<PAGE> 1
As filed with the Securities and Exchange Commission on July 20, 1998
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
GROUP 1 SOFTWARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 52-1483562
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
4200 PARLIAMENT PLACE
SUITE 600
LANHAM, MARYLAND 20706-1860
(301)918-0400
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
1995 GROUP 1 SOFTWARE, INC.
INCENTIVE STOCK OPTION, NON-QUALIFIED
STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
1995 GROUP 1 SOFTWARE, INC.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(FULL TITLE OF THE PLANS)
ROBERT S. BOWEN
CHIEF EXECUTIVE OFFICER
4200 PARLIAMENT PLACE
SUITE 600
LANHAM, MARYLAND 20706-1860
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(301) 731-2300
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
ARNOLD R. WESTERMAN, ESQ.
ARENT FOX KINTNER PLOTKIN & KAHN
1050 CONNECTICUT AVENUE, N.W.
WASHINGTON, DC 20036-5339
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE PRICE FEE
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, $.01 PAR VALUE 400,000 $14.06(1) $5,625,000.00(1) $1,475.00
==============================================================================================
</TABLE>
(1) ESTIMATED SOLELY FOR PURPOSES OF CALCULATING THE REGISTRATION FEE IN
ACCORDANCE WITH RULE 457(h) OF THE SECURITIES ACT OF 1933 AND BASED ON THE
AVERAGE OF THE HIGH AND LOW PRICES OF THE COMMON STOCK AS REPORTED ON THE NASDAQ
NATIONAL STOCK MARKET ON JULY 14, 1998.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
* Information about the Registrant required by Part I to be
contained in a Section 10(a) prospectus is omitted from the
Registration Statement in accordance with Rule 428 under the
Securities Act of 1933, as amended (the "Securities Act"), and
the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are incorporated by
reference in this Registration Statement:
1. The Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998.
2. All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") since the
end of the fiscal year ended March 31, 1998.
3. The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A (No. 0-15389), filed on
February 13, 1987 with the Commission pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), including any subsequent amendment or report filed for the
purpose of updating such description.
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act 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 in this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
1
<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, as amended,
provides that a corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or is or was serving
at its request in such capacity in another corporation or business
association, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to provide in its certificate of incorporation that a
director of the corporation shall not be personally liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
Article TWELFTH of the Registrant's Certificate of Incorporation, as
amended, provides for the elimination of personal liability of a director for
breach of fiduciary duty as permitted by Section 102(b)(7) of the Delaware
General Corporation Law, and also provides that the Registrant may indemnify
its directors and officers to the full extent permitted by the Delaware
General Corporation Law.
Article VI of the Registrant's By-Laws, as amended, provides that the
Registrant shall indemnify directors and officers to the fullest extent
permitted by the Delaware General Corporation Law.
The Registrant has in effect a directors and officers liability
insurance policy under which the directors and officers of the Registrant are
insured against loss arising from claims made against them due to wrongful
acts while acting in their individual and collective capacities as directors
and officers, subject to certain exclusions.
2
<PAGE> 4
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See Exhibit Index on page 7.
ITEM 9. UNDERTAKINGS
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this Registrant Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a twenty percent (20%) change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The Registrant hereby further 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
3
<PAGE> 5
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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, will 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.
4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Lanham, State of Maryland, on the 6th day of June,
1998.
GROUP 1 SOFTWARE, INC.
By: /s/
------------------------------------
Robert S. Bowen
Chairman and Chief Executive Officer
5
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Robert S. Bowen and/or Ronald F. Friedman true
and lawful attorney-in-fact and agent with power of substitution and
resubstitution, for him, and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post effective
amendments) to this Registration Statement on Form S-8, and to file the same,
with all exhibits thereto, and all documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done to comply with the provisions of the
Securities Act and all requirements of the Commission, hereby ratifying and
confirming all that said attorney-in-fact or any of them, or their or his or
her substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/
- ---------------------- Chairman and Chief Executive June 6, 1998
Robert S. Bowen Officer
/s/
- ---------------------- President, Chief Operating June 6, 1998
Ronald F. Friedman Officer and Director
/s/ Vice President, Chief Financial Officer, June 6, 1998
- ---------------------- Treasurer and Director
Mark D. Funston
/s/
- ---------------------- Director June 6, 1998
Thomas S. Buchsbaum
/s/
- ---------------------- Director June 6, 1998
Charles A. Mele
- ---------------------- Director June __, 1998
Joseph R. Sullivan
</TABLE>
6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
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Page
----
<S> <C>
Exhibit
- -------
4. Instruments defining the rights of securityholders:
(a) 1995 Incentive Stock Option, Non-qualified Stock Option and Stock
Appreciation Rights Plan and exhibits................................. 9
(b) 1995 Non-Employee Directors' Stock Option Plan
and exhibits.......................................................... 20
5. Opinion of Arent Fox Kintner Plotkin & Kahn re: validity of securities
registered.................................................................. 21
23. Consents of experts and counsel:
(a) Consent of Coopers & Lybrand (certified public accountants)........... 22
(b) Consent of Arent Fox Kintner Plotkin & Kahn (counsel): included
in Exhibit 5.......................................................... 21
24. Power of Attorney: included on signature page.
</TABLE>
7
<PAGE> 1
EXHIBIT 4(A) 1995 INCENTIVE STOCK OPTION, NON-
QUALIFIED STOCK OPTION AND STOCK
APPRECIATION RIGHTS PLAN AND EXHIBITS
Section 1: Purpose.
1.1 This Plan (the "Plan") is intended to provide a means for the granting
of awards (each such award is hereinafter referred to as the "Award") of stock
options and/or stock appreciation rights to selected full- and part-time
employees (including officers who are also employees) of Group 1 Software, Inc.
(the "Company") and such of its domestic or foreign, present or future,
affiliated companies as shall be designated from time to time by the Company's
Board of Directors (the "Board") (each such person, upon receipt of an Award is
hereinafter referred to as a "Participant").
1.2 This Plan is designed to (a) provide incentives and rewards to those
persons who are in a position to contribute to the long-term growth and
profitability of the Company; (b) assist the Company and such affiliated
companies (the "Affiliates") to attract, retain and motivate personnel with
experience and ability; and (c) make the Company's compensation program more
competitive with those of other companies. The Company expects that by providing
such Awards it will benefit from the added interest which such personnel will
have in the success of the Company and/or the Affiliates as a result of their
proprietary interest.
