II-2
LA952790.025
As filed with the Securities and Exchange Commission
on February 22, 1996
File No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ADVANCED MARKETING SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3768341-9
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5880 Oberlin Drive, Suite 400, San Diego, California 92121
(Address of Principal Executive Offices) (Zip Code)
Advanced Marketing Services, Inc. 1995 Stock Option Plan
(Full title of the plan)
CHARLES C. TILLINGHAST, III
5580 Oberlin Drive, Suite 400, San Diego, California 92121
(Name and address of agent for service)
(619) 457-2500
(Telephone number, including area code, of
agent for service)
Please send copies of all correspondence to:
THEODORE H. LATTY, ESQ.
Hughes Hubbard & Reed
350 South Grand Avenue, 36th Floor
Los Angeles, CA 90071-3442
(213) 613-2800
Proposed
Title of Amount to be Proposed maximum Amount of
securities registered maximum aggregate registratio
to be offering offering n fee
registered price per price
share
Common Stock 400,000 $11.5625 (2) $4,625,000 $1,595.00
$.001 Par shares(1)
Value
(1) Includes an indeterminable number of shares which may be issued as a
result of future adjustments in accordance with the terms of the
stock option plan to which this Registration Statement relates.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based upon the average of the high and low
prices of the Registrant's Common Stock as reported on the
Nasdaq/National Market System on February 16, 1996.
ADVANCED MARKETING SERVICES, INC.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3.Incorporation of Documents By Reference.
There are hereby incorporated by reference in this
Registration Statement the following documents and information
heretofore filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), with the Securities and Exchange
Commission (the "Commission"):
(a)The Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995, including the
portions of the Registrant's definitive proxy
statement for its July 27, 1995 Annual Meeting of
Stockholders incorporated by reference into such
Annual Report;
(b)All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act by the Registrant with the
Commission since March 31, 1995; and
(c)The description of the Registrant's Common Stock
contained in the Registrant's Registration Statement
on Form 8-A, filed pursuant to Section 12 of the
Exchange Act, and any amendment or report filed with
the Commission for the purpose of updating such
description, including without limitation the
information set forth under Item 5 of the
Registrant's Report on Form 8-K, dated July 25, 1991,
filed under Section 13 of the Exchange Act.
All documents filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the date of this Registration Statement and 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 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.
Under its Certificate of Incorporation and Bylaws, the
Registrant is required to indemnify its directors and officers to
the fullest extent authorized by Delaware law. Section 145 of
the General Corporation Law of the State of Delaware (the
"Delaware GCL") currently permits indemnification of such a
person against expenses and other liabilities 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; provided, however,
that if the action or proceeding is by or in the right of the
corporation, indemnification shall not be made in respect of any
claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the
extent that the Delaware Court of Chancery or such other court in
which such action was brought shall determine that, in view of
all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such expenses (but not other
liabilities) as the court shall deem proper. To the extent that
such a person is successful on the merits in the defense of an
action, the Delaware GCL requires the corporation to indemnify
the agent for his actual and reasonable expenses incurred in
connection with such defense. Under the Delaware GCL and the
Bylaws, the Registrant may advance expenses of such a person in
defending an action; provided, that such advancement of expenses
may be made only if the person provides an undertaking to
reimburse the Registrant if it is ultimately determined that the
person is not entitled to be indemnified against such expenses.
In certain circumstances, certain provisions of the
General Corporation Law of the State of California (the
"California GCL"), including provisions relating to the
indemnification of directors and officers, may be applicable to
the affairs of the Registrant to the exclusion of the Delaware
GCL. In such event, the Registrant's Certificate of
Incorporation and Bylaws require the Registrant to indemnify its
directors and officers to the fullest extent permitted by
California law. The requirements of the California GCL relating
to the indemnification of directors and officers are similar in
material respects to the requirements of Delaware law described
above.
The provisions of the Delaware GCL and the California GCL
relating to the indemnification of directors and officers are
sufficiently broad to permit the indemnification of such persons
in certain circumstances against liabilities (including
reimbursement of expenses incurred) arising under the Securities
Act of 1933, as amended (the "Securities Act").
