<PAGE> 1
Registration No. 333-
--------------
As filed with the Securities and Exchange Commission on July 17, 1998
------------------------------------------------------------------------------
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)
Employee Stock Purchase Plan
----------------------------
(Full title of the plan)
Charles C. Tillinghast, III
Advanced Marketing Services, Inc.
5880 Oberlin Drive, Suite 400, San Diego, California 92121
(619) 457-2500
-------------------------------------------------------------
(Name, address and telephone number of agent for service)
Copy to: Theodore H. Latty, Esq.
Hughes Hubbard & Reed LLP
350 South Grand Avenue
Los Angeles, California 90071-3442
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of
Securities Amount Proposed Maximum Proposed Amount of
to be to be Offering Price Maximum Aggregate Registration
Registered Registered* Per Share** Offering Price** Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value 100,000 shares $15.30 $1,530,000 $464.00
$.001 per share
- -----------------------------------------------------------------------------------------------------
</TABLE>
* This Registration Statement also relates to such indeterminate number of
additional shares as may be issuable pursuant to stock splits, stock dividends,
or similar transactions.
** The proposed maximum offering price per share of Common Stock and the
proposed maximum aggregate offering price are calculated solely for the purpose
of determining the registration fee pursuant to Rule 457(h) under the Securities
Act of 1933, and are based on 85% of the average of the high and low sale prices
of the Common Stock on July 14, 1998, as quoted on the Nasdaq National Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Advanced Marketing Services,
Inc. (the "Company") under the Securities Exchange Act of 1934 (the "Exchange
Act") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998;
(b) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since March 31, 1998; and
(c) The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A, filed pursuant to
Section 12 of the Exchange Act, and any amendment or report filed for
the purpose of updating such description, including without limitation
the information set forth under Item 5 of the Company's Report on Form
8-K dated July 25, 1991, filed under Section 13 of the Exchange Act.
All documents filed by the Company 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 hereby 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 the 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 Company 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
II-1
<PAGE> 3
permits indemnification of a corporate officer or director 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 Company, 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 Company, indemnification shall not be made in respect
of any claim, issue or matter as to which the officer or director shall have
been found liable to the Company unless and only to the extent that the court in
which such action was brought determines 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 a person is successful on the merits or otherwise in defense of
certain actions, the Delaware GCL requires the Company to indemnify the person
for his actual and reasonable expenses incurred in connection with such defense.
Under the Delaware GCL and the Bylaws, the Company 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 Company if
it is ultimately determined that the person is not entitled to be indemnified
against such expenses. Consistent with such statutory provisions, the Company
generally enters into written indemnity agreements with its executive officers
and directors.
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 officers and directors, may be
applicable to the affairs of the Company to the exclusion of the Delaware GCL.
In such event, the Company's Certificate of Incorporation and Bylaws require the
Company 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 officers and directors 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 (the "Securities Act").
The plan to which this Registration Statement relates requires
the Company to indemnify the board of directors or the committee administering
the plan against liabilities, costs and expenses which may be incurred in
connection with the administration of the plan, with respect to actions taken by
them in good faith.
Item 7. Exemption from Registration Claimed
Not applicable.
II-2
<PAGE> 4
Item 8. Exhibits
<TABLE>
<CAPTION>
Number Description Method of Filing
- ------ ----------- ----------------
<S> <C> <C>
4.1 Certificate of Incorporation, as Incorporated by reference from the
amended, of the Company Company's Report on Form 8-K for July
25, 1991, filed October 18, 1991
4.2 Bylaws, as amended, of the Company Incorporated by reference from the
Company's Report on Form 8-K for July
25, 1991, filed October 18, 1991
4.3 Employee Stock Purchase Plan Filed herewith
5.1 Opinion of Hughes Hubbard & Reed LLP Filed herewith
23.1 Consent of Arthur Andersen LLP Filed herewith
23.2 Consent of Hughes Hubbard & Reed LLP Contained in Exhibit 5.1
24.1 Powers of Attorney Filed herewith
</TABLE>
Item 9. Undertakings
(a) The Company 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, represents 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 information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the
II-3
<PAGE> 5
Securities Exchange Act of 1934 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 Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 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
Company pursuant to the foregoing provisions, or otherwise, the Company 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 Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company 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.
II-4
<PAGE> 6
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Diego, State of California, on
this 17th day of July, 1998.
ADVANCED MARKETING SERVICES, INC.
By: /s/ Charles C. Tillinghast, III
---------------------------------------
Charles C. Tillinghast, III
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on this 17th day of July, 1998.
