As filed with the Securities and Exchange Commission on May 16, 1995.
Registration No. 33-
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============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
---------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1097006
- ---------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
851 Irwin Street, Suite 200
San Rafael, California 94901
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(Address of principal executive offices, including zip code)
Non-Employee Directors' Stock Option Plan
Non-Plan Directors Options
--------------------------
(Full title of the plan)
Richard A. Niglio
President and Chief Executive Officer
Children's Discovery Centers of America, Inc.
851 Irwin Street, Suite 200
San Rafael, California 94901
----------------------------
(Name and address of agent for service)
(415) 257-4200
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(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
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Title of Amount to Proposed Proposed Amount of
securities be registered maximum maximum registrat
to be offering aggregate ion fee
registered price offering
per unit price
- ---------------------------------------------------------------------------
Common Stock, 69,000 $8.00(2) $552,000 $191
par value shares(1)
$.01 per share -----------------------------------------------------------
111,000 $16.81(4) $1,865,910 $643
shares(3)
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14,000 $6.00(6) $84,000 $28
shares(5)
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Total Registration Fee $862
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(1) Constitutes shares issuable upon exercise of options previously
granted under the Non-Employee Directors' Stock Option Plan.
(2) Represents the exercise price of the options referred to in (1)
above.
(3) Constitutes the remainder of the shares available for future
grants of options under the Non-Employee Directors' Stock Option
Plan.
(4) Estimated solely for purposes of determining the registration fee
in accordance with Rule 457(h) under the Securities Act of 1933,
using the average of the high and low prices of the Registrant's
Common Stock reported on the Nasdaq National Market on May 10,
1995.
(5) Constitutes shares issuable upon exercise of options granted to
non-employee directors in 1992.
(6) Represents the exercise price of the options referred to in (5)
above.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
The following documents filed with the Securities and Exchange
Commission are incorporated into this registration statement by reference:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994;
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995;
(c) The description of the Registrant's Common Stock, par value $.01
per share, contained in the Registrant's Registration Statement on Form 8-A
dated March 27, 1986, as amended by Amendment No. 1 dated March 28, 1994;
and
(d) All other reports filed by the Registrant pursuant to Section
13(c) or 15(d) of the Securities Exchange Act of 1934, as amended, since
December 31, 1994.
All reports and other documents filed by the Registrant pursuant
to sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this Registration Statement but prior to the filing
of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of each such report or other document.
Item 4. Description of Securities
-------------------------
Not applicable
Item 5. Interests of Named Experts and Counsel
--------------------------------------
The validity of the securities being offered hereunder has been passed
upon by Frank A. Devine. Mr. Devine is Secretary and General Counsel of
the Registrant.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Section 145 of the General Corporation Law of Delaware grants each
corporation organized thereunder the power to indemnify its officers,
directors, employees and agents on certain conditions against liabilities
arising out of any action or proceeding to which any of them is a party by
reason of being such officer, director, employee or agent. Section
102(b)(7) of the General Corporation Law permits a Delaware corporation,
with the approval of its stockholders, to include within its Certificate of
Incorporation a provision eliminating or limiting the personal liability of
its directors to that corporation or its stockholders for monetary damages
resulting from certain breaches of the directors' fiduciary duty of care,
both in suits by or on behalf of the corporation and in actions by
stockholders of the corporation.
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<PAGE>
The Registrant's Certificate of Incorporation includes an Article which
allows the company to take advantage of Section 102(b)(7) of the Delaware
General Corporation Law. The Certificate of Incorporation also provides
for the indemnification, to the fullest extent permitted by the Delaware
General Corporation Law, of officers and directors of the Registrant against
all expenses (including attorneys' fees), liabilities, judgments, fines and
amounts paid in settlement, and advance to each officer and director
expenses (including attorneys' fees) incurred by such officer or director
in defending a civil or criminal action, suit or proceeding upon receipt of
an undertaking by or on behalf of such officer or director to repay such
expenses if it is ultimately determined that such officer or director is
not entitled to be indemnified by the Registrant.
The Registrant's By-Laws include an Article which provides that any
person made a party to any action, suit or proceeding, by reason of the
fact that he, his testator or intestate representative is or was a
director, officer or employee of the Registrant, or of any corporation in
which he served as such at the request of the Registrant, shall be indemnified
by the Registrant against the reasonable expenses, including attorneys' fees,
actually and necessarily incurred by him in connection with the defense of
such action , suit or proceedings, or in connection with any appeal
therein, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding, or in connection with any appeal therein
that such officer director or employee is liable for negligence or
misconduct in the performance of his duties.
The Registrant has purchased $2,000,000.00 of directors and officers
liability insurance coverage on a claims made basis.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable
Item 8. Exhibits
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The following is a list of Exhibits required by Item 601 of Regulation
S-K filed as part of this Registration Statement.
4(a) The Children's Discovery Centers of America, Inc.'s Non-Employee
Directors' Stock Option Plan (the "Stock Option Plan")
4(b) Form of Stock Option Agreement for Non-Employee Directors under the
Stock Option Plan
4(c) Form of Non-Plan Stock Option Agreement for Non-Employee Directors
4(d)(i) Certificate of Incorporation filed on December 23, 1983, filed as
Exhibit 3(A) to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1994 (the "1994 Form 10-K"), which Exhibit is
incorporated herein by reference.
- 3 -
<PAGE>
4(d)(ii) Certificate of Amendment to Certificate of Incorporation filed on
July 12, 1984, filed as Exhibit 3(B) to the 1994 Form 10-K, which
Exhibit is incorporated herein by reference.
4(d)(iii) Certificate of Amendment to Certificate of Incorporation filed on
January 25, 1985, filed as Exhibit 3(C) to the 1994 Form 10-K, which
Exhibit is incorporated herein by reference.
4(d)(iv) Certificate of Amendment to Certificate of Incorporation filed on
August 19, 1985, filed as Exhibit 3(D) to the 1994 Form 10-K, which
Exhibit is incorporated herein by reference.
4(d)(v) Certificate of Amendment to Certificate of Incorporation filed on
May 27, 1987, filed as Exhibit 3(E) to the 1994 Form 10-K, which
Exhibit is incorporated herein by reference.
4(d)(vi) Certificate of Amendment to Certificate of Incorporation filed on
June 2, 1988, filed as Exhibit 3(F) to the 1994 Form 10-K, which
Exhibit is incorporated herein by reference.