The stock option plan to which this Registration
Statement relates requires the Registrant to indemnify its
directors against liabilities, costs and expenses which may be
incurred in connection with the administration of the stock
option plans, other than liabilities, costs and expenses that
result from the negligence, bad faith, willful misconduct or
criminal acts of such directors.
Item 7.Exemption From Registration Claimed.
Not applicable.
Item 8.Exhibits.
4.1 Advanced Marketing Services, Inc. 1995 Stock
Option Plan.
5.1 Opinion of Hughes Hubbard & Reed.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Hughes Hubbard & Reed (contained
in Exhibit 5.1).
24.1 Power of Attorney (see page S-1).
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; (ii) to reflect
in the prospectus any facts or events arising
after the effective date of this 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; (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 clauses
(1)(i) and (1)(ii) do not apply if the
information required to be included in a post-
effective amendment by those clauses 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 undersigned Registrant hereby undertakes that,
for the purposes of determining any liability under
the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this
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 will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of San Diego, State of California, on the 22nd day of February,
1996.
ADVANCED MARKETING SERVICES, INC.
By:/s/ CHARLES C. TILLINGHAST, III
Charles C. Tillinghast, III
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Charles C.
Tillinghast, III and Loren C. Paulsen, or either of them, jointly
and severally, his true and lawful attorneys-in-fact and agents,
with full powers of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any
and all amendments to this Registration Statement, and to file the
same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully as to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ CHARLES C. Chairman of the Board of February 22,
TILLINGHAST, III Directors and Chief 1996
Charles C. Tillinghast, Executive Officer
III (principal executive
officer)
/s/ JONATHAN S. FISH Executive Vice February 22,
Jonathan S. Fish President-Finance and 1996
Chief Financial Officer
(principal financial and
accounting officer)
Signature Title Date
/s/ MICHAEL M. NICITA Director February 22,
Michael M. Nicita 1996
/s/ LOREN C. PAULSEN Director February 22,
Loren C. Paulsen 1996
/s/ LYNN S. DAWSON Director February 22,
Lynn S. Dawson 1996
/s/ ROBERT F. BARTLETT Director February 22,
Robert F. Bartlett 1996
/s/ JAMES A. LEIDICH Director February 22,
James A. Leidich 1996
/s/ TRYGVE E. MYHREN Director February 22,
Trygve E. Myhren 1996
/s/ E. WILLIAM SWANSON Director February 22,
E. William Swanson 1996
EXHIBIT INDEX
Sequentially
Description of Exhibit Numbered Page
4.1 Advanced Marketing Services, Inc. 1995 Stock
Option Plan 9
5.1 Opinion of Hughes Hubbard & Reed. 21
23.1 Consent of Arthur Andersen LLP. 23
23.2 Consent of Hughes Hubbard & Reed (contained in
Exhibit 5.1)
24.1 Power of Attorney (see page S-1)
-12-
LA951420.063/6+
ADVANCED MARKETING SERVICES, INC.
1995 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Advanced Marketing Services, Inc. 1995
Stock Option Plan (the "Plan") is to further the interests of
Advanced Marketing Services, Inc. (the "Company") and its
Subsidiaries by strengthening the desire of employees to
continue their employment with the Company and its
Subsidiaries and by inducing individuals to become employees
of the Company and its Subsidiaries through stock options to
be granted hereunder. Options granted under the Plan are
either options intending to qualify as "incentive stock
options" within the meaning of Section 422 of the Code or non-
qualified stock options.
2. DEFINITIONS
Whenever used herein the following terms shall have the
following meanings, respectively:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder.
(c) "Committee" shall mean the Stock Option or
Compensation Committee appointed by the Board of Directors of
the Company, or if no committee has been appointed, reference
to "Committee" shall be deemed to refer to the Board of
Directors of the Company.
(d) "Common Stock" shall mean the Company's Common
Stock, $.001 par value, as described in the Company's Articles
of Incorporation, as amended.
(e) "Company" shall mean Advanced Marketing Services,
Inc., a California corporation, or any successor by merger
which agrees to assume the Plan.