<TABLE>
<CAPTION>
Signature Capacity
- --------- --------
<S> <C>
* Chairman of the Board and Director
- ------------------------------------------
Charles C. Tillinghast, III
* Chief Executive Officer and Director
- ------------------------------------------ (principal executive, financial, and
Michael M. Nicita accounting officer)
* Director
- ------------------------------------------
Loren C. Paulsen
* Director
- ------------------------------------------
Robert F. Bartlett
</TABLE>
II-5
<PAGE> 7
<TABLE>
<CAPTION>
Signature Capacity
- --------- --------
<S> <C>
* Director
- ------------------------------------------
Lynn S. Dawson
* Director
- ------------------------------------------
James A. Leidich
* Director
- ------------------------------------------
Trygve E. Myhren
* Director
- ------------------------------------------
E. William Swanson
* By: /s/ Charles C. Tillinghast, III,
----------------------------------
for himself and as authorized by
Power of Attorney filed as
Exhibit 24.1 to this Registration
Statement
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description Method of Filing Page
- ------ ----------- ---------------- ----
<S> <C> <C> <C>
4.1 Certificate of Incorporation, Incorporated by reference from the --
as amended, of the Company Company's Report on Form 8-K for July
25, 1991, filed October 18, 1991
4.2 Bylaws, as amended, of the Incorporated by reference from the --
Company Company's Report on Form 8-K for July
25, 1991, filed October 18, 1991
4.3 Employee Stock Purchase Plan Filed herewith 9
5.1 Opinion of Hughes Hubbard & Filed herewith 19
Reed LLP
23.1 Consent of Arthur Andersen LLP Filed herewith 21
23.2 Consent of Hughes Hubbard & Contained in Exhibit 5.1 --
Reed LLP
24.1 Powers of Attorney Filed herewith 22
</TABLE>
<PAGE> 1
Exhibit 4.3
ADVANCED MARKETING SERVICES, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended, and the
provisions of the Plan shall be construed in a manner consistent with the
requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Committee" shall mean the committee appointed by the Board
to administer the Plan, or, if no committee is appointed, the Board.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean Advanced Marketing Services, Inc., a
Delaware corporation.
(f) "Compensation" shall mean all regular straight time gross
earnings (before reduction on account of contributions pursuant to Code Sections
401(k) or 125 or to a non-qualified deferred compensation plan), and shall not
include payments for overtime, shift premium, incentive compensation, incentive
payments, bonuses or other compensation.
(g) "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan. The Designated Subsidiaries shall be named
in Appendix A to the Plan.
(h) "Employee" shall mean any individual who is classified as an
employee of the Employer for tax purposes. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Employer
only for the first 90 days of such leave or for such longer period as the
individual's right to reemployment is guaranteed either by statute or by
contract.
(i) "Employer" shall mean the Company and any Designated
Subsidiary.
(j) "Enrollment Date" shall mean the first day of each Offering
Period.
1
<PAGE> 2
(k) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
(1) If the Common Stock is listed on a national
securities exchange or the Nasdaq National Market or Nasdaq SmallCap Market, its
Fair Market Value shall be the closing sales price for such stock on such
exchange or market for the Trading Day preceding the date of such determination
(or if shares were not traded on such date, then on the next preceding Trading
Day on which a sale of the Common Stock occurred).
(2) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the Trading Day preceding the date of such determination.
(3) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.
(l) "Offering Period" shall mean a period of six months,
commencing on April 1 and October 1 of each year, or such alternative periods as
may be designated by the Board pursuant to Section 4 of the Plan.
(m) "Option" shall mean an option granted to a Plan participant
at the start of an Offering Period to purchase Common Stock at the Purchase
Price on the Purchase Date.
(n) "Plan" shall mean this Employee Stock Purchase Plan.
(o) "Purchase Date" shall mean the last day of each Offering
Period or, if such day is not a Trading Day, the next Trading Day.
(p) "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Purchase Date, whichever is lower, but in no case less than the par value of a
share.
(q) "Subsidiary" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(r) "Trading Day" shall mean a day on which national securities
exchanges and the Nasdaq Market are open for trading.
3. Eligibility.
(a) Any Employee who is employed by the Employer on a given
Enrollment Date and has been employed by the Company or any of its Subsidiaries
for at least six months shall be eligible to participate in the Plan for the
respective Offering Period.