4(d)(vii) Certificate of Amendment to Certificate of Incorporation filed on
March 18, 1991, filed as Exhibit 3(G) to the 1994 Form 10-K, which
Exhibit is incorporated herein by reference.
4(d)(viii) Certificate of Amendment to Certificate of Incorporation filed
on October 10, 1991, filed as Exhibit 4(A) to Form S-2 Registration
Statement No. 33-92533, which Exhibit is incorporated herein by
reference.
4(d)(ix) Certificate of Amendment to Certificate of Incorporation filed on
July 29, 1992, filed as Exhibit 3(H) to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1992 ("1992 Form 10-K"),
which Exhibit is incorporated herein by reference.
4(d)(x) Certificate of Designation, Preferences and Rights of Series A
Convertible Preferred Stock filed November 5, 1992 as Exhibit 4(D) to
the 1992 Form 10-K, which Exhibit is incorporated herein by reference.
4(d)(xi) Certificate of Amendment to Certificate of Incorporation filed on
December 6, 1993, filed as Exhibit 3(a) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1993, which
Exhibit is incorporated herein by reference.
4(e) By-Laws of the Registrant filed as Exhibit (3)(g) to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1989, which
Exhibit is incorporated herein by reference.
5 Opinion of Frank A. Devine, Esq.
23(a) Consent of Arthur Andersen LLP
- 4 -
<PAGE>
23(b) Consent of Counsel, contained in the opinion filed as Exhibit 5
hereto
24 Power of Attorney (see Signature Page)
Item 9. Undertakings
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act")
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
Provided, however, that paragraphs (1) (i) and (1) (ii) do
-----------------
not apply if the registration statement is on Form S-3, Form S-8 or form F-
3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
- 5 -
<PAGE>
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling persons in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
- 6 -
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Rafael, State of California,
on May 15, 1995.
CHILDREN'S DISCOVERY CENTERS
OF AMERICA, INC.
By:/s/R.A. Niglio
------------------------------
R. A. Niglio
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints each of Richard A. Niglio and
Randall A. Truelove, his true and lawful attorney-in-fact and agent with
full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with all exhibits
thereto, and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- ------------------------- ----- ----
/s/R.A. Niglio Chairman of the Board May 15, 1995
- ------------------------ (principal executive officer)
R. A. Niglio
/s/Randall J. Truelove Controller (principal May 15, 1995
- ------------------------ financial and accounting
Randall J. Truelove officer)
/s/Mark P. Clein Director May 15, 1995
- ------------------------
Mark P. Clein
/s/Michael J. Connelly Director May 15, 1995
- ------------------------
Michael J. Connelly
/s/Robert E. Kaufmann Director May 15, 1995
- ------------------------
Robert E. Kaufmann
/s/Wallace McDowell Director May 15, 1995
- ------------------------
W. Wallace McDowell
/s/Richard A. Niglio Director May 15, 1995
- ------------------------
Richard A. Niglio
/s/Myron A. Wick, III Director May 15, 1995
- ------------------------
Myron A. Wick, III
- 8 -
<PAGE>
EXHIBIT INDEX
The following is a list of exhibits required by Item 601 of Regulation
S-K filed as part of this Registration Statement.
Exhibit
Number Description of Exhibit
- ------- -------------------------------------------------------------------
4(a) The Children's Discovery Centers of America, Inc.'s
Non-Employee Directors' Stock Option Plan (the "Stock
Option Plan")
4(b) Form of Stock Option Agreement for Non-Employee Directors
under the Stock Option Plan
4(c) Form of Non-Plan Stock Option Agreement for Non-Employee
Directors
5 Opinion of Frank A. Devine, Esq.
23(a) Consent of Arthur Anderson LLP
23(b) Consent of Counsel(contained in the opinion filed as
Exhibit 5 hereto)
Exhibit 4(a)
------------
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
Non-Employee Directors' Stock Option Plan
1. Establishment. There is hereby established the Children's
-------------
Discovery Centers of America, Inc. Non-Employee Directors' Stock Option
Plan (hereinafter referred to as the "Directors' Plan" or the "Plan")
pursuant to which certain directors of CHILDREN'S DISCOVERY CENTERS OF
AMERICA, INC. (the "Company") may be granted options to purchase shares of
Class A Common Stock, par value $.01 per share ("Common Stock"), and
thereby share in the future growth of the business. The purpose of the
Directors' Plan is to provide an inducement to obtain and retain the
services of qualified persons who are not employees or officers of the
Company to serve as members of its Board of Directors.
2. Status of Options. The options to be issued pursuant to this
-----------------
Directors' Plan ("Options") shall not constitute incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
3. Eligibility. All directors of the Company who are not employees
-----------
of the Company or any of its subsidiaries (collectively, the
"Participants") shall be eligible to receive Options under this Directors'
Plan.
4. Number of Shares Covered by Options; No Preemptive Rights. The
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total number of shares which may be issued and sold pursuant to Options
granted under this Directors' Plan shall be 180,000 shares of Common Stock
(or the number and kind of shares of stock or other securities which, in
accordance with Section 8 of this Directors' Plan, shall be substituted for
such shares of Common Stock or to which said shares shall be adjusted; all
references to shares of Common Stock are deemed to be references to said
shares or shares so adjusted). The issuance of shares upon exercise of an
Option shall be free from any preemptive or preferential right of
subscription or purchase on the part of any stockholder. If any
outstanding Option granted under this Directors' Plan is terminated, for
any reason, the shares of Common Stock subject to the unexercised portion
of the Option will again be available for Options issued under this
Directors' Plan.
5. Administration.
--------------
(a) This Directors' Plan shall be administered by the Board of
Directors. A majority of the members of the Board shall constitute a
quorum. All determinations of the Board shall be made by a majority of
such quorum or by a written consent signed by all members of the Board.
<PAGE>
(b) Options shall be automatically granted to Participants in
accordance with Section 6 hereof and shall be issued upon the terms and
conditions set forth in Section 7 hereof. Accordingly, the persons to whom
Options shall be granted, the number of shares subject thereto and the
material terms and conditions governing the Options will not be subject to
the discretion of the Board. However, if any questions of interpretation
of this Directors' Plan or of any Options issued hereunder shall arise,
they shall be determined by the Board and such determination shall be final
and binding upon all persons having an interest in the Directors' Plan.
