As filed with the Securities and Exchange Commission [ ]
Registration No. 33-[ ]
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Securities and Exchange Commission
Washington, D.C. 20549
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Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
Spectrum Information Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 75-1940923
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 Westchester Avenue 10577
Purchase, New York (Zip Code)
(Address of Principal Executive
Offices)
Spectrum Information Technologies, Inc.
1998 Consultant Stock Incentive Plan
Donald J. Amoruso
2700 Westchester Avenue
Purchase, New York 10577
(914) 251-1800
(Name, address and telephone
number of agent for service)
Copy to:
Arthur Kohn, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
CALCULATION OF REGISTRATION FEE
=======================================================================
Proposed Proposed
Title of Maximum Maximum Amount of
Securities Amount Offering Aggregate Regis-
to be to be Price Per Offering tration
Registered Registered Share (1) Price (1) Fee
- -----------------------------------------------------------------------
Common Stock,
par value $.001 250,000 $.98 $245,000 $75.76
=======================================================================
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(h) on the basis of the
average of the high bid ($.91) and the low offer ($1.06) sales
prices per share of Spectrum Information Technologies, Inc.
Common Stock on July 24, 1998 as reported by the National
Quotation Bureau for stock traded on the NASDAQ OTC Bulletin
Board.
Page 1 of 19 total pages
Exhibit Index appears on page 6
<PAGE>
Part 1
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in this
Part I will be sent or given to participants as specified by Rule
428(b)(1). These documents and the documents incorporated by
reference in the registration statement pursuant to Item 3 of
Part II of this form, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities
Act.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents heretofore filed by Spectrum
Information Technologies, Inc. (the "Company" or "Registrant")
with the Securities and Exchange Commission are hereby
incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1998 and the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998.
(b) The description of the Company's common stock contained
in its Registration Statement on Form 10, dated April 10, 1987
(File No. 015596), filed with the Commission pursuant to Section
12(g) of the Exchange Act, and any amendment or report filed for
the purpose of updating such information, including the
description of the Company's common stock contained in the
Disclosure Statement (including exhibits thereto) filed as
Exhibit 5.1 to the Company's Current Report on Form 8-K dated
March 14, 1996.
All documents hereafter filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment hereto which indicates
that all securities 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 part hereof from the date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The Registrant is incorporated in Delaware. Under Section
145 of the General Corporation Law of the State of Delaware (the
"DGCL"), a Delaware corporation generally has the power to
indemnify its present and former directors, officers, employees
and agents against expenses and liabilities incurred by them in
connection with any action, suit or proceeding to which they are,
or are threatened to be made, a party by reason of their serving
in those positions so long as they acted in good faith and in a
manner they reasonably believed to be in, or not opposed to, the
best interests of the company, and with respect to any criminal
action or proceeding, so long as they had no reasonable cause to
believe their conduct was unlawful. The statute expressly
provides that the power to indemnify authorized thereby is not
exclusive of any rights granted under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise.
The Restated Certificate of Incorporation of the Registrant
provides that the Company shall indemnify to the full extent
authorized or permitted by law (as now or hereafter in effect)
any person made, or threatened to be made a party or witness to
any action, suit or proceeding (whether civil or criminal or
otherwise) by reason of the fact that he, his testator or
intestate, is or was a director or an officer of the Company or
by reason of the fact that such person, at the request of the
Company, is or was serving any other corporation, partnership,
joint venture, trust,
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employee benefit plan or other enterprise, in any capacity. The
Restated Certificate of Incorporation further provides that
nothing contained in such provision shall affect any rights to
indemnification to which employees other than directors and
officers may be entitled by law, and that no amendment or repeal
of such provision shall apply to or have any effect on any right
to indemnification provided pursuant to such provision with
respect to any acts or omissions occurring prior to such
amendment or repeal.
In accordance with Section 102(b)(7) of the DGCL, the
Restated Certificate of Incorporation of the Registrant provides
that directors of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for
any breach of fiduciary duty as a director, except (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 pursuant to Section 174 (relating to liability
for unauthorized acquisitions or redemptions of, or dividends on,
capital stock) of the DGCL, or (iv) for any transactions from
which any such director derived an improper personal benefit. The
Restated Certificate of Incorporation of the Registrant contains
such a provision.
The Registrant maintains insurance for the protection of its
directors and officers against claims asserted against them in
their official capacities.