(f) "Employee" shall mean in connection with Non-
Qualified Options, any director, officer or employee of the
Company or any Subsidiary or Parent Corporation of the
Company, it being understood that the Committee may in its
discretion also grant Options to induce individuals to become
and remain as Employees and that such persons, for purposes of
receiving Non-Qualified Options hereunder, shall be deemed
"Employees." In connection with Incentive Options under this
Plan, "Employee" shall mean only employees of the Company or
any Subsidiary or Parent Corporation of the Company.
(g) "Fair Market Value Per Share" of the Company's
Common Stock on any date shall mean if the Company's Common
Stock is publicly traded the mean between the highest and
lowest quoted selling prices of the Common Stock on such date
or, if not available, the mean between the bona fide bid and
asked prices of the Common Stock on such date. In any
situation not covered above or if there were no sales on the
date in question, the Fair Market Value Per Share shall be
determined by the Committee in accordance with Section 20.2031-
2 of the Federal Estate Tax Regulations.
(h) "Incentive Option" shall mean an Option granted
under the Plan which is designated as and qualified as an
incentive stock option within the meaning of Section 422 of
the Code.
(i) "Non-Qualified Option" shall mean an Option granted
under the Plan which does not qualify as, or is not designated
as, an incentive stock option within the meaning of Section
422 of the Code.
(j) "Option" shall mean an Incentive Option, as defined
in Section 2(h) hereof, or a Non-Qualified Option, as defined
in Section 2(i) hereof.
(k) "Optionee" shall mean any Employee who has been
granted an Option to purchase shares of Common Stock under the
Plan.
(l) "Parent Corporation" shall have the meaning set
forth in Section 424(e) of the Code.
(m) "Permanent Disability" shall mean termination of
employment with the Company or any Subsidiary or Parent
Corporation of the Company with the consent of the Company or
such Subsidiary by reason of permanent and total disability
within the meaning of Section 22(e)(3) of the Code.
(n) "Plan" shall mean the Advanced Marketing Services,
Inc. 1995 Stock Option Plan, as amended.
(o) "Subsidiary" shall have the meaning set forth in
Section 424(f) of the Code.
3. ADMINISTRATION
(a) The Plan shall be administered by a Committee of at
least two Directors of the Company appointed by the Board,
each of whom shall be a "disinterested person" for purposes of
Rule 16(b)(3) of the Securities and Exchange Commission and
may be an "outside director" within the meaning of Section
162(m) of the Code, or, if there are not at least two such
Directors who are willing to serve on the Committee, by the
Board. The Board may from time to time appoint members of the
Committee in substitution for or in addition to members
previously appointed and may fill vacancies.
(b) Any action of the Committee with respect to the
administration of the Plan shall be taken by majority vote or
by written consent of a majority of its members.
(c) Subject to the provisions of the Plan, the Committee
or the Board shall have the authority to construe and
interpret the Plan, to define the terms used therein, to
determine the time or times an Option may be exercised and the
number of shares for which an Option may be exercised at any
one time, to prescribe, amend and rescind rules and
regulations relating to the Plan, to approve and determine the
duration of leaves of absence which may be granted to
participants without constituting a termination of their
employment for purposes of the Plan, and to make all other
determinations necessary or advisable for the administration
of the Plan. All determinations and interpretations made by
the Committee shall be conclusive and binding on all Employees
and on their guardians, legal representatives and
beneficiaries.
(d) The Company will indemnify and hold harmless the
members of the Board of Directors and the Committee from and
against any and all liabilities, costs and expenses incurred
by such persons as a result of any act, or omission to act, in
connection with the performance of such persons' duties,
responsibilities and obligations under the Plan, other than
such liabilities, costs and expenses as may result from the
negligence, gross negligence, bad faith, willful misconduct
and/or criminal acts of such persons.
4. NUMBER OF SHARES SUBJECT TO PLAN
(a) The stock to be offered under the Plan shall consist
of up to 400,000 shares of the Company's Common Stock. If any
Option granted hereunder shall expire or terminate for any
reason without having been exercised in full, the unpurchased
shares subject thereto shall again be available for purposes
of this Plan.