(c) The granting of an Option pursuant to this Directors' Plan shall
not confer upon the Participant any right to be continued as a director of
the Company or any of its subsidiaries. In addition, the granting of an
Option pursuant to this Directors' Plan shall not confer upon the
Participant any rights as a stockholder of the Company with respect to any
shares issuable upon exercise of an Option unless and until a certificate
for such shares has been issued and delivered to such Participant.
6. Non-Discretionary Grants. Subject to approval of this Directors'
------------------------
Plan by the stockholders of the Company, during the term of this Directors'
Plan, Options shall be automatically granted to Participants as follows:
(a) an Option to purchase 11,500 shares of Common Stock ("Initial
Option") will be granted to each Participant on the date (the "Initial
Grant Date") which is the earlier of the date on which the public offering
of Common Stock of the Company which is being registered with the
Securities and Exchange Commission on Form S-2, Registration No. 33-70360
(the "Public Offering") commences and December 20, 1993; and
(b) an Option to purchase 3,500 shares of Common Stock will be granted
to each Participant who continues to serve as a director following each
annual meeting of stockholders of the Company at which directors are
elected, commencing with the annual meeting of stockholders conducted in
1995, with the grant of each such option to be deemed effective immediately
following the conclusion of each such meeting; provided that no Participant
may receive options under this Directors' Plan entitling him to purchase,
in the aggregate, in excess of 30,000 shares, at which time such
Participant shall be ineligible to receive any further Options under this
Directors' Plan. If the number of shares remaining in the Directors' Plan
on any date of grant is insufficient to grant each eligible Participant an
Option to purchase 3,500 shares of Common Stock, each eligible Participant
will automatically receive an Option to purchase a number of shares of
Common Stock to be determined by dividing the total number of shares
remaining in the Directors' Plan by the number of eligible Participants at
that time and, if necessary, rounding down to the nearest whole number of
shares.
<PAGE>
7. Terms and Conditions of Options; Stock Option Agreements. Each
--------------------------------------------------------
Option granted pursuant to this Directors' Plan shall be evidenced by a
written agreement between the Participant and the Company which shall be
subject to the following terms and conditions:
(a) The exercise price of each Option shall be one hundred percent
(100%) of the Fair Market Value (as hereinafter defined) of the shares
subject to such Option on the date of grant. For purposes of this Section,
the "Fair Market Value" of a share of Common Stock shall be the closing
sale price per share of the Company's Common Stock as reported on the
NASDAQ National Market System ("NASDAQ/NMS") on the date of grant or, if
the Common Stock is not traded on NASDAQ/NMS on the date of grant, on the
first business day immediately preceding the date of grant during which the
Common Stock was traded (the "Determination Date"). If the Common Stock is
not listed for quotation on NASDAQ/NMS at the time of grant of any Option,
then the Fair Market Value shall be (i) if the Common Stock is then listed
on any national securities exchange, the closing sale price per share as
reported by such exchange on the Determination Date; (ii) if the Common
Stock is listed for quotation on the NASDAQ Small-Cap Market, the mean
between the high bid and low asked prices per share of the Common Stock as
reported by the NASDAQ Small-Cap Market on the Determination Date; or (iii)
if the Common Stock is not listed on the NASDAQ Small-Cap Market, the mean
between the closing bid and asked prices per share of the Common Stock on
the Determination Date as furnished by a broker-dealer which regularly
furnishes price quotations for the Common Stock. Notwithstanding the
foregoing, in the event the Initial Grant Date is the date on which the
Public Offering commences, "Fair Market Value" of the Common Stock on that
date shall be deemed to be the price per share of the Common Stock sold to
the public in the Public Offering.
(b) The exercise price of the shares to be purchased pursuant to an
Option shall be paid (i) in full either in cash or by check, (ii) by
delivery (i.e., surrender) of shares of Common Stock of the Company which
----
have been owned by the Participant for at least six months prior to the
exercise of the Option with a Fair Market Value (as defined above) at the
time of the exercise of the Option equal to the exercise price, or (iii) by
a combination of (i) and (ii). In addition, to the extent permitted by
applicable law, the exercise price may be paid by one or more brokerage
firms pursuant to arrangements whereby such firm or firms, on behalf of a
Participant, shall pay to the Company the exercise price of the Option
being exercised, and the Company, pursuant to an irrevocable notice from
the Participant, shall deliver shares being purchased to such firm.
(c) Options granted shall not be exercisable until they become
vested. All Options shall vest in a Participant as follows: (i) with
respect 30% of the shares subject to such Option, on the date which is six
months following the date of grant, (ii) with respect to an additional 23-
1/3% of the shares
<PAGE>
subject to such Option, on the first anniversary of the date of grant,
(iii) with respect to an additional 23-1/3% of the shares subject to such
Option, on the second anniversary of the date of grant, and (iv) with
respect to the final 23-1/3% of the shares subject to such Option, on the
third anniversary of the date of grant; provided, however, that the vesting
-------- -------
of any portion of an Option on any particular date is conditioned on the
Participant having continuously served as a member of the Board of
Directors through such date. The number of shares as to which an Option
may be exercised shall be cumulative, so that once the Option shall become
exercisable as to any shares, it shall continue to be exercisable as to
said shares until expiration or termination of the Option as provided in
this Directors' Plan. Notwithstanding the foregoing, no Option granted
hereunder may be exercised prior to the date on which this Directors' Plan
is approved by stockholders of the Company as herein contemplated.
(d) Unless sooner terminated in accordance with the provisions of
paragraph (e) of this Section 7, an Option granted hereunder shall expire
on the date which is ten (10) years after the date of grant of the Option.
(e) In the event a Participant ceases to be a member of the Board of
Directors for any reason other than cause, any then unexercised portion of
Options granted to such Participant, to the extent not vested on the date
the Participant ceases to be a director (the "Termination Date"), will
immediately terminate and become void; any portion of an Option which is
vested on the Termination Date but has not yet been exercised may be
exercised, to the extent it is vested on the Termination Date, within one
year after the Termination Date. In the event of the Participant's death,
the Option may be exercised, if and to the extent that such deceased
Optionee was entitled to exercise the Option at the time of death, by the
person or persons to whom the deceased Participant's rights pass by will or
by the laws of descent and distribution of the state of his or her domicile
at the time of his or her death. In the event that a Participant ceases to
serve as a director for cause, all Options theretofore granted to such
Participant under this Directors' Plan shall, to the extent not theretofore
exercised, terminate on the Termination Date, whether or not any portion or
all of such Option is vested.