The Registrant has entered into separate indemnity
agreements with certain of its executive officers on employees
(the "Indemnitees"), under which the Registrant will, upon proper
request of the Indemnitee, indemnify him if such Indemnitee is a
party to or is threatened to be made a party to or is otherwise
involved in any third party proceedings or proceedings by or in
the right of the Registrant to procure a judgment in its favor by
reason of the fact that the Indemnitee is or was director,
officer, employee or agent of the Registrant or is or was serving
at the request of the Registrant as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust or other enterprise, against all expenses, judgments, fines
and penalties, actually and reasonably incurred by the Indemnitee
in connection with the defense or settlement of any of such
proceedings. Such right shall be a contract right and shall
include the right to be paid by the Registrant expenses incurred
in defending any such proceeding in advance of its final
disposition; provided, however, that the payment of such expenses
incurred by the Indemnitee in his capacity as a director or
officer (and not in any other capacity in which service was or is
rendered by an Indemnitee while a director or officer, including,
without limitation, service to an employee benefit plan) in
advance of the final disposition of such proceeding will be paid
only upon delivery to the Registrant of an undertaking, by or on
behalf of the Indemnitee, to repay all amounts so advanced if it
should be determined ultimately that the Indemnitee is not
entitled to be indemnified under this section or otherwise.
The preceding discussion of the Restated Certificate of
Incorporation of the Registrant and the DGCL is not intended to
be exhaustive and is qualified in its entirety by reference to
the complete texts of the Restated Certificate of Incorporation
of the Registrant and to the DGCL.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following are filed as exhibits to this Registration
Statement:
Exhibits
4.1 Restated Certificate of Incorporation of the Company is
incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement on Form S-8 regarding
Spectrum's 1996 Incentive Deferral Plan.
4.2 Restated Bylaws of the Company are incorporated by
reference to Exhibit 5.1 of the Registrant's Current
Report on Form 8-K dated March 14, 1996.
5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton.
24.1 Consent of BDO Seidman, LP.
24.2 Consent of Cleary, Gottlieb, Steen & Hamilton is included
in Exhibit 5.1.
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28.1 Spectrum Information Technologies, Inc. 1998 Consultant
Stock Incentive Plan.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information
with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement; PROVIDED, HOWEVER,
that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15 (d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Purchase, State of New York, on July 31, 1998.
SPECTRUM INFORMATION TECHNOLOGIES, INC.
By: /s/ Donald J. Amoruso
-------------------------
Donald J. Amoruso
Chief Executive Officer, President
and Chairman of the Board
By: /s/ Barry J. Hintze
-------------------------
Barry J. Hintze
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities set forth on July 31, 1998.
Signature Title
/s/ Donald J. Amoruso Director
- -------------------------
Donald J. Amoruso
/s/ Sheldon Buckler Director
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Sheldon Buckler
/s/ George Bugliarello Director
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George Bugliarello
/s/ Robert Dalziel Director
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Robert Dalziel
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Page No.
- ------- ----------- --------
4.1 Restated Certificate of Incorporation of
the Company (incorporated by reference to
Exhibit 4.1 of the Registrant's
Registration Statement on Form S-8
regarding Spectrum's 1996 Incentive
Deferral Plan)..
4.2 Restated Bylaws of the Company
(incorporated by reference to Exhibit 5.1
of the Registrant's Current Report on
Form 8-K dated March 14, 1996).
5.1 Opinion of Cleary, Gottlieb, Steen &
Hamilton
24.1 Consent of BDO Seidman, LP
24.2 Consent of Cleary, Gottlieb, Steen &
Hamilton (included in Exhibit 5.1)
28.1 Spectrum Information Technologies, Inc.
1998 Consultant Stock Incentive Plan
Exhibit 5.1
[Letterhead of Cleary, Gottlieb, Steen & Hamilton]
Writer's Direct Dial: (212) 225-2920
August 4, 1998
Christopher Graham, Esq.
Spectrum Information Technologies, Inc.
2700 Westchester Avenue
Purchase, N.Y.
Dear Sirs:
Spectrum Information Technologies, Inc., a Delaware
corporation, has requested our opinion in connection with a
Registration Statement on Form S-8 (the "Registration Statement")
to be filed by it today with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933,
as amended the ("Act"), relating to the shares of Common Stock,
$.001 par value, of Spectrum Information Technologies, Inc. to be
issued under the Spectrum Information Technologies, Inc. 1998
Consultant Stock Incentive Plan (the "Plan").