1.3 For purposes of this Plan, an Affiliate shall mean any corporation
defined as a subsidiary corporation under Section 425(f) of the Internal Revenue
Code, as amended (the "Code").
Section 2: Administration.
2.1 This Plan shall be administered by the Compensation Committee of the
Board (the "Committee"). Members of the Committee shall be disinterested within
the meaning of SEC Rule 16b-3. No individual may participate as a member of the
Committee in the administration of this Plan if he shall have been eligible to
receive Awards or any other stock options or stock appreciation rights of the
Company or any of its Affiliates under this Plan or any other discretionary plan
of the Company or its Affiliates at any time within one year prior to serving on
the Committee. Subject to the express provisions of this Plan and to such orders
or resolutions not inconsistent with the provisions of this Plan as may be
issued or adopted from time to time by the Board, the Committee shall have full
power and authority, in its discretion, to grant Awards; to determine to whom
and the time when Awards will be granted; to designate Awards as incentive stock
options or nonqualified stock options; to determine the purchase price of the
common stock covered by each option, the term of each option, and the
exercisability of each option; to determine the terms and provisions of the
option agreements (which need not be identical) entered into in connection with
Awards under this Plan; to interpret this Plan; to supervise the administration
of this Plan; to prescribe, amend and rescind rules and regulations relating to
this Plan; and to make all other determinations and take any other action deemed
necessary or desirable to the proper operation or administration of this Plan.
The Committee may authorize such of the Company's officers and other
<PAGE> 2
persons to perform such functions in the execution and administration of this
Plan (other than the interpretation of this Plan and the adoption of rules
governing its execution and administration) as the Committee shall determine
from time to time.
2.2 All decisions made by the Committee pursuant to the powers vested in
it by this Plan document and related orders or resolutions of the Board shall be
final and binding on all persons (including Participants, the Company and any
stockholder and/or employee of the Company or any Affiliate). No member of the
Committee shall be liable for any action or determination made in good faith
with respect to this Plan or any Award granted under it.
Section 3: Scope and Duration.
3.1 Awards under this Plan may be granted in the form of incentive stock
options (the "ISO's") as provided in Section 422 of the Code or in the form of
nonqualified stock options (the "NQSO's") and/or stock appreciation rights (the
"SAR's") as provided in Section 7. Unless otherwise indicated, references in
this Plan to "Options" include ISO's and NQSO's. As used in the preceding
sentence, the term "stock appreciation rights" means rights to receive the
payment provided for in Section 7, upon the surrender of an unexercised related
Option.
3.2 The total number of shares of common stock of the Company (the
"Stock") as to which Options or SAR's may be granted under this Plan shall be
300,000 shares subject to adjustments as provided in this Plan. Issuance of
Stock upon exercise of an option or reduction of the number of shares of Stock
subject to an option upon exercise of an SAR shall reduce the total number of
shares of Stock available under this Plan. There shall not be counted against
this total any shares of Stock covered by an Option that has lapsed unexercised
or has been forfeited as hereinafter provided.
3.3 Subject to adjustments provided for in Section 12 hereof, shares of
Stock as to which Options and SAR's under this Plan may be granted may be made
available by the Company from authorized but unissued shares of Stock or from
shares reacquired by the Company (including shares purchased in the open
market).
Section 4: Eligible Persons. The persons who shall be eligible to receive Awards
under this Plan shall be all full- and part-time employees (including officers
who are also employees) of the Company or an Affiliate, without limitation as to
length of service ("Eligible Persons").
Section 5: Granting Awards.
5.1 Subject to the limitations of this Plan, the Committee, at any time
and from time to time, and after such consultation with and consideration of
such recommendations of management as the Committee deems desirable, shall
select from Eligible Persons those persons to be granted Awards and determine
the time when each Award shall be granted, the number of shares of Stock to be
subject to an option and/or SAR and the terms and conditions, consistent with
this Plan, upon which Options and/or SAR's are to be awarded. The Committee
shall
<PAGE> 3
make Awards to the Eligible Persons so selected for the number of options and/or
SAR's and upon the terms and conditions to determined. No Options or SAR's or
underlying shares of Stock shall be issued or distributed under this Plan unless
and until all legal requirements applicable to the issuance or transfer of such
Options, SAR's and/or Stock have been complied with to the satisfaction of the
Committee and the Company.
5.2 No ISO shall be granted hereunder to any person who, at the time such
Option is to be granted, owns stock of the Company or of any of its Affiliates
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of any such Affiliate unless such grant complies with
Section 422 of the Code. For purposes of the preceding sentence, the attribution
rules of stock ownership set forth in Section 425(d) of the Code shall apply.
5.3 No Awards shall be granted under this Plan after its termination on
September 12, 2005, but Awards granted prior to such termination date may extend
beyond that date, and the terms of this Plan shall continue to apply to such
awards.
Section 6: Terms and Conditions of Options.
6.1 General. Each Option granted pursuant to this Plan shall be subject to
all of the terms and conditions hereinafter provided in this Section 6, all
other terms and conditions set forth in any other Section of this Plan, and such
other terms and conditions ("Discretionary Conditions") as may be specified by
the Committee with respect to the option and the Stock covered thereby at the
time of the making of the Award or as may be specified thereafter by the
Committee in the exercise of its powers under this Plan. Without limiting the
foregoing, it is understood that the Committee may, at any time and from time to
time after the granting of an Award under this Plan, specify such additional
terms and conditions with respect to such Award as may be deemed necessary or
appropriate to ensure compliance with all applicable laws, including, but not
limited to, terms and conditions for compliance with Federal and state
securities laws and methods of withholding or providing for the payment of
required taxes. The terms and conditions with respect to any Participant need
not be identical with the terms and conditions with respect to any other Award,
or with respect to any Award to any other Participant.
6.2 Option Agreement. Receipt of an Option shall be subject to execution
of a written agreement (the "Option Agreement") between the Company and the
Participant, in a form approved by the Committee, which shall set forth the
number of shares covered by the Option, the exercisability provisions of the
Option, the applicable Option Period (as defined herein), the conditions
provided in this Plan as may be deemed appropriate by the Committee, including,
but not limited to, any such Discretionary Conditions. A fully executed original
counterpart of the Option Agreement shall be provided to the Company and the
Participant.