(f) Each Option granted under this Directors' Plan shall be
non-transferable by the Participant except by will or by the laws of
descent and distribution, or pursuant to a qualified domestic relations
order.
(g) Unless a registration statement with respect to the shares to be
purchased upon exercise of the Option is in effect under the Securities Act
of 1933, as amended (the "Securities Act"), or any applicable state
securities laws, a Participant's right to purchase the shares issuable upon
exercise thereof shall be subject to the condition that the Company shall
have received such assurance as it may reasonably request that such
purchase
<PAGE>
will be in accordance with an applicable exemption from the registration
requirements of each such law. The Company shall not be obligated to issue
or deliver any shares upon exercise of the Option if to do so would violate
the Securities Act or any state securities law and the Company shall have
no obligation to file any registration statement or to take any other
action required or permitted by any such law. The Company shall give the
Participant and his counsel access to such information as may reasonably be
requested to enable such counsel to express an opinion as to the
availability of an exemption from such registration requirements.
8. Adjustment of Number of Shares. If a dividend or other
------------------------------
distribution shall be declared upon the Common Stock payable in shares of
Common Stock, the number of shares of Common Stock then subject to any
Option granted hereunder, and the number of shares reserved for issuance
pursuant to this Directors' Plan but not yet covered by an Option, shall be
adjusted by adding to each of such shares the number of shares which would
be distributable thereon if such shares had been outstanding on the date
fixed for determining the shareholders entitled to receive such stock
dividend or distribution. If the outstanding shares of Common Stock shall
be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or of another corporation, whether
through reorganization, reclassification, recapitalization, stock split-up,
combination of shares, merger or consolidation, then there shall be
substituted for each share of Common Stock then subject to any such Option
and for each share of Common Stock reserved for issuance pursuant to this
Directors' Plan but not yet covered by an Option, the number and kind of
shares of stock or other securities into which each outstanding share of
Common Stock shall be so changed or for which each such share shall be
exchangeable; provided, however, that in the event that such change or
exchange results from a merger or consolidation, and in the judgment of the
Board such substitution cannot be effected or would be inappropriate, or if
the Company shall sell all or substantially all of its assets, the Company
shall use reasonable efforts to effect some other adjustment of each then
outstanding Option which the Board, in its sole discretion, shall deem
equitable. In the event that there shall be any change, other than as
specified above in this Section 8, in the number or kind of outstanding
shares of Common Stock or of any stock or other securities into which such
shares of Common Stock shall have been changed or for which they shall have
been exchanged, then, if the Board shall determine that such change
equitably requires an adjustment in the number or kind of shares
theretofore reserved for issuance pursuant to the Directors' Plan but not
yet covered by an Option and of the shares then subject to an Option or
Options, such adjustment shall be made by the Board and shall be effective
and binding for all purposes of this Directors' Plan and of each stock
option agreement applicable to Options granted hereunder. In the case of
any substitution or adjustment as provided for in this Section 8, the
aggregate option price in each stock option agreement for all shares
covered thereby prior
<PAGE>
to such substitution or adjustment will be the aggregate option price for
all shares of stock or other securities (including any fraction) which
shall have been substituted therefor pursuant to this Section 8. No
adjustment or substitution provided for in this Section 8 shall require the
Company, in any stock option agreement, to sell a fractional share.
Accordingly, any fraction of a share or other security which results from
any such adjustment or substitution shall be eliminated and not carried
forward to any subsequent adjustment or substitution.
9. Effective Date and Term of Directors' Plan. This Directors' Plan
------------------------------------------
shall become effective on October 14, 1993, the date of its adoption by the
Board of Directors of the Company, but the Plan and the grant of Options
hereunder shall be subject to the approval thereof by the stockholders of
the Company at the next annual meeting of stockholders of the Company.
Except to the extent necessary to govern outstanding Options issued, this
Directors' Plan shall terminate on, and no additional Options shall be
granted after October 14, 2003, unless earlier terminated by the Board of
Directors in accordance with Section 10 hereof.
10. Termination and Amendment of Plan. This Directors' Plan may be
---------------------------------
terminated or amended from time to time by vote of the Board of Directors;
provided, however, that no such termination or amendment shall materially
- -------- -------
adversely affect or impair any then outstanding Option without the consent
of the Participant, and provided further, that the provisions of this
-------- -------
Directors' Plan specified in Rule 16b-3(c)(2)(ii)(A) of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (as in effect on the effective date of this Directors'
Plan) may not be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act, or the rules thereunder. In addition to approval by
the Board of Directors of any amendment to this Directors' Plan, if the
Board further determines on advice of counsel that it is necessary or
desirable to obtain stockholder approval of any amendment to this
Directors' Plan in order to comply with Rule 16b-3 of the Exchange Act, or
any successor rule, as it shall read as of the time of amendment, or for
any other reason, then the effectiveness of any such amendment may be
conditioned upon its approval by stockholders of the Company in accordance
with the applicable laws of the state of incorporation of the Company, or
such other stockholder approval as may be specified by the Board.
11. Compliance with Rule 16b-3. It is the intention of the Company
--------------------------
that this Directors' Plan comply in all respect with Rule 16b-3 promulgated
under Section 16(b) of the Exchange Act and that Participants remain
disinterested persons ("disinterested persons") for purposes of
administering other employee benefit plans of the Company and having such
other plans be exempt from Section 16(b) of the Exchange Act. Therefore,
if any provision of this Directors' Plan is later found not to be in
compliance
<PAGE>
with Rule 16b-3 or if any provision would disqualify Participants from
remaining disinterested persons, that provision shall be deemed null and
void, and in all events this Directors' Plan shall be construed in favor of
its meeting the requirements of Rule 16b-3.