5. ELIGIBILITY AND PARTICIPATION
(a) The Committee shall determine the Employees to whom
Options shall be granted, the time or times at which such
Options shall be granted and the number of shares to be
subject to each Option. An Employee who has been granted an
Option may, if he is otherwise eligible, be granted an
additional Option or Options if the Committee shall so
determine. An Employee may be granted Incentive Options or
Non-Qualified Options or both under the Plan; provided,
however, that the grant of Incentive Options and Non-Qualified
Options to an Employee shall be the grant of separate Options
and each Incentive Option and each Non-Qualified Option shall
be specifically designated as such.
(b) In no event shall the aggregate fair market value
(determined as of the time the Option is granted) of the
shares with respect to which Incentive Options (granted under
the Plan and all other plans of the Company and any Subsidiary
or Parent Corporation of the Company) are exercisable for the
first time by an Optionee in any calendar year exceed
$100,000.
(c) In no event shall the aggregate number of shares of
the Company's Common Stock with respect to which Options may
be granted to a single Optionee during the term of the Plan
exceed 200,000 shares.
6. PURCHASE PRICE
The purchase price of each share covered by each Option
shall be determined by the Committee; provided, however, that
in the case of an Incentive Option such price shall not be
less than 100% of the Fair Market Value Per Share of the
Common Stock of the Company on the date the Incentive Option
is granted; and provided further that if at the time an
Incentive Option is granted, the Optionee owns or would be
considered to own by reason of Section 424(d) of the Code more
than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary or Parent Corporation
of the Company, the purchase price of the shares covered by
such Incentive Option shall not be less than 110% of the Fair
Market Value Per Share of the Common Stock on the date the
Incentive Option is granted.
7. DURATION OF OPTIONS
The expiration date of an Option and all rights
thereunder shall be determined by the Committee; provided,
however, that the expiration date of an Incentive Option must
be within 10 years from the date on which the Incentive Option
is granted, unless at the time the Incentive Option is
granted, the Optionee owns or would be considered to own by
reason of Section 424(d) of the Code more than 10% of the
total combined voting power of all classes of stock of the
Company or any Subsidiary or Parent Corporation of the
Company, in which case the expiration date of such Incentive
Option must be within five years from the date the Incentive
Option is granted. In the event the Committee does not
specify the expiration date of an Option, the expiration date
shall be 10 years from the date on which the Option was
granted; provided, however, that if at the time an Incentive
Option is granted, the Optionee owns or would be considered to
own by reason of Section 424(d) of the Code more than 10% of
the total combined voting power of all classes of stock of the
Company or any Subsidiary or Parent Corporation of the
Company, such Incentive Option shall expire five years from
the date of grant. Options shall be subject to earlier
termination as provided herein.
8. EXERCISE OF OPTIONS
An Option shall vest and become exercisable from time to
time in installments or otherwise in accordance with such
schedule and upon such other terms and conditions as the
Committee shall in its discretion determine at the time the
Option is granted. An Optionee may purchase less than the
total number of shares for which the Option is exercisable,
provided that a partial exercise of an Option may not be for
less than 100 shares, unless the exercise is during the final
year of the Option, and shall not include any fractional
shares. As a condition to the exercise, in whole or in part,
of any Option, the Committee may in its sole discretion
require the Optionee to pay, in addition to the purchase price
of the shares covered by the Option, an amount equal to any
federal, state and local taxes that the Committee has
determined are required to be paid in connection with the
exercise of such Option in order to enable the Company to
claim a deduction or otherwise. Furthermore, if any Optionee
disposes of any shares of stock acquired by exercise of an
Incentive Option prior to the expiration of either of the
holding periods specified in Section 422(a)(1) of the Code,
the Optionee shall pay to the Company, or the Company shall
have the right to withhold from any payments to be made to the
Optionee, an amount equal to any federal, state and local
taxes that the Committee has determined are required to be
paid in connection with the exercise of such Option in order
to enable the Company to claim a deduction or otherwise.