We have examined and are relying on originals, or
copies certified or otherwise identified to our satisfaction, of
such corporate records and such other instruments, certificates
and representations of public officials, officers and
representatives of Spectrum Information Technologies, Inc. and
such other persons, and we have made such investigations of law,
as we have deemed appropriate as a basis for the opinion
expressed below.
Based on the foregoing, it is our opinion that the
shares of Spectrum Information Technologies, Inc. issuable under
the Plan are duly authorized and, when issued in accordance with
the terms of the Plan, at prices in excess of the par value
thereof, will be validly issued, fully paid and nonassessable.
<PAGE>
Christopher Graham, Esq., p. 2
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement. By giving such consent, we
do not thereby admit that we are experts with respect to any part
of the Registration Statement, including this exhibit, within the
meaning of the term "expert" as used in the Act or the rules and
regulations of the Commission issued thereunder.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By: /s/ Arthur H. Kohn
-------------------------
Arthur H. Kohn, a partner
Exhibit 24.1
CONSENT OF BDO SEIDMAN L.P.
Spectrum Information Technologies, Inc.
Purchase, NY
We hereby consent to the incorporation by reference and inclusion
in the Prospectus constituting a part of this Registration
Statement of our report dated June 11, 1998, relating to the
consolidated financial statements and schedule of Spectrum
Information Technologies, Inc. and subsidiaries appearing in the
Company's Annual Report on Form 10-K for the year ended March 31,
1998.
/s/BDO Seidman, LLP
August 3, 1998
SPECTRUM INFORMATION TECHNOLOGIES, INC.
1998 CONSULTANT STOCK INCENTIVE PLAN
AS ADOPTED JULY 24, 1998
1. Purpose of the Plan
This Spectrum Information Technologies, Inc. 1998 Consultant
Stock Incentive Plan is intended to promote the interests of the
Company by conserving its limited cash and providing non-employee
consultants to the Company, who provide services critical to the
growth and protection of the business of the Company, with
incentives and rewards to encourage them to continue in the
service of the Company.
2. Definitions
As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "Board of Directors" shall mean the Board of Directors of
Spectrum.
(b) "Change in Control" shall mean:
(i) any Person becomes the "beneficial owner" (as such term
is defined in Rule 13d-3 promulgated under the Exchange Act, a
"Beneficial Owner"), directly or indirectly, of securities of
Spectrum representing 20% or more of the combined voting power of
Spectrum's then outstanding securities, other than beneficial
ownership by a Participant, the Company, any employee benefit
plan of the Company or any person or entity organized, appointed
or established pursuant to the terms of any such benefit plan and
other than in connection with an acquisition, merger or similar
transaction;
(ii) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of Spectrum representing 40% or more of
the combined voting power of Spectrum's then outstanding
securities in connection with one or more transactions under
which Spectrum issues or transfers its securities, in whole or in
part, as consideration in connection with an acquisition, merger
or similar transaction;
(iii) Spectrum's stockholders approve an agreement to merge
or consolidate Spectrum with another corporation, or an agreement
providing for the sale of substantially all of the assets of
Spectrum to one or more corporations, in any case other than with
or to a corporation 50% or more of which is controlled by, or is
under common control with, Spectrum; or
(iv) during any two-year period, individuals who at the
date on which the period commences constitute a majority of the
Board of Directors cease to constitute a majority thereof for any
reason; provided, however, that a director who was not a director
at the beginning of such period shall be deemed to have been a
director at the beginning of such period if such director was
elected by, or on the recommendation of, at least two-thirds of
the directors who were directors at the beginning of such period
(either actually or by prior operation of this provision), other
than any director who is so approved in connection with any
actual or threatened contest for election to positions on the
Board of Directors.
(c) "Code" shall mean the Internal Revenue Code of 1986.
(d) "Committee" shall mean the Compensation Subcommittee of the
Board of Directors or such other committee as the Board of
Directors shall appoint from time to time to administer the Plan.
(e) "Common Stock" shall mean Spectrum's common stock, $.001 par
value per share.
(f) "Company" shall mean Spectrum and each of its Subsidiaries.
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(g) "Director" shall mean a member of the Board of Directors of
Spectrum.