Exhibit 4(b)
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
NON-EMPLOYEE DIRECTORS' STOCK OPTION AGREEMENT
NON-EMPLOYEE DIRECTORS' STOCK OPTION AGREEMENT (the "Agreement") made
as of this _____ day of ________, 1995 between Children's Discovery Centers of
America, Inc. (the "Company") and __________________, who is a non-employee
director of the Company (the "Participant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires, by affording the Participant an
opportunity to purchase shares of the Company's Common Stock, $0.01 par value
per share (the "Common Stock"), as hereinafter provided, to carry out the
purpose of the Company's Non-Employee Directors' Stock Option Plan (the "Plan"),
as the same may be amended and supplemented from time to time;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto mutually
covenant and agree as follows:
1. Grant of Options. The Company shall grant options ("Options") to
----------------
the Participants and such Options shall not constitute incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. The Options shall be granted as follows:
(a) an Option to purchase 11,500 shares of Common Stock ("Initial
Option") was granted to the Participant on the December 17, 1993 (the
"Initial Grant Date") which is the date on which the public offering of
Common Stock of the Company registered with the Securities and Exchange
Commission on Form S-2, Registration No. 33-70360 (the "Public Offering")
commenced; and
(b) an Option to purchase 3,500 shares of Common Stock (the "Annual
Option") was granted to Participant upon re-election or appointment as a
director following each annual meeting of stockholders of the Company at
which directors are elected, commencing with the annual meeting of
stockholders conducted in 1995, with the grant of
<PAGE>
each such Annual Option to be deemed effective immediately following the
conclusion of each such meeting.
2. Option Price. The option price of the shares of Common Stock
------------
issuable upon the exercise of each Option (the "Option Price") shall be one
hundred percent (100%) of the Fair Market Value (as hereinafter defined) of the
shares subject to such Option on the date of grant. For purposes of this
Section, the "Fair Market Value" of a share of Common Stock shall be the closing
sale price per share of the Company's Common Stock as reported on the NASDAQ
National Market System ("NASDAQ/NMS") on the date of grant or, if the Common
Stock is not traded on NASDAQ/NMS on the date of grant, on the first business
day immediately preceding the date of grant during which the Common Stock was
traded (the "Determination Date"). If the Common Stock is not listed for
quotation on NASDAQ/NMS at the time of grant of any Option, then the Fair Market
Value shall be (i) if the Common Stock is then listed on any national securities
exchange, the closing sale price per share as reported by such exchange on the
Determination Date; (ii) if the Common Stock is listed for quotation on the
NASDAQ Small-Cap Market, the mean between the high bid and low asked prices per
share of the Common Stock as reported by the NASDAQ Small-Cap Market on the
Determination Date; or (iii) if the Common Stock is not listed on the NASDAQ
Small-Cap Market, the mean between the closing bid and asked prices per share of
the Common Stock on the Determination Date as furnished by a broker-dealer which
regularly furnishes price quotations for the Common Stock. Notwithstanding the
foregoing, in the event the Initial Grant Date is the date on which the Public
Offering commences, "Fair Market Value" of the Common Stock on that date shall
be deemed to be the price per share of the Common Stock sold to the public in
the Public Offering.
3. Vesting of Option. Options granted shall not be exercisable until
-----------------
they become vested. All Options shall vest in a Participant as follows:
(i) with respect to 30% of the shares subject to such Option, on the date which
is six months following either the date of initial date of grant, or the date of
grant, (ii) with respect to an additional 23-1/3% of the shares subject to such
Option, on the first anniversary of the date of grant, (iii) with respect to an
additional 23-1/3% of the shares subject to such Option, on the second
anniversary of the date of grant, and (iv) with respect to the final 23-1/3% of
the shares subject to such Option, on the third anniversary of the date of
grant; provided, however, that the vesting of any portion of an Option on any
-------- -------
particular date is conditioned on the Participant having continuously served as
a member of the Board of Directors through such date. The number of shares as
to which an Option may be exercised shall be cumulative, so that once the
Option shall become exercisable as to any shares, it shall continue to be
exercisable as to said shares until expiration or termination of the Option as
provided in this Agreement.
4. Term and Exercise of Options. The term of the Options shall be
----------------------------
for a period of ten (10) years from each date of grant, subject to earlier
termination as provided in Paragraph 6 and 7 hereof and in no event shall the
Option be exercised after the expiration of such ten (10) year period. Except
to the extent necessary to govern outstanding Options issued, this
2
<PAGE>
Agreement shall terminate on, and no additional Options shall be granted after
December 13, 2003, unless earlier terminated by the Board of Directors in
accordance with Section 7.
Except as provided in Paragraph 6, the Options may not be exercised
unless, at the time the Options are exercised and at all times from the date
they are granted, the Participant shall then be and shall have been a non-
employee director of the Company.
5. Nontransferability. The Options shall not be transferable
------------------
otherwise than pursuant to a qualified domestic relations order or by will or
the laws of descent and distribution to the extent provided in Paragraph 6, and
the Options may be exercised, during the lifetime of the Participant, only by
him. Without limiting the generality of the foregoing, the Options may not be
assigned, transferred (except as provided above), pledged or hypothecated in any
way, shall not be assignable by operation of law, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Options contrary to the
provisions hereof and of the Plan shall be null and void and without effect,
and, upon the levy of any execution, attachment, or similar process upon the
Options, the Options shall hereupon be canceled and thereafter null and void.
6. Termination of Option. In the event a Participant ceases to be a
---------------------
member of the Board of Directors for any reason other than cause, any then
unexercised portion of Options granted to such Participant, to the extent not
vested on the date the Participant ceases to be a director (the "Termination
Date"), will immediately terminate and become void; any portion of an Option
which is vested on the Termination Date but has not yet been exercised may be
exercised, to the extent it is vested on the Termination Date, within one year
after the Termination Date. In the event of the Participant's death, the Option
may be exercised, if and to the extent that such deceased Participant was
entitled to exercise the Option at the time of death, by the person or persons
to whom the deceased Participant's rights pass by will or by the laws of descent
and distribution of the state of his or her domicile at the time of his or her
death. In the event that a Participant ceases to serve as a director for cause,
all Options theretofore granted to such Participant under this Agreement shall,
to the extent not theretofore exercised, terminate on the Termination Date,
whether or not any portion or all of such Option is vested.