9. METHOD OF EXERCISE
(a) To the extent that an Option has become exercisable,
the Option may be exercised from time to time by giving
written notice to the Company stating the number of shares
with respect to which the Option is being exercised,
accompanied by payment in full, by cash or by certified or
cashier's check payable to the order of the Company or the
equivalent thereof acceptable to the Company, of the purchase
price for the number of shares being purchased and, if
applicable, any federal, state or local taxes required to be
paid in accordance with the provisions of Section 8 hereof.
(b) In the Committee's discretion, payment of the
purchase price for the shares with respect to which the Option
is being exercised may be made in whole or in part with shares
of Common Stock of the Company. If payment is made with
shares of Common Stock, the Optionee, or other person entitled
to exercise the Option, shall deliver to the Company
certificates representing the number of shares of Common Stock
in payment for the shares being purchased, duly endorsed for
transfer to the Company. If requested by the Committee, prior
to the acceptance of such certificates in payment for such
shares, the Optionee, or any other person entitled to exercise
the Option, shall supply the Committee with a representation
and warranty in writing that he has good and marketable title
to the shares represented by the certificate(s), free and
clear of all liens and encumbrances. The value of the shares
of Common Stock tendered in payment for the shares being
purchased shall be their Fair Market Value Per Share on the
date of the Optionee's exercise.
(c) Notwithstanding the foregoing, the Company shall
have the right to postpone the time of delivery of the shares
for such period as may be required for it to comply, with
reasonable diligence, with any applicable listing requirements
of any national securities exchange or any federal, state or
local law. If an Optionee, or other person entitled to
exercise an Option, fails to accept delivery of or fails to
pay for all or any portion of the shares requested in the
notice of exercise, upon tender of delivery thereof, the
Committee shall have the right to terminate his Option with
respect to such shares.
10. NON-TRANSFERABILITY OF OPTIONS
No Option granted under the Plan shall be assignable or
transferable by the Optionee, either voluntarily or by
operation of law, otherwise than by will or the laws of
descent and distribution, and each Option shall be exercisable
during the Optionee's lifetime only by the Optionee.
11. CONTINUANCE OF EMPLOYMENT
Nothing contained in the Plan or in any Option granted
under the Plan shall confer upon any Optionee any rights with
respect to the continuation of his employment by the Company
or any Subsidiary or Parent Corporation of the Company or
interfere in any way with the right of the Company or any
Subsidiary or Parent Corporation of the Company at any time to
terminate such employment or to increase or decrease the
compensation of the Optionee from the rate in existence at the
time of the grant of an Option.
12. TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH OR PERMANENT
DISABILITY
Except as the Committee may expressly determine otherwise
with respect to any particular Non-Qualified Option granted
hereunder:
(a) If an Optionee ceases to be an Employee for any
reason other than his death or Permanent Disability, any
Options granted to him under the Plan shall terminate one
month from the date on which such Optionee terminates his
employment unless such Optionee has been rehired by the
Company and is an Employee on such date. During such one
month period, the Optionee may exercise any Option granted to
him but only to the extent such Option was exercisable on the
date of termination of his employment and provided that such
Option has not expired or otherwise terminated as provided
herein. A leave of absence approved in writing by the
Committee shall not be deemed a termination of employment for
purposes of this Section, but no Option may be exercised
during any such leave of absence, except during the first
month thereof.
(b) Termination of employment other than by death or
Permanent Disability for purposes hereof shall be deemed to
take place on the earliest to occur of the following: (i) the
Optionee's retirement under the normal retirement policies of
the Company or any Subsidiary of the Company; (ii) the date of
the Optionee's retirement with the approval of the Committee
because of disability other than Permanent Disability; (iii)
the date an Optionee receives notice or advice that his
employment is terminated; or (iv) the date an Optionee ceases
to render his services to the Company or any Subsidiary
(absences for temporary illness, emergencies and vacations or
leaves of absence approved in writing by the Committee
excepted). The fact that the Optionee may receive payment
from the Company or any Subsidiary of the Company after
termination for vacation pay, for services rendered prior to
termination, for salary in lieu of notice, or for other
benefits shall not affect the termination date.