(h) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(i) the "Fair Market Value" of a share of Common Stock with
respect to any day shall be (i) the average of the high and low
sales prices on such day of a share of Common Stock as reported
on the principal securities exchange on which shares of Common
Stock are then listed or admitted to trading or (ii) if not so
reported, the average of the closing bid and ask prices on such
day as reported on the National Association of Securities Dealers
Automated Quotation System or (iii) if not so reported, as
furnished by any member of the National Association of Securities
Dealers, Inc. selected by the Committee. In the event that the
price of a share of Common Stock shall not be so reported, the
Fair Market Value of a share of Common Stock shall be determined
by the Committee in its absolute discretion.
(j) "Incentive Award" shall mean an Option or Stock Bonus granted
pursuant to the terms of the Plan.
(k) "Option" shall mean a non-qualified option to purchase shares
of Common Stock of Spectrum granted pursuant to Section 6 hereof.
(l) "Participant" shall mean an non-employee consultant of the
Company who is eligible to participate in the Plan and to whom an
Incentive Award is granted pursuant to the Plan.
(m) "Person" shall mean a "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act.
(n) "Plan" shall mean this Spectrum Corporation 1998 Consultant's
Stock Option Plan, as it may be amended from time to time.
(o) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(p) "Spectrum" shall mean Spectrum Information Technologies,
Inc., a Delaware corporation, and its successors.
(q) "Stock Bonus" shall mean a grant of a bonus payable in shares
of Common Stock pursuant to the provisions of Section 7 hereof.
(r) "Subsidiary" shall mean any "subsidiary corporation" within
the meaning of Section 424(f) of the Code.
3. Stock Subject to the Plan
Under the Plan, the Committee may grant to Participants (i)
Options and (ii) Stock Bonuses.
Subject to adjustment as provided in Section 8 hereof, the
Committee may grant Options and Stock Bonuses under the Plan to
Participants with respect to, or for, an aggregate number of
shares of Common Stock that does not exceed two hundred fifty
thousand (250,000).
In the event that any outstanding Option expires, terminates or
is cancelled for any reason , the shares of Common Stock subject
to the unexercised portion of such Option shall again be
available for grants under the Plan. In the event that any Stock
Bonus is forfeited for any reason, the shares of Common Stock for
which the Stock Bonus was granted shall again be available for
grants under the Plan.
Shares of Common Stock issued under the Plan may be either newly
issued shares or treasury shares, at the discretion of the
Committee.
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4. Administration of the Plan
The Plan shall be administered by a Committee of two or more
members of the Board of Directors, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3
promulgated under Section 16 of the Exchange Act. The Committee
shall from time to time designate the consultants to the Company
who shall be granted Incentive Awards and the amount, type and
terms of such Incentive Awards.
The Committee shall have full authority to administer the Plan,
including authority to interpret and construe any provision of
the Plan and the terms of any Incentive Award issued under it and
to adopt such rules and regulations for administering the Plan as
it may deem necessary. Decisions of the Committee shall be final
and binding on all parties.
The Committee may, in its absolute discretion, accelerate the
date on which any Option granted under the Plan becomes
exercisable or, subject to Section 6(c)(1) hereof, extend the
term of any Option granted under the Plan. In addition, the
Committee may, in its absolute discretion, grant Incentive Awards
to Participants on the condition that such Participants surrender
to the Committee for cancellation such other Incentive Awards
(including, without limitation, Incentive Awards with higher
exercise prices) as the Committee specifies. Notwithstanding
Section 3 herein, prior to the surrender of such other Incentive
Awards, Incentive Awards granted pursuant to the preceding
sentence of this Section 4 shall not count against the limits set
forth in such Section 3.
No member of the Committee shall be liable for any action,
omission, or determination relating to the Plan, and Spectrum
shall indemnify and hold harmless each member of the Committee
and each other director or employee of the Company to whom any
duty or power relating to the administration or interpretation of
the Plan has been 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 Committee) arising
out of any action, omission or determination relating to the
Plan, unless, in either case, such action, omission or
determination was taken or made by such member, director or
employee in bad faith and without reasonable belief that it was
in the best interests of the Company.
5. Eligibility
The persons who shall be eligible to receive Incentive Awards
pursuant to the Plan shall be such non-employee consultants to
the Company who provide services critical to the growth and
protection of the business of the Company as the Committee shall
select from time to time.
6. Options
The Committee may grant Options pursuant to the Plan to
Participants and such Options shall be evidenced by agreements in
such form as the Committee shall from time to time approve.