6.3 Option Price. The purchase price of the Stock covered by each option
shall be determined by the Committee, but in no event shall the option Price be
less than 100% of the Fair Market Value of such Stock on the date the Option is
granted for ISO's nor less than 85% of the Fair Market Value of such Stock on
the date the Option is granted for NQSO's. If the Stock is listed on an
established
<PAGE> 4
stock exchange, such Fair Market value shall be deemed to be the closing price
of the Stock on such stock exchange on the day the Option is granted or if no
sale of the Stock shall have been made on any stock exchange on that day, the
next preceding day on which there was a sale of the Stock. If the Stock is not
listed on an established stock exchange but is traded in the over-the-counter
market, the Fair Market Value of the Stock shall be the closing price as quoted
in the National Association of Securities Dealers' Automated Quotation System
("Nasdaq") on the day the option is granted or if no sale of Stock is reflected
in Nasdaq on that day, on the preceding day on which there was a sale of Stock
reflected in Nasdaq. If no quotations are available, the Fair Market Value
shall be as determined by the Committee in good faith. The Committee shall have
full authority in fixing the option price, and be fully protected in doing so.
6.4 Term of Option. The duration of each Option granted under this Plan
shall not be more than 10 years from the date of grant, as the Committee shall
determine, subject to earlier termination as provided in Sections 9, 10 and 11.
6.5 Exercise and Vesting of Options; Time of Payment.
6.5.1 No ISO or NQSO shall be exercisable during the year ending on the
first anniversary of the Option's grant. Each ISO and NQSO shall be exercisable
thereafter as determined by the Committee (subject to the terms of this Plan)
and set forth in the Option Agreement.
6.5.2 A Participant wishing to exercise an option shall give written
notice to the Company in the form and manner prescribed by the Committee,
indicating the date of award and type of Option being exercised, the number of
shares to be exercised, and such other information as shall be required by the
Committee. Full payment for the shares exercised pursuant to the Option must
accompany the written notice. Except as provided in Sections 9 and 10, no Option
may be exercised at any time unless the Participant is then a full- or a
part-time employee of the Company or an Affiliate.
6.5.3 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall, without stock issuance
or transfer taxes to the Participant or to any other person entitled to exercise
an option pursuant to the Plan, deliver to the Participant or such other person
a certificate or certificates for the requisite number of shares of Stock.
6.5.4 Rights as a Stockholder. A Participant or any other person entitled
to exercise an Option under this Plan shall have no rights as a stockholder with
respect to any Stock covered by the Option until the date of issuance of a Stock
certificate for such Stock.
6.5.5 Partial Exercise. An Option granted under this Plan may be exercised
as to any lesser number of shares than the full amount for which it could be
exercised. Such a partial exercise of an Option shall not affect the right to
exercise the Option from time to time in accordance with this Plan as to the
remaining shares subject to the Option.
<PAGE> 5
6.5.6 The Option Price for the shares as to which an Option is exercised
shall be paid to the Company in full on the date of exercise. At the election of
the Participant, such payment may be (i) in cash, (ii) in shares of Stock owned
by the Participant prior to exercising the Option and having a Fair Market Value
on the date of payment equal to the Option Price for the shares of Stock being
purchased, and satisfying such other requirements as may be imposed by the
Committee or (iii) partly in cash and partly in such shares of Stock. The
Participant shall also be entitled to make payment by pyramiding the shares
received upon exercise of Options by simultaneously delivering such shares of
stock in payment of the purchase price of shares subject to additional Options;
any share delivered in payment of the exercise price must have been held of
record by the Optionee for a least six months or such other period as may be
required to avoid any adverse effect on the financial position of the Company or
a Subsidiary as a result of incurring compensation expense or otherwise.
Such shares, which shall be fully paid and non-assessable upon the
issuance thereof, shall be represented by a certificate or certificates
registered in the name of the Participant and stamped with any appropriate
legend. In addition, prior to delivery of the shares of Stock, any amount
necessary to satisfy applicable Federal, state or local tax requirements shall
be paid promptly upon notification of the amount due. Stock acquired by the
Participant which is identified as having been obtained through an ISO under
this Plan and still subject to ISO holding requirements as defined in the Code,
may not be tendered in payment of the Option Price.
6.6 Limitations on ISO's.
6.6.1 The aggregate Fair Market Value (determined as of the time of grant)
of all Stock for which an employee may be granted ISO's in any calendar year
(under this Plan and any other plan of the Company, any Affiliate or any
predecessor of any such corporation) shall not exceed the limitations imposed by
Section 422 of the Code.
6.6.2 ISO's shall also comply with any other restrictions and limitations
imposed by Section 422 of the Code not otherwise provided in the Plan.
Section 7: Terms and Conditions of SAR's.
7.1 Grants. The Committee may grant SAR's to Eligible Persons in
connection with Options granted under this Plan. Each SAR shall entitle the
Participant upon prior consent of the Committee (which consent the Committee may
withhold as to any individual SAR in its absolute discretion), to surrender to
the Company an unexercised related Option (or any portion thereof which the
employee from time to time determines to surrender for this purpose) and to
receive from the Company in exchange therefor, subject to the provisions of this
Plan and such rules and regulations as from time to time may be established by
the Committee, a quantity of shares of Stock equal to the excess of the Fair
Market Value on the exercise date of one share of Stock over the Option Price
per share times the number of shares covered by the Option, or portion thereof,
which is surrendered. The date a notice of exercise is received by the Company
shall be the exercise date.
7.2 General. Each SAR shall be subject to the same terms and conditions
as the Option to which
<PAGE> 6
it relates, shall be exercisable only to the extent the related option is
exercisable and the Committee consents to its exercise, and shall be subject to
such other terms and conditions as the Committee may determine.
7.3 Exercise of SAR's.
7.3.1 SAR's may be exercised from time to time as follows:
7.3.1.1 The Committee must receive written notice of exercise stating
the number of shares of Stock subject to an exercisable Option with respect to
which the SAR is being exercised.
7.3.1.2 The Committee shall advise the Participant within five
business days after receipt of such written notice whether or not it will
consent to such exercise.
7.3.1.3 If the Committee consents to the exercise, the SAR will be
deemed to have been exercised on the date of the Company's receipt of the
written notice.
7.3.1.4 If the Committee does not notify the Participant of its
decision within such five business day period, the Committee shall be
conclusively presumed to have given its consent.
7.3.1.5 If the Committee denies its consent, the Participant shall
not have the right to submit another written notice of exercise until six months
after the date of submission of the previous written notice of exercise.