13. DEATH OR PERMANENT DISABILITY OF OPTIONEE
Except as the Committee may expressly determine otherwise
with respect to any particular Non-Qualified Option granted
hereunder, if an Optionee shall die at a time when he is
employed by the Company or any Subsidiary or Parent
Corporation of the Company or if the Optionee shall cease to
be an Employee by reason of Permanent Disability, any Options
granted to him under this Plan shall terminate six months
after the date of his death or termination of employment due
to Permanent Disability unless by its terms it shall expire
before such date or otherwise terminate as provided herein,
and shall only be exercisable to the extent that it would have
been exercisable on the date of his death or his termination
due to Permanent Disability. In the case of death, the Option
may be exercised by the person or persons to whom the
Optionee's rights under the Option shall pass by will or by
the laws of descent and distribution.
14. STOCK PURCHASE NOT FOR DISTRIBUTION
Each Optionee shall, by accepting the grant of an Option
under the Plan, represent and agree, for himself and his
transferees by will or the laws of descent and distribution,
that all shares of stock purchased upon exercise of the Option
will be received and held without a view to distribution
except as may be permitted by the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
After each notice of exercise of any portion of an Option, if
requested by the Committee, the person entitled to exercise
the Option must agree in writing that the shares of stock are
being acquired in good faith without a view to distribution.
15. PRIVILEGES OF STOCK OWNERSHIP
No person entitled to exercise any Option granted under
the Plan shall have any of the rights or privileges of a
stockholder of the Company with respect to any shares of
Common Stock issuable upon exercise of such Option until such
person has become the holder of record of such shares. No
adjustment shall be made for dividends or distributions of
rights in respect of such shares if the record date is prior
to the date on which such person becomes the holder of record,
except as provided in Section 16 hereof.
16. ADJUSTMENTS
(a) If the number of outstanding shares of Common Stock
of the Company are increased or decreased, or if such shares
are exchanged for a different number or kind of shares or
securities of the Company through reorganization, merger,
recapitalization, reclassification, stock dividend, stock
split, combination of shares, or other similar transaction,
the aggregate number of shares of Common Stock subject to the
Plan as provided in Section 4 hereof, the shares of Common
Stock subject to issued and outstanding Options under the Plan
and the aggregate number of shares of Common Stock with
respect to which Options may be granted to a single Optionee
as provided in Section 5(c) hereof shall be appropriately and
proportionately adjusted by the Committee. Any such
adjustment in the outstanding Options shall be made without
change in the aggregate purchase price applicable to the
unexercised portion of the Option but with an appropriate
adjustment in the price for each share or other unit of any
security covered by the Option.
(b) Notwithstanding the provisions of subsection (a) of
this Section, upon the dissolution or liquidation of the
Company or upon any reorganization, merger or consolidation
with one or more corporations as a result of which the Company
is not the surviving corporation, or upon a sale of all or
substantially all the assets of the Company or of more than
80% of the then outstanding stock of the Company to another
corporation or entity, the Plan and each outstanding Option
shall terminate; provided, however, that: (i) each Option for
which no option has been tendered by the surviving corporation
in accordance with all of the terms of provision (ii)
immediately below shall become fully exercisable thirty days
before the effective date of such dissolution, liquidation,
merger, consolidation or sale of stock or assets in which the
Company is not the surviving corporation; or (ii) in its sole
and absolute discretion, the surviving corporation may, but
shall not be obligated to, tender to any Optionee holding an
Option, an option or options to purchase shares of the
surviving corporation or acquiring corporation, and such new
option or options shall contain such terms and provisions as
shall be required substantially to preserve the rights and
benefits of any Option then outstanding under this Plan.
(c) Adjustments under this Section shall be made by the
Committee, whose determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and
conclusive. No fractional shares of stock shall be issued
under the Plan or in connection with any such adjustment.