Options shall comply with and be subject to the following terms
and conditions:
(a) Identification of Options
All Options granted under the Plan shall be clearly identified in
the agreement evidencing such Options as non-qualified stock
options.
(b) Exercise Price
The exercise price of any Non-Qualified Stock Option granted
under the Plan shall be such price as the Committee shall
determine on the date on which such Non-Qualified Stock Option is
granted; provided, that such price may not be less than the
minimum price required by law.
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(c) Term and Exercise of Options
(1) Each Option shall be exercisable on such date or dates,
during such period and for such number of shares of Common Stock
as shall be determined by the Committee on the day on which such
Option is granted and set forth in the Option agreement with
respect to such Option; provided, however, that no Option shall
be exercisable after the expiration of ten years from the date
such Option was granted; and, provided, further, that each Option
shall be subject to earlier termination, expiration or
cancellation as provided in the Plan or in the agreement
evidencing such Option.
(2) Each Option shall be exercisable in whole or in part;
provided, that no partial exercise of an Option shall be for an
aggregate exercise price of less than $1,000. The partial
exercise of an Option shall not cause the expiration, termination
or cancellation of the remaining portion thereof.
(3) An Option shall be exercised by delivering notice to
Spectrum's principal office, to the attention of its General
Counsel, no less than three business days in advance of the
effective date of the proposed exercise. Such notice shall
specify the number of shares of Common Stock with respect to
which the Option is being exercised and the effective date of the
proposed exercise and shall be signed by the Participant. The
Participant may withdraw such notice at any time prior to the
close of business on the business day immediately preceding the
effective date of the proposed exercise. Payment for shares of
Common Stock purchased upon the exercise of an Option shall be
made on the effective date of such exercise either (i) in cash,
by certified check, bank cashier's check or wire transfer or (ii)
subject to the approval of the Committee, in shares of Common
Stock owned by the Participant and valued at their Fair Market
Value on the effective date of such exercise, or partly in shares
of Common Stock with the balance in cash, by certified check,
bank cashier's check or wire transfer. Any payment in shares of
Common Stock shall be effected by the delivery of such shares to
the General Counsel of Spectrum, duly endorsed in blank or
accompanied by stock powers duly executed in blank, together with
any other documents and evidences as the General Counsel of
Spectrum shall require from time to time.
(4) Any Option granted under the Plan may be exercised by a
broker-dealer acting on behalf of a Participant if (i) the
broker-dealer has received from the Participant or Spectrum a
fully- and duly-endorsed agreement evidencing such Option and
instructions signed by the Participant requesting Spectrum to
deliver the shares of Common Stock subject to such Option to the
broker-dealer on behalf of the Participant and specifying the
account into which such shares should be deposited, (ii) adequate
provision has been made with respect to the payment of any
withholding taxes due upon such exercise or, in the case of an
Incentive Stock Option, the disposition of such shares and (iii)
the broker-dealer and the Participant have otherwise complied
with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220.
(5) Certificates for shares of Common Stock purchased upon the
exercise of an Option shall be issued in the name of the
Participant and delivered to the Participant as soon as
practicable following the effective date on which the Option is
exercised.
(6) During the lifetime of a Participant, each Option granted to
him shall be exercisable only by him. No Option shall be
assignable or transferable otherwise than by will or by the laws
of descent and distribution.
(d) Consequences Upon Change in Control
Upon the occurrence of a Change in Control, each Option granted
under the Plan and outstanding at such time shall become fully
and immediately exercisable and shall remain exercisable until
its expiration, termination or cancellation pursuant to the terms
of the Plan.
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7. Stock Bonuses
The Committee may grant Stock Bonuses in such amounts as it shall
determine from time to time. A Stock Bonus shall be paid at such
time and subject to such conditions as the Committee shall
determine. Certificates for shares of Common Stock granted as a
Stock Bonus shall be issued in the name of the Participant to
whom such grant was made and delivered to such Participant as
soon as practicable after the date on which such Stock Bonus is
required to be paid.
8. Adjustment Upon Changes in Common Stock
(a) Shares Available for Grants
In the event of any change in the number of shares of Common
Stock outstanding by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange
of shares or similar corporate change, the maximum aggregate
number of shares of Common Stock with respect to which the
Committee may grant Options and Stock Bonuses shall be
appropriately adjusted by the Committee. In the event of any
change in the number of shares of Common Stock outstanding by
reason of any other event or transaction, the Committee may, but
need not, make such adjustments in the number and class of shares
of Common Stock with respect to which Options may be granted as
the Committee may deem appropriate.