7.3.2 All shares shall be valued at their Fair Market Value as of the
date of exercise of the SAR; provided, however, that with respect to exercises
of SAR's by a Participant who is subject to the provisions of Section 16(b) of
the Securities Exchange Act of 1934, during any period commencing on the third
business day following the date of release for publication of any annual or
quarterly summary statements of the Company's sales and earnings and ending on
the twelfth business day following such date (a "window period"), the Committee
shall prescribe whether payment shall be made in cash or otherwise, and may
prescribe, by rule of general application, such other measure of fair market
value per share as the Committee may, in its discretion, determine, but not in
excess of the highest Fair Market Value (as defined in Section 6.3) during such
window period and, in the case of SAR's that relate to an ISO, not in excess of
the maximum amount that would be permissible under Section 422A of the Code
without disqualifying such option as an ISO under such Section 422A.
7.3.3 The number of shares of Stock received by a Participant upon
exercise of a SAR may not exceed the number of shares covered by the Option or
portion thereof surrendered. No cash will be paid in lieu of any fractional
share of Stock.
7.3.4 Any amount necessary to satisfy applicable Federal, state or local
tax requirements shall be withheld or paid promptly upon notification of the
amount due and prior to or concurrently with delivery of a certificate
representing shares of Stock.
<PAGE> 7
7.3.5 Upon exercise of a SAR, the number of shares of Stock subject to
exercise under the related Option shall automatically be reduced by the number
of shares of Stock represented by the Option or portion thereof surrendered.
Shares of Stock subject to options or portions thereof surrendered upon the
exercise of SAR's shall not be available for subsequent awards under this Plan.
Section 8. Nontransferability of Options and SAR's.
Options and SAR's granted under this Plan shall not be transferable by the
Participant other than by will or by the laws of descent and distribution.
During the lifetime of a Participant, Options and SAR's may be exercised only by
the Participant or its representative. Options and SAR's exercisable after the
death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant.
Section 9. Termination of Employment.
9.1 If, prior to the expiration of the Option Period, a Participant's
employment by the Company or an Affiliate terminates (other than by reason of
death or disability), each Option then outstanding as to that Participant shall
remain exercisable for a period of three (3) months from the date of termination
of employment (but not later than the end of the Option Period) to the extent it
was exercisable on the date of termination of employment, and thereafter all
such Options shall terminate.
9.2 Notwithstanding any other provisions of this Section 9, if a
participant's employment is terminated for cause, all rights of the Participant
under any Options shall cease immediately.
Section 10. Death or Disability of Participant.
10.1. If, prior to the end of the Option Period, a Participant's
employment by the Company or an Affiliate terminates by reason of death, each
option shall remain exercisable for a period of six months from the date of
death (but no later than the end of the Option Period) to the extent that it was
exercisable on the date of death.
10.2. If, prior to the end of the Option Period, a Participant's
employment by the Company or an Affiliate terminates by reason of disability,
each option shall remain exercisable for a period of one year from the date of
such termination (but no later than the end of the Option Period) to the extent
that it was exercisable at the date of termination as used in this Section 10
and elsewhere in this Plan, the term "disability" means a physical or mental
impairment which comes within the definition of disability as set forth in
Section 22(e)(3) of the Code.
Section 11. Forfeiture Upon Occurrence of Certain Acts.
Notwithstanding any other provisions of this Plan, no payment under any
SAR or issuance of any Stock pursuant to any Award shall be made and all rights
of the Participant who received such
<PAGE> 8
Award (or his designated beneficiary or legal representatives) under this Plan
shall be forfeited if, prior to the time of such payment or issuance, the
Participant (i) shall be employed without the Company's or Affiliate's consent
by a competitor of, or shall be engaged in any activity in competition with, the
Company or an Affiliate; (ii) divulges without the consent of the Company any
secret or confidential information belonging to the Company or an Affiliate;
(iii) has been dishonest or fraudulent in any matter affecting the Company or
(iv) has committed any act which, in the sole judgment of the Committee, has
been substantially detrimental to the interests of the Company. The Company
shall give a Participant written notice of the occurrence of any such event
prior to making any such forfeiture. The determination of the Committee as to
the occurrence of any of the events specified in the foregoing clauses (i) and
(iv) of this Section 11 shall be conclusive and binding upon all persons for all
purposes. Any Award shall be subject to forfeiture for the reasons provided in
this Section in such manner as shall be provided by the Committee.
Section 12. Stock Adjustments.
12.1 In the event that the shares of Stock shall be changed into or
exchanged for a different number or kind of shares of stock of the Company or of
another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, stock split, combination of shares or
otherwise), or if the number of such shares of Stock shall be increased through
the payment of a stock dividend, then there shall be substituted for or added to
each share of Stock subject to, or which may become subject to, an Option under
this Plan, the number and kind of shares into which each outstanding share of
Stock shall be so changed or for which each such share shall be exchanged, or to
which each such share shall be so entitled, as the case may be. Outstanding
options shall also be appropriately amended as to Option Price and other terms
as may be necessary to reflect the foregoing events. In the event there shall be
any other change in the number or kind or outstanding shares of the Stock, or of
any shares into which such shares shall have been changed, or for which they
shall have been exchanged, and if the Committee shall, in its sole discretion,
determine that such change equitably requires an adjustment in any Option
theretofore granted or which may be granted under this Plan, such adjustments
shall be made in accordance with such determination.
12.2 Fractional shares resulting from any adjustment in Options pursuant
to this Section 12 may be settled in cash or otherwise as the Committee shall
determine. Notice of any adjustment shall be given by the Company to each holder
of an option which shall have been so adjusted and such adjustment (whether or
not such notice is given) shall be effective and binding for all purposes of
this Plan.