2
<PAGE> 3
(b) Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an Option under the Plan (i) to the extent that,
immediately after the grant, such Employee would own (with ownership determined
under the attribution rules of Section 424(d) of the Code) capital stock and/or
outstanding options or rights to purchase such stock possessing an aggregate of
five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Subsidiary, or (ii) to the
extent that his or her rights to purchase stock under all employee stock
purchase plans of the Company and its Subsidiaries would accrue at a rate which
exceeds $25,000 worth of stock (determined as the Fair Market Value of the
shares at the time such option is granted) for each calendar year in which such
Option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods, and shall continue automatically until the Plan is terminated
in accordance with Section 19 or 24. The Board shall have the power to change
the commencement dates and duration of Offering Periods with respect to future
offerings without stockholder or employee approval if such change is announced
at least five days prior to the scheduled beginning of the first Offering Period
to be affected by such change.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions on a form
provided by the Company, and filing it with the Company's payroll office (or
other location designated by the Company) within the period designated by the
Company with respect to the applicable Enrollment Date.
(b) Payroll deductions for an Offering Period shall commence on
the first pay day following the Enrollment Date and shall end on the last pay
day in the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant; provided, however, that any Compensation
paid within ten business days preceding the Purchase Date will be deemed to be
received by the participant in the next succeeding Offering Period.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he or she receives on each pay day during the Offering
Period. Payroll deductions shall be withheld in whole percentages only.
(b) The Company shall maintain a bookkeeping account on its
records for each participant, to which it shall credit all payroll deductions
made for such participant under the Plan. No amounts other than on account of
payroll deductions shall be credited to a participant's account. No interest
shall accrue on the payroll deductions of a participant.
(c) A participant may discontinue or decrease the rate of his or
her payroll deductions during the Offering Period by completing and filing with
the Company a new
3
<PAGE> 4
subscription agreement authorizing a change in payroll deduction rate. No
increases in the rate of payroll deductions are allowed during an Offering
Period. The Committee may, in its discretion, limit the number of rate changes
during any Offering Period. The discontinuation or decrease in rate shall be
effective with the first full payroll period beginning at least five business
days after the Company's receipt of the new subscription agreement, or after
such shorter period as the Company may apply on a uniform basis for all
participants. A participant's subscription agreement shall remain in effect for
successive Offering Periods unless the participant withdraws from an Offering
Period as provided in Section 10 hereof, discontinues payroll deductions, or
submits a new subscription agreement at least ten business days before the
Enrollment Date for that Offering Period.
(d) Notwithstanding a participant's subscription agreement, a
participant's payroll deductions shall be decreased to zero percent (0%) during
an Offering Period to the extent necessary to comply with Section 423(b) of the
Code and Section 3(b) hereof. In such case, the participant shall be required to
submit a new subscription agreement at least ten business days before the next
Enrollment Date for which payroll deductions would not violate such provisions
before payroll deductions can recommence.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
Option to purchase on the Purchase Date of such Offering Period (at the
applicable Purchase Price) the number of shares of the Company's Common Stock
determined by dividing such Employee's payroll deductions accumulated prior to
such Purchase Date and retained credited to his or her account as of the
Purchase Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during any Offering Period more than 850
shares (subject to any adjustment pursuant to Section 18) and provided further
that such purchase shall be subject to the limitations set forth in Section 423
of the Code and this Plan. Exercise of the Option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn from the Offering Period
pursuant to Section 10 hereof. The Option shall expire at midnight on the last
day of the Offering Period.
8. Exercise of Option.
(a) Unless a participant has withdrawn from the Offering Period
as provided in Section 10 hereof, his or her Option shall be exercised
automatically on the Purchase Date, and the maximum number of full shares
subject to such Option shall be purchased for such participant at the applicable
Purchase Price with the accumulated payroll deductions then credited to his or
her account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. Any other funds left over in a participant's account after
the Purchase Date shall be returned to the participant. A participant's Option
to purchase shares hereunder is exercisable only by him or her.
(b) At the time the Option is exercised, or at the time some or
all of the Company's Common Stock issued under the Plan is disposed of, the
participant must make
4
<PAGE> 5
adequate provision to satisfy all applicable federal, state, or other tax
withholding obligations, which arise upon the exercise of the Option or the
disposition of the Common Stock. At any time, the Employer may, but shall not be
obligated to, withhold from the participant's compensation the amount necessary
to satisfy applicable withholding obligations, including any withholding
required to make available to the Employer any tax deductions or benefits
attributable to sale or early disposition of Common Stock by the participant.
9. Delivery of Shares. The participant shall be the vested owner of the
shares purchased upon the exercise of his or her Option, which shall occur on
the respective Purchase Date. However, such shares shall not be transferable by
the participant, and shall be held on the participant's behalf by the Company or
its designee, until the completion of six months following the Purchase Date.
Upon completion of such period, the purchased shares shall, at the Company's
option, be registered in the participant's name and delivered to the
participant, or deposited into a brokerage account in the participant's name,
free of all restrictions.
