges that
the Purchased Shares are "restricted" securities, as defined by the U.S.
Securities Act of 1933, as amended, and the certificates evidencing the
Purchased Shares being sold to Purchaser shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and their sale, pledge or other
transfer is subject to the provisions of said Act. The shares represented
by this certificate are taken subject to the restrictions on
transferability specified in said Act, and no transfer of such shares shall
be valid or effective until such conditions have been fulfilled and
registration of such shares has been effectuated, or in the opinion of
counsel of the issuer thereof, such registration is not required."
3.3. ACCESS TO INFORMATION. Purchaser hereby acknowledges that Seller
has made no representations except as expressly set forth in paragraph 2 of this
Agreement and that Purchaser has had free access to the books and records
(financial and otherwise) of ALPNET. Further, Purchaser acknowledges that he
has been given access to the same kind of information as, to the best of his
knowledge, would be furnished in a Registration Statement under the U.S.
Securities Act of 1933, as amended, and that he currently has access to such
additional information as he deems necessary to verify the accuracy of such
information.
3.4. AUTHORIZATION. Purchaser has the absolute right, power and
authority and capacity to enter into and perform this Agreement in accordance
with its terms without any other or further authorization, action or proceeding.
4. DEFAULT. In the event that any of the following occur, the non-
defaulting party shall be entitled to terminate this Agreement and to pursue any
and all legal rights and remedies which it may have against the defaulting
party:
4.1. Any written representation, warranty or statement made by either
party hereto, or any written statement, report or document which is required to
be furnished to either party hereunder, is materially false or misleading; or
4.2. Failure of either party to comply with any or all terms of this
Agreement, provided that such failure has continued for thirty (30) days
following receipt by the other party of written notice specifying with
particularity such failure and requesting the defaulting party to cure such
failure.
5. STOCK OPTIONS. In conjunction with the acquisition of the Purchased
Shares and the employment of Purchaser by Seller, Seller hereby grants to
Purchaser an option (the "OPTION") to purchase 500,000 shares of Seller's
unissued but authorized restricted common stock, no par value (the "OPTION
SHARES"), on the terms and conditions that are set forth in this Agreement.
5.1. VESTING OF OPTION. The Option shall vest and become exercisable
immediately upon execution of this Agreement.
5.2. EXERCISE PRICE. The exercise price of the Option Shares shall be
US$0.34375 per share.
5.3. RIGHT TO EXERCISE; EXPIRATION OF OPTION. Purchaser has the right
to exercise the Option only while Purchaser is an employee, officer or director
of Seller. Any portion of the Option which has not been exercised by Purchaser
will expire on 1 September 2000, unless sooner terminated by the terms of this
Agreement.
5.4. METHOD OF EXERCISE. The Option shall be exercisable by a written
notice which shall:
5.4.1. State the election to exercise the Option,
the number of shares in respect of which it is being exercised, and
Purchaser's current address and Social Security Number (if applicable);
5.4.2. Contain such representations and
agreements as to Purchaser's investment intent with respect to such shares
as may be satisfactory to Seller's counsel; and
5.4.3. Be signed by Purchaser.
5.5. PAYMENT OF EXERCISE PRICE. Payment of the exercise price of any
shares with respect to which the Option is being exercised shall be paid in full
in United States dollars or by certified funds and shall be delivered with the
notice of exercise; provided, however, that at the discretion of Purchaser, the
exercise price may be paid in full or in part with stock of ALPNET valued at
fair market value as of the date of exercise of the Option. The Shares shall be
issued upon payment in full therefor. Until the issuance of the stock
certificates, no rights as a shareholder shall exist with respect to Option
Shares notwithstanding the exercise of the Option. No adjustment will be made
for a dividend or other rights for which the record date is prior to the date
the stock certificate is issued.
5.6. RESTRICTIONS ON EXERCISE AND SHARES. As a condition to his
exercise of the Option, Seller may require Purchaser to make such
representations and warranties to Seller as may be required by applicable law or
regulation. Purchaser acknowledges and understands that the shares issued
pursuant to the exercise of the Option will be restricted or legend securities
and will be so marked and identified.
5.7. NON-TRANSFERABILITY OF OPTION. The Option may not be transferred
by Purchaser and may be exercised during the lifetime of Purchaser only by him
and only while he is an employee, officer, director or independent contractor of
ALPNET, except that if his employment or position terminates by reason of his
death, to the extent that the Option remains unexercised on the date of
Purchaser's death, such unexercised option of the Option may be exercised within
six (6) months after the death of Purchaser, but in no event later than 1
September 2000, by, and only by, the person or persons to whom his rights under
the Option shall have passed by Will or by the laws of descent and distribution.
6. GENERAL PROVISIONS. The following provisions are also integral parts
of this Agreement:
6.1. BINDING AGREEMENT. This Agreement shall be binding upon and shall
inure to the benefit of the successors, heirs and assigns of the respective
parties hereto.