7. Termination and Amendment of Agreement. This Agreement may be
--------------------------------------
terminated or amended from time to time by vote of the Board of Directors;
provided, however, that no such termination or amendment shall materially
- -------- -------
adversely affect or impair any then outstanding Options without the consent of
the Participants, and provided further, that the provisions of this Agreement
-------- -------
specified in Rule 16b-3(c)(2)(ii)(A) of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (as in
effect on the effective date of the Plan) may not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act, or the rules thereunder. In
addition to approval by the Board of Directors of any amendment to this
Agreement, if the Board further determines on advice of counsel that it is
necessary or desirable to obtain stockholder approval of any amendment to this
Agreement in
3
<PAGE>
order to comply with Rule 16b-3 of the Exchange Act, or any successor rule, as
it shall read as of the time of amendment, or for any other reason, then the
effectiveness of any such amendment may be conditioned upon its approval by
stockholders of the Company in accordance with the applicable laws of the state
of incorporation of the Company, or such other stockholder approval as may be
specified by the Board.
8. Compliance with Rule 16b-3. It is the intention of the Company
--------------------------
that this Agreement comply in all respects with Rule 16b-3 promulgated under the
Exchange Act and that Participants remain disinterested persons ("Disinterested
Persons") for purposes of administering other employee benefit plans of the
Company and having such other plans be exempt from Section 16(b) of the Exchange
Act. Therefore, if any provision of this Agreement is later found not to be in
compliance with Rule 16b-3 or if any provision would disqualify Participants
from remaining Disinterested Persons, that provision shall be deemed null and
void, and in all events this Agreement shall be construed in favor of its
meeting the requirements of Rule 16b-3.
9. Administration. (a) The Plan shall be administered by the Board
--------------
of Directors. A majority of the members of the Board shall constitute a quorum.
All determinations of the Board shall be made by a majority of such quorum or by
a written consent signed by all members of the Board.
(b) Options shall be automatically granted to Participants in
accordance with Section 1 hereof and shall be issued upon the terms and
conditions set forth in this Agreement. Accordingly, the persons to whom
Options shall be granted, the number of shares subject thereto and the material
terms and conditions governing the Options will not be subject to the discretion
of the Board. However, if any questions of interpretation of this Agreement or
of any Options issued hereunder shall arise, they shall be determined by the
Board and such determination shall be final and binding upon all persons having
an interest in this Agreement.
10. Legend on Certificates. All certificates representing shares of
----------------------
Common Stock issued pursuant to the exercise of Options granted hereunder shall
bear the following legend:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in the absence
of (i) the effective registration statement for such securities under said
act or (ii) an opinion of company counsel that such registration is not
required."
11. Adjustment of Number of Shares. If a dividend or other
------------------------------
distribution shall be declared upon the Common Stock payable in shares of Common
Stock, the number of shares of Common Stock then subject to any Option granted
hereunder, and the number of shares reserved for issuance pursuant to this
Agreement but not yet covered by an Option, shall be adjusted by adding to each
of such shares the number of shares which would be distributable thereon if such
4
<PAGE>
shares had been outstanding on the date fixed for determining the shareholders
entitled to receive such stock dividend or the shareholders entitled to receive
such stock dividend or distribution. If the outstanding shares of Common Stock
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or of another corporation, whether
through reorganization, reclassification, recapitalization, stock split-up,
combination of shares, merger or consolidation, then there shall be substituted
for each share of Common Stock then subject to any such Option and for each
share of Common Stock reserved for issuance pursuant to this Agreement but not
yet covered by an Option, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchangeable; provided, however, that in
-------- --------
the event that such change or exchange results from a merger or consolidation,
and in the judgment of the Board such substitution cannot be effected or would
be inappropriate, or if the Company shall sell all or substantially all of its
assets, the Company shall use reasonable efforts to effect some other adjustment
of each then outstanding Option which the Board, in its sole discretion, shall
deem equitable. In the event that there shall be any change, other than as
specified above in this Section 11, in the number or kind of outstanding shares
of Common Stock or of any stock or other securities into which such shares of
Common Stock shall have been changed or for which they shall have been
exchanged, then, if the Board shall determine that such change equitably
requires an adjustment in the number or kind of shares theretofore reserved for
issuance pursuant to this Agreement but not yet covered by an Option and of the
shares then subject to an Option or Options, such adjustment shall be made by
the Board and shall be effective and binding for all purposes of this Agreement
and of each stock option agreement applicable to Options granted hereunder. In
the case of any substitution or adjustment as provided for in this Section 11,
the aggregate option price in each stock option agreement for all shares covered
thereby prior to such substitution or adjustment will be the aggregate option
price for all shares of stock or other securities (including any fraction) which
shall have been substituted therefore pursuant to this Section 11. No
adjustment or substitution provided for in this Section 11 shall require the
Company, in any stock option agreement, to sell a fractional share.
Accordingly, any fraction of a share or other security which results from any
such adjustment or substitution shall be eliminated and not carried forward to
any subsequent adjustment or substitution.
12. Method of Exercising Options. Subject to the terms and
----------------------------
conditions of this Agreement, the Option may be exercised by written notice to
the Company in accordance with Paragraph 15 hereof. Such notice shall state
that the Option is being exercised thereby and the number of shares of Common
Stock in respect of which it is being exercised. It shall be signed by the
person or persons so exercising the Option and shall be accompanied by payment
(i) in full either in cash or by check, (ii) by delivery (i.e., surrender) of
- -
shares of Common Stock of the Company which have been owned by the Participant
for at least six months prior to the exercise of the Option with a Fair Market
Value (as defined above) at the time of the exercise of the Option equal to the
exercise price, or (iii) by a combination of (i) and (ii). In addition, to the
extent permitted by applicable law, the exercise price may be paid by one or
more brokerage firms pursuant to arrangements whereby such firm or firms, on
behalf of a Participant, shall pay to the Company the exercise price of the
Option being exercised, and the Company, pursuant to an irrevocable notice from
the Participant, shall deliver shares being purchased to such firm. The
5
<PAGE>
Company shall issue, in the name of the person or persons exercising the Option
and deliver, a certificate or certificates representing such shares as soon as
practicable after the notice and payment shall be received.
In the event the Option shall be exercised by any person or persons
other than the Participant, pursuant to Section 6 hereof, such notice shall be
accompanied by appropriate proof, reasonably satisfactory to the Company, of the
right of such person or persons to exercise the Option.
The Participant shall have no rights of a stockholder with respect to
shares of Common Stock to be acquired by the exercise of the Option until the
issuance to him of a certificate or certificates representing said shares. All
shares of Common Stock purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable.
13. General. The Company shall at all times during the term of the
-------
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Agreement, shall pay all
original issue taxes with respect to the issuance of shares of Common Stock
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith, and shall, from time to time, use its best
efforts to comply with all federal and state securities laws and regulations
which, in the opinion of counsel for the Company, shall be applicable thereto.