12.3 Treatment of Options and SARs.
A. In the event of an occurrence of any of the following events:
(i) the commencement of a bona fide "tender offer", (other than by the
Company or COMNET Corporation, a Delaware corporation ("COMNET") or COMNET's
successor or assign), which tender offer is acceptable to the Company's Board
for the shares of the Company as provided under Rule 14d-2 promulgated under the
Federal Securities Exchange Act of 1934, as amended, or
<PAGE> 9
any subsequent comparable Federal rule or regulation governing tender offers;
(ii) a successful tender offer not previously approved by the Company's
Board of Directors resulting in a change of control of the Board;
(iii) the Company's execution of an agreement concerning the sale of
substantially all of its assets (other than to a subsidiary in a mere corporate
restructuring);
(iv) the Company's adoption of a plan of dissolution or liquidation; or
(v) the Company's execution of an agreement concerning a merger or
consolidation (with a corporation other than COMNET) involving the Company in
which the Company is not the surviving corporation or if, immediately following
such merger or consolidation, less than fifty percent (50%) of the surviving
corporation's outstanding voting stock is held by persons who were shareholders
of the Company immediately prior to such merger or consolidation; upon approval
of the Compensation Committee each Participant shall have the right, immediately
following such occurrence, to exercise his or her Options in full to the extent
not theretofore exercised regardless of any provision herein or any provision in
the Options contract providing for the deferment of the vesting or exercise
thereof.
The Participant shall then be entitled to exercise the Options regardless
of whether the tender offer (described in 12.3A(i)) is successful, regardless of
whether the dissolution or liquidation is consummated, and regardless of whether
the other corporation which is the surviving corporation in a merger or
consolidation shall adopt and maintain any plan under which options are granted
to the Participant. In the event the agreement concerning the sale of
substantially all of its assets or the agreement concerning a merger or
consolidation is not consummated by the parties, then the options not exercised
prior to the formal determination by the Board that the contemplated transaction
will not be consummated shall on and after the date of such determination again
be subject to the exercise restrictions set forth in the Option agreement. In
the case of a merger, consolidation, reorganization, reclassification, sale of
assets or similar event, all outstanding Options shall pertain to the securities
or other property to which a holder of the number of shares of Stock covered by
the Option would have been entitled to receive in connection with such event,
and in the case of any other event specified herein, each outstanding Option
shall remain outstanding and exercisable in accordance with its terms.
B. In the event of any of the occurrences referenced in Section 12.3A,
above, and upon approval of the Compensation Committee, the Redemption Date with
respect to all SARs theretofore granted hereunder and outstanding at that time
shall be the date of such event, regardless of any provision herein or any
provision in the Stock Unit contract providing for the deferment of the vesting
or redemption of any provision herein or any provision in the SAR contract
providing for the deferment of the vesting or redemption thereof. The
Participant shall be entitled to redeem the SAR regardless of whether the tender
offer is successful, regardless of whether the dissolution or liquidation is
consummated, and regardless of whether the other corporation which is the
surviving corporation in a merger or consolidation shall adopt and maintain any
plan under which SARs are
<PAGE> 10
granted to the Participant. In the event the agreement concerning the sale of
substantially all of its assets or the agreement concerning a merger or
consolidation is not consummated by the parties, then the SARs not exercised
prior to the formal determination by the Board that the contemplated transaction
will not be consummated shall on and after the date of such determination again
be subject to the vesting restrictions set forth in the Option agreement.
In the case of a merger, consolidation, reorganization, reclassification,
sale of assets or similar event, the SARs Value of any SAR upon the redemption
of such SAR shall be determined on the basis of the difference, if any, between
(i) the value of a single share of the Company's Stock as of the date of grant
of such SAR, and (ii) the current value, as of the Redemption Date of such SAR,
of the shares of stock or other securities into which a single share of the
Company's Stock would have been converted on the date of such reclassification,
consolidation, merger, reorganization, sale of assets or other similar event.
12.4 In making the adjustments provided for, by this Section 12,
consideration shall be given to applicable tax laws in order to avoid a
premature lapse or disqualifying disposition of an option due solely to such
adjustment.
Section 13. Effective Date, Termination and Amendment of the Plan.
13.1 This Plan shall become effective September 12, 1995, after approval
by the Company's stockholders. Once effective, this Plan shall terminate on
September 10, 2005.
13.2 The Board may, insofar as permitted by law, from time to time and at
any time, with respect to any shares at the time not subject to Options,
terminate, suspend, alter, amend or discontinue this Plan, in whole or in part,
except that no such modification, alteration, amendment or discontinuation
shall, without the Participant's consent, impair the rights of any Participant
under any Option granted to such Participant, except in accordance with the
provisions of this Plan and/or the Option Agreement applicable, to any such
Award, and except, further, that no modification, alteration of amendment shall,
without the approval by the holders of a majority of the then-outstanding voting
stock of the Company represented and entitled to vote at a stockholders'
meeting:
(i) Increase the total number of shares reserved for the purposes of this
Plan, except as provided in Section 12 for this Plan;
(ii) Decrease the Option Price of ISO's to less than 100% of Fair Market
Value on the date of grant of an Option or the option Price of NQSO's to less
than 85% of Fair Market Value on the date of grant of an option.
(iii) Change the persons (or class of persons) eligible to receive options
and SAR's under this Plan;
(iv) Materially increase the benefits accruing to Participants under this
Plan.
<PAGE> 11
Section 14. Miscellaneous.
14.1. This Plan does not, directly or indirectly, create any right for the
benefit of any employee or class of employees to receive any Awards under this
Plan, or create in any employee or class of employees any right with respect to
continuation of employment by the Company or an Affiliate, and it shall not be
deemed to interfere in any way with the Company's or an Affiliate's right to
terminate or otherwise modify an employee's employment at any time.
14.2 Notwithstanding any other provision of this Plan, no delivery of
Stock with respect to any Award shall be made, and all rights of the Participant
who receives such Award (or his designated beneficiary or legal representative)
to such delivery of Stock under this Plan shall be forfeited, at the discretion
of the Committee, if, prior to the time of such delivery, the Participant
breaches a restriction or any of the terms, restrictions and/or conditions of
this Plan and/or the Stock Option Agreement.
14.3 The provisions of this Plan and the terms and conditions of any Award
shall, in accordance with their terms, be binding upon, and inure to the benefit
of, all successors of each Participant, including, without limitation, such
Participant's estate and the executors, administrators or trustees thereof,
heirs and legatees and any receiver, trustee in bankruptcy or representative of
creditors of such Participant.
14.4 No member of the Committee shall be personally liable by reason of
any contract or other instrument executed by him or on his behalf in his
capacity as a member of the Committee, nor for any mistake of judgment made in
good faith, and the Company shall indemnify and hold harmless each member of the
Committee and each other officer, employee or director of the Company to whom
any duty or power relating to the administration or interpretation of this Plan
may be allocated or delegated, against any cost or expense (including counsel
fees) or liability (including any sum paid in settlement of a claim with the
approval of the Board) arising out of any act or omission to act in connection
with this Plan, unless arising out of such person's own fraud or bad faith.