17. AMENDMENT AND TERMINATION OF PLAN
(a) The Board of Directors of the Company may from time
to time, with respect to any shares at the time not subject to
Options, suspend or terminate the Plan or amend or revise the
terms of the Plan; provided that any amendment to the Plan
shall be approved by a majority of the stockholders of the
Company if the amendment would (i) materially increase the
benefits accruing to participants under the Plan; (ii)
increase the number of shares of Common Stock which may be
issued under the Plan, except as permitted under the
provisions of Section 16 hereof; or (iii) materially modify
the requirements as to eligibility for participation in the
Plan.
(b) No amendment, suspension or termination of the Plan
shall, without the consent of the Optionee, alter or impair in
a manner adverse to the Optionee any rights or obligations
under any Option theretofore granted to such Optionee under
the Plan.
(c) The terms and conditions of any Option granted to an
Optionee under the Plan may be modified or amended only by a
written agreement executed by the Optionee and the Company.
18. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon adoption by the
Board of Directors of the Company and approval by the
Company's stockholders; provided, however, that prior to
approval of the Plan by the Company's stockholders, but after
adoption by the Board of Directors, Options may be granted
under the Plan subject to obtaining the stockholders' approval
of the adoption of the Plan. Notwithstanding the foregoing,
stockholders' approval must occur no later than 12 months
after the date of adoption of the Plan by the Board of
Directors.
19. TERM OF PLAN
No Option shall be granted pursuant to the Plan after 10
years from the earlier of the date of adoption of the Plan by
the Board of Directors of the Company or the date of approval
of the Plan by the Company's stockholders.
Advanced Marketing Services, Inc.
Page 2
LA960510.029
6254.0200
February 16, 1996
Advanced Marketing Services, Inc.
5880 Oberlin Drive, Suite 400
San Diego, California 92121
Re: Registration Statement on Form S-8
Gentlemen:
We have represented Advanced Marketing Corporaton, Inc., a
Delaware corporation (the "Company"), as special securities
counsel in connection with the registration under the Securities
Act of 1933, as amended (the "Securities Act"), of 400,000 shares
of the Company's common stock, $.001 par value (the "Shares"),
issuable upon exercise of stock options granted under the
Advanced Marketing Services, Inc. 1995 Stock Option Plan (the
"Plan"). The Shares are being registered by the Company on a
Registration Statement on Form S-8 to be filed with the
Securities and Exchange Commission (the "Commission") on or about
February 22, 1996 (the "Registration Statement").
As such special securities counsel, and for the purpose of
rendering this opinion, we have reviewed such corporate records
and other documents as we have deemed necessary, including, but
not limited to, the following:
(a) Articles of Incorporation, as currently in effect, of
the Company;
(b) Bylaws, as currently in effect, of the Company;
(c) The Plan;
(d) Certain resolutions adopted by the Board of Directors
and the Shareholders of the Company and related documents
adopting and approving the Plan; and
(e) The Registration Statement, in the form proposed to be
filed with the Commission under the Act, together with exhibits
to be filed in connection therewith and the form of Prospectus
related thereto.
Additionally, we have consulted with officers and other
representatives of the Company and have obtained such
representations with respect to such matters of fact as we have
deemed necessary or advisable; however, we have not necessarily
independently verified the content of factual statements made to
us in connection therewith or the veracity of such
representations. We have assumed without independent
verification or investigation (i) the genuineness of all
signatures, (ii) the authenticity of all documents submitted to
us as originals and (iii) the conformity to authentic original
documents of all documents submitted to us as certified,
conformed or photostatic copies.
On the basis of the foregoing, such examinations of law and
such other information as we have deemed relevant under the
circumstances, we are of the opinion as of the date hereof that
the Shares, when issued and sold pursuant to the Plan, will be
validly issued, fully paid and nonassessable shares of common
stock of the Company.
The law covered by the opinion set forth above is limited to
the laws of the State of Delaware.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement relating to the Shares. In
giving this consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the
Securities Act or the rules or regulations of the Commission
promulgated thereunder.
Very truly yours,
HUGHES HUBBARD & REED
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby
consent to the incorporation by reference in this
registration statement on Form S-8 of our report
dated May 12, 1995 included in Advanced Marketing
Services, Inc.'s Form 10-K for the year ended
March 31, 1995.
ARTHUR ANDERSEN LLP
San Diego, California
February 22, 1996