14. Notices. Each notice relating to this Agreement shall be in
-------
writing and delivered in person, by overnight courier or by first class mail,
postage prepaid, to the proper address. Each notice shall be deemed to have
been given on the date it is received. Each notice to the Company shall be
addressed to it at its then principal office, currently
851 Irwin Street, Suite 200
San Rafael, CA 94901
Each notice to the Participant or other person or persons then entitled to
exercise the Option shall be addressed to the Participant or such other person
or persons at the Participant's address set forth below:
Anyone to whom a notice may be given under this Agreement may designate a new
address by notice to that effect given in accordance with this Section 14.
6
<PAGE>
15. Incorporation of Plan. Notwithstanding the terms and conditions
---------------------
herein, this Agreement shall be subject to and governed by all the terms and
conditions of the Plan. A copy of the Plan, which is herein incorporated by
reference has been delivered to Participant who hereby acknowledges receipt
thereof. In the event of any discrepancy or inconsistency between the terms and
conditions of the Agreement and of the Plan, the terms and conditions of the
Plan shall control.
16. Continuance as Director. The granting of the Option is in
-----------------------
consideration of the Participant's continuing relationship with the Company as a
non-employee director; however, nothing in this Agreement shall confer upon the
Participant the right to continue as a director of the Company or any of its
subsidiaries.
17. Enforceability. This Agreement shall be binding upon the
--------------
Participant, his estate, his personal representatives and beneficiaries and
shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officers thereunto duly authorized, and the Participant has
hereunto set his hand all as of the day and year first above written.
CHILDREN'S DISCOVERY CENTERS
OF AMERICA, INC.
By: _________________________________
Richard A. Niglio, President
PARTICIPANT:
_______________________________________
7
Exhibit 4(c)
CHILDREN' DISCOVERY CENTERS OF AMERICA, INC.
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT is made as of the 16th day of June,
1992, between Children's Discovery Centers of America, Inc. (the
"Company"), and __________ (the "Optionee"), residing at 140 Broadway,
New York, New York, 10005.
WITNESSETH:
-----------
WHEREAS, the Company desires, by affording the Optionee an
opportunity to purchase shares of the Company's Class A Common Stock,
$0.01 par value per share (the "Common Stock"), as herein-after
provided, to encourage the Optionee to provide services to the
Company;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter contained, the parties
hereto mutually covenant and agree as follows:
1. Grant of Option. The Company hereby grants to the optionee
------------------
an option (the "Option") to purchase all or any part of an aggregate
of 3,500 share of Common Stock (such number being subject to
adjustment as provided in Paragraph (6) on the terms and conditions
hereinafter set forth, for a purchase price of $6.00 per share (the
"Option Price").
2. Term of Option. The term of the Option shall be for a period
--------------
of five (5) years from June 16, 1992 (the Date of Grant), subject to
earlier termination as provided herein, and in no event shall the
Option be exercised after the expiration of such five (5) year period.
<PAGE>
3. Nontransferability. The Option shall not be transferable
------------------
otherwise than by will or the laws of descent to the extent provided
in paragraph 7, and the Option may be exercised, during the lifetime
of the Optionee, only by him. Without limiting the generality of the
foregoing, the Option may not be assigned, transferred (except as
provided above), pledged or hypothecated in any way, shall not be
assignable by operation of law, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof shall be null and void and without effect, and
upon the levy of any execution, attachment, or similar process upon
the Option, the Option shall thereupon be cancelled and thereafter
shall be null and void.
4. Termination. The Option shall terminate and may no longer be
-----------
exercised if the Optionee ceases to serve as a member of the Company's
Board of Directors except that (i) Optionee may exercise this Option
within ninety (90) days of the date he ceases serving as a member of
the Company's Board of Directors, (ii) if the Optionee is disabled
(within the meaning of Section 105(d) (4) of the Internal Revenue Code
of 1986 (the "Code") while a Director of the Company, then to the
extent that the Optionee was entitled to exercise the Option on the
date of the disability, the Option may be exercised within one(1) year
after the date of the disability; or (iii) if the Optionee dies while
serving as a Director of the Company or its subsidiaries, then, to the
extent that the Option could have been exercised by the Optionee
immediately prior to the date of the death, the Option may be
exercised by the estate or by the person or persons who shall have
acquired the right to exercise the Option by bequest or inheritance
for a maximum period of one (1) year from the date of the Optionee's
death. Notwithstanding the foregoing provisions of this paragraph 4,
no Option shall be exercisable after the expiration date of such
Option.
In the event that the Option is determined by legal proceeding
(including administrative proceedings) to be invalid as a matter of
law, the Company will, immediately after such determination, grant to
the Optionee new options which are as similar as is practicable to
those granted hereunder.
2
<PAGE>
5. Legend on Certificates. All certificates representing shares
----------------------
of Common Stock issued pursuant to the exercise of Options granted
hereunder shall bear the following legend:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, and may not be sold, transferred, pledged,
hypothecated, or otherwise disposed of in the absence
of (i) and effective registration statement for such
securities under said act, or (ii) an opinion of company
counsel that such registration is not required."
6. Stock Splits, Mergers, etc.. In case of any stock split,
---------------------------
stock dividend or similar transaction which increases or decreases the
number of outstanding shares of Common Stock, appropriate adjustment
shall be made by the Board of Directors, whose determination shall be
final, to the number of shares of Common Stock which may be purchased
under the Option. In the case of a pending merger, sale of assets or
similar transaction which will result in a replacement of the Common
Stock with stock of another corporation, the period during which
Options exercisable hereunder may be exercised shall not less than
three months, but in no event shall any period longer than three
months extend beyond the date of the merger, sale of assets or similar
transactions.
7. Method of Exercising Option. Subject to the terms and
---------------------------
conditions of this Agreement, the Option may be exercised by written
notice ("Exercise Notice") from the Optionee delivered to the Company
stating the election to exercise the Option and the number of shares
of Common Stock in respect of which it is being exercised (which shall
not be less than 100 or the remaining Common Stock covered by the
Option), and shall be signed by the person so exercising the Option.
The exercise notice shall be accompanied by the full Option Price for
the Common Stock in respect of which the Option is being exercised.