14.5 Nothing contained in the Plan shall be construed to preclude the
granting of an Option or Options pursuant to Section 5.1 to an Optionee in
addition to an Option or options for the purchase of Shares already held by that
Optionee or the granting of more than one option pursuant to Section 5.1 to an
Optionee at the same time.
14.6. Any and all grants of Options shall be subject to all applicable
rules and regulations of any exchange on which the Company's Common Stock may
then be listed.
14.7 Notwithstanding any provision of the Plan or any Option Agreement to
the contrary, no Option may be granted or exercised at any time when such Option
or the granting or exercise thereof or payment therefor may result in the
violation of any law or governmental order or regulation.
14.8 Each member of the Board, Compensation Committee and each officer and
employee of the Company in performing duties under the Plan shall be entitled to
rely upon information and reports
<PAGE> 12
furnished in connection with the administration of this Plan by any duly
authorized officer or agent of the Company.
14.9 No member of the Board or Compensation Committee and no officer or
employee of the Company shall be liable for any action or determination made in
good faith with respect to the Plan or any Option granted under the Plan.
14.10 Any Option Agreement may include provisions that if the Company or a
Subsidiary shall be required to withhold any amounts by reason of any federal,
state or local tax rules or regulations in respect of the issuance of Shares
pursuant to the exercise of an Option, the Company or the Subsidiary shall be
entitled to deduct and to withhold such amount from any cash payments to be made
to the Optionee. The Administrator may establish such rules and procedures,
including, without limitation, any rules or procedures necessary to comply with
Rule 16b-3, as it may deem necessary or advisable in connection with the
withholding taxes relating to the exercise of any option.
14.11 If at any time an Optionee is indebted to or otherwise obligated to
make any payment to the Company or any Subsidiary, the Company may (a) withhold
from the Optionee (i) following the exercise by the Optionee of an Option,
Shares issuable to the Optionee having a Fair Market Value on the date of
exercise up to the amount of Indebtedness to the Company or (ii) following the
sale by an Optionee of Shares received pursuant to the exercise of an Option
amounts due to an Optionee in connection with the sale of such Shares up to the
amount of the indebtedness to the Company, or (b) take any substantially similar
action. The Company may establish such rules and procedures as it may deem
necessary or advisable in connection with the taking of any action contemplated
by this Section 14.11.
14.12 The section headings contained herein have no substantive meaning or
content and are not part of this Plan.
<PAGE> 1
EXHIBIT 4(B) 1995 NON-EMPLOYEE DIRECTORS' STOCK
OPTION PLAN AND EXHIBITS
1. Purpose of the Plan
This Stock Option Plan (the "Plan") is intended to promote the interests
of Group 1 SOFTWARE, Inc. (the "Company") by providing non-employee directors of
the Company with incentives to work for the best interests of the Company and
its stockholders through continuing personal interest in the value of the common
stock.
2. Administration of the Plan
(a) The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company. Such administration shall consist of
authority to interpret the provisions of the Plan, to establish such rules and
procedures as may be necessary or advisable to administer the Plan and to make
all determinations necessary or advisable for the administration of the Plan;
provided, however, that no such interpretation or determination shall change or
affect the selection of participants eligible to receive grants under the Plan,
the number of shares covered by or the timing of any grant of Options under the
Plan or the terms and conditions thereof. The interpretation and construction by
the Committee of any provision of the Plan or of any Option Agreement shall be
final and conclusive.
(b) The Plan is intended to comply with the terms and provisions of Rule
16b-3 promulgated under the Exchange Act. Any provision of the Plan or any
option Agreement inconsistent with the terms of such Rule in effect on such date
shall be inoperative and shall not affect the validity of the Plan, such Option
Agreement or any other provision thereof.
3. Stock Subject to the Plan
Under this Plan, options may be granted for shares of the Company's common
stock, $.01 par value ("Shares"). Shares issued upon exercise of options may be
either newly issued Shares or treasury Shares, at the discretion of the Company.
The aggregate number of Shares under the Plan is 100,000. If any outstanding
option under the Plan expires or is terminated for any reason, the Shares
allocable to the unexercised portion of such option may again be subject to an
option under the Plan.
4. Eligibility; Grant of Options
(a) Each person who becomes a Non-Employee Director at any time after the
effective date of the Plan shall be automatically granted an option to purchase
5,000 Shares on the date when he becomes a director.
(b) Each Non-Employee Director who is granted an option pursuant to
Subparagraph 4(a) above shall be automatically granted an additional option to
purchase 5,000 Shares on each anniversary of the date of his first grant under
the Plan if, on such anniversary, he is then a Non-Employee Director.
5. Terms and Conditions of Options
Stock options granted pursuant to the Plan shall be evidenced by
agreements in such form as the Compensation Committee shall, from time to time,
approve, which agreements shall comply with and be subject to the following
terms and conditions:
<PAGE> 2
(a) Option Price
The option price of any option granted under the Plan shall be the fair
market value of the Company common stock on the date of the grant of such
option. If the Shares are listed on an established stock exchange, such fair
market value shall be deemed to be the closing price of Company common stock on
such stock exchange on the day the option is granted or, if no sale of Company
common stock shall have been made on any stock exchange on that day, the next
preceding day on which there was a sale of such stock. If Company common stock
is not listed on an established stock exchange but is traded in the
over-the-counter market, the fair market value of the Shares shall be the
closing price as quoted in the National Association of Securities Dealers'
Automated Quotation System ("Nasdaq") on the day the option is granted or, if no
sale of Company common stock is reflected in Nasdaq on that day, on the
preceding day on which there was a sale of such stock reflected in Nasdaq. If no
quotations are available, the fair market value shall be as determined by a
majority of the Board of Directors in good faith. The Compensation Committee
shall have full authority and discretion in fixing the option price in
accordance with any reasonable method of valuation, and be fully protected in
doing so.
(b) Terms and Exercise of Options
(1) Each option granted under the Plan shall be exercisable as to
20% of the total number of Shares covered thereby during each consecutive
twelve month period commencing on a date twelve months after the granting of
the option.
(2) To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, in any subsequent period but not more than ten
years from the date the option is granted.