(b) Outstanding Incentive Awards - Increase or Decrease in Issued
Shares Without Consideration
Subject to any required action by the shareholders of Spectrum,
in the event of any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or
consolidation of shares of Common Stock or the payment of a stock
dividend (but only on the shares of Common Stock), or any other
increase or decrease in the number of such shares effected
without receipt or payment of consideration by Spectrum, the
Committee shall proportionally adjust (i) the number of shares of
Common Stock subject to each outstanding Option and Stock Bonus
and (ii) the exercise price per share of Common Stock of each
such Option.
(c) Outstanding Incentive Awards - Certain Mergers
Subject to any required action by the shareholders of Spectrum,
in the event that Spectrum shall be the surviving corporation in
any merger or consolidation (except a merger or consolidation as
a result of which the holders of shares of Common Stock receive
securities of another corporation), each Option outstanding on
the date of such merger or consolidation, and the undistributed
portion of each Stock Bonus theretofore awarded, shall pertain to
and apply to the securities which a holder of the number of
shares of Common Stock subject to such Option, or undistributed
portion Stock Bonus would have received in such merger or
consolidation.
(d) Outstanding Incentive Awards - Certain Other Transactions
In the event of (i) a dissolution or liquidation of Spectrum,
(ii) a sale of all or substantially all of Spectrum's assets,
(iii) a merger or consolidation involving Spectrum in which
Spectrum is not the surviving corporation or (iv) a merger or
consolidation involving Spectrum in which Spectrum is the
surviving corporation but the holders of shares of Common Stock
receive securities of another corporation and/or other property,
including cash, the Committee shall, in its absolute discretion,
have the power to:
(i) cancel, effective immediately prior to the occurrence of
such event, each Option outstanding immediately prior to such
event (whether or not then exercisable) and, in full
consideration of such cancellation, pay to the Participant to
whom such Option was granted an amount in cash, for each share of
Common Stock subject to such Option equal to the excess of (A)
the value, as determined by the Committee in its absolute
discretion, of the property (including cash) received by the
holder of a share of Common Stock as a result of such event over
(B) the exercise price of such Option; or
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(ii) provide for the exchange of each Option (whether or not then
exercisable) for an option with respect to, as appropriate, some
or all of the property for which such Option is exchanged and,
incident thereto, make an equitable adjustment as determined by
the Committee in its absolute discretion in the exercise price of
the option, or the number of shares or amount of property subject
to the option or stock appreciation right or, if appropriate,
provide for a cash payment to the Participant to whom such Option
or was granted in partial consideration for the exchange of the
Option.
(e) Outstanding Incentive Awards - Other Changes
In the event of any change in the capitalization of Spectrum or
corporate change other than those specifically referred to in
Sections 12(b), (c) or (d) hereof, the Committee may, in its
absolute discretion, make such adjustments in the number and
class of shares subject to Options outstanding on the date on
which such change occurs and in the per share exercise price of
each such Option as the Committee may consider appropriate to
prevent dilution or enlargement of rights.
(f) No Other Rights
Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any dividend, any
increase or decrease in the number of shares of stock of any
class or any dissolution, liquidation, merger or consolidation of
Spectrum or any other corporation. Except as expressly provided
in the Plan, no issuance by Spectrum of shares of stock of any
class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number of shares of Common Stock
subject to an Incentive Award or the exercise price of any
Option.
9. Rights as a Stockholder
No person shall have any rights as a stockholder with respect to
any shares of Common Stock covered by or relating to any
Incentive Award granted pursuant to this Plan until the date of
the issuance of a stock certificate with respect to such shares.
Except as otherwise expressly provided in Section 8 hereof, no
adjustment to any Incentive Award shall be made for dividends or
other rights for which the record date occurs prior to the date
such stock certificate is issued.
10. No Special Employment Rights; No Right to Incentive Award
Nothing contained in the Plan or any Incentive Award shall confer
upon any Participant any right with respect to the continuation
of his providing services to the Company or interfere in any way
with the right of the Company at any time to terminate any
consulting agreement or to increase or decrease the compensation
of the Participant from the rate in existence at the time of the
grant of an Incentive Award.
No person shall have any claim or right to receive an Incentive
Award hereunder. The Committee's granting of an Incentive Award
to a Participant at any time shall neither require the Committee
to grant an Incentive Award to such Participant or any other
Participant or other person at any time nor preclude the
Committee from making subsequent grants to such Participant or
any other Participant or other person.