In the event the Option shall be exercised pursuant to section 3
thereof by any person or persons other than the Optionee, such notice
shall be accompanied by appropriate proof of the right of such person
or persons to exercise the Option. Payment of the Option Price may be
made in cash, in shares of Common Stock of the Company, or a
combination of cash and shares of stock of the Company. To the extent
payment is not made in cash, such payment shall be made by certified
or bank cashier's check, or the equivalent thereof, payable to the
order of the Company. In the event payment is made in Common Stock of
the Company, the amount of payment tendered the Company shall be
measured by the fair market value of the average of the closing bid
and ask price on the date immediately preceding the date of the
exercise notice.
3
<PAGE>
The certificate or certificates for the Common Stock in respect
of which the Option shall have been exercised shall be registered in
the name of the person or persons exercising the Option, or, if the
Option is exercised by the Optionee and if the Optionee shall so
request in the exercise notice, shall be registered in the name of the
Optionee and another person jointly, with right of survivorship, and
shall be delivered as provided above to or upon the written request of
the person or persons exercising the Option.. All of the Common Stock
purchased upon the exercise of the Option as provided herein shall,
when issued, be fully paid and nonassessable. The Option shall not be
exercisable for fractional shares.
The Option shall be exercisable by the Optionee as follows: The
Optionee shall be entitled to purchase up to seven hundred (700)
shares of Common Stock subject to the Option, from and after the date
of grant, and an additional twenty percent after each July 1st until
exhausted.
8. Undertaking. The Company may at any time during the period in
-----------
which this Option or any part thereof remains in existence, including
the period immediately following an attempt to exercise the Option by
the holder but prior to the delivery of the Common Stock, require the
person attempting to exercise the Option to execute one or more
undertakings, in a form satisfactory to the Company, that such shares
of Common Stock are being acquired for investment and not for resale,
acknowledging that no representations have been made by the Company
and that the Company is relying on Optionee's representation.
The Company may also require the person exercising this Option to
deliver to the Company an acknowledgment that he or she has reviewed
the Company's latest financial reports, has determined independently
to exercise the Option, has carefully reviewed such material as has
been made available to him or her, is aware that the shares of Common
Stock being acquired are unregistered, that the Company is not
obligated to transfer the Common Stock acquired unless the transfer is
in compliance with Federal Securities Law, or pursuant of a
registration statement or an exemption.
9. General. The company shall at all times during the term of
-------
the Option reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of this
Agreement, shall pay all original issue taxes with respect to the
issuance of shares of Common Stock pursuant hereto and all other fees
and expenses necessarily incurred by the Company in connection
therewith. Notwithstanding the preceding sentence, the Company shall
have no obligation to pay any income tax incurred by the optionee or
those claiming through such Optionee, with respect to the exercise of
the Option or any part thereof.
4
<PAGE>
10. Notices. Each notice relating to this Agreement shall be in
-------
writing and delivered in person, by overnight courier or by first
class mail, postage prepaid, to the proper address. Each notice shall
be deemed to have been given on the date it is received. Each notice
to the Company shall be addressed to it at its them principal office,
currently:
President, Children's Discovery Centers of America, Inc.
1210 Fifth Avenue
San Rafael, California 94901
Each notice to the Optionee or other person or persons then entitled
to exercise the option shall be addressed to the Optionee or such
other person or persons at the Optionee's address set forth in the
heading of this Agreement. Anyone to whom a notice may be given under
this Agreement may designate a new address by notice to that effect
given in accordance with this paragraph 11.
11. Enforceability. This Agreement shall be binding upon the
--------------
Optionee, her estate, her personal representatives and beneficiaries
and shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed by an officer thereunto duly authorized and the
Optionee has hereunto set her hand, as of the day and year first above
written.
COMPANY:
CHILDREN'S DISCOVERY CENTERS OF AMERICA, INC.
By:
-----------------------------------------
Title:
--------------------------------------
Optionee:
--------------------------------------------------------
5
Exhibit 5
---------
May 15, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington D.C. 20549-001
Gentlemen:
I have acted as counsel to Children's Discovery Centers of America, Inc.
(the "Company") in connection with the preparation and filing with the
Securities and Exchange Commission of its Registration Statement on Form S-
8 under the Securities Act of 1933 (the "Registration Statement") relating
to 180,000 shares of Common Stock of the Company, $.01 par value per share
("Common Stock"), issuable upon the exercise of options granted under the
Company's Non-Employee Directors' Stock Option Plan ("Plan") and 14,000
shares of Common Stock issuable upon the exercise of options granted to
non-employee directors prior to the existence of the Plan ("Non-Plan
Options").
In this connection, I have reviewed the Company's Certificate of
Incorporation and By-Laws, each as amended to date, Resolutions of its
Board of Directors, the Plan, agreements relating to the Non-Plan Options
and such other documents and corporate records, and have considered such
questions of law, as I have deemed appropriate in the circumstances.
Based upon and subject to the foregoing, I am of the opinion that: (i) the
issuance and sale of shares of Common Stock upon exercise of any Plan
Options or Non-Plan Options, as the case may be, in accordance with the
terms and subject to the conditions set forth in the agreements pursuant to
which the Plan Options or Non-Plan Options, as the case may be, were
granted (the "Option Agreements") has been duly authorized and (ii) when
the consideration for any such shares of Common Stock shall have been
received by the Company and shares are issued pursuant to such Plan Options
or Non-Plan Options, as the case may be, in accordance with the terms and
subject to the conditions set forth in the Option Agreements, such shares
of Common Stock will be validly issued, fully paid and nonassessable.
I am admitted to practice in the State of California. Although I am not
admitted to the Bar of the State of Delaware, in rendering this opinion I
have considered the General Corporation Law of such State. Accordingly,
the foregoing opinion is limited solely to the effect of the laws of the
State of California and of the United States of America, and the General
Corporation Law of the State of Delaware.
<PAGE>
I consent to the use of this opinion as an exhibit to the Registration
Statement. This does not constitute a consent under Section 7 of the
Securities Act of 1933 since I have not certified any part of such
Registration Statement and do not otherwise come within the categories of
persons whose consent is required under Section 7 or the rules and regulations
of the Securities and Exchange Commission.
Very truly yours,
/s/ Frank A. Devine
Frank A. Devine
General Counsel
Exhibit 23(a)
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated February
23, 1995 included in the Children's Discovery Centers of America, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1994 and to all
references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Oakland, California
May 12, 1995