(3) Any option granted under the Plan may be exercised by notifying
the Company of such exercise prior to the termination of such option. The
option price for the number of Shares for which the option is exercised shall
become immediately due and payable; provided, however, that in lieu of cash an
optionee may exercise his option by tendering to the Company, shares of Company
common stock owned by him (which includes pyramiding the shares received upon
exercise of options by simultaneously delivering such shares of stock in payment
of the purchase price of shares subject to additional options having a fair
market value equal to the cash exercise price of the Shares being purchased),
provided that any Share delivered in payment of the exercise price must have
been held of record by the Optionee for a least six months or such other period
as may be required to avoid any adverse effect on the financial position of the
Company or a subsidiary as a result of incurring compensation expense or
otherwise. Such shares, which shall be fully paid and non-assessable upon the
issuance thereof, shall be represented by a certificate or certificates
registered in the name of the Participant and stamped with any appropriate
legend.
(4) During the lifetime of the optionee, the options shall be
exercisable only by him or his representative and shall not be assignable or
transferable by him otherwise than by will or the laws of descent and
distribution.
(c) Effect of Termination of Directorship
(1) In the event that an optionee shall cease to be a Non-Employee
Director of the Company for any reason other than his death, such optionee shall
have the right to exercise his options at any time within thirty days after he
has ceased to be a Non-Employee Director to the extent of the full number of
Shares he was entitled to purchase under the options on the date of termination,
subject to the condition that no option shall be exercisable after the
expiration of the term of the option.
<PAGE> 3
(2) If the optionee shall die while he is a Non-Employee Director of the
Company or within one month after termination of such status for any reason, and
he shall not have fully exercised all his options, such options may be exercised
at any time within six months after his death by the executors or administrators
of the optionee or by any person or persons to whom the options are transferred
by will or the applicable laws of descent and distribution, to the extent of the
full number of Shares he was entitled to purchase under the options on the date
of death, and subject to the condition that no option shall be exercisable after
the expiration of the term of the option.
(d) Adjustment Upon Changes in Stock
If any change is made in the common stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividends, stock splits, combination of
shares, exchange of shares, change in corporate structure, or otherwise)
appropriate adjustments shall be made as to the maximum number of Shares subject
to outstanding options.
(e) Rights As A Stockholder
No person shall have any rights as a stockholder with respect to any Shares
covered by an option granted pursuant to the Plan until the date of the issuance
of a stock certificate to him for such Shares.
(f) In the event of an occurrence of any of the following events:
(1) the commencement of a bona fide "tender offer" (other than by
the Company or COMNET Corporation, a Delaware corporation ("COMNET") or COMNET's
successor or assign) which tender offer is acceptable to the Company's Board for
the shares of the Company as provided under Rule 14d-2 promulgated under the
Federal Securities Exchange Act of 1934, as amended, or any subsequent
comparable Federal rule or regulation governing tender offers;
(2) a successful tender offer not previously approved by the
Company's Board of Directors resulting in a change of control of the Board;
(3) the Company's execution of an agreement concerning the sale of
substantially all of its assets (other than to a subsidiary in a mere corporate
restructuring);
(4) the Company's adoption of a plan of dissolution or liquidation;
or
(5) the Company's execution of an agreement concerning a merger or
consolidation (with a corporation other than COMNET) involving the Company in
which the Company is not the surviving corporation or if, immediately following
such merger or consolidation, less than fifty percent (50%) of the surviving
corporation's outstanding voting stock is held by persons who were shareholders
of the Company immediately prior to such merger or consolidation; upon approval
of the Compensation Committee each Participant shall have the right, immediately
following such occurrence, to exercise his or her Option in full to the extent
not theretofore exercised regardless of any provision herein or any provision in
the Option contract providing for the deferment of the vesting or exercise
thereof.
The Participant shall then be entitled to exercise the options regardless
of whether the tender offer described in 5(f)(1) is successful, regardless of
whether the dissolution or liquidation is consummated, and regardless of whether
the other corporation which is the surviving corporation in a merger or
consolidation
<PAGE> 4
shall adopt and maintain any plan under which options are granted to the
Participant. In the event the agreement concerning the sale of substantially all
of its assets or the agreement concerning a merger or consolidation is not
consummated by the parties, then the Options not exercised prior to the formal
determination by the Board that the contemplated transaction will not be
consummated shall on and after the date of such determination again be subject
to the exercise restrictions set forth in the Option agreement. In the case of a
merger, consolidation, reorganization, reclassification, sale of assets or
similar event, all outstanding Options shall pertain to the securities or other
property to which a holder of the number of shares of Stock covered by the
Option would have been entitled to receive in connection with such event, and in
the case of any other event specified herein, each outstanding Option shall
remain outstanding and exercisable in accordance with its terms.
(g) Treatment of SARs.
In the event of any of the occurrences referenced in Section 5(f), above,
the Redemption Date with respect to all SARs theretofore granted hereunder and
outstanding at that time shall be the date of such event, regardless of any
provision herein or any provision in the Stock Unit contract providing for the
deferment of the vesting or redemption of any provision herein or any provision
in the SAR contract providing for the deferment of the vesting or redemption
thereof. The Participant shall be entitled to redeem the SAR regardless of
whether the tender offer is successful, regardless of whether the dissolution or
liquidation is consummated, and regardless of whether the other corporation
which is the surviving corporation in a merger or consolidation shall adopt and
maintain any plan under which SARs are granted to the Participant. In the event
the agreement concerning the sale of substantially of all of its assets or the
agreement concerning a merger or consolidation is not consummated by the
parties, then the SARs not exercised prior to the formal determination by the
Board that the contemplated transaction will not be consummated shall on and
after the date of such determination again be subject to the vesting
restrictions set forth in the Option agreement.
In the case of a merger, consolidation, reorganization, reclassification,
sale of assets or similar event, the SARs Value of any SAR upon the redemption
of such SAR shall be determined on the basis of the difference, if any, between
(i) the value of a single share of the Company's Stock as of the date of grant
of such SAR, and (ii) the current value, as of the Redemption Date of such SAR,
of the shares of stock or other securities into which a single share of the
Company's Stock would have been converted on the date of such reclassification,
consolidation, merger, reorganization, sale of assets or other similar event.
(h) In making the adjustments provided for, by this Section 5,
consideration shall be given to applicable tax laws in order to avoid a
premature lapse or disqualifying disposition of an option due solely to such
adjustment.