6.2. CAPTIONS. The headings used in this Agreement are inserted for
reference purposes only and shall not be deemed to define, limit, extend,
describe or affect in any want the meaning, scope or interpretation of any of
the terms or provisions of this Agreement or the intent hereof.
6.3. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement between the parties and supersedes all prior
agreements, representations or understandings between the parties relating to
the subject matter hereof. All preceding agreements relating to the subject
matter hereof, whether written or oral, are hereby merged into this Agreement.
6.4. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures upon any counterpart were
upon the same instrument, and all signed counterparts shall be deemed to be one
original.
6.5. SEVERABILITY. The provisions of this Agreement are severable, and
should any provision hereof be void, voidable, unenforceable or invalid, such
void, voidable, unenforceable or invalid provisions shall not affect any other
provision of this Agreement.
6.6. WAIVER OF BREACH. Any waiver by either party hereto of any breach
of any kind or character whatsoever by the other party, whether such be direct
or implied, shall not be construed as a continuing waiver of or consent to any
subsequent breach of this Agreement on the part of the other party.
6.7. CUMULATIVE REMEDIES. The several rights and remedies herein shall
be construed as cumulative and none of them shall be exclusive of, or in lieu of
limitation of, any other right, remedy, or priority allowed by law.
6.8. AMENDMENT. This Agreement may not be modified except by a written
instrument signed by the parties hereto.
6.9. TIME OF ESSENCE. The parties agree that time is of the essence in
the performance of all duties herein.
6.10. INTERPRETATION. This Agreement shall be interpreted, construed
and enforced in accordance with the laws of the State of Utah, except as federal
law may apply.
6.11. ATTORNEY'S FEES. In the event any action or proceeding is brought
by either party against the other under this Agreement, the prevailing party
shall be entitled to recover its reasonable attorney's fees and costs, with or
without suit or before or after judgment.
6.12. NOTICES. All notices required or permitted to be given hereunder
shall be duly given if, and as of, delivered or mailed by registered or
certified mail, postage prepaid, addressed to the following:
If to Seller, to:
ALPNET, INC.
4444 South 700 East, Suite 204
Salt Lake City, Utah 84107-3075
USA
Attn: D. Kerry Stubbs
If to Purchaser, to:
JAAP VAN DER MEER
Oosteinde No. 9
1483 AB De Rijp
The Netherlands
Either party shall have the right to specify in writing in the manner above
provided another address to which subsequent notices shall be given.
6.13. SECURITIES LAWS. The transactions herein contemplated and the
purchase of the Purchased Shares constitutes an offer or sale of securities
under United States federal and state securities laws, and this transaction
shall be consummated with reliance upon exemption from registration or any
prospectus or delivery requirements of Section 5 of the Securities Act of 1933
and reliance upon exemption from state securities laws.
6.14. REASONABLE DOCUMENTATION. Each party hereby agrees to furnish the
other with such other documents, agreements and undertakings as may be
reasonably required to effectuate the intent of this Agreement.
6.15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
obligations of the parties hereto, and all representations and warranties made
by the parties herein, shall survive the execution of this Agreement.
DATED EFFECTIVE the day, month and year first above written.
SELLER:
ALPNET, INC., a Utah corporation
By: \s\ Thomas F. Seal
THOMAS F. SEAL
Its President
PURCHASER:
\s\ Jaap van der Meer
JAAP VAN DER MEER
<TABLE>
E X H I B I T 1 1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<CAPTION>
(Thousands of dollars and shares)
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net income (loss) $348 $ 25 $368 $(646)
Weighted average shares of Common
Stock outstanding 15,847 15,562 15,657 15,562
Weighted average shares of
Common Stock issuable upon
conversion of Convertible
Preferred Stock (2) 7,021 6,637 6,765 2,237
Total shares of Common Stock and
Common Stock equivalents 22,868 22,199 22,422 17,799
Net income (loss) per share $.015 $.001 $.016 $(.036)
<FN>
(1) Primary and fully diluted per share earnings (loss) are substantially the
same for each period presented.
(2) Common Stock issuable upon conversion of Convertible Preferred Stock was
antidilutive for certain periods in 1994.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 786
<SECURITIES> 0
<RECEIVABLES> 5343
<ALLOWANCES> 193
<INVENTORY> 0
<CURRENT-ASSETS> 7173
<PP&E> 3893
<DEPRECIATION> 2929
<TOTAL-ASSETS> 14693
<CURRENT-LIABILITIES> 5891
<BONDS> 234
<COMMON> 38327
0
3127
<OTHER-SE> (32886)
<TOTAL-LIABILITY-AND-EQUITY> 14693
<SALES> 19751
<TOTAL-REVENUES> 19751
<CGS> 16898
<TOTAL-COSTS> 16898
<OTHER-EXPENSES> 2195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 160
<INCOME-PRETAX> 498
<INCOME-TAX> 130
<INCOME-CONTINUING> 368
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 368
<EPS-PRIMARY> .016
<EPS-DILUTED> .016
</TABLE>