10. Withdrawal of Payroll Deductions. A participant may withdraw all but
not less than all the payroll deductions credited to his or her account and not
yet used to exercise his or her Option under the Plan, at any time by giving
written notice to the Company in the form provided by the Company. If such
notice is received by the Company at least five business days before the last
day of the Offering Period, all of the participant's payroll deductions credited
to his or her account shall be paid to such participant promptly after the
Company's receipt of notice of withdrawal, and such participant's Option for the
Offering Period shall be automatically terminated and no further payroll
deductions for the purchase of shares under the Plan shall be made for such
Offering Period. If a participant withdraws from an Offering Period, payroll
deductions shall not resume at the beginning of the succeeding Offering Period
unless the participant delivers to the Company a new subscription agreement
within the time period required by Section 5(a).
11. Termination of Employment. Upon a participant's ceasing to be an
Employee for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise an Option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15 hereof, and such participant's
Option shall be automatically terminated.
12. Notification of Disposition of Common Stock. Each participant shall
give prompt notice to the Company of any disposition or other transfer of any
shares of Common Stock acquired under the Plan if such disposition or transfer
is made (i) within two years after the Enrollment Date of the Offering Period in
which the shares were purchased or (ii) within one year after the Purchase Date
with respect to such shares. Such notice shall specify the date of such
transaction and the amount realized by the participant in such transaction.
13. Stock.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 100,000 shares,
subject to adjustment
5
<PAGE> 6
upon changes in capitalization of the Company as provided in Section 18 hereof.
If, on a given Purchase Date, the number of shares with respect to which Options
are to be exercised exceeds the number of shares then available under the Plan,
the Committee shall make a pro rata allocation of the shares remaining available
for purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.
(b) The participant shall have no interest or voting right in
shares covered by his or her Option until such Option has been exercised.
(c) Shares delivered under the Plan may be either authorized but
unissued shares or shares that have been reacquired by the Company.
14. Administration.
(a) Except for duties specifically allocated to the Board, the
Plan shall be administered by the Committee. The Committee shall have full and
exclusive discretionary authority to construe, interpret and apply the terms of
the Plan, to determine all questions of eligibility, and to adjudicate all
disputed claims filed under the Plan. Every finding, decision and determination
made by the Committee shall, to the full extent permitted by law, be final and
binding upon all parties.
(b) The Committee may act by decision of a majority of its
members at a meeting or telephonic meeting, or by a writing signed by all
members of the Committee. The Committee may delegate its duties and authority
under the Plan to one or more officers of the Company, and may employ
recordkeepers, consultants, or other persons. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or any Option, and all members of the
Committee shall be fully indemnified by the Company with respect to any such
action, determination or interpretation.
(c) All costs and expenses incurred in administering the Plan
shall be paid by the Company, except that all brokerage fees for the sale of
shares acquired under the Plan shall be paid by the participant.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash to which the participant is entitled under
the Plan in the event of such participant's death. If a participant is married
and the designated beneficiary is not the spouse, notarized spousal consent
shall be required for such designation to be effective. Such designation of
beneficiary may be changed by the participant at any time by written notice
(subject to the spousal consent requirement of the preceding sentence).
(b) In the event of the death of a participant and in the absence
of a beneficiary validly designated under the Plan who is living at the time of
such participant's death, the Company shall deliver such shares and/or cash to
the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of
6
<PAGE> 7
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant.
16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an Option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way by the participant (other than, in the case of
shares or cash, by will, the laws of descent and distribution, or as provided in
Section 15 hereof). Any attempt at assignment, transfer, pledge or other
disposition in violation of this Section 16 shall be without effect, except that
the Company may treat such act as an election to withdraw from an Offering
Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions or to pay
interest on such payroll deductions.
18. Adjustments Upon Changes in Capitalization and Corporate
Transactions.
(a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock authorized
for issuance under the Plan, the maximum number of shares each participant may
purchase each Offering Period, the Purchase Price per share and the number of
shares of Common Stock covered by each Option under the Plan which has not yet
been exercised shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company 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 or price of shares
of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Purchase Date which shall be a date
determined by the Board which is before the date of the Company's proposed
dissolution or liquidation. The Company shall notify each participant in
writing, at least ten business days prior to the new Purchase Date, that the
participant's Option will be exercised automatically on the new Purchase Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding Option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option, any Offering Period
then in
7
<PAGE> 8
progress shall be shortened by setting a new Purchase Date which shall be a date
determined by the Board which is before the date of the Company's proposed sale
or merger. The Company shall notify each participant in writing, at least ten
business days prior to the new Purchase Date, that the participant's Option will
be exercised automatically on the new Purchase Date, unless prior to such date
the participant has withdrawn from the Offering Period as provided in Section 10
hereof.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time amend
or terminate the Plan. Except as provided in Section 18 hereof, no such
amendment or termination may affect Options previously granted or adversely
affect the rights of any participant. Shareholder approval of amendments shall
not be required except to the extent necessary to comply with Section 423 of the
Code (or any successor rule or provision) or any other applicable law,
regulation or stock exchange rule.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or the Committee) shall be entitled to change the Offering Periods,
change the frequency and/or number of changes in the amount of payroll
deductions permitted during an Offering Period, establish the exchange ratio
applicable to amounts of payroll deductions in a currency other than U.S.