6. Securities Matters
The exercise of any option granted hereunder shall only be effective at
such time as counsel to the Company shall have determined that the issuance and
delivery of Shares pursuant to such exercise will not violate any state or
federal securities laws or other laws. The Non-Employee Director desiring to
exercise an option may be required by the Company, as a condition of the
effectiveness of any exercise of an option granted hereunder, to agree in
writing that all Shares to be acquired pursuant to such exercise shall be held
for his own account without a view to any further distribution thereof, that the
certificates for such Shares shall bear an appropriate legend to that effect,
and that such Shares shall not be transferred or disposed of except in
compliance with applicable federal and state laws. The Company may, in its sole
discretion, defer the effectiveness of any exercise of any option granted
hereunder in order to allow the issuance of Shares to be made pursuant to
registration or an exemption from registration or other methods for compliance
available under federal or state securities laws. The Company shall be under no
obligation to effect the registration pursuant to the Securities
<PAGE> 5
Act of 1933 of any Shares to be issued hereunder or to effect similar compliance
under any state laws. The Company shall inform the optionee in writing of its
decision to defer the effectiveness of the exercise of an option granted
hereunder. During the period that the effectiveness of the exercise of an option
has been deferred, the optionee may, by written notice, withdraw such exercise
and obtain the refund of any amount paid with respect thereto.
7. Amendment or Termination of the Plan.
The Plan may be terminated and may be modified or amended by the Board at
any time and from time to time; provided, however, that (i) no modification or
amendment increasing the aggregate number of Shares which may be issued under
options, materially increasing benefits accruing to optionees, or materially
modifying the requirements as to eligibility to receive options hereunder or
otherwise instituting a material modification or amendment to the Plan shall be
effective without stockholder approval, (ii) no such termination, modification,
or amendment of the Plan shall alter or affect the terms of any then outstanding
options previously granted hereunder without the consent of the holder thereof
and (iii) the provisions of Section 5 with respect to the number of Shares for
which Options shall be granted, the timing of such grants and the Option Price
for such Options shall not be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
8. Miscellaneous
(a) Nothing contained in the Plan shall be construed to preclude the
granting of an option or options to an optionee in addition to an option or
options for the purchase of Shares already held by that optionee or the
granting of more than one option to an optionee at the same time.
(b) Any and all grants of options shall be subject to all applicable rules
and regulations of any exchange on which the Company's Common Stock may then be
listed.
(c) The Plan shall be effective on September 12, 1995, after approval by
the Company's stockholders at the 1995 annual meeting of stockholders. No
Option shall be granted after September 10, 2005.
(d) Nothing in the Plan nor in any option granted under the Plan shall
confer (or be deemed to confer) any right on any optionee to continue as a
director of the Company or any subsidiary or shall interfere in any way with
the right of the Board or the stockholders of the Company, or the board of
directors or stockholders (including the Company) of any subsidiary, to
terminate such status at any time, with or without cause and with or without
notice except as otherwise provided by the certificate of incorporation or by
laws of the Company or such Subsidiary or applicable law.
(e) Notwithstanding any provision of the Plan or any option agreement to
the contrary, no option may be granted or exercised at any time when such
option or the granting or exercise thereof or payment therefore may result in
the violation of any law or governmental order or regulation.
(f) Each member of the Board and each officer and employee of the Company
in performing duties under the Plan shall be entitled to rely upon information
and reports furnished in connection with the administration of this Plan by any
duly authorized officer or agent of the Company.
(g) No member of the Board and no officer or employee of the Company
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under the Plan.
<PAGE> 6
(h) Any option agreement may include provisions that if the Company or a
subsidiary shall be required to withhold any amounts by reason of any federal,
state or local tax rules or regulations in respect of the issuance of Shares
pursuant to the exercise of an option, the Company or the Subsidiary shall be
entitled to deduct and to withhold such amount from any cash payments to be
made to the optionee. The Administrator may establish such rules and
procedures, including, without limitation, any rules or procedures necessary to
comply with Rule 16b-3, as it may deem necessary or advisable in connection
with the withholding taxes relating to the exercise of any option.
(i) The section headings contained herein have no substantive meaning or
content and are not part of this Plan.
<PAGE> 1
EXHIBIT 5 OPINION OF ARENT FOX KINTNER PLOTKIN &
KAHN RE: VALIDITY OF SECURITIES
REGISTERED
[ARENT FOX LETTERHEAD]
July 8, 1998
The Board of Directors
Group 1 Software, Inc.
4200 Parliament Place
Suite 600
Lanham, Maryland 20706-1860
Gentlemen:
We have acted as counsel to Group 1 Software, Inc., (the "Company"),
with respect to the Company's Registration Statement on Form S-8, filed by
the Company with the Securities and Exchange Commission (the "Commission") in
connection with the registration under the Securities Act of 1933, as
amended, of (i) 300,000 shares of Common Stock, $.01 par value (the
"Shares"), subject to the 1995 Group 1 Software, Inc. Incentive Stock Option,
Non-qualified Stock Option and Stock Appreciation Rights Plan (the "Stock
Option Plan") and (ii) 100,000 Shares subject to the Group 1 Software, Inc.
1995 Non-employee Directors' Stock Option Plan (the "Non-employee Directors
Plan").
As counsel to the Company, we have examined the Company's Certificate
of Incorporation and such records, certificates and other documents of the
Company, as well as relevant statutes, regulations, published rulings and
such questions of law, as we considered necessary or appropriate for the
purpose of this opinion.
Based on the foregoing, we are of the opinion that the 300,000 Shares
subject to the Stock Option Plan, when issued and paid for in accordance with
the terms of the Stock Option Plan, and the 100,000 Shares subject to the
Non-employee Directors Plan, when issued and paid for in accordance with the
terms of the Non-employee Directors Plan, will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving this consent, we do not hereby admit that we come
within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the General Rules and Regulations
thereunder.
Very truly yours,
ARENT FOX KINTNER PLOTKIN & KAHN
By: /s/ Arnold R. Westerman
------------------------------
Arnold R. Westerman
<PAGE> 1
EXHIBIT 23(A) CONSENT OF PRICEWATERHOUSECOOPERS
(CERTIFIED PUBLIC ACCOUNTANTS)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of Group 1 Software, Inc. on Form S-8 (File No. 33-__________) of our report
dated June 12, 1998, on our audits of the consolidated financial statements
and financial statement schedule of Group 1 Software, Inc..
PRICEWATERHOUSECOOPERS, L.L.P.
McLean, Virginia
July 8, 1998