11. Securities Matters
(a) Spectrum shall be under no obligation to effect the
registration pursuant to the Securities Act of any shares of
Common Stock to be issued hereunder or to effect similar
compliance under any state laws. Notwithstanding anything herein
to the contrary, Spectrum shall not be obligated to cause to be
issued or delivered any certificates evidencing shares of Common
Stock pursuant to the Plan unless and until Spectrum is advised
by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of any
securities exchange
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on which shares of Common Stock are traded. The Committee may
require, as a condition of the issuance and delivery of
certificates evidencing shares of Common Stock pursuant to the
terms hereof, that the recipient of such shares make such
covenants, agreements and representations, and that such
certificates bear such legends, as the Committee, in its sole
discretion, deems necessary or desirable.
(b) The exercise of any Option granted hereunder shall only be
effective at such time as counsel to Spectrum shall have
determined that the issuance and delivery of shares of Common
Stock pursuant to such exercise is in compliance with all
applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Common
Stock are traded. Spectrum may, in its sole discretion, defer the
effectiveness of any exercise of an Option granted hereunder in
order to allow the issuance of shares of Common Stock pursuant
thereto to be made pursuant to registration or an exemption from
registration or other methods for compliance available under
federal or state securities laws. Spectrum shall inform the
Participant 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 Participant may, by written notice, withdraw such
exercise and obtain the refund of any amount paid with respect
thereto.
12. Withholding Taxes
Whenever shares of Common Stock are to be issued upon the
exercise of an Option or in connection with a Stock Bonus,
Spectrum shall have the right to require the Participant to remit
to Spectrum in cash an amount sufficient to satisfy federal,
state and local withholding tax requirements, if any,
attributable to such exercise prior to the delivery of any
certificate or certificates for such shares. In addition,
Spectrum may require the Participant to provide its tax
identification number and certify that it is not subject to
backup withholding.
13. Amendment of the Plan
The Board of Directors may at any time suspend or discontinue the
Plan or revise or amend it in any respect whatsoever; provided,
however, that without approval of the shareholders no revision or
amendment shall (i) except as provided in Section 8 hereof,
increase the number of shares of Common Stock that may be issued
under the Plan, (ii) materially increase the benefits accruing to
individuals holding Incentive Awards granted pursuant to the
Plan, or (iii) materially modify the requirements as to
eligibility for participation in the Plan.
14. No Obligation to Exercise
The grant to a Participant of an Option shall impose no
obligation upon such Participant to exercise such Option.
15. Transfers Upon Death
Upon the death of a Participant, outstanding Incentive Awards
granted to such Participant may be exercised only by the
executors or administrators of the Participant's estate or by any
person or persons who shall have acquired such right to exercise
by will or by the laws of descent and distribution and
outstanding Incentive Awards providing for transfers to such
Participant shall be transferred to the executors or
administrators of the Participant's estate or to any person or
persons who shall have acquired the right to receive such
transfer by will or by the laws of descent and distribution. No
transfer by will or the laws of descent and distribution of any
Incentive Award, or the right to exercise any Incentive Award,
shall be effective to bind Spectrum unless the Committee shall
have been furnished with (a) written notice thereof and with a
copy of the will and/or such evidence as the Committee may deem
necessary to establish the validity of the transfer and (b) an
agreement by the transferee to comply with all the terms and
conditions of the Incentive Award that are or would have been
applicable to the Participant and to be
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bound by the acknowledgements made by the Participant in
connection with the grant of the Incentive Award.
16. Expenses and Receipts
The expenses of the Plan shall be paid by Spectrum. Any proceeds
received by Spectrum in connection with any Incentive Award will
be used for general corporate purposes.
17. Failure to Comply
In addition to the remedies of Spectrum elsewhere provided for
herein, failure by a Participant to comply with any of the terms
and conditions of the Plan or the agreement executed by such
Participant evidencing an Incentive Award, unless such failure is
remedied by such Participant within ten days after having been
notified of such failure by the Committee, shall be grounds for
the cancellation and forfeiture of such Incentive Award, in whole
or in part, as the Committee, in its absolute discretion, may
determine.
18. Effective Date and Term of Plan
The Plan was adopted by the Board of Directors on July 24, 1998.
No grants may be made under the Plan after July 23, 2008.