dollars, permit payroll deductions in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the Company's
processing of properly completed elections, establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure that
amounts applied toward the purchase of Common Stock for each participant
properly correspond with amounts deducted from the participant's Compensation,
and establish such other limitations or procedures as the Board (or the
Committee) determines in its sole discretion advisable which are consistent with
the Plan.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an Option unless the exercise of such Option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance. As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by law.
8
<PAGE> 9
22. Compliance with Section 423. All eligible Employees shall have equal
rights and privileges with respect to the Plan to the extent necessary to
satisfy the requirements of Section 423 of the Code. Any provision of the Plan
which is inconsistent with Section 423 of the Code shall be interpreted or
reformed so as to comply with the requirements of Section 423. This provision
shall take precedence over all other provisions of the Plan.
23. No Employment Rights. Participation in the Plan shall not confer
upon any Employee any right to continue in the employ of the Company or a
Subsidiary or interfere in any way with the right of the Company and its
Subsidiaries to terminate the employment of any Employee.
24. Term of Plan. The Plan shall become effective July 23, 1998 subject
to approval by the shareholders of the Company, and the first Enrollment Date
shall be October 1, 1998. The Plan shall continue in effect until terminated by
the Board of Directors under Section 19 hereof or, if earlier, until all shares
of Common Stock available for issuance under the Plan have been purchased by
participants.
9
<PAGE> 10
APPENDIX A
DESIGNATED SUBSIDIARIES
Advanced Marketing, S. de R.L. de C.V.
Advanced Marketing (UK) Limited
Aura Books PLC
10
<PAGE> 1
[HUGHES HUBBARD & REED LLP LETTERHEAD]
Exhibit 5.1
July 17, 1998
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 Corporation, 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 100,000 shares of the Company's common stock, $.001 par value (the
"Shares"), issuable in connection with the Company's Employee Stock Purchase
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 the date hereof (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, as amended to date;
(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.
In addition, 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
<PAGE> 2
[HUGHES HUBBARD & REED LLP LETTERHEAD]
Advanced Marketing Services, Inc.
July 17, 1998
Page 2
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 LLP
<PAGE> 1
Exhibit 23.1
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, 1998, included in Advanced Marketing Services, Inc.'s Form
10-K for the year ended March 31, 1998, and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
San Diego, California
July 15, 1998
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
ADVANCED MARKETING SERVICES, INC.
S-8 REGISTRATION OF EMPLOYEE STOCK PURCHASE PLAN
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does
hereby constitute and appoint each of Charles C. Tillinghast, III, Michael M.
Nicita and Loren C. Paulsen, with full power of substitution and resubstitution,
his true and lawful attorney-in-fact and agent to execute in his name any
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission under the Securities Act of 1933 relating to shares issuable under
the Advanced Marketing Services, Inc. Employee Stock Purchase Plan, including
without limitation any and all amendments (including post-effective amendments)
to any such Registration Statement, and to file the same, with all exhibits
thereto and any other documents in connection therewith, with the Securities and
Exchange Commission. Each such attorney-in-fact and his substitutes shall have
and may exercise all powers to act hereunder. Each of the undersigned does
hereby ratify and confirm all that said attorney-in-fact and agent shall do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has signed his name
hereto as of this 17th day of July, 1998.
/s/ Charles C. Tillinghast, III /s/ Michael M. Nicita
-------------------------------- -----------------------------------
Charles C. Tillinghast, III Michael M. Nicita
/s/ Loren C. Paulsen /s/ Robert F. Bartlett
-------------------------------- -----------------------------------
Loren C. Paulsen Robert F. Bartlett
/s/ Lynn S. Dawson /s/ James A. Leidich
-------------------------------- -----------------------------------
Lynn S. Dawson James A. Leidich
/s/ Trygve E. Myhren /s/ E. William Swanson
-------------------------------- -----------------------------------
Trygve E. Myhren E. William Swanson
